EX-99.2 2 ex_938948.htm EXHIBIT 99.2 ex_938948.htm
 

Exhibit 99.2

 

HECLA MINING COMPANY

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

 

 

The unaudited pro forma condensed consolidated financial information contained herein is prepared in accordance with Article 11 of Regulation S-X and should be read in conjunction with the accompanying notes. The following unaudited pro forma condensed consolidated financial statements were prepared to give effect to the disposal by Hecla Mining Company ("us", "we", the "Company" or "Hecla") of our wholly-owned subsidiary Hecla Quebec Inc. disposal (the "disposal"). The disposal will be presented as a discontinued operation in our Consolidated Financial Statements.

 

On January 26, 2026, we announced that we had entered into a material definitive agreement for the disposal of our Hecla Quebec Inc. subsidiary which owns the Casa Berardi segment and various exploration properties in Quebec, Canada to an affiliate of Orezone Gold Corporation ("Orezone") for up to $593 million in total consideration comprised of the following:

 

 

●

Cash consideration of $160 million due upon closing;

 

 

●

Equity consideration of approximately 65.8 million Orezone common shares, to be issued upon closing;

 

 

●

Deferred cash consideration of $30 million and $50 million to be paid at 18 months and 30 months, respectively, from closing; and

 

 

●

Contingent consideration of up to $241 million consisting of:

 

 

o

Production-based royalty payments of up to $211 million ($80/ounce for the first 500,000 ounces, then $180/ounce thereafter from open pit operations)

 

 

o

Permit receipt payment of $20 million upon grant of permits

 

 

o

Gold price-linked payment of up to $10 million at gold prices exceeding $4,200/ounce.

 

Under the terms of the transaction, (i) Orezone is entitled to reduce future deferred cash payments or contingent royalty payments owed to us if the financial assurance required under Casa Berardi’s updated closure plan exceeds $150.0 million, by 50% of such amount and (ii) On April 24, 2026 a working capital true up adjustment will be made to reflect any difference between actual and targeted working capital agreed upon between Hecla and Orezone.

 

On March 25, 2026, the disposal closed and we received cash consideration of $160 million and 65,757,265 Orezone shares valued at $95.5 million. We intend to utilize the $160 million cash consideration received and existing cash resources to call and redeem the remaining $263 million 7.25% Senior Notes due February 15, 2028 ("Senior Notes"). We issued $475 million Senior Notes on February 19, 2020, and called and redeemed $212 million Senior Notes during 2025.

 

The unaudited pro forma condensed consolidated financial information is presented on the basis that we will utilize the cash proceeds received from the disposition and existing the cash resources to call and redeem $263 million of Senior Notes. The unaudited pro forma condensed consolidated financial information and related notes present our historical condensed consolidated balance sheet and historical condensed consolidated statement of operations adjusted to reflect the impact of the disposal that are (i) directly attributable to the disposal and (ii) factually supportable.

 

The unaudited pro forma condensed consolidated financial information for the years ended December 31, 2025, 2024 and 2023 and as of December 31, 2025, has been derived from our audited consolidated financial statements for the years ended December 31, 2025, 2024 and 2023. The unaudited pro forma condensed consolidated financial information has been prepared as if the disposal was completed as of January 1, 2023, in the case of the unaudited pro forma condensed consolidated statement of operations, and on December 31, 2025, in the case of the unaudited pro forma condensed consolidated balance sheet. The unaudited pro forma condensed consolidated presentation of the consideration received is preliminary and subject to adjustment. The final allocation of consideration among the derecognized assets and liabilities may differ materially from the amounts shown as of the applicable closing dates.

 

The unaudited pro forma condensed consolidated financial information does not purport to project our future operating results and should be read in conjunction with the accompanying notes.

 

This unaudited pro forma condensed consolidated financial information, including the related notes, is derived from, and should be read in conjunction with, our audited consolidated financial statements, which are available in our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on February 18, 2026.

 

1
 

 

HECLA MINING COMPANY

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

For the year ended December 31, 2025

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

 

   

Hecla

Historical

December 31,

2025

    

Hecla Quebec

Inc. Disposal Adjustments

(Note 2)

      

Pro Forma

adjustments

      

Pro Forma

  

Sales

   $ 1,423,019     $ (319,117 )

a.

   $ —       $ 1,103,902  

Cost of sales and other direct production costs

     640,799       (173,486 )

a.

     -         467,313  

Depreciation, depletion and amortization

     160,017       (33,232 )

a.

     -         126,785  

Total cost of sales

     800,816       (206,718 )       -         594,098  

Gross profit

     622,203       (112,399 )

a.

     -         509,804  
                                     

Other operating expenses:

                                    

General and administrative

     57,626       -         -         57,626  

Exploration and pre-development

     27,745       (393 )

a.

