Hecla Reports Second Quarter 2015 Results

Hecla Mining Company (NYSE:HL) today announced a second quarter net loss applicable to common shareholders of $26.8 million, or $0.07 per share, and a loss after adjustments applicable to common shareholders of $17.6 million, or $0.05 per share.¹

SECOND QUARTER HIGHLIGHTS AND SIGNIFICANT ITEMS

• Sales of $104.2 million.
• Adjusted EBITDA of $29.5 million.²
• Operating cash flow of $30.8 million.
• Total silver production of 2.5 million ounces at a cash cost, after by-product credits, per silver ounce, of $5.61.³
• Gold production of 44,692 ounces, of which Casa Berardi produced 30,939 ounces at a cash cost, after by-product credits, per gold ounce of $832.³
• Completed acquisition of Revett Mining Company, owner of the Rock Creek project.
• Cash and cash equivalents of $192 million at June 30, 2015.
• Secured the third-party-owned Velardeña mill to process high-grade material from San Sebastian.
• Strong exploration success at San Sebastian and Casa Berardi.
• Increased estimated 2015 silver production to 10.5 - 11.0 million ounces.
• Accrual of $8.7 million for possible settlement of environmental claims at two legacy sites.

“Despite lower silver prices, we continue to advance growth projects like San Sebastian and #4 Shaft at Lucky Friday for their potential to increase production of high-grade ounces at low cash costs, after by-product credits,” said Phillips S. Baker, Jr., Hecla’s President and CEO. “Our assets, particularly Greens Creek with its recent improvements in recovery, have allowed us to weather the metals price weakness, and we retain the ability to reduce costs and programs if prices remain weak or go lower. With expected mining at San Sebastian early in 2016, and, combined with the deeper Lucky Friday in three years, we anticipate the addition of significant additional cash flow, further strengthening us going forward.”

FINANCIAL OVERVIEW

Net loss applicable to common shareholders for the second quarter was $26.8 million, or $0.07 per share, compared to net loss applicable to common shareholders of $14.5 million, or $0.04 per share, for the same period a year ago, and was impacted by the following items:

• Cash cost, after by-product credits, per gold ounce decreased 13% and per silver ounce increased 5% from second quarter 2014.
• Net mark-to-market loss on base metal derivative contracts of $0.9 million, as a result of rising base metals prices, compared to a net loss of $11.6 million in the second quarter of 2014.
• Increased pre-development spending on San Sebastian.
• A $1.8 million foreign exchange loss on Canadian assets.
• Lower realized silver, gold, and lead prices with higher realized zinc prices.
• An $8.7 million accrual for possible environmental settlement.
• $2.1 million of acquisition costs for Revett Mining Company.

Operating cash flow was $4 million higher than the second quarter 2014 due to the timing of concentrate shipments at Greens Creek contributing $7.3 million and the advance settlement of financially settled base metal forward contracts contributing $12 million.

Capital expenditures (excluding capitalized interest) at the operations totaled $32 million for the second quarter. Expenditures were $11.4 million at Lucky Friday, $12.1 million at Greens Creek and $8.6 million at Casa Berardi.

Metals Prices

The average realized silver price in the second quarter was $16.32 per ounce, 17% lower than the $19.62 price realized in the second quarter of 2014. Realized gold and lead prices also decreased by 8% and 6%, respectively, from the second quarter of 2014. The average realized zinc price rose slightly to $0.96, up 2% from the prior year period.

Base Metals Forward Sales Contracts

The following table summarizes the quantities of base metals committed under financially settled forward sales contracts at June 30, 2015:

The contracts represent 11% of the forecasted payable zinc production at an average price of $0.93 per pound. With advanced settlement of financially settled base metal forward contracts, the forecasted payable zinc and lead remaining under contract have declined from 101.9 million pounds of zinc and 86.6 million pounds of lead committed at June 30, 2014 to 34.0 million pounds of zinc and no lead at June 30, 2015.

OPERATIONS OVERVIEW

Overview

• Greens Creek production of 1.9 million ounces of silver is 10% higher than the 1.7 million ounces in the same period 2014 and within the mine’s expected production range.
• Lucky Friday silver production of 613,474 ounces is a decrease from 820,786 ounces from the same period of 2014 due to the impact upon production related to the failure of a ventilation booster fan.
• Casa Berardi gold production of 30,939 ounces is an increase over 28,623 ounces in the same period of 2014 due to higher grades and tonnage.

