Hecla Reports 2015 Sales of $444 Million

Hecla Mining Company (NYSE:HL) today announced 2015 sales of $443.6 million and gross profit of $38.5 million, with net loss applicable to common stockholders of $87.5 million, or $0.23 per basic share, and an adjusted net loss applicable to common stockholders of $34.0 million, or $0.09 per basic share.¹

FOURTH QUARTER 2015 HIGHLIGHTS (comparison to Q4 2014)

• Silver production increased 13% to 3.6 million ounces at a cash cost, after by-product credits, of $5.55 per silver ounce.²
• Gold production increased 10% to 60,350 ounces, of which Casa Berardi produced 42,282 ounces of gold at a cash cost, after by-product credits, of $591 per gold ounce.²
• San Sebastian began producing gold and silver, pouring first doré on December 22.
• Operating cash flow of $27.5 million and adjusted EBITDA of $34.5 million.³

FULL YEAR 2015 HIGHLIGHTS (comparison to 2014) AND 2016 OUTLOOK

• Silver equivalent production of 37.5 million ounces, the highest in the Company's history.⁴
• Silver production increased 5% to 11.6 million ounces, the highest in the Company's history, at a cash cost, after by-product credits, per silver ounce of $5.85.²
• Gold production increased 1% to 189,327 ounces, with 127,891 ounces produced at Casa Berardi at an average cash cost, after by-product credits, per gold ounce of $772.²
• Highest year-end proven and probable silver reserve levels in Company history for the 10th consecutive year despite using $14.50/oz silver for the calculation.
• Operating cash flow of $106.4 million and adjusted EBITDA of $116.8 million.³
• Cash and cash equivalents of $155.2 million at December 31, 2015.
• Proceeding with East Mine Crown Pillar (EMCP) pit at Casa Berardi, expect to produce ore from the new pit by year end.
• Estimated 2016 silver production of 13.5-14.0 million ounces and gold production of approximately 207,000 ounces.

"We finished 2015 strongly, with robust performance at all our mines in the fourth quarter helping us set record silver and silver equivalent production for the year. And despite using probably the most conservative price assumptions in the industry, the Company had its 10th consecutive year of growing silver reserves to the most in our history," said Phillips S. Baker Jr., Hecla's President and CEO. "We believe we are one of few precious metals companies growing right now, not just in reserves but in production as well. Because our balance sheet allowed us to continue investing during the price decline of the last few years, we expect more than a 15% increase in silver production and about a 10% increase in gold production this year, positioning us to take advantage of the rally in prices we have seen in 2016."

SILVER AND GOLD RESERVE GROWTH

Proven and probable silver reserves of 175 million ounces increased by 1% over December 31, 2014 levels due to the addition of approximately 8 million silver ounces at San Sebastian using a price assumption of $14.50/oz, a 16% reduction from last year’s $17.25/oz assumption. Proven and probable gold reserves of 2.1 million ounces were unchanged over December 31, 2014 levels using an assumption of $1,100/oz, a 10% decline from last year’s $1,225/oz assumption.

Please refer to the reserves and resources table at the end of this press release, or to the press release entitled "Hecla Reports Record Silver Reserves," issued on February 16, 2016, for the breakdown between proven and probable reserve and resource levels as well as a detailed summary of the Company's exploration programs.

FINANCIAL OVERVIEW

Net loss applicable to common stockholders for the fourth quarter and full year of 2015, respectively, was $63.1 million and $87.5 million, or $0.17 and $0.23 per basic share, compared to net losses of $16.8 million and $17.3 million, or $0.05 per basic share for both the fourth quarter and full year of 2014. Among items impacting the results for the 2015 periods compared to 2014 were the following:

• Revenue decreased by 5% for the fourth quarter and 11% for the year due to lower average silver, gold, lead and zinc prices in 2015 partially offset by higher production.
• Exploration and pre-development expense decreased by $2.0 million for the quarter and increased by $2.3 million for the year.
• Foreign exchange gains due to the weakness in the Canadian dollar.
• Increase in the provision for closed operations and reclamation for historic properties to $12.0 million.
• Net mark-to-market gains on base metal forward contracts of $0.0 million and $8.3 million for the fourth quarter and full year of 2015 compared to net losses of $11.7 million and net gains of $9.1 million for the same periods in 2014.
• Impairment losses of $2.5 million for 2015 for investments in exploration companies.
• Income tax provision of $56.3 million in 2015, largely due to a non-cash increase in the U.S. valuation allowance, against net operating loss carryforwards, as a result of this year’s lower metal prices, which was partially offset by the decrease in the Mexican valuation allowance related to net operating losses which are expected to be utilized as a result of San Sebastian’s operating activities.

