Earnings Call Transcript - HL Q4 2025

Operator, Operator

Good morning, everyone, and thank you for joining us. My name is Kelvin, and I will be your conference operator today. I would like to welcome you to the Q4 and Year-end 2025 Hecla Mining Company Earnings Conference Call. I will now turn the call over to Mike Parkin, Vice President of Strategy and Investor Relations. Please proceed.

Mike Parkin, Vice President, Strategy and Investor Relations

Thank you, Kelvin. Good morning, and thank you all for joining us for Hecla's Fourth Quarter and Full Year 2025 Results Conference Call. I'm Mike Parkin, Vice President of Strategy and Investor Relations. Our earnings release that was issued yesterday, along with today's presentation, are available on our website. On the call today with us is Rob Krcmarov, President and Chief Executive Officer; Russell Lawlar, Senior Vice President and Chief Financial Officer; Carlos Aguiar, Senior Vice President and Chief Operations Officer; Kurt Allen, Vice President, Exploration; Matt Blattman, Vice President, Technical Services; as well as other members of our management team. At the conclusion of our prepared remarks, we will all be available to answer questions. Turning to Slide 2, cautionary statements. Any forward-looking statements made today by the management team come under the Private Securities Litigation Reform Act and involve risks as shown on Slide 2 in our earnings release and in our 10-K filings with the SEC. These and other risks could cause results to differ from those projected in the forward-looking statements. Non-GAAP measures cited in this call and related slides are reconciled in the slides or the news release. I will now pass the call over to Rob.