The following table provides the production and cash cost, after by-product credits, per silver and gold ounce summary for the second quarters ended June 30, 2015 and 2014:

The following table provides the production summary on a consolidated basis for the second quarter and six months ended June 30, 2015 and 2014:

Greens Creek Mine - Alaska

Greens Creek’s second quarter production of 1.9 million ounces of silver exceeded the second quarter of 2014 by 10%, while gold production of 13,753 ounces was 8% less. The higher silver production was a result of higher recoveries and grade, partially offset by slightly lower tonnage. Silver recoveries increased 8%, or 5.6 percentage points, to 75.4% over the prior year period. The improvement is a result of a change implemented in late 2014 to the flotation circuit to more efficiently scalp additional lead concentrate directly to final concentrate, and by introducing CO₂ for pH control in the lead flotation circuit. The reduction in gold production was the result of lower tonnage and grade partially offset by recoveries that increased due to the plant improvements. The mill operated at an average of 2,194 tons per day (tpd) in the second quarter.

As a result of higher grades and recoveries, the Company now expects Greens Creek to produce 7.7 to 8.0 million ounces of silver, an increase over the previous estimate of 7.3 million ounces.

The cash cost, after by-product credits, per silver ounce of $3.30 decreased from $3.52 in the second quarter 2014.¹ The per ounce cost was beneficially impacted by lower operating costs and negatively impacted by lower by-product credits. Power costs were similar to the 2014 period due to higher precipitation levels in southeast Alaska in both cases resulting in availability of less expensive hydroelectric power, a condition that is expected to last through the next quarter. Treatment costs were lower as a result of lower realized silver prices, as treatment costs include the value of silver not payable to the company through the smelting process. Mining costs per ton increased by 1% due to lower production, and milling costs per ton decreased 2% due to slightly lower labor costs and various other variances partially offset by lower production. The Company now expects Greens Creek to produce silver in 2015 at a cash cost, after by-product credits of $3.75 per ounce, a reduction from the previous estimate of $4.50 per ounce.

Lucky Friday Mine - Idaho

Lucky Friday’s second quarter silver production of 613,474 ounces was 25% lower than the second quarter of 2014 due to lower tonnage and grade resulting from a failure of the underground booster fan reducing the ventilation capacity of the mine, leading to the temporary closure of a higher-grade production stope. Lucky Friday has returned to near normal production rates by extending the work schedule to seven days per week from six, but is mining lower grade material until the fan is replaced, expected to be in the fourth quarter. In addition, there are 15 days of scheduled downtime in the third quarter for hoist mechanical maintenance. The mill operated at an average of 792 tpd in the second quarter.

The mine is now expected to produce 2.8 to 3.0 million ounces of silver in 2015, a reduction over the previous estimate of 3.2 million ounces.

The cash cost, after by-product credits, per silver ounce of $12.58, increased from $9.10 per ounce in the second quarter of 2014.¹ This increase was principally due to lower production and realized metals grades relating to ventilation upgrades and lower by-product credits. The Company now expects Lucky Friday to produce silver in 2015 at a cash cost, after by-product credits, of $10.75 per ounce, an increase over the previous estimate of $8.75 per ounce.

#4 Shaft, a key growth project, has been excavated approximately 2,900 feet below the shaft collar to the 7835 level. The project is more than 85% complete and is expected to be finished in the fourth quarter of 2016. The total estimated completion cost of #4 Shaft is approximately $225 million, with $184 million already spent through the second quarter of 2015. As of June 30, 2015, the #4 Shaft team has worked 1,321 days without a lost-time accident.

Casa Berardi - Quebec

Casa Berardi’s second quarter gold production of 30,939 ounces was 8% higher than the second quarter of 2014 because of higher grades and tonnage, partially offset by lower recovery. The mine experienced higher grades as a result of mine sequencing. Although recoveries relative to the 2014 period decreased to 86% from 90% due to the presence of arsenopyrite in some of the 118 Zone ore, adjustments made to the plant in 2015 are expected to contribute to recoveries increasing to 87% during the second half of the year. The mill operated at an average of 2,407 tpd in the second quarter.

With expectations for additional recovery improvements, and the planned addition of higher-grade stopes in Zone 123 in the fourth quarter, the mine is expected to meet its 130,000 gold ounce target for the year.

