Good day, and thank you for standing by. Welcome to Q3 2021 Mining Company Earnings Conference call by Hecla. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. If you require any further assistance, please press star zero. I would now like to hand the conference over to Anvita Patil. Ma'am, please go ahead.
Thank you, operator, and welcome, everyone. Thank you for joining us for Hecla's Q3 2021 Financial and Operations Results Conference Call. I'm Anvita Patil, Hecla's Assistant Treasurer. Our financial results news release that was issued this morning, along with today's presentation, are available on Hecla's website. On today's call, we have Phil Baker, Hecla's President and CEO, Lauren Roberts, Hecla's Senior Vice President and Chief Operating Officer, and Russell Lawlar, Hecla's Senior Vice President and Chief Financial Officer.
Any forward-looking statements made today by the management team come under the Private Securities Litigation Reform Act and involve risks as shown on slides two and three in our earnings release and in our 10-Q and 10-K filings with the SEC. These and other risks could cause results to differ from those projected in the forward-looking statement. Reconciliations of non-GAAP measures cited in this call and related slides are found in the slides or news release. With that, I'll pass the call to Phil Baker.
Thanks, Anvita. Good morning, everyone, and thanks for joining our call. Looking at slide four, Hecla continued with another quarter of solid financial performance, including free cash flow generation of $15.6 million. This makes it the eighth out of the past nine quarters of generating free cash flow. We've totaled $237 million over that period. As a result, the balance sheet is solid with $190 million in cash. Now, we've been working to improve the operational consistency at Casa Berardi, and I'm happy to see that this hard work's paying off with record throughput this quarter of nearly 400,000 tons. Realize this is 150% more tons than the Q3 of 2013, which is the year we acquired Casa Berardi.
Since 2013, we've recommissioned the East Mine. We've also expanded the operation to include numerous open pits, and we continued to extend the mine life. Now, I'm highlighting these facts not only to give credit to the good work that the guys and gals at Casa are doing, but also just to highlight the culture we have of improvement and innovation. Further evidence of that culture is our new mining method at the Lucky Friday. This is the first time we're really talking about the new mining method, and we call it underhand closed bench, and it's shown positive results in managing seismicity, which is the biggest issue that we have at the Lucky Friday.
This new mining method was developed as a result of another example of Hecla's commitment to innovation, the development of the Remote Vein Miner. As the mine was preparing to receive the RVM, we were completing destress blasting, and we determined that this blasting method could be optimized in a way to be a new and more effective mining method. The RVM has been developed and constructed, and we're gonna deploy it, but it's gonna be at another property. As the new drill and blast method is better suited to control seismicity, and so that's an important safety element of the mine. Lauren's gonna tell you more about this method in a moment. Now, speaking of safety, I wanna give credit to the operations team for their continued commitment to the health and safety of our employees.
This, at this point, we've achieved a company-wide all-injury frequency rate of 1.63. Earlier this year, we published our sustainability report, and we emphasized how small of a footprint we have. We generate less than 100,000 tons of Scope 1 and 2 greenhouse gas emissions. Given how small our emissions are, we invested in enough carbon offset credits for Hecla to have net zero emissions this year. I suspect we're one of the few mining companies that can say they are net zero for Scope 1 and 2, and we expect to continue to be net zero again next year. Lastly, before I turn it over to Russell and Lauren, I'd like to discuss the inflationary pressure that has impacted the industry.
At Hecla, we operate very high grade, high value mines that are also very low tonnage, so we don't move a lot of rock. You know, we do in a year what a larger mining company moves in a day. We don't use a large amount of consumables, which is where you've had the most significant inflationary pressure. Also our power is supplied by local utilities from renewable sources, mostly hydro, so our energy costs are very stable. Now we have seen some labor costs and turnover pressure as most businesses are experiencing.
At Greens Creek with our fly-in, fly-out and almost fully vaccinated workforce being able really to work from just about anywhere, we had higher than normal turnover in certain job classifications in the last quarter. It also takes longer to replace those employees with newly fully vaccinated employees. This is what we saw at Greens Creek this quarter. We had higher than normal turnover, which caused us to change the mining sequence and mine tons that were closer to the portal, which also tended to be lower grade.