Robert Krcmarov, CEO

Thank you, Mike, and good morning, everyone. Turning to Slide 3. 2025 was a transformational year for Hecla, one marked by disciplined execution and strategic clarity. Hecla's 135-year legacy as the oldest company on the New York Stock Exchange is our foundation, but it's not our destination. What drives us forward is our clear, compelling strategy to become and be recognized as the premier silver company in North America. So let me walk you through how we're executing against this strategy. Our foundation rests on 3 critical pillars. First, legacy and longevity. 135 years old. We're the oldest mining company on the NYSE. We protect value through market cycles for over a century. Second, top jurisdictions. All of our mines and projects from Greens Creek in Alaska to Lucky Friday in Idaho to Keno Hill in the Yukon to Midas in Nevada, they operate in the best and safest mining jurisdictions in North America. This jurisdictional advantage is a competitive advantage that protects our cash flows, reduces our risk profile and safeguards our license to operate. Third, silver focused. We've made a deliberate choice to build peer-leading silver exposure in both our revenue mix and our reserve base. While we produce gold, lead, zinc and copper as important byproducts, silver is the strategic anchor of our business. Our strategy delivers 4 key outcomes: Portfolio value surfacing. So we're actively managing our portfolio, retaining and investing in our world-class silver assets while strategically divesting noncore assets. The pending sale of Casa Berardi, which we announced last month is an example of this disciplined approach to capital allocation. It was a difficult decision, but one as a fundamentally silver company we had to make. Operational excellence. We're relentlessly focused on core asset optimization and execution. Not at the expense of safety or sustainability; they are the foundation of everything that we do and key drivers of productivity, not a compliance exercise. Investment discipline. This is the new Hecla. We utilize strict capital discipline with target ROIC thresholds to guide us in our path forward. Every dollar we deploy is intended to generate returns for our shareholders. And finally, organic growth. Through disciplined exploration programs, we are surfacing value for shareholders. And I think our recent Nevada exploration demonstrates this approach. We're working to discover and build the next generation of production from assets that we already own. This strategy is not abstract. It's delivering tangible results, as you'll see on the next slide. So moving to Slide 4. 2025 was a transformational year for Hecla. On the financial front, we delivered records, record revenue of $1.4 billion, record profitability, net income applicable to shareholders of $321 million or $0.49 per share, record adjusted EBITDA, $670 million. But the headline number that matters most is what these records enabled, which is substantial deleveraging and balance sheet transformation. Our total debt has declined to just $276 million. Our gross debt to adjusted EBITDA ratio, 0.4x. We generated operating cash flow of $563 million, which translated to $310 million in free cash flow, with each mine generating positive free cash flow last year. On the operational front, we executed well, hit our top end of silver production guidance at 17 million ounces, exceeded our gold production guidance with 150,000 ounces produced. Lucky Friday delivered a record 5.3 million ounces of silver production, exceeding the top end of the guidance range. It was as recently as 2021 that Lucky Friday was producing 3.6 million ounces, nearly a 50% increase in just 4 years. Keno Hill achieved new record production of over 3 million ounces while achieving first year profitability and positive free cash flow under Hecla ownership. Our Lucky Friday surface cooling project is 79% complete and on track for mid-2026 completion. That's a critical investment in the health and safety of our workforce and a key milestone as we work towards making Lucky Friday a zero discharge facility. And we received our finding of no significant impact or FONSI at Aurora, which is a major permitting milestone, allowing us to kick off exploration activities this year at the historic, very high-grade gold-silver producer, past producer in Western Nevada. Turning to Slide 5. Now I want to talk about the pending sale of Casa Berardi to Orezone Gold Corporation. This transaction represents portfolio optimization and action. Casa Berardi is a gold mine in a Tier 1 jurisdiction. It has a nice future, has had a nice run with us. Its mid-range mine plan is for a gold miner, some with a different schedule than us. So we plan to redirect capital and management focus towards our silver assets. We still have upside exposure with a 10% stake in Orezone. Why does this matter strategically? Well, there are 4 reasons. First is strategic portfolio optimization. So we're sharpening our focus. Capital that was tied up in gold would now flow towards silver assets with superior economics and longer reserve lives. Second is the enhanced market position. Upon closing, Hecla should be recognized unambiguously as the premier North American silver mining company. So silver would represent about 73% of our consolidated revenues, the highest silver revenue exposure among all our multi-asset mining peers with all our operating mines in the best jurisdictions. Third, strengthened balance sheet. We plan to use cash proceeds towards debt reduction and enhance financial flexibility. This positions us to a debt-free balance sheet with prices sustaining or better. Fourth is value maximization. We maintain exposure to Casa Berardi's upside through our OreZone shares, with OreZone well positioned to extract additional value from the asset given their focus and expertise in gold. I think this is a sophisticated capital allocation. This is how we maximize shareholder returns. And so now I'll pass the call over to Russell.

