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“Our success in 2016 was a result of decisions taken over the past several years to invest in our business. We generated organic growth at a time when most of our peers were cutting their business and selling assets. Our outperformance speaks to the success of our strategy.”
In February, the Society for Mining, Metallurgy & Exploration presented Mr. Baker with the 2016 William Lawrence Saunders Gold Medal for his “significant contributions to the mining industry” and Clayr Alexander, General Manager of Lucky Friday, with the M&E Division Miner of the Year Award for his “leadership in underground mining.” In September, Mr. Baker will assume the role of Chairman of the Board of the National Mining Association.
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Phillips S. Baker, Jr.
President and Chief Executive Officer
DEAR FELLOW SHAREHOLDER,
We began 2016 with a celebration of Hecla’s 125 years in business, a milestone that is particularly significant for a mining company. We ended the year strongly with the most silver production and the highest revenue in our company’s history. The 17.2 million ounces of silver and the 46 million silver equivalent ounces we produced marked our third consecutive year of record-breaking production. Both the share price and operating cash flow were up by triple digits – 177% and 112%, respectively – significantly outperforming the majority of our peers.
In addition, cost of sales, cash costs, after by-product credits, and debt metrics improved while liquidity, net income, and adjusted EBITDA increased.
These extraordinary achievements are a direct result of our strategy of investing in our mines. Through the recent down cycle, we continued to build our production capacity with the successful startup of San Sebastian, the development of the open pit at Casa Berardi, and the construction of the #4 Shaft at the Lucky Friday – which is now operational. The performance of these investments, plus the ongoing strong performance of Greens Creek, enabled Hecla to generate substantial cash flows this year. And we expect to continue to do so
well into the future.
A STRATEGY THAT WORKS
At the heart of our strategy is long-lived, low-cost mines. Our focus has been on acquiring assets with the ability to be long-lived, then