Thus, while we were able to produce the tonnage, the number of oz were lower as a result. We've made changes to the crew schedule, and we continue to recruit to ensure full staffing, and we see this as a temporary issue which doesn't impact the long-term value of production of the world-class Greens Creek mine. We have, however, lowered our short-term production guidance at Greens Creek due to lower quarterly production, and we'll speak more about this later in the presentation. With that, I wanna turn it over to Russell.
Thanks, Phil. Turning to slide six. During the quarter, silver contributed 30% of the company's revenue, while gold contributed 46%. The lower contribution of silver is due to the price of silver having decreased somewhat during the quarter compared to gold holding steady and the production at Greens Creek, as Phil has already discussed. During the quarter, our revenue continued to be driven by Greens Creek and Casa Berardi. However, we continue to see long-term growth in operational improvement at Lucky Friday. We continue to see strong margins at both our silver assets, where the margin was more than $11 per oz, and the gold assets, where the margin was more than $300 per oz. This means the properties generated more than $45 million of free cash flow.
Turning to slide seven, we continue to add to our balance sheet through cash flow from our operations, with our net cash balance increasing roughly $10 million. Keep in mind, this is after the largest exploration spend in the company's history, the semiannual interest payment on our long-term debt, and during the quarter, we had some other smaller working capital adjustments, such as the settlement of a lawsuit related to a 1989 arrangement, purchase of land at the Lucky Friday, which sets us up for tailings expansion for decades into the future, and the purchase of carbon credits. Our leverage profile has remained similar to that of last quarter at 1.2 times and is the lowest since we first issued the long-term bonds in 2013.
We continue to see strong margins in our silver assets, which have driven our free cash flow generation over 8 of the last 9 quarters. The strength of these assets allows us to not only return significant amounts of capital to our shareholders in the way of dividends, in fact, it's been 20% of our free cash flow in 2021, and we've been paying dividends for a decade now, but also to enhance the dividend to our shareholders by lowering the silver link threshold to $20 per oz of silver during the quarter. With that, I'll pass the call to Lauren to go through our operations.
Thanks, Russell. I'll start on slide nine. We produced 1.8 million oz of silver and 9.7 thousand oz of gold at the Greens Creek mine in Q3 at an all-in sustaining cost of $5.94 per oz of silver. As Phil described, production was lower because of challenges in sustaining full mining crews. The mining sequence was adjusted to make the best use of the available working shifts, and this had us focus on zones nearer to the portal but with lower silver grade. Despite this lower grade, the mine generated strong free cash flow of $34.4 million during the quarter, and it's really a testament to the quality of this asset. Mining resumed in the deeper reaches of the mine in October, and the silver grades are rebounding.
In the past six quarters, Greens Creek generated $290 million of free cash flow. To reflect the lower Q3 production, we're lowering silver production guidance to 9.2-9.5 million oz from the 9.5-10 million oz. Gold production guidance is unchanged. Silver cash cost is maintained at -$1 to +$1 per oz, and silver all-in sustaining cost guidance is maintained at $3.25-$4 per oz. Moving to slide 10. The Lucky Friday Mine produced almost 832,000 oz of silver and generated positive free cash flow of $7.5 million in the quarter. Year to date, the mine generated $26 million in free cash flow and remains on track to achieve production and cost guidance.
We're very excited about the UCB mining method, which is showing significant improvements in managing seismicity, a key operating parameter for us. Think of UCB as a short long-hole stope with no undercut that is found down dip under engineered fill. The method keeps the miner within a de-stress horizon with work area dimensions that are readily rock bolted. In the Q3, 87% of the tons mined came from the UCB method. As we continue to refine it, we are looking for opportunities to improve productivity as well. With the success we are seeing from the UCB, we plan to deploy the Remote Vein Miner at another Hecla operation. On slide 11, the Casa Berardi Mine achieved record quarterly throughput of approximately 400,000 tons milled this quarter, the highest in the mine's history.
