Our next presenter is Hecla Mining. Hecla is a senior precious metals company with four mines in operation in the United States and Canada. Here today to provide an update is Hecla's CEO, Rob Krcmarov.
Good morning, everyone, and thank you, Stephanie, and Finn, both of you, for inviting me to speak at Hecla today. Most of my comments will really be centered around Hecla's strategic vision, our priorities, our operations, and silver fundamentals. Hecla, as most of you know, is a 134-year-old company with a culture of innovation and continuous improvement, but today I'd really like to focus my talk on just three key messages, which I hope you'll take away from this presentation. The first is that Hecla is the largest silver producer in the United States and Canada, and the third largest primary silver producer. We will be producing between 15.5 and 17 million ounces of silver this year from our three silver mines, and they're all located in top-tier mining jurisdictions.
Secondly, our operations have long reserve mine lives exceeding 12 years with low costs and significant leverage to silver prices. Our margins are over 50% at current prices. Our portfolio offers further optionality of silver growth in the near and long term with our exploration projects like the assets in Montana, which I'll touch on a little bit later. And that's the third largest undeveloped silver copper deposit in the United States. And third, silver fundamentals are strong given the current macroeconomic environment and silver's critical role in the energy transition, particularly with respect to EVs and solar panels. Now, I will be making some forward-looking statements, and I'll direct your attention to this slide and encourage you to read the disclosures in our 10-K and 10-Q. You know, it's only been three months since I took over as Hecla's president and CEO.
Looking at Hecla's portfolio of opportunities, you can see why it's easy to see why I'm excited and really honored and privileged to lead such a storied company. As we embark on our next chapter of growth and success, I want to highlight our strategic vision. Firstly, we're committed to achieving operational excellence through relentless improvement, and this process will be centered on implementing standardized operating systems across all sites. Lucky Friday was obviously one of the starting assets for Hecla, but the others were acquired. We have some work to do to make sure that we implement some standardized systems and processes and be able to spread best practices. We'll also look at investing in automation where it makes sense and advanced analytics.
And really, the advanced analytics are going to help inform planning and making real-time decision-making capabilities and also driving continuous improvement in cost control. Secondly, we're optimizing our portfolio to maximize value, and that process has already started with our strategic review of Casa Berardi, and we're evaluating our extensive portfolio of exploration assets and investments to unlock value. And so, while organic growth at Keno Hill remains our primary focus, we're also developing a strategic and disciplined M&A framework that leverages our core competencies to create substantial value. And thirdly, we're intensifying our focus on financial discipline and shareholder returns. If there's one thing I really want to highlight, it is that we're not driven by achieving production targets. It really is about financial discipline, generating cash flow and returns.
We're implementing a rigorous capital allocation framework, as I said, centered on cash flow generation, return on investment metrics with clear hurdle rates, and holding ourselves accountable to that. I think this disciplined approach should strengthen our balance sheet, build financial flexibility, and deliver consistent returns to our shareholders. Fourth, our strategic focus on silver production in the United States and Canada. I think that continues to deliver exceptional value. We've got the largest silver reserve base in the U.S. and Canada. As I said, operations are centered on tier one jurisdictions. We're strongly positioned to meet the growing demand from green technology and renewable energy sectors. Our expanding footprint in these stable regions, combined with our industry-leading cost structure, really gives Hecla an unmatched advantage in capturing new opportunities while providing investors with really unparalleled security of assets.
I think this distinctive market position, I think that really sets Hecla apart and really warrants a premium valuation in what's today's really complex and dynamic global environment. Of course, underpinning these pillars is our unwavering commitment to ESG leadership in the mining industry. Our success really does depend on responsible environmental stewardship, strong community partnerships, and deepening relations with First Nations and, in fact, all stakeholders, and it's something we never take for granted. This map highlights our operating mines and exploration projects across North America. Our strategic presence in stable, low-risk jurisdictions provides us with a compelling advantage in today's complex geopolitical landscape. Our three silver mines, they both reserve lives exceeding 12 years, and our flagship operations at Greens Creek and Lucky Friday, they rank in the top third percentile of the primary silver mine cost curve.
