Hecla Mining Company (HL) Q2 2025 Earnings Report, Transcript and Summary

Thank you for standing by. My name is Liz, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Second Quarter 2025 Hecla Mining Company Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Mike Parkin, Vice President of Strategy and Investor Relations. Please go ahead.

Thank you, operator. Good morning, and thank you all for joining us for Hecla's Second Quarter 2025 Results Conference Call. I am Mike Parkin, Vice President, Strategy and Investor Relations. Our earnings release that was issued yesterday, along with today's presentation, are available on our website. On today's call are 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; Anvita Patil, Vice President, Finance and Treasurer; and Matt Blattman, Vice President, Technical Services. At the conclusion of our prepared remarks, we will be available to answer questions. Turning to Slide 2. Our cautionary statement slide. Any forward-looking statements made today by the management team come under the Private Securities Litigation Reform Act and involve risks as shown on the Slide 2. In our earnings release and in our 10-Q 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.

Thank you, Mike, and good morning, everyone. Turning to Slide 3. Our strategic vision remains focused on 4 key pillars grounded in ESG leadership that position Hecla for sustainable value creation. The first pillar is operational excellence. We're starting to implement semi-automation and advanced analytics across our operations. We're standardizing our systems and processes and improving mine planning to drive efficiency gains throughout the organization. Our second pillar is portfolio optimization. Our Casa Berardi strategic review has progressed well, and I'm pleased to report that we should be in a position to update the market in the coming weeks on a path forward. I also want to address the recent acquisition activity in the sector. I believe the best opportunities to add value for shareholders is through deals that focus on earlier-stage assets versus acquisitions of well-defined producing assets that are already being fully valued in the market. So while we will continue to evaluate potential opportunities as any prudent management team should, at this time, we see more compelling value surfacing opportunities within our own robust project pipeline. Our third pillar focuses on disciplined capital allocation, so prioritizing high-return projects while strengthening our balance sheet. We're structuring our framework to prioritize free cash flow generation with clear return on invested capital targets. This means that every dollar we deploy must meet analytically derived return hurdles. Our effective execution on the ATM to delever $212 million of the $475 million long-term debt while minimizing shareholder dilution is a reflection of our capital allocation strategy in meeting these goals, and Russell is going to speak more on this in a moment. Fourth, we're committed to maintaining our silver market leadership. Our high-quality operations averaging 14-plus year reserve lives, which is double the peer average, and they operate exclusively in low-risk jurisdictions. While we strive to achieve these pillars and while continuing to aim to be an ESG leader in the silver sector through environmental stewardship through strengthening First Nations partnerships and maintaining safety excellence. Turning to Slide 4. I want to walk you through the strategic recalibration at Keno Hill that really demonstrates our disciplined approach to value creation. Our focus on optimizing Keno Hill has confirmed that it is a core asset capable of delivering strong returns even at conservative metal price assumptions. The asset meets our investment hurdle rates at $25 per ounce silver and approaches self- financing capability at current metal prices. The key strategic decision was revising our production target to 440 tonnes per day, down from the original 550 to 600 tonnes per day baseline. And this isn't about scaling back, it's about optimization through improved ore quality control, overbreak reduction and cost control. This throughput level delivers superior returns while preserving our expansion optionality. We've identified mining capacity as the primary near-term production constraint, and we have high confidence in achieving our target through systematic capital deployment, including cement and tailings plant construction, waste dump upgrades, mine development programs, tailings capacity expansion and water treatment infrastructure enhancements. This measured approach gives us high confidence in achieving our target of 440 tonnes per day while maintaining the flexibility to expand when the conditions are warranted. As we turn to Slide 5, let me walk you through the compelling financial case for our 440 tonnes per day optimization at Keno Hill. The economics here are particularly strong. Looking at the table in the upper left of the slide, at $30 silver, a significant discount to current spot prices, Keno Hill will deliver a 35% IRR over its reserve mine life. This return profile is well above our investment thresholds and demonstrates the potential quality of this asset. Even under our conservative case at $25 per ounce silver, the project would generate a solid 15% IRR from January 1, 2025 forwards. The 16-year reserve life provides another strategic advantage. This longevity has the potential to capture value through multiple metal cycles. As illustrated by the red line on the chart, we expect there is the potential for particularly strong free cash flow generation in later years as the mine reaches its steady-state production of 440 tonnes per day. And of course, ongoing exploration success could extend the mine life, which could further enhance the already attractive returns. I'll now discuss the medium-term outlook for Keno Hill and some of the major projects we'll undertake to deliver the asset into nameplate capacity. Slide 6 outlines our systematic approach to ramping up Keno Hill to its optimized production level. Our production time line demonstrates a measured derisked path from current operations to 440 tonnes per day, which we anticipate achieving in 2028. The key here is that we're building Keno Hill with a long-term future in mind rather than rushing the ramp-up. And this approach allows for sustainable returns to our shareholders while ensuring the ESG excellence through our commitment to environmental stewardship and partnering with the local first nations. And from an infrastructure perspective, our tailings storage facility will operate phase under Phase 2 through 2028 when Phase 3 will seamlessly take over. This sequencing aligns with our waste storage capacity and existing permitting framework, diminishing the risk of potential bottlenecks. Now while our analysis confirms that 440 tonnes per day meets our return thresholds even at conservative silver price assumptions, we have preserved valuable optionality. The infrastructure we're building can support expansion beyond this level should future conditions warrant. Meanwhile, our exploration program continues to deliver consistently replacing depletion and growing our resource base. So what we're accomplishing at Keno Hill is systematic derisking while advancing the project towards sustainable, profitable production. And with each milestone we achieve, we're increasing our confidence in the project's potential to deliver meaningful returns to our shareholders. As with any development project, execution remains key. Turning to Slide 7. The second quarter delivered exceptional results across multiple metrics. On the financial side, we achieved record sales of $304 million, net income applicable to common shareholders of nearly $58 million and record adjusted EBITDA of $133 million, improving our net leverage ratio to 0.7x. We generated cash from operations of over $160 million and record quarterly free cash flow of $104 million. Operationally, we produced 4.5 million ounces of silver and nearly 46,000 ounces of gold. Our silver operations delivered cash costs of negative $5.46 per ounce and all-in sustaining costs of $5.19 per ounce. That's after byproduct credits. Casa Berardi's unit costs dropped by over $600 per ounce over the prior quarter, and Lucky Friday set a new quarterly milling record. On Greens Creek, strong performance year-to-date, we made positive revisions to gold production and silver cost guidance with the new guidance summarized on Slide 24 in the appendix of this presentation. I'll now hand the call over to Russell for a detailed financial review.