Our mill optimization investments continued to deliver results with consistent plant availability, higher mill throughput, and improved metal recovery. In the Q3, the mine produced 29.7 thousand oz of gold at an all-in sustaining cost of $1,476 per oz. While production and throughput are strong, we are seeing higher costs related to the increased volume processed, mill contractor costs associated with the improvement activities, and higher underground mobile maintenance costs. We are increasing our production guidance to 130-135 thousand oz of gold for the year. Cash cost guidance is maintained at $1,000-$1,125 per oz of gold.
Our sustaining capital spend was higher than anticipated due to several factors, including accelerating the acquisition of two pieces of underground mobile equipment which were planned for next year. We are increasing the all-in sustaining cash cost guidance to $1,350-$1,400 per oz. We remain focused on reducing and optimizing costs at the mine following the impressive results from our mill improvement program. Casa Berardi generated $73 million in free cash flow in the past six quarters, and we're looking forward to extending this trend. With that, I would like to return the call to Phil.
Thanks, Lauren. Slide 13 shows our consolidated production guidance for 2021 to 2023. We've tweaked it slightly with an increase in gold production and a decrease in silver for the year, but no changes for the future years. I wanna remind everyone that all of our silver is mined in the United States, representing about 40% of the silver mined here, and it makes Hecla the U.S.'s largest producer. Now, silver cost guidance and gold cash guidance are reaffirmed. The gold AISC guidance has increased because of advancing the purchase of some of the equipment, as Lauren described, and because also of the strengthening of the Canadian dollar.
Unlike our cash costs, where 72% of our direct production costs are hedged at an average rate of $1.33, our sustaining capital is unhedged, so we had the impact of the change in the currency. We might change this in the future. We might hedge the sustaining capital. Now, if you go to the bottom of the slide, you can see capital expenditures, exploration, and pre-development cost guidance is unchanged. Now, before I take questions, I wanna close with a comment about ESG. The way we have approached ESG is to make a real difference in our environment, you know, for our employees and the communities that we operate in and for our shareholders.
First, for the environment, I'm really proud of the fact that we probably have the lowest absolute emission per dollar of revenue of any mining company, and the fact that we are net zero today for Scope 1 and 2. For employees, I'm proud of the way we treat our employees. They not only have a living wage, but are generally the highest paid workers in the communities that they live in. For the U.S. employees, they have benefits that are really best in class as far as healthcare and pension benefits. We have both a traditional pension and a 401(k). In the communities that we operate in, we've been operating there for almost two full generations.
In the case of Lucky Friday, almost four, and are the largest private employer in those communities. The communities and the mines have a real active engagement because they're largely part of the mine. Finally, Hecla has about 80,000 shareholders. About half of these are institutions, half are individuals. I think Hecla's board governs the business thinking about how to align management to the interests of shareholders, and I think they do a very good job of that.
One other thing I'll mention before taking questions is I wanna remind you that we give everyone the opportunity to have a one-on-one conversation with us. On page eight of the release, you'll see a link that will allow you to sign up for one-on-ones on one of the four tracks that we have, so a track for exploration, operations, general, and ESG. I just would encourage you to take advantage of this opportunity, and it's open to anyone. With that, operator, happy to take questions.
Thank you. At this time, if you would like to ask a question, please press star one on your telephone keypad. Again, to ask a question, simply press star one on your telephone keypad. Your first question comes from the line of Heiko Ihle from H.C. Wainwright. Your line is now open.
Hey, Phil. Good morning. Thanks for taking my questions.
Sure thing.
Hey. You spent almost $14 million on exploration in the quarter. You said that at least part of that is related to less COVID limitations, which makes perfect sense. I mean, you still increased expenditures by about 50% since Q2. I just went through your September 14th exploration release again, and there you were stating that you were planning on replacing your reserves by the end of the year. That all said, walk me through your plans for 2022, and while you likely can't give me actual numbers, just sort of philosophically maybe walk me through your thoughts of exploration expenditures over the next several quarters, ideally by quarter, if you can.
Well, Heiko, as you realize, we're still in the budgeting process for the coming year, so I'm not gonna be able to give you quarterly information. What I can suggest to you is that we'll have a level of expenditure that will be similar to this year. You know, the reason for that is we see huge opportunities at really each of our operating properties, and then we have a suite of, you know, almost 10 other properties that we see the need to explore because of the potential that they have to create real value for shareholders. You know, it just sort of applies across the board, so I'm not gonna really go through any particular property.