Russell Lawlar, CFO

Thank you, Rob. As we turn to Slide 7, let me take you through our financial scorecard because the numbers tell a compelling story of transformation. On balance sheet strength, our gross leverage ratio improved to 75% from 1.6x in 2024 to 0.4x in 2025, while our net leverage ratio improved 94% from 1.6x to 0.1x. And at current metal prices, we're positioned to achieve a debt-free balance sheet within 2026. This balance sheet transformation has set the company up for future growth with a substantial reduction in risk. On margin and return generation, our silver all-in sustaining cost per ounce margin improved from a very strong 54% in 2024 to 75% in 2025. This reflects both strong realized prices and disciplined cost management. Our free cash flow surged from $4 million last year to $310 million this year. While our return on invested capital improved 3x from 4% to 12%, we're now generating returns well above our cost of capital. These changes all sum up to cash on our balance sheet increasing ninefold from $27 million coming into the year to $242 million coming out of the year. This represents a complete transformation from a leveraged balance sheet to a position of financial strength in a single year. As we turn to Slide 8, I'll walk through some of the details from the fourth quarter because they show a sustained momentum and operational consistency. During the fourth quarter, we generated $439 million in revenue. Silver accounted for 59% of that total, but notably, excluding Casa Berardi, our silver exposure is expected to increase to approximately 73%, which would provide the highest silver exposure among our peer group, not to mention jurisdictional profile or other unique attributes. Our realized silver price in the fourth quarter was nearly $70 per ounce, beating the quarterly average by over $14 per ounce. Our all-in sustaining cost was $18.11 per ounce, putting our silver margin at $51 per ounce or 74% of the realized price. This is exceptional profitability. Our adjusted EBITDA was $670 million in 2025, which coupled with gross debt deleveraging improved our net leverage ratio from 0.3x last quarter to 0.1x this quarter, demonstrating the momentum in our deleveraging trajectory. We generated almost $135 million in free cash flow on a consolidated basis during the quarter, and all our operations contributed positively. This excellent quarter and the resulting cash flow was due to better pricing, but also executing on a variety of strategic initiatives across all our assets. As we turn to Slide 9, the bar chart here illustrates our projected cash flows across a range of silver and gold price scenarios. As we discussed during our Investor Day, Hecla has among the best leverage to silver prices compared to peers, which could improve upon closing of the Casa Berardi sale. This analysis on the slide assumes the Casa sale is completed and at $75 silver and $4,500 gold, we forecast cash flows of about $600 million, but this grows to about $850 million at $100 silver and $5,500 gold. Our forecast and at these metal price scenarios, we estimate nearly 70% of our revenue would be tied to silver sales, which is an industry best. Turning to Slide 10. I want to continue to emphasize our capital allocation framework because it's central to how we create shareholder value. We've shared this framework over the recent months, and it guides every decision we make at Hecla. We maintain an unwavering commitment to 6 key pillars in priority order. First, safety and environmental excellence, which is first and foremost. Second, sustaining growth capital maintains our asset base, derisking our assets and providing a solid base to build from as we provide high return organic growth. On exploration, it provides asymmetric potential returns and is critical in the long-term strategy of any mining company. As we think about deleveraging and strengthening of our balance sheet, this provides financial resilience and flexibility and ensures the ability to invest when opportunities arise. If we think about strategic investments, whether internal or external, will be guided by our predetermined return on investment criteria. And finally, as we think about shareholder returns, we'll look to return additional capital to shareholders when appropriate with a focus on maintaining strict return on investment criteria. This framework ensures disciplined decision-making aligned with long-term value creation. I'll now turn the call to Carlos.