Thank you, Rob. Turning to Slide 9. Our capital allocation priorities center on strengthening our balance sheet, investing in our highest return opportunities across our portfolio and maximizing free cash flow generation. As we focus on these priorities, we're investing in organic growth. Notably, this was Keno Hill's first positive free cash flow quarter under our ownership. We continue focusing on deleveraging, having improved our net leverage ratio to 0.7x. And earlier this week, we initiated a partial redemption for $212 million of our senior notes. Additionally, we also repaid our investment Quebec notes totaling CAD 50 million from free cash flow in July. We're also progressing on portfolio optimization with strategic review with the strategic review of Casa Berardi and disposal of a noncore exploration property and a noncore equity position. On the right-hand side of the slide, you'll note that our producing asset base generated over $100 million in free cash flow, a new quarterly record with all 4 mines contributing to this total. Moving on to Slide 10. Silver made up 41% of our consolidated revenue with gold increasing to 42% based on the performance of Casa Berardi and Greens Creek in addition to the increase in the price of gold, while base metals made up the remaining 17%. With the increase in the silver price, we've also seen an expansion in our margins, which grew from 65% last quarter to 85% this quarter with silver AISC at $5.19 per ounce after by-product credits. I'll discuss the details more on the next slide, but in addition to the performance of our operations, we took steps during the quarter to improve our balance sheet, which resulted in our net leverage ratio improving significantly from 2.7x from 1.5x last quarter. Turning to Slide 11. Our strategic approach to raising capital demonstrates prudent financial management, in which we utilized our ATM facility to raise funds for a partial redemption of the senior notes. We chose the ATM facility to execute this capital raise to minimize shareholder dilution versus traditional equity offerings, which have had discounts of more than 10% this year, whereas we executed the ATM at a price which is approximately 10% higher than the volume-weighted average price for the quarter at a minimal cost to our shareholders. This planned debt reduction lowers our overall future interest expense by about $16 million on an annual basis. We anticipate the interest savings will be reinvested to accelerate value-creating activities, including investment in our operations, expanded exploration programs as well as strengthening the balance sheet. Our strong existing asset base provides us confidence in our ability to service the remaining debt, even apart from using the proceeds from any potential asset sales and fund growth initiatives while maintaining operational flexibility. So going forward, we will prioritize other means for debt reduction before issuing more equity. I'll now turn the call to Carlos to discuss the details of our operations.