And so, these cornerstone assets, they generated $228 million of free cash flow in 2024, and they offer substantial leverage to silver price movements. Keno Hill represents our growth asset, and that's got exceptional exploration upside. In fact, last year, we increased the reserves by 17%. Innovation and continuous improvement, they drive our operational excellence. And at Lucky Friday, our implementation of new mining methods has really transformed what was once on-and-off mine that was bouncing around between two and a half to three million ounces to almost doubling production and making the mine a lot safer. Similarly, at Greens Creek, our targeted capital investments have yielded significant returns through improved throughput and increased recovery rates. Our exploration portfolio also includes the Montana projects, and that is the third largest undeveloped copper-silver deposit in the United States.
We're also evaluating opportunities to optimize this extensive exploration portfolio to maximize value creation and deliver sustainable returns to our shareholders. Safety remains our foremost priority. Our 2024 All-Injury Frequency Rate of 1.86 outperformed the industry average by about 6%. That's still not good enough. You know, we still have our work cut out to do there on safety. The implementation of our patented Underhand Closed Bench mining method, as I said at Lucky Friday, that's significantly enhanced both safety standards and operational efficiency. You can see that they go hand in hand. Our operations really maintain an exceptionally low carbon footprint, and that's driven by the high-grade underground mines that we have and the renewable power sources that we use.
While we've achieved net zero carbon emissions in previous years, we're now expanding our focus to include carbon sequestration initiatives across our operations. Renewable energy powers our portfolio. Casa Berardi that operates on 100% renewable energy. The other operations, including Keno Hill, they benefit from predominantly renewable power grids, further minimizing our environmental impact. Despite our minimal carbon footprint, our economic impact is quite substantial. In 2023, we contributed $855 million to our operating communities, serving as really vital economic pillars in these regions. We do recognize the long-term potential of Keno Hill and our Yukon exploration properties, and this drives our commitment to fostering really strong and enduring partnerships with First Nations communities and the Yukon government, supporting the development of a robust and responsible mining industry in the territory. Silver production in safe and stable jurisdictions is rare.
Looking at global silver production, roughly half of the world's silver production comes from just three countries: China, Peru, and Mexico. The U.S. produces only about 4% of global silver, and I think that makes Hecla's position as the largest U.S. silver producer particularly significant. You know, Hecla has arguably the lowest geopolitical risk profile in the industry. This U.S. and Canadian silver production, it's underpinned by our high-quality silver reserves, which are the fourth largest among peers. Our silver reserve grades are the second highest among peers, and that contributes to our industry-leading cost profile. When compared to our peer group, Hecla has the lowest cost profile in the industry. When you put all that together, we've got the lowest geopolitical risk profile, the fourth largest silver reserves, the second highest grade, and the lowest cost profile.
I think that puts Hecla in a league of its own and a premier go-to silver producer. Let me outline our three-tiered approach to capital allocation. Our first priority is investment in organic growth. We continue to invest in our operating mines and exploration portfolio with current emphasis on the Keno Hill ramp-up. You know, while historically our return on invested capital has not met expectations, we are implementing more rigorous capital allocation processes to optimize returns on every investment dollar. I think this focused approach will drive production growth and enhance ROIC as a key performance metric. Secondly, the balance sheet strength remains fundamental, and we successfully reduced our revolver utilization during the fourth quarter, achieving net cash position by year-end. This financial flexibility, supported by a robust balance sheet, continues to guide our capital allocation decisions. Third, we maintain our commitment to shareholder returns.
Our recently streamlined dividend policy ensures sustainable base dividends, while our strategic focus on high-return operational investments aims to maximize long-term shareholder value. Greens Creek, our flagship operation in Alaska, boasts a 12-year reserve life, a remarkable improvement from its initial seven-year projection when the operation began 35 years ago. This extension demonstrates our exceptional exploration success, and combined with its industry-leading cost structure and environmental stewardship, Greens Creek really stands among the world's premier silver mines, and since assuming operational control in 2008, we've driven significant performance improvement through systematic optimization. Over these 15 years, we've achieved a 7% increase in silver recoveries while expanding throughput by 25% to nearly 2,500 tons per day. Our operational excellence at Greens Creek, it exemplifies the value of sustained innovation and execution. The mines generated over $2 billion in free cash flow since production began.