The cash cost, after by-product credits, per gold ounce of $832, decreased from $952 in the second quarter of 2014 due to higher production and the weaker Canadian dollar.¹

EXPLORATION AND PRE-DEVELOPMENT

Expenditures

Exploration and pre-development expenses were $4.6 million and $1.6 million, respectively, in the second quarter of 2015, increases of about $1.5 million and $1.2 million compared to the second quarter 2014 as a result of increased spending at the San Sebastian property. Full year exploration and pre-development expenses are expected to be about $24 million, an increase from the previous expectation of $18 million principally due to increased activity at San Sebastian.

San Sebastian - Mexico

Hecla has secured the use of a Merrill-Crowe processing plant near Velardeña in the State of Durango, Mexico, as announced on July 15, 2015. Under the terms of the agreement, Hecla has exclusive use of the mill for 18 months, with the potential to increase for up to another 12 months. Located within 100 miles of San Sebastian, the mill was previously used by Hecla to process ore when it mined on the property from 2001 to 2005.

The mill has been idle for several years and requires some rehabilitation and updating to meet the standard Hecla uses for environmental protection and best practices in milling standards.

A Preliminary Economic Assessment (PEA) is expected to be completed by the end of the third quarter, but does not include results of the recent in-fill drilling program described below.

There has been significant drilling success over the past two years on the near-surface East Francine, Middle and North veins at the San Sebastian project, and the project is quickly advancing to open pit mine production. The East Francine, Andrea, Middle and North veins now define nearly 5.0 miles of mineralized strike length and are open along strike and at depth. The East Francine Vein is the faulted extension of the past-producing, high-grade Francine Vein which from 2001 to 2005 was one of the highest-grade producers in Mexico.

The East Francine Vein has currently been traced for over 1,600 feet along strike and to 500 feet of depth. The near-surface, high-grade zones are characterized as being silver and gold dominant, supergene enriched and oxidized (cyanide soluble). An in-fill drill program of the main mineralized shoot has demonstrated the continuity of the vein structure and increased resource confidence to measured and indicated categories in the proposed open pit areas. Relative to the initial drilling, the assay results of the in-fill program are generally about 3.3 feet wider than expected and returned some extremely high grades that are consistent with previous drilling. The drilling also appears to extend the high-grade area further along strike to the east and west, potentially expanding the open pit resource. Assay results from the shallow East Francine Vein in-fill drill program include 1.18 oz/ton gold and 358.7 oz/ton silver over 18.6 feet, 0.78 oz/ton gold and 120.3 oz/ton silver over 15.1 feet, 0.87 oz/ton gold and 160.8 oz/ton silver over 11.5 feet, and 0.26 oz/ton gold and 25.4 oz/ton silver over 18.7 feet.

The Middle Vein has been traced for nearly 7,000 feet along strike and to a depth of over 1,000 feet. Shallow in-fill drilling of the Middle Vein confirmed the continuity of the vein mineralization and includes intercepts of 0.57 oz/ton gold and 157.3 oz/ton silver over 7.3 feet, 0.24 oz/ton gold and 26.9 oz/ton silver over 5.5 feet, and 0.19 oz/ton gold and 25.5 oz/ton silver over 5.0 feet. Although assay results are not complete, there appears to be a slight improvement in grade over previous drilling. Exploration drilling continues to define a new zone of near-surface mineralization to the southeast, past the San Ricardo Fault. The zone is slightly deeper and shallower dipping than the Middle Vein to the west of the fault assay and intervals include 0.10 oz/ton gold and 13.2 oz/ton silver over 7.0 feet, and 0.02 oz/ton gold and 11.1 oz/ton silver over 8.9 feet.

The North Vein has a mineralized trend that extends over 3,500 feet along strike and 700 feet to depth and remains open along strike in both directions and at depth. The North Vein in-fill drilling intercepts have returned grade results that are consistent with the initial drilling. These assay intervals include 0.84 oz/ton gold and 16.8 oz/ton silver over 2.6 feet, and 0.69 oz/ton gold and 10.1 oz/ton silver over 3.1 feet. On the North Vein some of the deeper exploration intercepts to the south east include 0.10 oz/ton gold and 14.8 oz/ton silver over 4.1 feet and 0.04 oz/ton gold and 11.7 oz/ton silver over 5.0 feet.