Thank you, Russell. I will begin on Slide 13. Greens Creek continues to be our flagship asset, generating a strong free cash flow. The second quarter silver production was 2.4 million ounces, a 21% increase over the first quarter with silver grades averaging 13.54 ounces per tonne. Total cost of sales decreased 15% to just under $59 million. Our second quarter silver cash costs were negative $11.91 per ounce and all-in sustaining costs were negative $8.19 per ounce, both after byproduct credits. Better-than-expected gold production and higher gold prices drove Greens strong cost performance over the prior quarter. The operation generated over $75 million in operating cash flow and $69 million in free cash flow. For Greens Creek, we maintained our silver production guidance, increased gold production guidance and reduced cost guidance because we expect higher byproduct credits from gold. The table on Slide 13 summarize the guidance for the mine. Turning to Slide 14. Lucky Friday achieved a new quarterly milling record of over 114,000 tons, beating the first quarter record by 5%. We maintained consistent silver production of 1.3 million ounces with grades of 12.5 ounce per tonne. Total cost of sales decreased 4% to $42.3 million with cash cost of $6.19 per ounce and all-in sustaining cost of $19.07 per ounce. The operation generated $20.7 million in operating cash flow and nearly $5 million in free cash flow. We expect the third quarter to be our softer production quarter of the year due to planned capital project that will impact [ hoist availability ], which was anticipated in our February guidance. Lucky Friday guidance remains with no change. Turning to Slide 15. Keno Hill's second quarter silver production reached just over 750,000 ounces at a milling rate of just under 300 tonnes per day as we continue ramping to higher tonnage rates. Importantly, we delivered $2.7 million in free cash flow in the second quarter, our first positive free cash flow quarter under Hecla ownership. The operation remains in pre-commercial production as the ramp-up continues and capital projects are executed. The cemented tailings plant construction work is progressing well, and we expect completion at the year-end. On Slide 16, Casa Berardi showed significant cost improvements over the prior quarter with both cash costs and all-in sustaining costs decreasing by more than $600 per ounce. Second quarter gold production increased 37% to just over 28,000 ounces, driven by planned increases in both underground and surface ore grades. We expect the stripping ratio of the 160 pit to decline in the fourth quarter with our surface mining contractor completing the mobilization. This will drive further cost reduction while maintaining full mill capacity. Cash costs in the second quarter improved to $1,578 per ounce and all-in sustaining cost to $1,669 per ounce. We expect to provide an update on our strategic review process in the coming weeks. I will now pass the call to Kurt.

Thanks, Carlos. Turning to Slide 17. I will give an update on the activities going on in Nevada. Historically, Midas produced 2.2 million ounces of gold and 27 million ounces of silver at exceptional grades. With a fully permitted mill, ample tailings capacity and 30,000 acres fairly explored, Midas offers potentially transformative upside. The 2020-2021 Sinter Discovery containing 169,000 ounces of gold and inferred resources hints at a larger untapped system. Active drilling is delivering results. 7 of 12 planned holes are completed and have yielded 2 new gold-bearing structures with visible gold. This is not from infill drilling or incremental extensions, but from areas located over 2 miles from the existing underground development and dense drilling, and that really is what makes this particularly exciting. These potentially emerging discoveries, combined with widespread mineralization indicators throughout the area, support potential for a significant new deposit. A recent draft engineering assessment confirms the mill remains in good condition, requiring only modest capital to restart. Hollister was historically ranked as North America's third highest grade underground gold mine, producing 0.5 million ounces of gold equivalent. Located within trucking distance of Midas' processing facilities, the large property shows extensive surface alteration and mineralization. The Hatter Graben resource anchors multiple high-grade expansion targets with additional potential at [ Santorini ]. Both assets feature proven high-grade production history, existing infrastructure eliminating major capital needs and vast unexplored potential. With that, I'll turn it back to Rob.

