$0.51
$4.31
bear $0.51
base $1.99
bull $4.31
margin of safety $0.90
market price* $15.30
Hecla Mining mines silver, gold, lead and zinc at Greens Creek in Alaska, Lucky Friday in Idaho and Keno Hill in Canada's Yukon. In March 2026 it closed the sale of its Casa Berardi gold mine in Quebec to Orezone Gold, and in April 2026 it redeemed its remaining $263 million of 7.25% senior notes. It now has no borrowings other than roughly $8 million of equipment leases, and held $483 million of cash at June 30, 2026. WHAT DRIVES THE VALUE. Hecla sells metal at prices it does not set, against a largely fixed cost base and a heavy capital program ($252 million in 2025). Cash generation therefore swings widely with metal prices. We measure it as the cash the mines produce before paying lenders, after removing working-capital swings, deducting stock compensation and deducting all capital spending. That figure was about minus $81 million in 2023 (realized silver $23.33, gold $1,939), about $97 million in 2024 ($28.58 and $2,403) and about $433 million in 2025 ($45.25 and $3,490). Four of the last ten years produced less than $35 million. The 2021-2025 median is about $97 million a year, or $0.14 per share on today's 676 million shares; that window holds one boom year (2025) and one trough (2023) and reflects recent costs. The ten-year median is lower, about $65 million. Because the share count has grown from 389 million in 2016 to 656 million in 2025, we work in dollars and divide by today's shares rather than by each year's smaller count. ACCOUNTING JUDGEMENTS. All capital spending is treated as ongoing cost: 2025 revenue rose 53% while realized silver rose 58% and gold 45%, so the extra revenue was price, not new capacity, and we do not carve out growth spending. Reclamation payments are kept as a recurring mining cost. In 2025 reported cash flow was held back by a $137 million build in receivables; we removed that timing swing. Casa Berardi is now sold, but its earlier results sit inside the history: it earned $112 million of gross profit in 2025 but lost $14 million in 2024, so the earnings level is, if anything, slightly conservative in ordinary-price years. We could not isolate Casa Berardi's cash contribution for every year from the filings. WHAT IS CREDITED AND WHAT IS NOT. We credit no production or earnings growth: nothing is contracted, metal prices are not something the company controls, and Keno Hill is still ramping up. The one thing we credit is the length of the mines' lives. The current mine plans run through 2036 at Greens Creek, 2040 at Keno Hill and 2044 at Lucky Friday. Greens Creek's plan end moved from 2034 in the 2022 annual report to 2036 in the 2025 report while three years of ore was mined, so exploration has been replacing what is mined. After the plans end, nothing is assumed to continue. For the first year we assume cash generation of $0.14 a share (before interest, which is now nil), against $0.66 in 2025 and $0.16 in 2024. The assumption is below the latest year, so no reversal of a slowdown is required; the 2025 jump was metal prices. WHAT EACH CASE ASSUMES (per share; what the business is worth, what the company owes, and the difference). Bear, $0.51. We repeat a full downturn of the kind Hecla has lived through: five years at the average of its four weakest of the last ten years (2018, 2019, 2022 and 2023), about minus $10 million a year or minus $0.015 a share, followed by a recovery to only about $25 million a year ($0.04 a share, the lower quartile of the last ten years). Greens Creek's plan ends in 2036 with no replacement, Keno Hill ends in 2040 and Lucky Friday in 2044, and closure costs come to $250 million in 2038. The mines are worth about $0.09 a share, borrowings are zero, cash adds $0.60 and closure costs subtract $0.18. Base, $1.99. Cash generation holds at $97 million a year ($0.14 a share) through 2036 with no growth. Greens Creek is credited with four years beyond its current plan, to 2040, which is less than its demonstrated replacement pace. Keno Hill also runs to 2040; from 2041 to 2044 only Lucky Friday (26% of 2025 gross profit from the three remaining mines) continues, and then the story ends. Closure costs are $200 million, at the end of Lucky Friday's plan. The mines are worth about $1.39 a share, borrowings are zero, cash adds $0.60, the deferred Casa Berardi payments add $0.10 and closure subtracts $0.10. Bull, $4.31. First-half 2026 operating cash flow, as reported, was $369 million against $78 million of capital spending, a pace of roughly $580 million a year, or $0.86 a share. We credit less than that: $0.60 a share for three years, then $0.30 a share for seven years, because the company's US federal tax-loss carryforwards ($577 million) will be used up and cash taxes will rise, and because receivables and inventory have been building. Mine lives are the same as base. The mines are worth about $3.71 a share, borrowings are zero, cash adds $0.60, deferred payments add $0.10 and closure subtracts $0.10. CASH AND OTHER ITEMS. Net cash is $0.60 a share: $485 million of cash and short-term investments, less $7.6 million of leases, less $75 million kept to run the business, divided by 676 million shares. In base and bull we add the $80 million of deferred cash Orezone owes (due 18 and 30 months after the March 2026 closing), worth about $0.10 a share now; the bear case leaves it out because Orezone can reduce it if Casa Berardi's closure obligations come in above $150 million. We leave out the Orezone shares received and up to $241 million of contingent payments. Hecla carried $202 million of reclamation and closure liabilities at the end of 2025, of which $76 million was Casa Berardi's asset retirement obligation, implying roughly $126 million for the continuing mines; the cases deduct more than that. CHECKS AGAINST THE FILINGS. The 2025 cash flow reconciles to net income plus depreciation, deferred taxes and the other non-cash items with no unexplained gap. The $130 million of deferred taxes added back in 2025 means book taxes well above the cash taxes paid, helped by tax-loss carryforwards, which is one reason the base case is anchored on 2024's level rather than 2025's. Greens Creek provided 63% of 2025 gross profit from the three remaining mines ($322.6 million of $509 million), and it sits on an island that depends on marine transport, so a prolonged outage there is the largest single exposure and is not modelled separately. WHAT WOULD MAKE THIS WRONG. If silver and gold stay near their 2025-26 levels for years, cash generation would be several times our base; each additional $0.10 a share of sustained annual cash flow adds roughly $0.97 to the base value. If prices fall and stay down, the cash on hand cushions the first years, but owner earnings were negative in four of the last ten years. This analysis is on a different basis from the earlier one, so the earlier figures are not comparable. What has changed in the business since then is that the senior notes are fully repaid, the Casa Berardi sale has closed, and the first half of 2026 produced $369 million of operating cash flow. MARGIN-OF-SAFETY PRICE, $0.90. We are not sure of the earnings level: it depends on metal prices, and owner earnings were negative in four of the last ten years. The worst plausible outcome is a long slump like 2018-19 and 2022-23 combined with a shorter life at Greens Creek; the company has no debt to force a restructuring and its cash covers the cash burn of that slump, so it would survive, but the shares would be worth about $0.51. If we are wrong about metal prices, the shares are worth about that bear value; if we are wrong about Greens Creek's life, each year cut from it costs about $0.04 a share; if we are wrong about closure costs, each extra $100 million costs about $0.05 a share today. The price assumes a three-to-five-year holding period, with a dividend (currently $0.04 a share a year) paid during it. At $0.90, $0.60 is cash already in the company, leaving about $0.30 for the mines, roughly two years of their median cash flow, with mine plans reaching to 2036-2044. A bear outcome would imply a loss of about 40% from that price, which is why the margin-of-safety price is not higher.