Carlos Aguiar, COO

Thank you, Russell. Turning to Slide 12. Before we move to asset-by-asset operational results, I want to start with what matters most. Operational excellence begins with safety. Our 2025 total recordable injury frequency rate was 1.69, which is a 13% reduction year-over-year. So this single year improvement reflects a multiyear effort of systematically driving down our TRIFR through dedicated focus on keeping our employees and contractors safe. This is not luck. It's culture, systems and commitment, and it matters because safe mines are productive mines. In 2024, we reaffirmed our commitment to safety values to a company-wide safety day and the rollout of Safety 365: Work safe. Home safe. In 2025, we focused intensively on the specific drivers of incidents. And in 2026, we are implementing a formal Fatality Prevention Program alongside continued improvement of all safety systems. Moving to Slide 13. Let me walk through our 3 operating silver mines, starting with Greens Creek, our flagship world-class, low-cost silver mine in Alaska that has been in production for over 35 years and is expected to continue delivering exceptional economics for many years to come. In Q4, Greens Creek produced 2 million ounces of silver with AISC of under $3 per ounce after by-product credits, generating $102 million in operating cash flow and nearly $80 million in free cash flow. For the full year 2025, Greens Creek delivered 8.7 million ounces of silver at the top end of guidance, with AISC of under negative $2 per ounce after by-product credits. For 2026, we are projecting 7.5 million to 8.1 million ounces of silver and 51,000 to 55,000 ounces of gold with AISC guided to nearly 0 after by-product credits. This is a testament to the extraordinary economics of this asset. What's remarkable about Greens Creek is the longevity of the resource base. We had a 12-year reserve mine plan, but through ongoing exploration success, we see a pathway of sustained reserve replacement well beyond that time frame. That's why we are investing today in our tailings facility, building out capacity through 2045. When this mine started 35 years ago, it had a 10-year mine life. Today, we have 12 years of reserves ahead plus significant reserves we are actively working to convert to reserves. Greens Creek is a mine in a Tier 1 jurisdiction with world-class economics. It is the cornerstone of our portfolio. Turning to Slide 14. Lucky Friday is our primary silver mine in Idaho, a deep underground operation with a 15-year reserve mine plan, producing consistently high-grade silver ore. I'm extremely excited about this mine. I spent 10 years working in that place. In Q4, Lucky Friday produced 1.3 million ounces of silver with AISC under $26 per ounce after by-product credits, generating $57 million in operating cash flow and over $33 million in free cash flow. For the full year 2025, the mine delivered record production of 5.3 million ounces of silver, exceeding the top end of guidance with AISC of under $22 per ounce after by-product credits. For 2026, we are guiding to 4.7 million to 5.2 million ounces of silver production with AISC of $23.50 to $26 per ounce after by-product credits. The expected year-over-year increase in AISC reflects higher profit-sharing payments to our workforce. This is a good thing. These payments are tied directly to profitability, which we expect to remain strong given the current metal prices. A key near-term project at Lucky Friday is our surface cooling project, which is 79% complete and on track for completion by mid-2026, which will significantly improve underground health and safety. Turning to Slide 15. Keno Hill's transformation story. Hecla acquired Keno Hill in 2022. And last year, the mine achieved its first full year of profitability and positive free cash flow generation. This is a significant milestone. In Q4, Keno Hill produced 597,000 ounces of silver, generating $33 million in operating cash flow and over $17 million in free cash flow. For the full year 2025, we exceeded 3 million ounces, a new production record and above the top end of guidance. For 2026, we are guiding to 2.9 million to 3.2 million ounces of silver production with capital investment of $61 million to $66 million as we continue to advance towards steady-state operations. What's exceptional about Keno Hill is its current profitability while still on the path to its nameplate capacity. As we reach the planned throughput rate of 440 tons per day, we are modeling robust positive free cash flow generation potential across a wide range of silver prices, as you can see in the bar chart on this slide. Keno Hill represents the optionality and upside within our portfolio. I will now hand it over to Kurt to discuss exploration.

Kurt Allen, Vice President, Exploration

Thanks, Carlos. Moving to Slide 17. Our exploration strategy is straightforward: discover and develop the next generation of production from within our existing portfolio of high-quality projects. Moving to Slide 18. Our primary growth engine is the Nevada platform. At Midas, recent drilling returned outstanding results, including 6.1 feet at 0.46 ounces per ton gold and 0.93 ounces per ton silver at Sinter offset and 2.2 feet at 0.95 ounces per ton gold and 0.6 ounces per ton silver at Pogo. These confirm high-grade mineralization and support a potential near-term production restart with existing mill infrastructure on-site. Aurora achieved a major milestone, receiving our FONSI from the U.S. Forest Service, clearing a path for 2026 exploration at this historic high-grade gold-silver producer. Regarding mine life extension, Greens Creek definition drilling delivered. We added 3.7 million silver ounces through model updates, replaced 9.5 million ounces depleted through mining and grew the reserves by 2.4 million ounces net. With a 12-year reserve life and 88.7 million silver ounces in measured and indicated resources, Greens Creek continues to demonstrate longevity potential. Lucky Friday nearly replaced reserves, reducing only 200,000 silver ounces during a record 5.3 million silver ounce production year and with 40.5 million ounces of measured and indicated resources beyond reserves providing a clear runway for continued reserve replacement. Now we're investing $45 million to $55 million in 2026 exploration, heavily weighted towards Nevada and near-mine opportunities. This directly supports achieving greater than 100% reserve replacement and building the pipeline to drive us toward 20 million ounces annually. We're discovering high-grade mineralization on lands we control, in jurisdictions we understand, with infrastructure often already in place, organic growth with superior economics. I'll now turn the call back to Rob.