Thanks, Kurt. Turning to Slide 18. Our 2025 strategy focuses on 4 key themes. First, we're focused on creating long-term value at Keno Hill by prioritizing permitting and project execution. Second, we'll continue deleveraging through strong free cash flow generation. Third, we're establishing a capital allocation framework to ensure smart organic investment. And fourth, we're rationalizing our portfolio with the Casa Berardi strategic review expected to conclude in the coming weeks. I now want to address why I feel Hecla Mining makes for a compelling investment opportunity. So please turn to Slide 19. Hecla's competitive advantage is evident in our industry-leading reserve mine life. Our average reserve mine life of 14 years is double the silver -- the silver industry peer average of just 7 years. This provides exceptional stability and long-term value creation potential and allows for us to invest in these operations under the belief that we have more than a decade to earn a return on those investments. But not only do our mines have world-class mine life, they're also positioned in the U.S. and Canada, which gives us the best jurisdictional risk ranking of any of our peers. Moving on to Slide 20. We see another reason to own Hecla shares and what makes our portfolio unique. Hecla offers investors substantial silver revenue exposure with about 45% of our 9-month 2024 revenue coming from silver, amongst the highest in our peer group. And this calculation includes recent peer transactions on a pro forma basis. Our silver exposure has remained strong with second quarter results showing 41% of revenues from silver sales. Our asset portfolio is heavily focused on silver with both revenues and resources concentrated in this precious metal. And finally, on Slide 21, we compare Hecla to our immediate peer group on core valuation metrics. We believe Hecla represents the best value investment in the mid-cap silver space. We trade at approximately $1.60 per silver equivalent ounce of total resources, the lowest amongst mid-cap peers and at 1.3x NAV, which puts us at the low end of the peer range. The bubble sizes on this chart are equally important. They reflect jurisdictional quality with larger bubbles indicating safer jurisdictions. And as you can see, Hecla's focus on safe jurisdictions is demonstrated by our bubble size relative to our peers. This undervaluation represents significant asset reevaluation upside as we shift capital towards high-return projects designed to unlock the true value of our mineral reserves and resources. And I'm confident that over time and through continued execution, our true value will be better reflected in our share price. With that, operator, I'd like to open the call to questions.

[Operator Instructions] Your first question comes from the line of Wayne Lam with TD Securities.

Maybe at Greens Creek, congrats on a good quarter there operationally. Just wondering what was driving the higher grades and the outperformance there in the quarter. Was that a function of positive reconciliation? Or were those higher grades anticipated as part of the mine plan? And then just wondering maybe if there's potential for that to kind of continue here? Or should we expect a bit of a reversion in the back half of the year?

So we are expecting to continue with similar grades for the remainder of the year. And the main reason about -- it was a good execution. We had additional areas available to -- with better grades and that was the main reason for.

Okay. Got it. And then maybe at Keno Hill, it seems like there's been quite a change in commentary quarter-over-quarter, maybe helped by the continued strength in metals prices. I guess last quarter, the commentary seemed to indicate that the 440 tonnes wasn't sustainable given the confines of the current permit constraints. So just wondering what's changed there that would enable you to reach that target? Are you getting -- are you anticipating more ore from Birmingham or Flame & Moth? Or just wondering what's driving the change in thinking here?

Well, we started the year with -- thanks for your question. We started the year with just Birmingham. We've expanded the Flame and Moth so we have a little bit more operational flexibility. We're also now focused on reducing overbreak, controlling dilution, ore control, all those sorts of things. Anything you want to add, Carlos, on that?

And it's just the proper balance between capital execution, permitting and space for growth. So we are trying to balance all the components, and that's it.

Okay. But you have enough capacity on the back end to get to the 440 tonnes given the current permit constraints?

We won't be getting there this year. That will still take some time, but we do expect to see an increase next year.

Okay. Okay. And then maybe just one last question for me. Maybe on the debt. Just wondering in the context of record prices and a number of your peers being able to delever organically and buy back some stock. Did you guys feel as though the portfolio is not positioned to where the current operations would be able to service that debt? And then maybe just wondering if viewed in conjunction with the elimination of the Silver-Linked Dividend, has the capital allocation strategy changed here? Or just wondering why you felt the need to retire a large amount of the notes with quite a bit of term left on the debt?

Yes. Thanks, Wayne. The idea behind that was both the Silver-Linked Dividend and the interest that leaves the company to service the debt, those funds would be better served by our investors to be invested in our operations and in the opportunities that we have within our portfolio. And so we took the opportunity to reduce the debt so that we could increase the cash flow and reinvest in the assets. You heard Kurt talk about Nevada. We've owned Nevada for quite some time. We've been high on Nevada for quite some time. But the exploration there has been kind of in fits and starts as we've had cash flows. So what we're looking to do is really generate consistent cash flow so that we can then reinvest those cash flows back into those areas that will benefit our investors the most.