You know, in the time I've been at Hecla, I've not seen us have this inventory of exploration opportunities. Having said that, we are judicious on the use of this capital. It's hard to come by. We have lots of competing interests for the capital, both exploration and operations-wise and, you know, acquiring additional assets. It is a competitive process for the use of it.
That's a good answer, and more or less what I was looking for. Oh, by the way, just to clarify, you're saying the same as this year, not the same as this quarter, correct?
Correct. I mean, I would anticipate. Our guidance is right at $40 million. I would expect us to be something similar to that in 2022. We have the capability to do it, and we have the opportunity.
Makes sense. Okay. Just one quick clarification. I've asked something somewhat similar a few quarters ago, but the numbers are just even more extreme now. You have essentially the equivalent of a quarter sales in cash on the balance sheet. You have more than twice that in available liquidity. I guess where I'm going with this is when is enough?
Look, Heiko, if you look at us historically, we have viewed the need to have the balance sheet be relatively conservative. Levels of cash on the balance sheet of $200 million, you know, or more is something that we will likely have. You know, will we have double that? You know, probably not. We probably will have enough opportunities where to deploy the capital that, you know, that won't grow to that sort of level. But, you know, you conceivably could if you look at the strength of these operations and if you have the right metals price.
Thank you so much. I'll get back to you.
Thanks, Heiko.
Thank you. Your next question comes from the line of Lucas Pipes from B. Riley Securities. Your line is now open.
Thank you very much, and good morning, everyone. Phil, relative to my expectations for Q3, Greens Creek was a little weaker, and I just wondered, are you able to provide a bit more color what happened? Maybe it was just my estimate that was too aggressive. What's your take on Greens Creek and the outlook for Q4 next year? Thank you very much.
Sure, sure, Lucas. As we tried to indicate, what we had was a shortfall in the number of workers as a result. It's really as a result of really the quality of these guys and their ability to move to different positions with different entities. You know, it's a fly-in, fly-out operation for the most part, for at least a large portion of the workforce. We had people that left, and we hadn't had the opportunity to replace them. We have now done that through two ways. One is recruiting more people, but we've also changed the schedule. You'll see things go back pretty much to normal.
I think it's gonna be an ongoing challenge that we and everyone has. I mean, it's just a fact. In every business there seems to be a shortage of people and you know, we're quite competitive, and we have a great operation. We have a great culture there where people want to come to the mine. I don't think we'll have any long-term issues. Lauren, anything you wanna add to that?
I'd just reiterate that, you know, we're all enjoying the mining sector as we're all enjoying elevated metal prices and skilled trade, skilled miners are in high demand and, you know, we should expect some turnover as a result. I think it will be manageable for us.
To follow up on this, is the competition coming from within the mining sector, or is it the broader economy where electricians, you know, can find a lot of work in other industries too?
It depends on the skill set that the person has. You know, certainly for miners, it's within. For electricians, for mechanics, it's both within and without.
When it comes to retaining skilled labor, I assume labor rates will go up and as we look out to 2022, is there a ballpark kind of cost inflation figure that we should be penciling in to account for this?
I think there's some increase that you'll see, but it is, you know, frankly, you know, when you think about the fact that we spend in aggregate about half a billion dollars, I mean, a little more than that, it's really quite small, the impact that will have on our cash flow. Lauren, anything to add?
I don't think we should anticipate across-the-board increases. We're being very focused on staying competitive in certain areas, so that helps to mitigate the cost exposure.
The other thing is I think we just have a compensation structure that's quite competitive and, you know, there's a fair amount of pay that people get that is based on performance, and the mine has had very good performance, Greens Creek in particular. We see that happening with Casa, with the improvements that we've made at the Lucky Friday with the new mining method. As a result, there is more. You know, as these mines are more productive, there is more opportunity for this incentive pay to pay out.
Very helpful. Thank you for that discussion. Switching topics, there's been a couple of, you know, headlines regarding smelter curtailments on the back of high energy prices. I wondered, are you seeing that impact you? If so, where would this be showing up operationally and ultimately maybe in the numbers, would be keen to hear your perspective on this.