Robert Krcmarov, CEO

Thank you, Kurt. Let me now address our medium-term outlook because it shows some of the depth of optionality that's within our portfolio. Our 2026 silver production outlook calls for 15.1 million to 16.5 million ounces. But as we've shown recently at our Investor Day, we've got a credible pathway to 20 million ounces over the medium term. We've got multiple projects that could drive us towards that 20 million ounce target. So first, continued ramp-up of Keno Hill to the permitted capacity of 440 tons per day that could drive meaningful production growth from current levels. Second, the potential Midas production restart that Kurt just spoke about. Midas is an exceptional gold and silver project in Nevada that Hecla operated historically. As Kurt pointed out, we have the mill infrastructure in place. And we're currently advancing exploration at Midas with exceptional drill results that we just spoke about. And that supports greater exploration investment in the project this year. A development decision on Midas could add meaningful gold and silver production over the medium to longer term at low capital intensity, representing a potential significant value-surfacing opportunity. But the upside doesn't end there. Touching on just a couple of our other projects, we see potential to optimize Lucky Friday even further from the current record production levels it's been achieving. At Greens Creek, we've identified the potential for reprocessing of historic dry stack tailings to extract value from the significant metals contained within. These are projects within our control, within our existing portfolio, projects that offer the potential for significant value creation that we don't need to execute expensive M&A to own. That's why we believe 20 million ounces of silver production over the medium term is achievable with further upside potential over the long term. So what we've presented today is a company in transformation, a company that's moved from financially leveraged and free cash flow constrained into one with a robust balance sheet, strong cash generation, and the financial flexibility to invest in our project pipeline to surface value for shareholders over the long term. We're executing operationally at the highest level across our entire portfolio. We're maintaining strict capital allocation discipline across all 6 pillars of our framework. We're strategically focused on becoming the premier North American silver producer, and we have multiple near-term and medium-term growth projects within our existing asset base. 2025 was a year of multiple records. 2026 and beyond present exceptional opportunities. We're executing our strategy with precision, and we're confident in delivering sustainable shareholder value. Thank you. And with that, I'll turn it over to questions.

Operator, Operator

Your first question comes from the line of Heiko Ihle of H.C. Wainwright.

Heiko Ihle, Analyst

Can you share any unexpected findings from the exploration at Keno Hill this year, whether they are better or worse than your internal plans? Additionally, how have the ongoing costs of exploration per meter been this year, and what are your projections for the rest of the year?

Kurt Allen, Vice President, Exploration

Yes. In our exploration for 2025, we've identified what we believe to be a new high-grade ore shoot at deep Birmingham, which is open for expansion. This will be a key focus for us this year, along with drilling in the surrounding areas of Birmingham and the Flame & Moth. Our budget for Keno Hill this year is $13 million, and the direct drilling costs are estimated to be around $180 to $190 per meter, although I will confirm that number later. The exploration potential there is quite impressive.

Heiko Ihle, Analyst

Fair. And then just one quick clarification before I go back in the queue. On Casa, and I went through the press release that you guys issued earlier today again. Just to be clear, you're getting all cash flows from Casa through the closing date, correct? There won't be any backdating or anything. I mean, with gold above $5,000 again as of today, obviously, there's real money to be made every single hour.

Russell Lawlar, CFO

Yes. Heiko, that's right. We'll get cash flows through closing. And then obviously, then the structure of the deal will bring further cash flows.

Operator, Operator

Your next question comes from the line of Cosmos Chiu of CIBC.

Cosmos Chiu, Analyst

Maybe my first question is about accounting regarding Casa Berardi. I'm wondering about the accounting treatment and its impact. I noticed that your gold cost guidance for Q1 is actually higher now, and that's based on just a quarter's worth of Casa. Does that affect your earnings? How does that influence your earnings overall? Also, will you be looking to record some type of gain from the transaction? I can't recall the book value. Finally, what is the timing for some of these accounting transactions?