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

At Casa, you state in the release that the pit stripping ratio is expected to decline in the fourth quarter of this year, and that should be further reducing your costs. Two-part follow-up to that. First of all, we're halfway through Q3 next week. Can you provide a bit of color on what we should model for this quarter? And then maybe also quantify the improvements in the stripping ratio that you expect to see in Q4 and your current cost to haul that waste, please?

Heiko, this is Matt Blattman. There's a lot of pieces that are moving here, but one of the primary factors for the decrease in stripping ratio is the pit is nearing the end of its mine life. So as you go down deeper in the pit, your stripping ratio is just going to increase or improve geometrically as it goes down. So we started off the year somewhere around that 15:20:1 stripping. We're probably close to 10:1 at this point. And then you'll just see it completely decrease over the next 18 months until that last tonne of ore that comes out is probably 1:1. So we're probably looking at something like a 10% decrease before the end of the year, but it's just going to go slowly until we reach the end.

And maybe I'll jump in just a little bit, right? Because clearly, we don't give guidance on a quarterly basis. We've seen the stripping ratio go down as we've gone through the year, and that you see that come through in the economics. We expect as that stripping ratio will go down, we'll be able to reduce contract reliance, which we should see then a cost improvement from that. And as we look at the guidance that we provided, we expect to meet the annual guidance throughout the year. But clearly, we don't give that quarter-by- quarter.

Fair enough. And then the permitting process or the cost to haul the waste, any color on that?

I wouldn't expect a dramatic change. I mean, as we go deeper, the distances are going to get farther. So the biggest improvement we'll see is the -- as we let the mining contractor go and mine with our own fleet, that will help. But like I said, the haulage distances are just going to get more longer for us and not going to help.

Got it. And I get there is a strategic review process here. But I mean, with the permitting process for the new pits at Casa, how much time should we mentally be looking at for that to happen? And maybe just cash cost, like the costs that you pay to get this done, I assume, are reasonably de minimis, correct?

Permitting is not -- it's not a super well-defined process. It takes time. There's review periods, there's backwards and forwards. What we've previously said is that there was going to be a 5-year permitting hiatus. And that would allow us towards the tail end of that. We would do some pre-stripping, some dewatering and so on and so forth, getting ready. That's all we can say. We can't be much more specific than that at this point.

And your next question comes from the line of Joseph Reagor with ROTH Capital.

I guess first one back on Keno. On the Slide 5 in the presentation, it shows that at the 440 tonnes per day, the free cash flow increases starting pretty much in 2028. Is that driven by higher grades, lower CapEx, a combination thereof, just so we can model out that?

Joe, I can jump in here. It's a combination of a few things. You do see some of the larger projects coming to an end at that point. So we do see capital coming off to some degree. If you flip to the next slide, you will see that there is some projects that will have to obviously continue and will have to continue mine development and those types of things. So it's not that capital comes to an absolute halt. But it does -- as we complete the tailings batch fill plant, there's some water treatment capacity, those types of things. When those things come to a completion, you do see the capital decrease. You also see the throughput -- that throughput getting to 440 tonnes per day will scale up and get to that 440 tonnes per day kind of late in this decade is the anticipation. And so as a result, you see more throughput and therefore, you would see higher ounce production as well.

Okay. That's helpful. And then over at Greens Creek, it looks like it could have been an even better quarter. I mean it was already a pretty good quarter for the mine, but it could have been a better quarter if not for maybe some concentrate that didn't get shipped out in time to count it. And should we expect that to get sold next quarter?

Yes. Greens Creek, we have talked about this. It's -- the sales can be lumpy, right, because we ship out essentially generally once per month on a ship. And so depending on when you ship within the month, we had a shipment in June, but it was kind of earlier in the month of June. And compared to in March, it was later in the month of March. And so we just had an inventory buildup. And it really just comes down to when a ship would leave in September, whether we would have that inventory kind of remain stable or whether we would see a drawdown in inventory. Perspective of -- sorry, Joe, what was that?

But at some point, it will be sold. It's just -- it's not necessarily going to show up in Q3. It's just eventually going to show up.