     -         27,352  

Ramp-up and suspension costs

     14,005       -         -         14,005  

Provision for closed operations and environmental matters

     7,867       -         -         7,867  

Other operating loss

     165       6,381  

a.

     -         6,546  
      107,408       5,988         -         113,396  

Income from operations

     514,795       (118,387 )       -         396,408  

Other expense:

                                    

Interest expense

     (41,581 )     583  

a.

     19,068  

b.

     (21,930 )

Fair value adjustments, net

     12,455       (4,065 )

a.

     -         8,390  

Foreign exchange loss

     (5,764 )     -         -         (5,764 )

Other expense, net

     (726 )     -         -         (726 )
      (35,616 )     (3,482 )       19,068         (20,030 )

Income before income and mining taxes

     479,179       (121,869 )       19,068         376,378  

Income and mining tax provision

     (157,467 )     44,160  

a.

     (5,148 )

b.

     (118,455 )

Net income

     321,712       (77,709 )       13,920         257,923  

Preferred stock dividends

     (552 )     -         -         (552 )

Net income applicable to common stockholders

   $ 321,160     $ (77,709 )     $ 13,920       $ 257,371  

Basic income per common share after preferred dividends

   $ 0.49                         $ 0.39  

Diluted income per common share after preferred dividends

   $ 0.49                         $ 0.39  

Weighted average number of common shares outstanding basic

     651,965                           651,965  

Weighted average number of common shares outstanding diluted

     655,768                           655,768  

 

2
 

 

HECLA MINING COMPANY

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

For the year ended December 31, 2024

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

 

   

Hecla

Historical

December

31, 2024

    

Hecla

Quebec Inc.

Disposal

Adjustments

(Note 2)

      

Pro Forma

adjustments

      

Pro Forma

  

Sales

   $ 929,925     $ (209,679 )

a.

   $ —       $ 720,246  

Cost of sales and other direct production costs

     548,245       (150,779 )

a.

     —         397,466  

Depreciation, depletion and amortization

     183,470       (72,835 )

a.

     —         110,635  

Total cost of sales

     731,715       (223,614 )       —         508,101  

Gross profit

     198,210       13,935         -         212,145  
                                     

Other operating expenses:

                                    

General and administrative

     45,405       (1,863 )

a.

     —         43,542  

Exploration and pre-development

     27,321       —         —         27,321  

Ramp-up and suspension costs

     43,307       —         —         43,307  

Provision for closed operations and environmental matters

     6,843       —         —         6,843  

Write-down of property, plant and equipment

     14,574       —         —         14,574  

Other operating income

     (45,516 )     (1,688 )

a.

     —         (47,204 )
      91,934       (3,551 )       —         88,383  

Income from operations

     106,276       17,486         -         123,762  

Other expense:

                                    

Interest expense

     (49,834 )     520  

a.

     19,068  

b.

     (30,246 )

Fair value adjustments, net

     (2,204 )     5,745  

a.

     —         3,541  

Foreign exchange gain

     7,552       —         —         7,552  

Other income, net

     4,426       —         —         4,426  
      (40,060 )     6,265         19,068         (14,727 )

Income before income and mining taxes

     66,216       23,751         19,068         109,035  

Income and mining tax provision

     (30,414 )     (4,810 )

a.

     (5,148 )

b.

     (40,372 )

Net income

     35,802       18,941         13,920         68,663  

Preferred stock dividends

     (552 )     —         —         (552 )

Net income applicable to common stockholders

   $ 35,250     $ 18,941       $ 13,920       $ 68,111  

Basic income per common share after preferred dividends

   $ 0.06                         $ 0.11  

Diluted income per common share after preferred dividends

   $ 0.06                         $ 0.11  

Weighted average number of common shares outstanding basic

     620,848                           620,848  

Weighted average number of common shares outstanding diluted

     622,535                           622,535  

 

3
 

 

HECLA MINING COMPANY

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

For the year ended December 31, 2023

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

 

   

Hecla

Historical

December 31,

2023

    

Hecla Quebec

Inc. Disposal Adjustments

(Note 2)

      

Pro Forma

adjustments

      

Pro Forma

  

Sales

   $ 720,227     $ (177,678 )

a.

   $ —       $ 542,549  

Cost of sales and other direct production costs

     458,504       (155,304 )

a.

     —         303,200  

Depreciation, depletion and amortization

     148,774       (66,037 )

a.

     —         82,737  

Total cost of sales

     607,278       (221,341 )       —         385,937  

Gross profit

     112,949       43,663         —         156,612  
                                     

Other operating expenses:

                                    

General and administrative

     42,722       (2,084 )

a.

     —         40,638  

Exploration and pre-development

     32,512       (5,685 )

a.

     —         26,827  

Ramp-up and suspension costs

     76,252       (2,228 )

a.