I guess the first thing I'd say is that we have frame contracts for our concentrates, so we don't have a concern for not having a home for the concentrates, which you know could be a concern. We have a small amount that we sell spot, but it's very desirable concentrate, so no concern there. I think you know long term it's probably. It's hard to say what the balance is, but long term it's you know net benefit for us to have this sort of consistent production that we have and these contracts. Russell, anything you wanna add?
Just to confirm kind of what Phil has already said, we have long-term customers who we've been dealing with for many years. You know, as a result of that, we haven't really seen any change in or risk of us not being able to sell our concentrate as a result of the increase in power costs. What we did see, obviously, was the change in the prices of the underlying metals, which, you know, certainly was beneficial to us. But we didn't see the other side of that being the risk of, you know, a lack of a place to send the concentrate.
The other thing to remember, Lucas, is that we sell all of our concentrates into Asia or North America.
Got it. Very helpful. Maybe one follow-up on this. In the industry, what's the take on this issue? Is it viewed as a kind of temporary, you know, energy crunch or are folks maybe positioning themselves structurally to, you know, take into account a maybe less certain offtake environment?
Yeah, we were at the virtual LBMA conference and talking to our customers and some of whom have these operations that were shut down, and that was the question we were asking them. It's, you know, fundamentally, it becomes a question of how Europe deals with getting the energy costs down. It sure seems that they will have to do that. It's, you know, the impact of having such high energy costs is so difficult for that, ultimately for that economy that, you know, I think it will eventually reverse. There's a lot of politics that come into play as well.
Got it. Thank you. One last question from me, Phil. Just on Lucky Friday, wanted to circle back on the seismicity and you know get your take. This has obviously been something you've been talking about for some time, and it sounds very encouraging. Just thought if you're able to elaborate on your prior comments and your outlook on Lucky Friday with controlling the seismicity going forward. Thank you for your perspective.
Sure. Absolutely, the Lucky Friday's biggest impediment to production is seismicity. Roughly 20% of the stopes available time is not available because we're having to manage seismicity. With this new mining method, we think we can change that number dramatically. Most important point is, we're not going to have workers that are in these headings that have the potential for a seismic event, or at least the same level of potential for a seismic event. We're very encouraged by the safety improvements, substantial improvement in the safety of the mine, particularly of a catastrophic safety event. That's number one. As we fine-tune this, and fine-tune is maybe too strong of a description of where we are at this point. As we improve it, we think there's the potential for maybe productivity improvements. Lauren, what would you like to add?
I'd just reiterate that being able to utilize the headings more than 80% of the time is a clear and obvious benefit, in addition to the safety. As we become more efficient with the method, we may be able to improve the productivity. I think the three things taken together are very promising.
You know, you look at the Lucky Friday and with the reserve and the resource that it has and the exploration potential that it has, both down dip and on strike, you know and within sort of a 2 or 3 year, 2 or 3 mile range around this infrastructure, the potential this has being able to manage the seismicity has a huge value benefit for the mine and the company.
Thank you. A quick follow-up on this. When it comes to the new mining technique, kind of what do you benchmark against? Are you developing this expertise mostly in-house, or do you have consultants that you've brought in who are helping you on that learning curve?
Well, look, sort of the way this became apparent to us was as we were trying to advance the RVM and reduce the seismicity associated with this, we came to the conclusion that we could test this and potentially have this UCB method be an alternative or in addition to, and we've decided that it's an alternative to the RVM. We have had some assistance in some areas, but for the most part, it's been homegrown. I wouldn't say most part, it's 95% homegrown.
You know, certainly there's elements of drilling and blasting that we've brought in contractors that have helped us with that. I'm very optimistic that Lauren and his team and with help from others, that we're gonna really advance this and realize this is a patented mining method. It's patent pending, but we have applied for that, because it is quite unique what we're doing. Lauren?
No, I think the only thing I would follow up with, Phil, in answer to Lucas' question about benchmarking, I think really the only thing you can benchmark the new method against is the previous method at the Lucky Friday, because the Lucky Friday really is a unique setting from a geotechnical perspective. To benchmark this against other mining methods, I think is probably not a very productive exercise, but going forward, we'll be benchmarking against our ability to produce in that mine from the previous method.