Russell Lawlar, CFO

Yes. Regarding Cosmos, we have a few points to cover. First, we've estimated guidance through the first quarter and expect to close the deal in that timeframe. Consequently, we anticipated a full quarter's worth of production costs. However, in January, there was severe weather in the Abitibi region of Eastern Canada, which impacted production and led to lower output than expected. Since we are only considering one quarter, we couldn't recover that production in time, resulting in higher per-ounce costs. As for the transaction itself, the recorded details will be reflected in our financials upon closing. In Q1, we expect that Casa Berardi will be designated as held for sale, impacting the core sections of our financial statements. Nevertheless, the operations of Casa will still be reflected in our net income until the deal closes, although it will be shown separately. Regarding the valuation of the transaction, a portion will be deferred and contingent, requiring a fair value assessment to record the estimated fair value. We'll then compare that to the carrying value. I anticipate we may see some losses from this transaction rather than gains because the carrying value is likely to remain higher. We're currently assessing this, so I won't speculate on the exact figures. Please let me know if I've addressed all your questions, as I may have overlooked one.

Cosmos Chiu, Analyst

If it closes in Q1, it will be regarded as a Q1 accounting transaction, and I'm sure you'll provide some guidance before that.

Russell Lawlar, CFO

Yes, that's right. And obviously, we guided production and costs such that you all have the information needed to kind of see what the ongoing cash flows and that type of thing you'd expect to see from Casa.

Cosmos Chiu, Analyst

Great. And then maybe my second question is on strategy. And Rob, it's good to hear that you're going to be silver focused, looking to be the premier silver company and looking to redeploy some of those proceeds coming from Casa into growing your silver sort of portfolio. But again, I guess my question is, if I look at your exploration budget, a big chunk of it is heading to Nevada, which is more gold-rich. You do have some longer-term exploration assets, including in the Silver Valley, also San Juan Silver, but that's, again, longer dated. So I guess my question is, if you can walk us through your thinking behind how you can continue to grow your silver production, your silver focus? And do you need to look externally, and I think you answered that question, but I'll ask you anyways, do you need to look externally to really unlock the full silver potential of Hecla?

Robert Krcmarov, CEO

Thank you for the question, Cosmos. It's clear to me that we need to keep expanding our silver portfolio. While we've been focused on selling some assets and possibly leasing out more, we also need to bring in new projects. I've assigned Kurt to create a project generation and new business group, similar to what I had at my previous company. Their goal is to get us into new silver districts early, keep an eye on competitor intelligence, especially in the junior sector, where we might identify new discoveries and seek partnerships. As for mergers and acquisitions, we will continue to explore that option, though there is a limited supply of silver-producing assets. I've previously shared our criteria for this at our Investor Day. I'm very aware of the need to refresh our pipeline, and Kurt has recently brought someone on board who has substantial experience.

Kurt Allen, Vice President, Exploration

Yes, yes. We've got a recruit in. He's quite experienced. So it will be good with the program going forward. Yes.

Cosmos Chiu, Analyst

Great, Kurt, you've got quite a task.

Operator, Operator

Your next question comes from the line of Alex Terentiew of National Bank.

Alexander Terentiew, Analyst

I have a couple of questions. First, regarding the Lucky Friday project. The cooling surface project should be completed around midyear. I'm curious about the long-term implications of this completion and any potential cost reductions. Rob, you mentioned optimizing Lucky Friday as a possible avenue for future growth. How does this project fit into the mine's long-term potential?

Robert Krcmarov, CEO

Yes. Thanks for the question, Alex. So the surface cooling project should be done by about midyear. It's primarily driven for, I guess, health and safety reasons or the well-being of our workers. We're obviously deep at Lucky Friday. It's a hot mine. And so as we go into successively deeper veins, bearing in mind that we have a long mine life here, we still have many levels to develop ahead of us, so this is really setting the foundation for the future. But the other thing I'd ask you to consider is that, obviously, when workers are comfortable, they're generally more productive. And so that could have an impact. The other thing I spoke about on our Investor Day is that even though we broke successive records in throughput at Lucky Friday, our GM there, Chris Neville, he still believes that he might be able to wring some more out of that. Anything you want to add, Carlos, on that?