     —         74,024  

Provision for closed operations and environmental matters

     7,575       —         —         7,575  

Other operating income

     (1,438 )     (3,023 )

a.

     —         (4,461 )
      157,623       (13,020 )       —         144,603  

(Loss) income from operations

     (44,674 )     56,683         —         12,009  

Other expense:

                                    

Interest expense

     (43,319 )     189  

a.

     19,068  

b.

     (24,062 )

Fair value adjustments, net

     2,925       (1,190 )

a.

     —         1,735  

Foreign exchange loss

     (3,810 )     —         —         (3,810 )

Other (expense) income, net

     5,883       —         —         5,883  
      (38,321 )     (1,001 )       19,068         (20,254 )

Loss before income and mining taxes

     (82,995 )     55,682         19,068         (8,246 )

Income and mining tax provision

     (1,222 )     (17,838 )

a.

     (5,148 )

b.

     (24,208 )

Net loss

     (84,217 )     37,844         13,920         (32,454 )

Preferred stock dividends

     (552 )     —         —         (552 )

Net loss applicable to common stockholders

   $ (84,769 )   $ 37,844       $ 13,920       $ (33,006 )

Basic and diluted loss per common share after preferred dividends

   $ (0.14 )                       $ (0.05 )

Weighted average number of common shares outstanding basic and diluted

     605,668                           605,668  

 

4
 

 

HECLA MINING COMPANY

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

As of December 31, 2025

(dollars in thousands - unaudited)

 

   

Hecla Historical December 31, 2025

    

Hecla Quebec Disposition

Adjustments

(Note 3)

      

Pro Forma

Adjustments

      

Pro Forma

  

ASSETS

                                    

Current assets:

                                    

Cash and cash equivalents

   $ 241,558     $ 160,000  

a.b.

   $ (263,000 )

h.

   $ 138,558  

Accounts receivable

     187,340       (5,091 )

b.

     —         182,249  

Inventories

     114,785       (33,098 )

b.

     —         81,687  

Other current assets

     85,661       (2,596 )

b.

     —         83,065  

Total current assets

     629,344       119,215         (263,000 )       485,559  

Investments

     47,842       95,245  

c.

     —         143,087  

Restricted cash and cash equivalents

     1,174       —         —         1,174  

Properties, plants, equipment and mine development, net

     2,840,827       (687,496 )

b.d.

     —         2,153,331  

Operating lease right-of-use assets

     8,859       —         —         8,859  

Other non-current assets

     32,599       79,859  

e.

     —         112,458  

Total assets

   $ 3,560,645     $ (393,177 )     $ (263,000 )     $ 2,904,468  
                                     

LIABILITIES

                                    

Current liabilities:

                                    

Accounts payable and other current accrued liabilities

   $ 163,811     $ (32,581 )

b.

   $ —       $ 131,230  

Finance leases

     7,173       —         —         7,173  

Accrued reclamation and closure costs

     13,795       —         —         13,795  

Accrued interest

     7,678       —         —         7,678  

Other current liabilities

     39,107       1,134  

b.f.

     —         40,241  

Total current liabilities

     231,564       (31,447 )       —         200,117  

Accrued reclamation and closure costs

     188,471       (75,980 )

b.

     —         112,491  

Long-term debt including finance leases

     268,627       —         (263,000 )

h.

     5,627  

Deferred tax liability

     246,425       (88,840 )

b.

     —         157,585  

Other non-current liabilities

     33,912       —         —         33,912  

Total liabilities

   $ 968,999     $ (196,267 )     $ (263,000 )     $ 509,732  
                                     

STOCKHOLDERS’ EQUITY

                                    

Preferred stock

   $ 39     $ —       $ —       $ 39  

Common stock

     169,689       —         —         169,689  

Capital surplus

     2,643,211       —         —         2,643,211  

Accumulated deficit

     (182,143 )     (196,910 )

g.

     —         (379,053 )

Accumulated other comprehensive loss, net

     (3,334 )     —         —         (3,334 )

Treasury stock

     (35,816 )     —         —         (35,816 )

Total stockholders’ equity

     2,591,646       (196,910 )       —         2,394,736  

Total liabilities and stockholders’ equity

   $ 3,560,645     $ (393,177 )     $ (263,000 )     $ 2,904,468  

 

5
 

 

HECLA MINING COMPANY

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

(IN THOUSANDS OF DOLLARS, UNLESS OTHERWISE NOTED)

 

 

Note 1. Basis of Presentation and Description of the Transactions

 

Basis of Presentation

 

The unaudited pro forma condensed consolidated financial information has been prepared in accordance with Article 11. The unaudited pro forma condensed consolidated balance sheet is presented as of December 31, 2025, as if the disposal of Hecla Quebec Inc. occurred on December 31, 2025. The unaudited pro forma condensed consolidated statement of operations for the years ended December 31, 2025, 2024 and 2023 has been prepared as if the disposal had occurred as of January 1, 2023, and exclude the results of Hecla Quebec Inc. for all periods. The disposal will be presented as a discontinued operation in our Consolidated Financial Statements, resulting in unaudited pro forma statement of operations for each of the years ended December 31, 2025, 2024 and 2023, respectively being presented.