Our 2008 acquisition of a 70% stake has yielded an exceptional 141% return on investment, placing Greens Creek really as one of the world's most successful mining operations, and this achievement is particularly noteworthy given the location within a national monument, demonstrating our commitment to balancing profitable operations with environmental stewardship. Lucky Friday is our second cornerstone mine located in Idaho with a 17-year reserve mine life. It's been operating for 80 years, and it really does exemplify our culture of innovation with our patented Underhand Closed Bench or the UCB mining method. We've significantly improved both safety and productivity of Lucky Friday, and, you know, Lucky Friday's transformation tells a really compelling story. Throughout most of its 80-year history, as I said, the mine produced two and a half to three million ounces of silver a year.
In 2024, we produced 4.9 million ounces and generated $81 million of free cash flow. And looking ahead, our underhand closed bench mining method and the strategic throughput investments really positions Lucky Friday to be producing around about 5 million ounces a year for at least the next decade, and that's nearly double its historic average. And I think this success really demonstrates the power of having a long-term vision. So, in the early 2000s, with silver prices below $5 an ounce, few saw potential in a 60-year-old mine. And yet, we launched a really ambitious drilling program in 2005, and that delivered a remarkable 300% increase in reserves over 17 years. Combined with strategic infrastructure investments and our UCB mining method, this long-term approach has really fundamentally transformed the mine's potential. And we're confident that Lucky Friday's most productive decade lies ahead.
Let me now turn to Keno Hill, where we're applying the same long-term thinking that's proven so successful at our other operations. Keno Hill holds a special position in our portfolio. It has the largest primary silver reserves in Canada and ranks amongst the highest-grade silver mines globally. The district itself has a rich history of silver production, and it continues to show significant exploration potential. As I mentioned, last year, we increased our reserves at the operation by 17% to almost 65 million ounces, and that's at an incredibly high grade. Our strategy at Keno Hill has two clear phases. Phase one focuses on achieving consistent production at 440 short tons per day. We've made substantial infrastructure investments over recent years, including critical projects such as the cemented tailings backfill plant, water treatment facilities, and mine development.
However, our ramp-up timeline has been impacted by permitting delays following the leach pad incident at Victoria Gold's nearby Eagle Gold Mine last June. Phase two targets 600 short tons per day, and that's a crucial throughput increase for managing the high fixed costs that are inherent in operating in a remote environment, and this expansion requires additional infrastructure investment and new permits. Securing the permitting pathway to 600 tons per day is essential for achieving sustained profitability. You know, we're encouraged by the Yukon Premier's commitment to create efficiencies in the permitting process and support established mining partners. You know, the Yukon government wants to see more respectable mining companies who are adept at operating in sensitive environments like we have been at Greens Creek, and he's committed to helping support our endeavors, and so, you know, I am seeing positive momentum in our partnership with the government.
He's demonstrated strong support through highlighting a collaborative approach to operational solutions like power and working on developing a charter with the major mines department, which could give us a little bit more visibility and certainty that we're going to be advancing through the permitting process, and so, while the permitting challenges for phase two of the expansion remain, we continue to strengthen our relationship with the First Nations and the Yukon government, demonstrating Hecla as a committed and responsible long-term partner. Our Montana assets represent a significant opportunity as the third largest undeveloped silver copper deposit in the United States. This remarkable resource contains 330 million ounces of silver and approximately three billion pounds of copper in inferred resources. We're currently progressing through the regulatory process.
We're awaiting for approval for our plan of operations to drill the existing resource through an existing underground adit that goes for about a kilometer and a half. We need to get the permit to be able to dewater that, access the adit, and continue some drilling from underground, shore up the resource, and do some geotechnical drilling as well. And based on the feedback received and the timeline for the Forestry Service's final environmental assessment, we expect or we anticipate potential approval of our plan of operations before the end of the year. As we conclude, I just want to share our perspective on the silver market and explain our strong conviction in our industry positioning. The silver market currently supplies around about a billion ounces of silver a year annually. That's mostly from mine production. About 80% of that's from mine production.
The demand exceeds this at roughly 1.2 billion ounces, with industrial applications accounting for about 55% of consumption. So, there's been about a 200 million ounce a year deficit for at least the last five years, and we see that continuing forward. Solar sector demand has demonstrated remarkable growth, expanding at a 17% annual rate over the last five years. And again, we expect this trajectory to continue as silver remains essential to solar and other energy transition technologies, including electric vehicles. New solar technologies are using more silver for efficiency and are gaining market share. Every gigawatt of solar installation requires about 450,000 ounces of silver. And, you know, I firmly believe silver's strongest market performance lies ahead as the supply-demand deficit widens, primarily driven by increasing industrial applications, particularly in the green energy sector. So, thank you for your attention.