Casa Berardi - Quebec

At Casa Berardi, up to seven drills have been operating underground in an effort to refine current stope designs and resources in the 118, 123, 124 and Southwest zones, and exploration drilling has extended mineralization on the 124 Zone and newly discovered 117 Zone. In-stope and definition drilling of the upper 118 Zone from the 530 level intersected a 15 to 55-foot wide shear zone that includes mineralized intervals of 0.54 oz/ton gold over 26.2 feet and 0.33 oz/ton gold over 19.0 feet. Mineralization is open and deeper drilling suggests the zone continues to plunge to the west. Drilling from the 910 level on the lower 118 Zone intersected a lens grading 0.55 oz/ton gold over 15.7 feet and 0.36 oz/ton gold over 17.7 feet and remains open to depth.

Drilling has identified multiple, stacked high-grade lenses of the 123 Zone that represent at least 1,600 feet of continuous down-dip mineralization with an average strike length of 450 feet. Definition and step-out drilling at the bottom of the 123 Zone resource has linked high-grade mineralized structures at the 850 level that are open at depth and to the west. Recent intersections of quartz-dominant zones include 1.1 oz/ton gold over 18.4 feet (123-01), 1.2 oz/ton gold over 11.2 feet (123-01), 1.8 oz/ton gold over 15.7 feet (123-02), 1.6 oz/ton gold over 10.5 feet (123-03) and 1.2 oz/ton gold over 17.7 feet (123-03). Future drilling is expected to continue to fill the gaps on the 123-01 and 123-03 lenses and extend the mineralization further east and at depth on the 123-04 and 123-11 lenses. The close proximity of these new lenses to mine infrastructure is expected to allow near-term production from these areas.

Exploration drilling from the 810 level of the newly defined 117 Zone has extended gold mineralization both north and south of the Casa Berardi Fault for over 300 feet down-plunge. Recent drill results include 0.64 oz/ton gold over 12.1 feet in iron formation north of the Casa Berardi Fault and 0.15 oz/ton gold over 21.8 feet in sheared veins to the south of the Casa Berardi Fault. Surface drilling on the 124 Zone east of the Principal Zone area defined a 15 to 60-foot thick, quartz-bearing zone for over 300 feet strike length that is expected to define an inferred resource from the 250 level to near-surface. Underground drill results on the 124-81 lens include 0.62 oz/ton gold over 16.7 feet and 0.44 oz/ton gold over 7.9 feet. Surface drilling has started on the 157 Zone program at the East Mine in an effort to better define geometry and continuity of a high-grade target that was drilled in 2004 from surface and in 2010 from underground.

Greens Creek - Alaska

At Greens Creek, definition and exploration drilling made progress in refining the NWW, 9A, Deep 200 South and West Wall resources and expanding the Gallagher Fault Block and Upper Southwest trends. Recent drilling of the lower NWW Zone has generally confirmed and upgraded the resource model of the shared and upper limbs. Recent assay results include 107.3 oz/ton silver, 0.73 oz/ton gold, 4.0% zinc, and 2.1% lead over 6.0 feet and 50.5 oz/ton silver, 0.14 oz/ton gold, 13.1% zinc, and 7.3% lead over 6.2 feet. Exploration extensions to this drilling have defined additional West Wall mineralization up to 240 feet down-dip from the current resource model.

Drilling of the 9A zone has defined continuous mineralization along the southernmost portion of the mine contact within the Maki Fault. Overall this drilling has added continuity to existing drilling and should allow for the current modeled blocks to be connected into a more continuous resource. Assay intervals include 26.8 oz/ton silver, 0.01 oz/ton gold, 3.8% zinc, and 2.4% lead over 14.0 feet and 10.4 oz/ton silver, 0.06 oz/ton gold, 18.4% zinc, and 7.9% lead over 10.2 feet. Drilling of the Upper Southwest defined multiple, flat-lying mineralized contacts between the 5250 and Upper Southwest mineralization. Recent exploration drilling of the Gallagher Fault Block combined with existing intercepts defines mineralized zones within the Gallagher Fault with 95 to 425 vertical feet of continuity over 1,000 feet of strike length.