Operating cash flow increased 28% to $106.4 million in 2015. Year end 2015 cash and cash equivalents of $155.2 million reduced $54.5 million over the prior year level as the Company undertook the second largest capital program in its history. Hecla's capital investments (excluding capitalized interest) at its existing operations were $42.0 million and $140.6 million for the fourth quarter and year ended December 31, 2015, respectively. The capital investment for the year at Lucky Friday was $55.9 million, including $39.5 million for the #4 Shaft Project. At Greens Creek, capital spending was $46.0 million, including $20.7 million for the tailings pond expansion. At Casa Berardi, capital investment was $35.3 million and was focused on mine development. At San Sebastian, capital investment was $3.4 million, focused on mill upgrades.

Metals Prices

Average realized silver prices in the fourth quarter and full year 2015 were $14.26 and $15.57 per ounce, 11% and 16% lower than the prior periods, respectively. Realized prices for gold for the fourth quarter and full year 2015 were $1,089 and $1,150 per ounce, both 9% lower than the prior periods. Realized prices for lead and zinc were lower for the 2015 periods than 2014.

Base Metals Forward Sales Contracts

The following table summarizes the quantities of base metals committed under financially settled forward sales contracts at December 31, 2015:

With the advanced settlement of the balance of financially settled base metal forward contracts in 2015, net proceeds of $16.5 million were generated during the year.

OPERATIONS

Overview

• Greens Creek production of 2.6 million and 8.5 million ounces of silver in the fourth quarter and full year of 2015, respectively, an increase of 4% and 8% over the same periods of 2014.
• Lucky Friday silver production of 985,698 and 3,028,134 ounces for the fourth quarter and full year of 2015, respectively, an increase of 32% and decrease of 7% over the same periods of 2014.
• Casa Berardi gold production of 42,282 and 127,891 ounces for the fourth quarter and full year of 2015, respectively, a 7% increase and no change over production in the 2014 periods.
• San Sebastian poured its first doré on December 22, producing 81,677 ounces of silver and 870 ounces of gold in the fourth quarter of 2015.

The following table provides the production and cash cost, after by-product credits, per silver and gold ounce summary for the fourth quarters and twelve months ended December 31, 2015 and 2014:

The following table provides the production summary on a consolidated basis for the fourth quarter and twelve months ended December 31, 2015 and 2014:

Greens Creek Mine - Alaska

Silver production at Greens Creek in 2015 was 2.6 million ounces for the fourth quarter and 8.5 million ounces for the year, the highest annual silver production since Hecla acquired 100% of the mine in 2008. Silver production increased over 2014 levels due to higher silver ore grades, particularly during the fourth quarter of 2015, as well as higher metallurgical recoveries. The mill operated at an average of 2,324 tons per day in the fourth quarter, and 2,231 tons per day in 2015.

Cash cost, after by-product credits, per silver ounce at Greens Creek was $4.18 and $3.91 for the fourth quarter and full year, respectively, compared to $2.74 and $2.89 for the same periods in 2014. The increase in cash costs, after by-product credits, per silver ounce for 2015 compared to 2014 is the result of lower by-product credits due to decreasing metal prices, partially offset by increased silver production.

Capital spending for Greens Creek in 2016 is estimated to be $48 million, of which approximately $14 million is for the tailings expansion project.

Lucky Friday Mine - Idaho

The Lucky Friday mine produced 985,698 ounces of silver in the fourth quarter and 3,028,134 ounces of silver for the full year 2015, compared to 745,766 ounces and 3,239,151 ounces for the same periods in 2014. The grades in the fourth quarter increased by more than 10% over the prior year period due to mine sequencing. The reduction in annual production is due to a failure in the underground ventilation system that was resolved on October 1. The mill averaged 926 tons per day in the fourth quarter and 815 tons per day for the year.