You can expect, Lucas, over the course of the next sort of six months, we will provide quite a bit of detail and insight into how the method works, and what the cycle is and how it changes the design of the mine. Because all of those things have come into play, and all of them are in process. We have been in a full-on test of this for over a year now, or I guess right at a year. As Lauren said, 87% of the tons have come from this method. We're not suggesting something to you that is at great risk. In fact, we've really taken the risk out of it over the course of the testing period that we've had.
Very helpful. Really appreciate all the color. Phil and team, best of luck.
Okay. Well, thank you, Lucas. We're excited about it.
Thank you. Your next question comes from Michael Siperco from RBC Capital Markets. Your line is now open.
Thanks, very much, guys. Maybe drilling down a little bit on Greens Creek, can you talk about how things are looking, quarter to date? Are you fully staffed at this point? Is throughput looking better? Are you accessing those higher grade areas, or is it still too early to provide details beyond what's implied by the revised guidance?
Short answer to all that is yes. We're, you know, you get, you've seen our guidance, so you can sort of do the math as to what we would expect the Q4 to look like. We fully believe we'll be in that range. We did change our schedule. The schedule had been in the process of being changed during the course of the quarter. That has, I think, fully implemented now, the schedule change, Lauren?
With the crews that we've made that transition to, yes.
Right. Yeah. It's not everyone that has. Right. You know, as far as hiring, yeah, we have the full contingent. We don't have budget, but because we always budget more employees than we need. We still have more hiring that we'll be doing, but we don't see any impediment at this point to reaching the guidance that we've provided.
Would it be fair to say that October looks better than September, August?
Yep.
Okay.
Yes.
Great. Okay.
We're mining it. The issue was we were not mining in the 200 South. The 200 South is about a 1 hour and 40 minute round trip.
Oh, yeah, it's 45 minutes one way with a loaded truck.
Yeah
down at the bottom.
We are able to mine there. We have the personnel. We were short 25% of the workforce, of the mining workforce, the crews that would be doing this work. It was a major impediment, and it you know didn't become apparent to us until you know well into the quarter.
Right. Makes sense. Good to hear that that's getting better. Maybe following up on the last question or parts of the last question, and you've touched on it a bit on the call, but I didn't see the word inflation in your results. Obviously, that's been an ongoing theme for most of your peers. You benefit somewhat from not having a big CapEx spend ahead of you, obviously. Can you talk about what you're seeing at the mine level on the cost side in terms of labor, materials or any other impacts that you might be getting visibility on or that we might need to watch into 2022?
The short answer, Michael, is that about 50% of our costs are labor, about 10% energy, and nothing else is double digit. As I said, the energy costs are stable. The labor costs that we would anticipate inflation in certain categories of labor, but not across the board. And then with respect to everything else, yeah, there's gonna be a little bit of inflation, but it is. It's not the same sort of impact for us that you have for, you know, these larger economies of scale type operations.
You know, remember these mines, you know, Casa's 4,500 oz a day, you know, 2,000 tons a day, 2,200 tons a day at Greens Creek, you know, 1,000 tons a day at Lucky Friday. Really, really small operations. The inflationary pressure is really more on the labor side, and I think that will be largely a trailing factor compared to the other consumables. Lauren, anything to add?
No, I think it, you know, for us it's our energy is essentially a fixed-
Right
AISC, because of the hydropower. Labor, we'll see some variation in some categories, and then it's kind of a mixed bag. Like, we've been working to renegotiate contracts, and in many cases, we've driven our consumable costs down, but in some areas they go up.
Right.
Steel's up, cement's up.
Right.
Fuel.
You know, and you think about contractors, cost of contractors has absolutely increased.
Yeah, because of the good performance of the sector.
Yeah
There's a lot of work.
Yeah.
You pay more for it.
You know, you think of drilling and it's the same thing in assay. There is. You know, there's no doubt, Michael, there's cost pressure, but it's on a relative basis, it's muted for us.
That actually that last point was going to be my follow-up. On the exploration side, in terms of your program for this year and especially into next year, realizing that you're budgeting and can't get specific, but are you seeing impacts in terms of rig availability, contractor availability, and I guess those cost pressures as well?