 

The unaudited pro forma condensed consolidated financial statements and explanatory notes have been prepared to illustrate the effects of the Hecla Quebec Inc., sale by Hecla. The unaudited pro forma condensed consolidated financial statements are presented for informational purposes only and do not necessarily indicate the financial results of the disaggregated company had the sale occurred at the beginning of the periods presented, nor do they necessarily indicate the results of operations in future periods or the future financial position of the company. The unaudited pro forma condensed consolidated presentation of the consideration received is preliminary and subject to adjustment. The final allocation of consideration among the derecognized assets and liabilities may differ materially from the amounts shown as of the applicable closing dates.

 

The unaudited pro forma condensed consolidated financial information is presented for illustrative purposes only.

 

Sale of Hecla Quebec Inc.

 

On January 26, 2026, we announced that we had entered into a material definitive agreement for the disposal of our Hecla Quebec Inc. subsidiary which owns the Casa Berardi segment to Orezone Gold Corporation ("Orezone") for up to $593 million in total consideration comprised of the following:

 

 

●

Cash consideration of $160 million due upon closing;

 

 

●

Equity consideration of approximately 65.8 million Orezone common shares, to be issued upon closing;

 

 

●

Deferred cash consideration of $30 million and $50 million to be paid at 18 months and 30 months, respectively, from closing; and

 

 

●

Contingent consideration of up to $241 million consisting of:

 

 

o

Production-based royalty payments of up to $211 million ($80/ounce for the first 500,000 ounces, then $180/ounce thereafter from open pit operations)

 

 

o

Permit receipt payment of $20 million upon grant of permits

 

 

o

Gold price-linked payment of up to $10 million at gold prices exceeding $4,200/ounce.

 

Under the terms of the transaction, (i) Orezone is entitled to reduce future deferred cash payments or contingent royalty payments owed to us if the financial assurance required under Casa Berardi’s updated closure plan exceeds $150.0 million, by 50% of such amount and (ii) On April 24, 2026 a working capital true up adjustment will be made to reflect any difference between actual and targeted working capital agreed upon between Hecla and Orezone.

 

We intend to utilize the $160 million cash consideration received and existing cash resources to call and redeem the remaining $263 million 7.25% Senior Notes due February 15, 2028 ("Senior Notes"). We issued $475 million Senior Notes on February 19, 2020, and called and redeemed $212 million Senior Notes during 2025.

 

6
 

 

Note 2. Adjustments to the Unaudited Pro Forma Condensed Consolidated Statement of Operations

 

The following adjustments correspond to those included in the unaudited condensed consolidated pro forma statements of operations for the years ended December 31, 2025, 2024 and 2023, respectively, based on Management's preliminary accounting assessments which are subject to change.

 

Hecla Quebec Inc. Disposal Adjustments

 

a.

Represents the income and expenses eliminated in connection with the disposal of Hecla Quebec Inc.

 

Pro Forma Adjustments

 

b.

Reflects the elimination of interest expense of $19.1 million following repayment of $263 million of Senior Notes and related income and mining tax expense.

 

Note 3. Adjustments to the Unaudited Pro Forma Condensed Balance Sheet

 

The following adjustments correspond to those included in the unaudited condensed consolidated pro forma balance sheet as of December 31, 2025, based on Management's preliminary accounting assessments which are subject to change.

 

a.

Represents the cash proceeds received of $160 million.

 

b.

Represents the assets and liabilities derecognized which amounted to total assets of $763.8 million and liabilities of $210.6 million, respectively.

 

c.

Represents the 65,757,265 Orezone shares valued at $95.5 million.

 

d.

Represents the fair value of the royalty contingent consideration of $22.8 million received, less the $710.2 million properties, plants, equipment and mine development, net disposed of.

 

e.

Represents the fair value of the deferred cash and contingent consideration of $80.7 million

 

f.

Represents accrual for estimated transaction costs of $6.0 million, less $4.9 million of other current liabilities disposed of.

 

g.

Represents the estimated loss on the disposal of $196.9 million, net of estimated transaction cost of $6.0 million, as if the disposal had occurred on December 31, 2025. This loss may not be representative of what will actually be recorded during the year ended December 31, 2026.

 

Pro Forma Adjustments

 

h.

Reflects the repayment of $263 million of Senior Notes utilizing a combination of the $160 million net cash proceeds received and $103 million of existing cash resources.

 

 

7