Drilling of the Deep 200 South in the past few years has defined three stacked folds of high-grade mineralization that represent up to 600 feet of down-dip continuity. Recent drill intersections of the folded upper bench mineralization include 61.9 oz/ton silver, 0.04 oz/ton gold, 2.1% zinc, and 1.3% lead over 6.2 feet and 41.2 oz/ton silver, 0.04 oz/ton gold, 3.7% zinc and 3.2% lead over 7.0 feet along the upper limb. The mineralization remains open to the south and exploration drilling is planned for later in the year.

The first drill hole of the surface exploration program at Greens Creek started in mid-June at southeast Killer Creek. This hole intersected the “mine contact” at 1,580 feet where there is sulfide-bearing veins, pyrite pods and pyrite laminations with minor lead-zinc sulfides. This contact is located on the north side of Greens Creek about 3,100 feet away from NWW mine infrastructure. Surface drilling of this target and the High Sore area southeast of the mine is planned for the next two months.

More complete drill assay highlights from San Sebastian, Greens Creek, and Casa Berardi can be found in Table A at the end of the release.

Other Properties

Limited mapping and trenching programs are being advanced in the Silver Valley over the summer. In mid-June fieldwork started on to the Opinaca-Wildcat project near the Eleonore Mine in northern Quebec. Prospecting and sampling of outcrops and floats are mainly focused on the area covered by the Induced Polarization geophysical survey in April. These surveys are expected to serve as the basis for follow-up prospection and trenching in July and August.

2015 GUIDANCE

Estimated 2015 production was updated on July 16, 2015. Exploration and pre-development expectations have increased to $24 million from $18 million on increased activity at San Sebastian. Estimated cash costs, after by-product credits, for Greens Creek are lowered to $3.75 per ounce and for Lucky Friday are increased to $10.75 an ounce. Capital expectations for the year remain unchanged, as do estimates for Casa Berardi production and cash costs, after by-product credits.

For the full year 2015, the Company expects:

COMMON STOCK DIVIDEND

The Board of Directors declared a quarterly cash dividend of $0.0025 per share of common stock, payable on or about September 1, 2015, to shareholders of record on August 21, 2015.

CONFERENCE CALL AND WEBCAST

A conference call and webcast will be held Thursday, August 6, at 11:00 a.m. Eastern Time to discuss these results. You may join the conference call by dialing toll-free 1-855-760-8158 or for international by dialing 1-720-634-2922. The participant passcode is HECLA. Hecla’s live and archived webcast can be accessed at www.hecla-mining.com under Investors or via Thomson StreetEvents Network.

ABOUT HECLA

Hecla Mining Company (NYSE:HL) is a leading low-cost U.S. silver producer with operating mines in Alaska and Idaho, and is a growing gold producer with an operating mine in Quebec, Canada. The Company also has exploration and pre-development properties in six world-class silver and gold mining districts in the U.S., Canada and Mexico, and an exploration office and investments in early-stage silver exploration projects in Canada.

Cautionary Statements to Investors on Forward-Looking Statements, including 2015 Outlook