Yes, absolutely. And it's -- we have to put together in 1 ship, you may have 2 or 3 different parcels going to 2 or 3 different customers. And so you're managing that process trying to both manage the inventory on site as well as getting ships in and out based on tides and light and when customers need it, et cetera. So it's a balancing act trying to get it all done. But we look at that and try to maximize -- get as much revenue as quickly as possible. So it's not like we're sitting on it.

[Operator Instructions] Your next question comes from the line of Alex Terentiew with National Bank Financial.

Congrats on the great quarter. Good to see all your operations firing on all cylinders there. A couple of questions for me on Casa Berardi and Keno Hill. Maybe just starting with Keno Hill, I wanted to clarify your Slide 5, you've got free cash flow undiscounted cash flow expectations at different silver prices. And they're saying 440 tonnes per day. Is that kind of assuming your gradual ramp up to 440? Or is that hypothetical, assuming it was 440 in '26, '27, '28, et cetera? I'm just trying to.

Maybe we should have clarified that in that slide. That is a ramp-up to 440 tonnes per day. We would get to that 440 tonnes per day later in the decade, 29 or 30 in this scenario, ramping up to that point. So yes, I appreciate the question because yes, we should have clarified that on the slide.

Okay. Okay. That makes sense. I figured that was probably the case, but yes, I wanted to check. And then just kind of related there, and I know somebody asked this earlier or a variation of it. Just on the capital side, I could kind of use that chart to help calibrate. But you noted a few things are coming off. Any big spending that we could kind of think about over the next 2 years to kind of get to that $440 rate? Any major investments that have to be done?

Yes. We'll -- Carlos is sitting here with me, too, so please fill in some of the details. But we do have to build some tailings over the next few years. And I think you see that on Slide 6. It's kind of laid out there. We're working on tailings batch fill plant now, and that will kind of come to a conclusion sometime next year. There's some additional water treatment that we have to put in. I think there's some waste storage, some other infrastructure, some buildings and things like that.

Yes, there are investments related with power distribution upgrades. So it's -- in some of the projects are going to take over 1 year. And so there are significant upgrades in the infrastructure, and we are expecting to maintain similar level of investment for the rest of the decade.

Okay. And then just on the permitting -- sorry, for dry stack tailings, Slide 6 shows later in 2028 additional permitted capacity required. Is that capacity required just to maintain it at 440? So I guess my question is, come 2028, end of the year, what's the risk that, that's kind of a hard stop unless if you don't have the permitting -- permitted additional capacity? Or do you have a bit more room to keep going and kind of work on the permits?

I guess I'll take that one. So yes, in the end of 2028, we start to run into a capacity requirement. We need additional capacity for tailings. We do have some flexibility that once we have the cemented tailings plant constructed and operational, we have more opportunity to put more of the tailings underground, which then makes that surface capacity less of a risk. But yes, somewhere in '29, we do have to have that permit in place, and it's already underway. We're already chasing that. So it does give us some room to work. And similarly, the waste production, there is a limit in our permit that says total tonnes of waste that we can mine. It's not a surface constraint. It's not a physical constraint. It's in the permit. So that is an expansion as well. And they hit about the same time frame. So that's part of the reason why you ramp up to 440 over a longer period. If you ramp up the mine to 440 very quickly and then run out of capacity, then you shut down, that doesn't help anyone either. So it's all about balancing all the pieces at once.

Okay. That makes a lot of sense. And then just lastly, Casa Berardi. Gold prices are obviously quite high. Is there opportunity to -- and I guess, a similar question here on the tailings and permits. Is there opportunity to continue Casa Berardi even for another 6 or 12 months, kind of lowering the cutoff, getting more tonnes through? Or is it -- are there other constraints, whether it's permits or tailings or something like that, that kind of making -- that's making end of 2027 a deadline?

Well, we started this year with a view of closing down the underground around May of this year. Obviously, gold prices have helped, and it's turning out to be an increasingly valuable asset. We've now extended the underground to at least the end of the year, and then we'll just see where gold prices are.

Okay. Okay. And last one here on Casa. Obviously, a very strong Q2. You guys have made 49,000 ounces from that mine year-to- date. You've kept guidance. So I guess my question is, any upside to that number? Or should we be kind of thinking that production will come down in the second half of this year?

I guess I can jump in and ask that. We're working through a strategic review right now. I would suggest, as Rob said in his comments earlier in the slides, we'll have something to talk about to the market in a few weeks. And at that point, we'll be able to answer that question.

