Ladies and gentlemen, thank you for standing by and welcome to the Q1 2020 Hecla Mining Company Earnings Conference Call. At this time all participants are in listen-only mode. [Operator Instructions]. I would now like to hand the conference over to your speaker today, Mike Westerlund, Vice President of Investors Relations. Thank you. Please go ahead, sir.

Thank you, operator. Good morning, everyone and thank you for joining us for Hecla’s first quarter 2020 financial and operations results conference call. Our financial results news release that was issued this morning before the market opened, along with today’s presentation are available on Hecla’s website. On today’s call, we have Phil Baker, President and CEO; Lindsay Hall, Senior Vice President and Chief Financial Officer; Lauren Roberts, Senior Vice President and Chief Operating Officer; Kurt Allen, Director of Exploration; and Keith Blair, Chief Geologist. Any forward-looking statements made today by the management team come under the Private Securities Litigation Reform Act and involve risks as shown on Slides 2 and 3 in the presentation in our earnings release in the 10-Q and 10-K. Reconciliations of non-GAAP measures and cautions for terms like resources are also found in these documents. With that, I will pass the call to Phil Baker.

Thanks Mike. Good morning, everyone. And thanks for joining our call. I’m going to start on Slide 4. I know many calls that you’ve been on with managements have had their participants calling from home. This call is different. While Lindsay is calling from home, the rest of us are in the office and have been, that’s because our office has never closed. Idaho from beginning said mining is an essential business that needed to continue to operate and we know we can people safe if they follow our hygiene and social distancing requirements which our people have done. We’re sitting here in the office with six feet of distance between us. Our mines are also in operation. We currently have four of our five mines operating representing 95% of our production. On Sunday, it will be two months that we’ve had our pandemic plans activated and we’ve not had a case of COVID-19 among our workforce. Greens Creek has for over a month not allowed any one and I mean any one on the Island mine that has not been quarantined for two weeks at our separate quarantine facilities. At the other mines, we’ve taken appropriate measures that protect the workforce and the community. Our financial position was significantly improved in the first quarter with the refinancing of the bonds to 2028 and an extension, and expansion of the revolver to 2023 and the $210 million draw down. In addition, we bought gold and silver insurance puts that assures of a minimum price with no limit on the upside and forward contracts on our lead and zinc production. So the point of all that is, is that we’re in a good shape and how did we get here? On January 31, alarm bells went off for Hecla, President Trump…

Thanks Phil and good morning, everyone. I’m on Slide 7. We have what I call a good busy quarter following on our successful second half of 2019. We ended the year with some $62 million in cash and in early February we used $40 million of that cash to replace our $506 million of bonds due next year with the new eight-year bond maturing in 2028 and the amount of $475 million. In conjunction with issuing the new bonds our revolving line of credit of $250 million was refreshed for a new full three-year period and as well we’ve received upgrades from both rating agencies. Our bonds don’t mature for eight years which in the current climate the world finds itself in is reassuring to us. As the leading silver producer in the US with a diverse asset and commodity mix, we also have been able to benefit from the substantial increases in price. This along [ph] gold price with gold making up 60% of our total revenues for the quarter. this along with the ability to produce silver and gold at cash cost which are substantially lower than the realized metal prices, positions the company to weather any volatility in current economic climate may present. Turning to Slide 8, while operationally the mines performed as planned for the quarter. There were a number of financial impacts that are normal part of the business that contributed negatively to the reported earnings and cash flows. On Slide 8, you can see that compared to our 2019 first quarter at Greens Creek. By-product revenues were lower due primarily to lower zinc pricing of $9 million and an increase in treatment charges of $8 million, as the market benchmarks from which most of our TC/RCs are based increased significantly from the previous year’s…

Thank you, Lindsay. I want to spend a few minutes on each asset to give an update on how we’re faring during the pandemic and to update various projects we have underway. First and most gratifying is that our safety record continues to improve as you can see on Slide 11. We currently have an all injury frequency rate of 1.14 which shows a 75% decline over the past six years, a remarkable accomplishment. At Greens Creek, we’ve gotten 380 days without a reportable injury which is a record for the mine in its 30 years of operations. Early in our response to the COVID-19 threat we started a 14-day quarantine for everyone coming onto Admiralty Island. Everyone goes through this quarantine and one of the two hotels we’re renting. Then they go onto the Island for 28 days of work, then return for 14 days with their family. We believe this significantly reduces the risk of the virus directly impacting our operations. Of course there are costs associated with this procedure, but they pale in comparison to the potential consequences otherwise. Morale remains good. And the site has really come together as a team in the face of this challenge. We’re taking advantage of this time to redouble our safety efforts, clean up the site and review how we can capture the good aspects we’re seeing for the future. At Casa, the pandemic has impacted operations due to the government shutdown and then subsequent ramp up as we return to full production. It has cut 16,000 ounces of gold production from this year’s estimate and the higher cost we estimate relate to the lower production. We missed the last gold pour in March which didn’t allow us to convert our work in process inventory into cash flow, as expected.…