This news release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbor created by such sections and other applicable laws, including Canadian securities laws. Such forward-looking statements may include, without limitation: (i) estimates for 2015 for 1) silver and gold production, 2) cash cost, after by-product credits, and 3) capital expenditures and pre-development and exploration expenditures, in each case for each of the Company’s three mines and on a Company-wide basis; (ii) estimated Company-wide silver equivalent production (which assumes metal prices of gold at $1,225/oz., silver at $17.25/oz., zinc at $0.90/lb. and lead at $0.95/lb. and USD/CAD at $0.91); (iii) certain statements regarding the Greens Creek mine, including expected continued availability of hydroelectric power, and planned drilling and the ability for planned drilling, when combined with existing drilling data, to extend known areas of mineralization in various zones; (iv) certain statements regarding the Lucky Friday mine, including the estimated completion of repairs to the booster fan in the fourth quarter, and the future prospects of the #4 Shaft project, including expectations that 1) it will produce high grade ounces at low cash costs after by-product credits, 2) it will contribute to significant additional cash flow, 3) it will be finished in the fourth quarter of 2016, and 4) that it will cost $225 million; (v) certain statements regarding the Casa Berardi mine, including expectations that 1) there will be additional recovery improvements, 2) higher grade stopes in Zone 123 will be added in the fourth quarter, 3) future drilling will extend mineralization, and 4) the proximity of new lenses to existing infrastructure will allow near term production from these areas; and (vi) statements regarding the future prospects of San Sebastian, including expectations that 1) mining will commence in early 2016, 2) it will produce high grade ounces at low cash costs after by-product credits, 3) it will contribute to significant additional cash flow, and 4) the completion of a preliminary economic assessment by the end of the third quarter. Estimates or expectations of future events or results are based upon certain assumptions, which may prove to be incorrect. Such assumptions, include, but are not limited to: (i) there being no significant change to current geotechnical, metallurgical, hydrological and other physical conditions; (ii) permitting, development, operations and expansion of the Company’s projects being consistent with current expectations and mine plans; (iii) political/regulatory developments in any jurisdiction in which the Company operates being consistent with its current expectations; (iv) the exchange rate for the Canadian dollar to the U.S. dollar, being approximately consistent with current levels; (v) certain price assumptions for gold, silver, lead and zinc; (vi) prices for key supplies being approximately consistent with current levels; (vii) the accuracy of our current mineral reserve and mineral resource estimates; and (viii) the Company’s plans for development and production will proceed as expected and will not require revision as a result of risks or uncertainties, whether known, unknown or unanticipated. Where the Company expresses or implies an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, such statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by the “forward-looking statements.” Such risks include, but are not limited to gold, silver and other metals price volatility, operating risks, currency fluctuations, increased production costs and variances in ore grade or recovery rates from those assumed in mining plans, community relations, conflict resolution and outcome of projects or oppositions, litigation, political, regulatory, labor and environmental risks, and exploration risks and results, including that mineral resources are not mineral reserves, they do not have demonstrated economic viability and there is no certainty that they can be upgraded to mineral reserves through continued exploration. For a more detailed discussion of such risks and other factors, see the Company’s 2014 Form 10-K, filed on February 18, 2015 with the Securities and Exchange Commission (SEC), as well as the Company’s other SEC filings. The Company does not undertake any obligation to release publicly revisions to any “forward-looking statement,” including, without limitation, outlook, to reflect events or circumstances after the date of this news release, or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws. Investors should not assume that any lack of update to a previously issued “forward-looking statement” constitutes a reaffirmation of that statement. Continued reliance on “forward-looking statements” is at investors’ own risk.

Qualified Person (QP) Pursuant to Canadian National Instrument 43-101

Dean McDonald, PhD. P.Geo., Senior Vice President - Exploration of Hecla Mining Company, who serves as a Qualified Person under National Instrument 43-101, supervised the preparation of the scientific and technical information concerning Hecla’s mineral projects in this news release. Information regarding data verification, surveys and investigations, quality assurance program and quality control measures and a summary of sample, analytical or testing procedures for the Greens Creek Mine are contained in a technical report prepared for Hecla and Aurizon Mines Ltd. titled “Technical Report for the Greens Creek Mine, Juneau, Alaska, USA” effective date March 28, 2013, and for the Lucky Friday Mine are contained in a technical report prepared for Hecla titled “Technical Report on the Lucky Friday Mine Shoshone County, Idaho, USA” effective date April 2, 2014, and for the Casa Berardi Mine are contained in a technical report prepared for Hecla titled “Technical Report on the Mineral Resource and Mineral Reserve Estimate for the Casa Berardi Mine, Northwestern Quebec, Canada” effective date March 31, 2014 (the “Casa Berardi Technical Report”). Also included in these three technical reports is a description of the key assumptions, parameters and methods used to estimate mineral reserves and resources and a general discussion of the extent to which the estimates may be affected by any known environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant factors. Copies of these technical reports are available under Hecla’s profile on SEDAR at www.sedar.com.

Cautionary Statements to Investors on Reserves and Resources

Reporting requirements in the United States for disclosure of mineral properties are governed by the SEC and included in the SEC’s Securities Act Industry Guide 7, entitled “Description of Property by Issuers Engaged or to be Engaged in Significant Mining Operations” (“Guide 7”). However, the Company is also a “reporting issuer” under Canadian securities laws, which require estimates of mineral resources and reserves to be prepared in accordance with Canadian National Instrument 43-101 (“NI 43-101”). NI 43-101 requires all disclosure of estimates of potential mineral resources and reserves to be disclosed in accordance with its requirements. Such Canadian information is being included here to satisfy the Company’s “public disclosure” obligations under Regulation FD of the SEC and to provide U.S. holders with ready access to information publicly available in Canada.