The good news is with the given that the two programs are relatively the same, most of those rigs that we had in, you know, this year, we will have next year. Is there increased cost pressure? Absolutely. We won't get as much footage, but that also becomes a design issue of how long of holes will we do. You know, we're trying to manage that. I think we'll still get very good results even with the cost being higher.
Got it. Makes sense. Then maybe finally for me in terms of Rock Creek and Montanore, I know you've stated that you'd provide next steps early next year. I don't mean to jump the gun here, but can you maybe walk us through at a high level, you know, what that process is from here and how we should think about how they slot into the portfolio from your perspective?
Sure. I don't think anything has dramatically changed in that we still think that Rock Creek and Montanore are in production end of this decade, early in the next decade. We had taken into account the fact that it's a legal process, not a regulatory process that we're really in. You have to react to the decisions that the judge makes. You know, earlier this year, the judge made a decision that remanded or set aside the Record of Decision, the biological opinion on Rock Creek. That's one project. Montanore is a separate project.
What we have done, or what we are in the process of doing is evaluating how to advance Montanore and Rock Creek, but particularly Montanore because it's really the next one up, so that we satisfy the decision that the judge, and it's the same judge, that the judge made on Rock Creek. We're working through that, and that's really all I can say at this point.
Okay, great. Thanks for the answers. Much appreciated. Thank you.
Sure, Michael.
Thank you. We have a follow-up question from Lucas Pipes from B. Riley Securities. Your line is now open.
Thank you very much. My follow-up question on Rock Creek and Montanore was just asked, but since I'm on the line, I'll ask you a high level question. So it's macro related, but you know, gold prices hanging in there despite, in my opinion, really high inflation readings, but they're not, well, it's not, they're not breaking out. I wondered kind of how do you look at the investor backdrop? Are there discussions about how to engage with investors in this environment? It seems to me like there's a disconnect between what I'm seeing on the macro side and how the group is trading. Would appreciate your thoughts on that.
Sure. Well, I guess the first thing I'll say is that the equity investor is a price follower of the commodity. For the equity investor to have an impact on the general view of gold is limited. You know, certainly sometimes you'll see the equities outrun the commodity, but we're not seeing that at this point. I think there is you know as I talk to investors there's you know a general view that's similar to yours, but there just has to be more of a generalist interest in the commodity itself.
That hasn't come yet. I think it will come. There's everything that you're saying about inflation is absolutely true, and you start to look at where real rates are given that inflationary level. There really should be quite an interest in precious metals. I don't know, Russell, if you have anything to add to that.
The only thing I would add is, you know, certainly gold, you know, I think it's got a lot of things in the macroeconomic environment to support it. You know, silver on the other side of that, which, you know, obviously being, you know, the largest silver producer in the U.S., you know, we're highly leveraged in silver. And we see that really being, you know, supported similar to gold, but then you also get the industrial demand as well. You know, from the perspective of our portfolio, certainly we take a look at that, and we take a look at what's going on in the macroeconomic environment, and we feel quite good about the outlook.
Yeah. That's a great point, Russell. You think about silver, and you think about this, you know, you had the Biden administration that said they want half the vehicles to be electric by 2030, and we wanna reduce the coal power generation. Those two things require, as well as everything else, requires more silver and solar photovoltaics and wind energy and other things, so do, and the electric vehicles itself. You look at the outlook for silver, and it's not like the demand that we've had in the past.
It is order of magnitude higher than what we've had previously. It's just unlike any time in the history of the metal. You know, you can go back to the early 1900s, and that was the last time you had a change in technology that caused demand for the metal, and in the same way that we're having with this energy change.
Very helpful. Again, really appreciate it, and best of luck.
Thanks, Lucas.
Thank you. Again, to ask a question, please press star one on your telephone keypad. And there are no further question at this time. Presenters, please go ahead.
Okay. All right. Well, thank you very much. I'll just leave you with the invitation to take us on one-on-one. There's four tracks. You'll find the link on page eight of the press release. We encourage you to click on that link and set up a meeting with us. Thanks very much. Have a great day.
Ladies and gentlemen, that Concludes Q3 2021 Hecla Mining Company Earnings Conference Call. You may now disconnect. Thank you for your participation.