Carlos Aguiar, COO

Yes. And it's part of the optimization plan, right? We have different steps where we have continuous improvement and the hoisting capacity and securing the areas in the deep underground, this is the cooling system. So we say it in New York, right, the best decade of Lucky Friday is still ahead of us because we have plenty of opportunities going up an order proportion of production.

Alexander Terentiew, Analyst

Yes, that makes sense. I have another question regarding Midas. The developments in Nevada are quite promising. You have solid infrastructure in place and some high-grade intercepts. I understand this is a longer-term strategy. Could you clarify what we can expect in the next 1 to 2 years regarding your plans to advance this project?

Robert Krcmarov, CEO

So a lot of it hinges on building up a critical mass of high-grade resources to get it back into construction. Again, just to recap, we've got the mill, we've got the tailings dam. We have some new discoveries. Out where one of the new discoveries is there's a resource that was discovered roughly 4 years ago, I guess, it's somewhere around 180,000 to 200,000 ounces at well above the historic Midas production grade. So that's the head start that we have. Now 4 years ago, when that was discovered, the drilling came up against the fault. Across the other side of the fault, there was no mineralization. And so the groundwork that was laid over the last couple of years has basically identified where the offset has gone. And now we've picked up the scent again and starting to drill mineralization. And I guess the starting resource, we're not talking about 1 million ounces to get this thing going. We're talking about 300,000 to 400,000 ounces. So we're already a significant portion of the way there. And really, the focus on this year is going to be on exploration. At the same time, we'll do some studies. Matt, maybe you can talk about that.

Matt Blattman, Vice President, Technical Services

Yes, the discoveries are in an area with little to no historic mining. We need to gather data on geotechnical factors, metallurgical performance, and hydrogeology, as water is crucial in mining. To expedite this process, we will collect data and conduct studies alongside our exploration efforts. Once we have a resource model, we can proceed with more technical feasibility work.

Robert Krcmarov, CEO

And at some point, we'll appoint a dedicated project manager to that. We're planning on success.

John Tumazos, Analyst

Could you refresh us on the capacity tons per day of the Midas mill, what you think the initial throughput would be, whether you can fill it up and whether the grades would compare to back in the heyday, something like 10 grams gold, 10 ounces of silver per ton?

Robert Krcmarov, CEO

I believe the Midas mill has a permitted capacity of 1,200 tons per day.

Matt Blattman, Vice President, Technical Services

That's right. The permit is 450,000 tons a year, which works out to about 1,200 tons a day.

Robert Krcmarov, CEO

Yes. And sorry, what was the second part of your question, John?

John Tumazos, Analyst

How many tons per day do you think you're going to put through it? And what might the grades be? In the old days, it was something like 10 grams gold, 10 ounces of silver.

Robert Krcmarov, CEO

I think it's too early to say, John. I mean, we're in the early discovery stages. We need to pin down a more robust resource. The historic grades, you're right, it was 0.4 ounces per ton, so roughly 12, 13 grams per ton and significant silver as well, actually.

Operator, Operator

There are no further questions at this time. And with that, I will now turn the call over to Rob Krcmarov, CEO, for closing remarks. Please go ahead.

Robert Krcmarov, CEO

Well, thank you all for your thoughtful questions and your continued interest and support of Hecla. 2025 was a genuine year of transformation financially, operationally and strategically. And so we enter this year with a stronger balance sheet, a sharper focus and what we believe is the most compelling silver portfolio in North America. We've got a lot of work ahead of us. We know that, and we're looking forward to it, and we'll talk again at Q1. So thank you, everyone. Have a great day.

Operator, Operator

Ladies and gentlemen, this concludes today's call. We thank you for participating. You may now disconnect your lines.