Thanks Lauren and so we’re now on Slide 17. For the last 13 years we’ve had a charitable foundation that it’s contributed over $3 million to the communities, we operate in. we have now committed a new very targeting contribution of $125,000 to Juno [ph] with most of that going so far to food banks. And we’ve done something similar in other locations. We’re the largest private employer in Juno [ph] and the Silver Valley and then Lasar [ph]. So we have lots of support but also lots of responsibility. So we’re taking that seriously to support the community. One more note before I take questions. Our Annual Meeting is on May 21 and it’s going to be a virtual meeting this year to ensure everyone stays safe and we’ll have a presentation. I think you’ll find interesting and then we’ll also have a chance for you to have call in with the teams of managers one-on-one after the meeting ends. So watch out for our press release with the details on that in the next few days. So with that, I’ll open things up operator to questions.

[Operator Instructions] your first question comes from the line of Jacob Sekelsky with Roth Capital Partners.

It looks like you’re backing down capital spend by both 25% for the year. Can you just give us a bit more on where you see this reductions coming from?

Sure, it’s pretty straightforward its primarily Greens Creek and Casa Berardi that will see these reductions. Lauren, do you want to give him any further indication?

Yes, it’s thing that are not impactful over the long run. We might rebuild some more equipment rather than replace units. It’s things of that nature, nothing major. We don’t have any big capital projects underway. So it’s nibbling around the edges in order to sustain our cost guidance.

Okay, that’s helpful. And then just in Nevada, you talked a bit about a gold sampling [ph] program that you have going on. Should we expect to see interim updates on that over the next few quarters or the second half or is this more for internal data collection going into next year?

I think as we formulate our plans and move that forward, we’ll have more information probably at the end of second quarter. We’ll have an update at the end of the third quarter. We’ll have an update. I would anticipate that if we move forward with things will have some major news on what we’re doing early in the New Year, that’s really what we’re trying to set things up for is to be able to make an economic study of how we move forward on the inferred resources that we have there. As we said, when we started this when we made the pause, we said we’re not going to move Nevada forward quickly until we have a clear plan that we’re confident. It can work. Lauren, anything to add?

Phil covered it very well, I think. We will start the mining and that’s really what we’ll be able to report on in the earlier days. Obviously, the Nevada gold mines plants are large plants and they’ll process our ore in a lot. So it will take us sometime to accumulate enough to be processed so I wouldn’t expect to see processing results until later in the year.

Lauren, would you talk a little bit about why Nevada gold would want to do this?

Sure. So Nevada gold does have a business of supporting other companies in the State of Nevada where they will process ore for independence [ph]. But they were quite selective about it. And they’re specifically looking for a couple of aspects. One, they want good grades and two, they want high sulfur content and we have both of those things. The sulfur content is utilized in their process to displace fuel costs. So it is then advantageous to them both in terms of the fact that they make the profit on the processing. But also it displaces fuel costs.

Okay, that makes sense. So potentially by Q4 we could see initial preliminary results out of the gold mine program.

At least, portion of it. We’ll have the mining cost side of it. We probably won’t have the results from the processing until early in 2021.

Okay, that’s fair. It’s good to see you. Looking forward to that. [Indiscernible]. Appreciated.

[Operator Instructions] your next question comes from the line of Heiko Ihle with H.C. Wainwright.

Guys, can you hear me all right?

Yes, we can Heiko.

Perfect. Thank you. Sorry I just got kicked out of the call, had to dial back in, so Tyler beat me to it, my apologies. But with Casa Berardi, can you just maybe walk us through the steps that you undertook to restart operations there? How long did everything take? How does it compare to your estimates? Current bottlenecks? And your assumptions on how long it will take to get it resolved?