Cash cost, after by-product credits, per silver ounce at Lucky Friday was $9.02 and $11.23 in the fourth quarter and full year, respectively, compared to $10.65 and $9.44 for the same periods in 2014. The reduction in quarterly cash cost, after by-product credits, per silver ounce is attributable to the higher production level resulting from higher grades. The increase in annual cash cost, after by-product credits, per silver ounce is attributable to the necessity of mining lower grade material as the ventilation issue was being resolved.

The #4 Shaft Project is a key growth project that is currently excavated to the 8500 level. The #4 Shaft Project is more than 90% completed, and is expected to be finished in the fourth quarter of 2016, allowing access to higher-grade zones once the associated development is concluded. The #4 Shaft Project is expected to cost approximately $225 million, with approximately $20 million left to be spent over 2016.

Capital spending for Lucky Friday in 2016 is estimated to be $37 million, including the #4 Shaft Project.

The Collective Bargaining Agreement at the Lucky Friday, between the bargaining unit employees represented by the United Steel Workers and the Company, is scheduled to expire on April 30, 2016.

Casa Berardi Gold Mine - Quebec

The Casa Berardi mine produced 42,282 ounces of gold in the fourth quarter, the highest quarterly production since Hecla acquired the mine in 2013, and 127,891 ounces for the full year 2015, compared to 39,385 and 128,244 ounces of gold for the 2014 periods. The increased gold production during the quarter was due in part to higher grades and recoveries. The mill throughput rate averaged 2,488 tons per day in the fourth quarter and 2,313 tons per day over the year.

Cash cost, after by-product credits, per gold ounce was $591 for the fourth quarter and $772 for 2015, a 7% and 6% decrease, respectively, from 2014 periods. The lower costs were due in part to higher production as well as changes in the CAD/USD exchange rate.

The Company is moving forward with the East Mine Crown Pillar ("EMCP") pit, which is situated between the east and west mines. In a report prepared for the Company's use by Mine Development Associates, dated June 26, 2015, the project is estimated to have an NPV (12%) of C$37.5¹, and an IRR of 90% ($1,225/oz gold). The pit is expected to provide about 5.5 years of production which is meant to supplement the material coming from the underground operation, increasing the mill throughput to about 3,100 tons per day for the remaining mine life starting in 2017. Excavation of surface materials has begun, and production of about 5,000 ounces of gold is expected before year-end, increasing to approximately 30,000 ounces of gold in 2017. Capital investment for the EMCP pit project is estimated at $39 million over the life of the project, with $19 million to be spent in 2016.

Capital spending for Casa Berardi in 2016 is estimated to be $61 million.

San Sebastian - Mexico

The San Sebastian mine began operations and poured its first doré on December 22, 2015. The mine produced 81,677 ounces of silver at a cash cost, after by-product credits, of $6.71 per ounce. The mine also produced 870 ounces of gold.

In January, San Sebastian produced 288,271 ounces of silver and 2,231 ounces of gold from 10,446 tons of mill feed. The feed averaged 0.23 oz/ton gold and 29.4 oz/ton silver, with corresponding recoveries of 91.8% and 93.8%.

Capital spending for San Sebastian in 2016 is estimated to be $2 million.

2016 GUIDANCE

For the full year 2016, the Company expects:

DIVIDEND

The Board of Directors declared a quarterly dividend of $0.0025 per share of common stock, payable on or about March 30, 2016, to shareholders of record on March 18, 2016. The Company's realized silver price was $14.26 in the fourth quarter and therefore did not satisfy the criteria for a larger dividend under the Company's dividend policy.

The Board of Directors also declared the regular quarterly dividend of $0.875 per share on the 157,816 outstanding shares of Series B Cumulative Convertible Preferred Stock. This represents a total amount to be paid of approximately $138,000. The cash dividend is payable April 1, 2016, to shareholders of record on March 15, 2016.

EXPECTED COST REDUCTIONS

Recognizing the ongoing weakness in the price of silver, the Company has enacted several measures to reduce costs and maintain its financial strength. The Company expects to reduce non-payroll costs by approximately $25 million in 2016. These cuts are expected to come from all areas of the business. In addition, senior management and board members have taken a 10% reduction in base salary and retainer fees, respectively, and the CEO has taken a 20% reduction in base salary.