I'm now happy to address any questions anyone has.
For sure. And for the audience, feel free to put your questions into the app or just raise your hand, and we can get a microphone over to you. But, Rob, maybe just to start it off, you talked, you know, a bit about Keno Hill and the ramp-up there. Can you give us a bit more detail on the milestones remaining that you have to hit to get to full run rates?
So, as I said, last year we were producing around about 300 tons per day. This year it's going to be reasonably similar. That equates to about roughly 3 million ounces. We need permits to make some of the infrastructure investments. So, water treatment plants, we need increased tailings capacity.
Tailings backfill plant, we'll be using cemented tailings underground to make the mine safer and hopefully more productivity. Expanding up to six, and I should mention that the current permit limit is at 440 tons per day. We do have an operating limit where we only have 12 hours per day that we can haul waste ore and tailings. So, that moving that constraint would be helpful. Ultimately, to get to 600 tons per day, which is really where we need to get to, that's going to require putting the Flame & Moth deposit back into production. Now, that was in production up until about a year and a bit ago. And we also need to continue with spending money on development and preparing the stopes. So, really, the bottleneck right now is the permits, which are holding up the infrastructure investments.
And then, you know, we do see a pathway forwards to profitability. As of today, on a look-forward basis, it does meet our investment criteria. But we're keeping a close eye on it. If there continues to be more slippage, we'll re-examine our investments and do whatever's the right thing to do by our shareholders. Great. And then can you speak a bit to the opportunities that exist to optimize cash flow at Greens Creek and Lucky Friday? Greens Creek and Lucky Friday, you know, they're well-established mines and have performed very predictably. Obviously, at Greens Creek, we're getting further and further away from the portal. So, over time, as you can expect in most mines, as you get further away from the processing facilities, costs will gradually creep up, but it's going to be steady for the foreseeable future.
There's opportunity to, you know, labor costs are pretty high, and it's hard to get labor. So, getting things like electricians and maintenance people and miners is expensive. And sometimes we have to compensate by using contractors. So, particularly at Lucky Friday this year, we had a lot of contractors, and we're focusing on removing those and lowering costs. Great. And then one from the app here. How should we think about leverage targets in the medium term and the long term? Obviously, we're carrying, you know, a fair bit of debt. Our leverage ratio was above two. It's, I think we ended the year, we went to 1.8 times, and then I think we ended the year at about 1.6. Our goal really is to try and get that to one or hopefully even below one. Great.
And then you touched briefly on M&A earlier in the presentation, but can you give a bit more of your thoughts there and, you know, how is Hecla thinking about, you know, any potential M&A and what you might be looking for? M&A right now, my attention, our company's attention is really focused on the ramp-up at Keno Hill. We're obviously busy looking at alternatives for Casa Berardi, and so it's really inwardly focused. But I do recognize at some point, you know, we do want to upgrade the, we want to continue to upgrade the portfolio. And when we do, it's going to be a much more strategic approach. We're going to agree on certain criteria with the board.
We're not going to react to whatever opportunity is potentially available because I think some of the best transactions are those that you build a relationship with a counterparty, you get to know the asset, you take your time and execute properly. So, it'll be a much more thoughtful approach with thorough due diligence. In terms of geography, our preference is obviously to stay in stable jurisdictions, but the deposits are where the deposits are. And so, we'll look at risk-adjusted returns and we'll be fully aware of all the risks and whether we have the ability to mitigate those risks as a company before we make a decision.
Great. And then maybe one more thinking about organic growth. You know, Hecla has lots of exploration opportunities across the portfolio. How do you think about that?
It's a good point. We do have an abundance of projects.
We have a very small exploration budget, which is only $28 million this year. That's not from lack of opportunities. We have plenty of opportunities, but it really speaks to the financial discipline. We have long reserve mine lives ahead of us, so it's not an urgency. It's not a priority. When we're in a financially stronger position, we will, you know, I expect that we'll at least double our commitment to exploration. There are some projects that have, I should say that this year the focus is going to be mostly on reserve replacement around our existing operations. But there are some very compelling opportunities that have been identified. One that I like in particular is the Midas project in Nevada. And so, we'll be targeting some high-grade targets there, some extensions to known mineralization. So, that kind of excites me.
Great.
Rob, thanks very much for joining us, and we'll wrap it up there.
Thank you very much.