Sure, Heiko. I’ll make a few comments and maybe Lauren you can run through. The first thing I would tell you Heiko, is that we were very aware of areas within Quebec that have had the virus and so looked at the workforce and we wanted to make sure that people that were coming back were - had not been exposed to the virus that we spent some time evaluating that and sort of prioritizing bringing people back. We also made the decision to bring back fewer people initially and sort of ramp them up in order to make sure that we had the social distancing within the facilities and we changed how we - when people would arrive and that sort of thing. And then final thing, I’ll say is that, we have a contractor that we have not yet brought back. We’ll bring him back I think the middle of May - so we won’t see full production until later in May, maybe early June. Go ahead, Lauren.

Good morning, Heiko. So we’ve been back to add the ramp up here for a little over a week roughly and so far, it’s going according to plan. As I mentioned, we’re running at about 80% to 85% of our normal Hecla staffing level, included in that number are salaried staff that still are working from home in some cases or working from our Val-d’Or office. But in terms of the operating personnel at the mine site. We’re hitting our marks. We’re pretty on our ramp up schedule. I would say that looking at the last several days or run rate through the middle. We’ve been hitting our tonnage. But it’s going to be a little bit bumpy as we rotate through crews. Some crews have more people coming back than others and it will take full rotation to get a back up to our full complement of people. And that’s assuming that the government continues to relax restrictions in the manner in which they have said, they will because as Phil mentioned our workforce comes from a diverse range of communities and some of those communities can’t travel yet. But I would say so far, it’s going quite well. We’re on a good ramp up pace and we should be up full production by the end of May.

And we’ve also divided the management team into two groups.

Right, so we’ve kept the management teams segregated. So we’ve got number one and a number two in command for each major group, each major function in the mines and in terms of the staff, half of them are working at the mine and half of them are either from home or the Val-d’Or office. That protects us in the event that we have some kind of outbreak and that we keep management continuity but it’s a cautionary measure, so far, we’ve had no events whatsoever.

So the way to think about this is, we had a shutdown for about a month and we’ve got a ramp up for about six weeks.

In aggregate Heiko, estimated at six weeks production impact.

Got it. Building on that a little bit. I mean this is the first mine that we covered that’s actually been fully reopened because obviously Mexico is lagging. I’m just trying to get a grasp on how the process is going [indiscernible]. And frankly maybe I’m very jaded living in New York. I mean do you have any issues in getting sanitizers, gloves, sanitation equipment. I mean all the stuff that you need because I mean around here it’s impossible to procure any of that.

Right. Well I think it’s a demand situation, Heiko. And very early in the process as Phil mentioned we took a look at our supply chain and our inventory. One of the things we looked out was our access to PPE and sanitizer. And although we were pretty well stocked in most places. We did beef up orders very quickly and we have transferred things around internal from the company because some places have a bit more in one supply than another. And we’ve been able to meet the demand and the supply chain has caught up for us. So we’re not anticipating any issue there.

So Heiko, I have my own personal supply, if you need something let me know and I’ll send it to you.

FedEx’s still work here.

You’re an absolute gentleman and I appreciate that. Thank you. And then just last one before I get back in queue. Can you just venture a guess on your G&A savings during Q2 given the essential to stoppage of travel, conference attendance, etc.? And then just extrapolating how meaningful the number is that and how sustainable do you think it is? And also just, do you have the costs for the hotels in Juno [ph] and the quarantine, is there a number that you can give us or at least an estimate sorts? Thank you, guys, so much.

Sure. So with respect to G&A, no we’re not able to quantify yet, we’re still working through that. We do think this provides us with some opportunity to reduce travel cost permanently. And we also are leasing our office space, comes up in two years. And we were already looking at how we might reconfigure our offices in the future and so, we’ll certainly consider that. But the impact to that will be a couple of years out. With respect to the quarantine facilities. We have two hotels that we have leased it, total hotels we have all of it and of course in Juno [ph]. The tourist industry is really hurting so it’s very well received in the community and our cost of this quarantine activity, order of magnitude is three quarters of a million dollars a month or so and that’s reflective in our guidance.

Very good. Thank you, guys, so much. Thanks for my taking my questions and stay safe.

Thank you. At this time I would like to turn the conference back to Mr. Phil Baker.

Okay, thanks very much. Obviously, Mike and I are available to answer questions. I hope the thing you took out of this call is, the fact we had this material that is an inventory, we have change in treatment charges some of which is temporary, some which is, is going to run the rest of the year. And we’re essentially in full production with the four of our five operations. And like we told you a year ago when we said the second half of the year will be better than the first half of the year, same story this year and you saw the sort of results that we had a year ago. So if you have questions. Please go a hold of Mike or I. thanks very much.

Ladies and gentlemen, that does conclude today’s conference call. Thank you for participating. You may now disconnect.