Your last question comes from the line of Kevin O'Halloran with BMO Capital Markets.

Congrats on the quarter. Just going back one more time to Keno. On the ramp-up there, can you give us any granularity on the trajectory of the throughput? Would it be like a more gradual increase to the 440 tonnes per day? Or should we expect kind of more lumpy gains in throughput as you complete some of these infrastructure items?

It will be a gradual ramp-up. 2027 will probably be somewhere around about 330 tonnes per day from memory, and that's around about 75% of the permitted capacity. And then it will continue to ramp up to 440. Yes. [indiscernible] for that. That's the plan.

Okay. Great. That's helpful. And then just final question for me, shifting to the Montana assets. Can you remind us what your current thinking is on how to advance those? I think you've previously been looking at a few options like maybe bringing in a partner versus advancing it yourself. Is there any updates on your thinking there?

Not really. Our focus has really been on completing the Casa review. We -- I have Dave Schenker here with me. We're basically in the final stages of the review period. In fact, I think that finishes next week. Can you fill us in, Dave?

Sure. Yes. We expect to get a finding of no significant impact on our permit application in the objection period ended this week. So the Forest Service will work through that, but we would expect by I'd say, October time frame that we would have that plan of operations approved, which would allow us to begin to rehab the added in the portal and to begin the exploration work at that project. So we'll see what happens with the objection period.

So this is -- just to remind you, this is primarily a copper asset, copper equivalent grade of about 1.2% copper equivalent. I would say that it's probably not going to be core for us. And so we would be receptive to someone who's going to have a copper focus coming in and partnering with us. We do definitely want to participate in the upside on this thing because we see substantial value there to be realized.

And that concludes our question-and-answer session. I will now hand over the call to Mike Parkin for closing remarks.

Actually, I'll make some closing remarks, operator. Just before we wrap up, I do want to recap Hecla's value proposition. So unmatched jurisdictional security is something I've talked about. And so in an era of increasing geopolitical uncertainty, I think Hecla offers what others can't, complete operational stability. With 100% of our core assets in Canada and the U.S., we eliminate the regulatory surprises, the policy shifts, the security risks that plague some of our competitors in less stable jurisdictions. And so your investment is going to be protected by really the world's most reliable mining frameworks. You've got industry-leading silver exposure. And if you believe in silver's fundamentals and you should, Hecla delivers peer-leading silver revenue exposure. And so while we do produce gold and lead and zinc, silver dominates our revenue matrix and revenue mix rather. And that percentage could increase further depending on the results of the strategic review of Casa Berardi. When silver moves, we should move more. And this concentrated exposure gives you high leverage to the metal with some very compelling supply-demand dynamics in the sector. You've got decades of visible production. Short mine lives create investment uncertainty and our assets offer something rare, multi- decade production visibility that extends well beyond typical investment horizons. Our long-life mines don't just offer returns next quarter. They provide a sustainable production platform that's positioned to deliver value through multiple commodity cycles. And this isn't just speculating on finding tomorrow's ounces, it's ownership of proven long-term cash flow generation. And there's disciplined capital allocation. While competitors chase expensive M&A deals in risky jurisdictions, we've deliberately stayed on the sidelines of the recent consolidation frenzy. Our strategy is clear to create value through the drill bit, not through the checkbook. Our proven exploration teams consistently delivered mine life extensions and new discoveries, and that's the most accretive form of growth. We're also built for all cycles. So our crown jewels, Greens Creek and Lucky Friday, they're not just mines, they're fortresses. These are low-cost, long-life assets that are projected to generate cash even in downturns, and that positions us to play offense when others are forced to play defense. So when the next cycle turns and distressed assets flood the market, we expect to have a balance sheet that will allow us to capitalize while others perhaps struggle to find their higher cost operations in risky jurisdictions. And the bottom line really is that I think Hecla offers what smart investors seek and that's jurisdictional certainty, industry-leading silver leverage, decades of production visibility, disciplined management and cycle-proof assets. In a sector full of risks, our approach is to systematically eliminate the variables that destroy value while maximizing exposure to silver's upside. So not just another mining investment, it's a strategic position in the future of silver backed by the stability that only the U.S. and Canadian assets can provide. So thanks for joining us today, and we look forward to updating you on our continued progress in delivering shareholder value through operational excellence and strategic execution. Have a great day, everyone.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.