Reporting requirements in the United States for disclosure of mineral properties under Guide 7 and the requirements in Canada under NI 43-101 standards are substantially different. This document contains a summary of certain estimates of the Company, not only of proven and probable reserves within the meaning of Guide 7, which requires the preparation of a “final” or “bankable” feasibility study demonstrating the economic feasibility of mining and processing the mineralization using the three-year historical average price for any reserve or cash flow analysis to designate reserves and that the primary environmental analysis or report be filed with the appropriate governmental authority, but also of mineral resource and mineral reserve estimates estimated in accordance with the definitional standards of the Canadian Institute of Mining, Metallurgy and Petroleum referred to in NI 43-101. The terms “measured resources,” “indicated resources,” and “inferred resources” are Canadian mining terms as defined in accordance with NI 43-101. These terms are not defined under Guide 7 and are not normally permitted to be used in reports and registration statements filed with the SEC in the United States, except where required to be disclosed by foreign law. Investors are cautioned not to assume that any part or all of the mineral deposits in such categories will ever be converted into proven or probable reserves. “Resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of such a “resource” will ever be upgraded to a higher category or will ever be economically extracted. Investors are cautioned not to assume that all or any part of a “resource” exists or is economically or legally mineable. Investors are also especially cautioned that the mere fact that such resources may be referred to in ounces of silver and/or gold, rather than in tons of mineralization and grades of silver and/or gold estimated per ton, is not an indication that such material will ever result in mined ore which is processed into commercial silver or gold.

This release contains references to a non-GAAP measure of cash cost, before by-product credits, per ounce and cash cost, after by-product credits, per ounce. Cash cost, before by-product credits, per ounce and cash cost, after by-product credits, per ounce represent non-U.S. Generally Accepted Accounting Principles (GAAP) measurements that the Company believes provide management and investors an indication of net cash flow. Management also uses this measurement for the comparative monitoring of performance of mining operations period-to-period from a cash flow perspective. Cash cost, before by-product credits, per ounce and Cash cost, after by-product credits, per ounce are measures developed by gold companies and used by silver companies in an effort to provide a comparable standard; however, there can be no assurance that our reporting of these non-GAAP measures is similar to those reported by other mining companies. Cost of sales and other direct production costs and depreciation, depletion and amortization are the most comparable financial measures calculated in accordance with GAAP to cash cost, before by-product credits cash cost, after by-product credits.

As depicted in the Greens Creek Unit and the Lucky Friday Unit tables below, by-product credits comprise an essential element of our silver unit cost structure. By-product credits constitute an important competitive distinction for our silver operations due to the polymetallic nature of their orebodies. By-product credits included in our presentation of cash cost, after by-product credits, per silver ounce include:

By-product credits included in our presentation of cash cost, after by-product credits, per gold ounce for our Casa Berardi Unit include:

The following table calculates cash cost, before by-product credits, per ounce and cash cost, after by-product credits, per ounce (in thousands, except per-ounce amounts):

This release refers to a non-GAAP measure of adjusted net income (loss) applicable to common stockholders and adjusted net income (loss) per share, which are indicators of our performance. They exclude certain impacts which are of a nature which we believe are not reflective of our underlying performance. Management believes that adjusted net income (loss) per common share provides investors with the ability to better evaluate our underlying operating performance.

This release refers to a non-GAAP measure of adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”), which is a measure of our operating performance. Adjusted EBITDA is calculated as net income before the following items: interest expense, income tax provision, depreciation, depletion, and amortization expense, exploration expense, pre-development expense, Aurizon acquisition costs, Lucky Friday suspension-related costs, interest and other income (expense), foreign exchange gains and losses, gains and losses on derivative contracts, unrealized gains on investments, provisions for environmental matters, stock-based compensation, and provisional price gains and losses. Management believes that, when presented in conjunction with comparable GAAP measures, Adjusted EBITDA is useful to investors in evaluating our operating performance. The following table reconciles net loss to Adjusted EBITDA:

Assay Results - Q2 2015

Note: All assay intervals represent true widths of drill core with the exception of the results from Greens Creek. At Greens Creek the assay intervals represent the horizontal width because the mineralized bodies are very irregular in shape and in most cases this is the best approximation for true width.