BOARD UPDATE

The Board of Directors of Hecla has appointed Mr. George R. Johnson and Mr. Stephen F. Ralbovsky as Directors effective March 1, 2016. Mr. Johnson has over 45 years of experience in the mining industry, and was most recently Senior Vice President of Operations of B2 Gold Corporation. He has also held senior operations positions at Kinross Gold Corporation and Bema Gold Corp. and held various positions at Hecla from 1983 to 1999. Mr. Ralbovsky was a partner with PricewaterhouseCoopers, LLP from 1990 until his retirement in June 2014 where he was US Mining Leader (all lines of service), US Mining Tax Leader and Global Mining Tax Leader.

CONFERENCE CALL AND WEBCAST

A conference call and webcast will be held today, Tuesday, February 23, at 1:00 p.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

Founded in 1891, Hecla Mining Company (NYSE:HL) is a leading low-cost U.S. silver producer with operating mines in Alaska, Idaho and Mexico, 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 Statement Regarding Forward-Looking Statements, Including 2016 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 of future production and sales, including as a result of the #4 Shaft Project; (ii) estimates of future costs including the expected cost of the #4 Shaft project and cash cost, after by-product credits per ounce of silver/gold; (iii) estimates for 2016 for silver and gold production, silver equivalent production, cash cost, after by-product credits, capital expenditures and exploration and pre-development expenditures (which assumes metal prices of gold at $1,150/oz, Ag $15/oz, Zn $0.75/lb, Pb $0.80/lb; USD/CAD assumed to be $0.75, USD/MXN assumed to be $0.06; (iv) expectations regarding the development, growth potential, financial performance and exploration potential of the Company’s projects, including the EMCP pits in Quebec and San Sebastian operations; (v) the Company’s mineral reserves and resources; 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 2015 Form 10-K, filed on February 23, 2016 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.

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. The term “resource” does not equate to the term “reserve”. Under Guide 7, the material described herein as “indicated resources” and “measured resources” would be characterized as “mineralized material” and is permitted to be disclosed in tonnage and grade only, not ounces. The category of “inferred resources” is not recognized by Guide 7. 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.

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, 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"), and for the San Sebastian Mine are contained in a technical report prepared for Hecla titled "Technical Report for the San Sebastian Ag-Au Property, Durango, Mexico" effective date September 8, 2015. Also included in these four 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.

The current Casa Berardi drill program was performed on core sawed in half and included the insertion of blanks and standards of variable grade in every 24 core samples. Standards were generally provided by Analytical Solutions Ltd and prepared in 30 gram bags. Samples were sent to the Swastika Laboratories in Swastika, Ontario, a registered accredited laboratory, where they were dried, crushed, and split for gold analysis. Analysis for gold was completed by fire assay with AA finish. Gold over-limits were analyzed by fire assay with gravimetric finish. Data received from the lab were subject to validation using in-built program triggers to identify outside limit blank or standard assays that require re-analysis. Over 5% of the original pulps and rejects are sent for re-assay to ALS Chemex in Val d’Or for quality control.

Dr. McDonald reviewed and verified information regarding drill sampling, data verification of all digitally-collected data, drill surveys and specific gravity determinations relating to the Casa Berardi mine. The review encompassed quality assurance programs and quality control measures including analytical or testing practice, chain-of-custody procedures, sample storage procedures and included independent sample collection and analysis. This review found the information and procedures meet industry standards and are adequate for Mineral Resource and Mineral Reserve estimation and mine planning purposes.

HECLA MINING COMPANY

Reconciliation of Non-GAAP Measures to GAAP

(Unaudited)

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 precious metals companies (including the Silver Institute) in an effort to provide a uniform standard for comparison purposes; 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 is the most comparable financial measure calculated in accordance with GAAP to cash cost, before by-product credits and cash cost, after by-product credits per ounce of silver/gold.

As depicted in the Greens Creek Unit, Lucky Friday Unit and San Sebastian 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:

HECLA MINING COMPANY

Reconciliation of Net Income (Loss) (GAAP) to Adjusted EBITDA

(dollars and ounces in thousands, except per share amounts - unaudited)

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 (benefit), depreciation, depletion, and amortization expense, exploration expense, pre-development expense, acquisition costs, foreign exchange gains, gains on derivative contracts, provisional price gains and losses, provisions for closed operations expense, stock-based compensation, and unrealized losses on investments. 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 income (loss) to Adjusted EBITDA: