| Business Segments and Sales of Products |
Note 2. Business Segments and Sales of Products We discover, acquire and develop mines and other mineral interests and produce and market (i) concentrates containing silver, gold, lead, zinc, and copper, and (ii) doré containing silver and gold. We are currently organized and managed in three segments: Greens Creek, Lucky Friday, and Keno Hill. We regularly review our segment reporting for alignment with our strategic goals and operational structure as well as for evaluation of business performance and the allocation of resources by our President and Chief Executive Officer, who has been identified as our Chief Operating Decision Maker ("CODM"). The CODM evaluates the performance for all of our reportable segments based on gross profit. For all segments, the CODM uses segment gross profit to assess segment performance and allocate resources for each segment predominantly in the annual budget and quarterly forecasting process. The CODM considers budget to actual variances on a monthly basis when making decisions about allocating capital and personnel to the segments. Significant segment expenses that drive the financial performance of our reportable segments are (i) salaries, wages and other benefits, (ii) contractors, (iii) materials and consumables, (iv) change in product inventory, and (v) other direct production costs. In further evaluating the operational performance of each segment, the CODM also considers the amount of metal production versus budget, and the grade of the metal processed. General corporate activities not associated with operating mines and their various exploration activities, as well as idle properties and environmental remediation services we provide in the Yukon, Canada, are presented as “other.” The nature of the items that reconcile gross profit (loss) to income before income and mining taxes are not related to our reportable segments. The tables below present information about our reportable segments for the three and nine months ended September 30, 2026 and 2025 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30, 2026 |
Greens Creek |
|
Lucky Friday |
|
Keno Hill |
|
Total Reportable Segments |
|
Other |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Metal sales |
$ |
222,216 |
|
$ |
100,066 |
|
$ |
50,172 |
|
$ |
372,454 |
|
$ |
— |
|
$ |
372,454 |
|
Environmental remediation services |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
22,366 |
|
|
22,366 |
|
Intersegment sales |
|
— |
|
|
— |
|
|
5,860 |
|
|
5,860 |
|
|
— |
|
|
5,860 |
|
Reconciliation of sales |
|
222,216 |
|
|
100,066 |
|
|
56,032 |
|
|
378,314 |
|
|
22,366 |
|
|
400,680 |
|
Elimination of intersegment sales |
|
— |
|
|
— |
|
|
(5,860 |
) |
|
(5,860 |
) |
|
— |
|
|
(5,860 |
) |
Total consolidated sales |
|
|
|
|
|
|
|
|
|
|
|
394,820 |
|
Salaries, wages and other benefits |
|
20,282 |
|
|
18,086 |
|
|
8,816 |
|
|
47,184 |
|
|
253 |
|
|
47,437 |
|
Contractors |
|
2,882 |
|
|
3,684 |
|
|
4,619 |
|
|
11,185 |
|
|
19,343 |
|
|
30,528 |
|
Materials and consumables |
|
27,159 |
|
|
10,226 |
|
|
8,114 |
|
|
45,499 |
|
|
2,798 |
|
|
48,297 |
|
Product inventory change |
|
12,561 |
|
|
535 |
|
|
1,596 |
|
|
14,692 |
|
|
— |
|
|
14,692 |
|
Other direct production costs |
|
13,283 |
|
|
1,694 |
|
|
2,257 |
|
|
17,234 |
|
|
9 |
|
|
17,243 |
|
Depreciation, depletion and amortization |
|
15,621 |
|
|
14,985 |
|
|
5,943 |
|
|
36,549 |
|
|
— |
|
|
36,549 |
|
Gross profit (loss) |
$ |
130,428 |
|
$ |
50,856 |
|
$ |
18,827 |
|
$ |
200,111 |
|
$ |
(37 |
) |
$ |
200,074 |
|
Other operating expenses (a) |
|
|
|
|
|
|
|
|
|
|
|
42,920 |
|
Income from operations |
|
|
|
|
|
|
|
|
|
|
|
157,154 |
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
(620 |
) |
Fair value adjustments, net |
|
|
|
|
|
|
|
|
|
|
|
26,691 |
|
Foreign exchange loss, net |
|
|
|
|
|
|
|
|
|
|
|
(652 |
) |
Other income |
|
|
|
|
|
|
|
|
|
|
|
7,575 |
|
Income before income and mining taxes |
|
|
|
|
|
|
|
|
|
|
$ |
190,148 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital investments |
$ |
11,746 |
|
$ |
23,655 |
|
$ |
11,205 |
|
$ |
46,606 |
|
$ |
5,108 |
|
$ |
51,714 |
|
(a) Other operating expense items include general and administrative, exploration and pre-development, care and maintenance, provision for closed operations and environmental matters, and other operating expense, net.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30, 2025 |
Greens Creek |
|
Lucky Friday |
|
Keno Hill |
|
Total Reportable Segments |
|
Other |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Metal sales |
$ |
178,064 |
|
$ |
74,192 |
|
$ |
47,551 |
|
$ |
299,807 |
|
$ |
— |
|
$ |
299,807 |
|
Environmental remediation services |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
16,191 |
|
|
16,191 |
|
Intersegment sales |
|
— |
|
|
— |
|
|
1,928 |
|
|
1,928 |
|
|
— |
|
|
1,928 |
|
Reconciliation of sales |
|
178,064 |
|
|
74,192 |
|
|
49,479 |
|
|
301,735 |
|
|
16,191 |
|
|
317,926 |
|
Elimination of intersegment sales |
|
— |
|
|
— |
|
|
(1,928 |
) |
|
(1,928 |
) |
|
— |
|
|
(1,928 |
) |
Total consolidated sales |
|
|
|
|
|
|
|
|
|
|
|
315,998 |
|
Salaries, wages and other benefits |
|
19,392 |
|
|
16,586 |
|
|
7,377 |
|
|
43,355 |
|
|
177 |
|
|
43,532 |
|
Contractors |
|
2,951 |
|
|
3,669 |
|
|
3,781 |
|
|
10,401 |
|
|
15,665 |
|
|
26,066 |
|
Materials and consumables |
|
27,430 |
|
|
11,398 |
|
|
5,913 |
|
|
44,741 |
|
|
337 |
|
|
45,078 |
|
Product inventory change |
|
5,106 |
|
|
(1,127 |
) |
|
8,057 |
|
|
12,036 |
|
|
— |
|
|
12,036 |
|
Other direct production costs |
|
10,550 |
|
|
644 |
|
|
(1,985 |
) |
|
9,209 |
|
|
4 |
|
|
9,213 |
|
Depreciation, depletion and amortization |
|
16,229 |
|
|
13,471 |
|
|
8,028 |
|
|
37,728 |
|
|
— |
|
|
37,728 |
|
Gross profit |
$ |
96,406 |
|
$ |
29,551 |
|
$ |
16,380 |
|
$ |
142,337 |
|
$ |
8 |
|
$ |
142,345 |
|
Other operating expenses (a) |
|
|
|
|
|
|
|
|
|
|
|
31,362 |
|
Income from operations |
|
|
|
|
|
|
|
|
|
|
|
110,983 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
(13,264 |
) |
Fair value adjustments, net |
|
|
|
|
|
|
|
|
|
|
|
19,828 |
|
Foreign exchange gain, net |
|
|
|
|
|
|
|
|
|
|
|
436 |
|
Other income |
|
|
|
|
|
|
|
|
|
|
|
2,410 |
|
Income before income and mining taxes |
|
|
|
|
|
|
|
|
|
|
$ |
120,393 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital investments |
$ |
12,179 |
|
$ |
16,865 |
|
$ |
14,747 |
|
$ |
43,791 |
|
$ |
634 |
|
$ |
44,425 |
|
(a) Other operating expense items include general and administrative, exploration and pre-development, care and maintenance, provision for closed operations and environmental matters, and other operating expense, net.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended September 30, 2026 |
Greens Creek |
|
Lucky Friday |
|
Keno Hill |
|
Total Reportable Segments |
|
Other |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Metal sales |
$ |
638,548 |
|
$ |
332,643 |
|
$ |
131,066 |
|
$ |
1,102,257 |
|
$ |
— |
|
$ |
1,102,257 |
|
Environmental remediation services |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
37,847 |
|
|
37,847 |
|
Intersegment sales |
|
— |
|
|
— |
|
|
9,733 |
|
|
9,733 |
|
|
— |
|
|
9,733 |
|
Reconciliation of sales |
|
638,548 |
|
|
332,643 |
|
|
140,799 |
|
|
1,111,990 |
|
|
37,847 |
|
|
1,149,837 |
|
Elimination of intersegment sales |
|
— |
|
|
— |
|
|
(9,733 |
) |
|
(9,733 |
) |
|
— |
|
|
(9,733 |
) |
Total consolidated sales |
|
|
|
|
|
|
|
|
|
|
|
1,140,104 |
|
Salaries, wages and other benefits |
|
60,088 |
|
|
57,274 |
|
|
26,452 |
|
|
143,814 |
|
|
542 |
|
|
144,356 |
|
Contractors |
|
8,304 |
|
|
11,722 |
|
|
10,888 |
|
|
30,914 |
|
|
34,634 |
|
|
65,548 |
|
Materials and consumables |
|
81,476 |
|
|
31,246 |
|
|
23,344 |
|
|
136,066 |
|
|
2,381 |
|
|
138,447 |
|
Product inventory change |
|
8,338 |
|
|
1,699 |
|
|
(2,112 |
) |
|
7,925 |
|
|
— |
|
|
7,925 |
|
Other direct production costs |
|
34,247 |
|
|
2,427 |
|
|
6,889 |
|
|
43,563 |
|
|
51 |
|
|
43,614 |
|
Depreciation, depletion and amortization |
|
45,918 |
|
|
45,545 |
|
|
15,626 |
|
|
107,089 |
|
|
— |
|
|
107,089 |
|
Gross profit |
$ |
400,177 |
|
$ |
182,730 |
|
$ |
49,979 |
|
$ |
632,886 |
|
$ |
239 |
|
$ |
633,125 |
|
Other operating expenses (a) |
|
|
|
|
|
|
|
|
|
|
|
107,166 |
|
Income from operations |
|
|
|
|
|
|
|
|
|
|
|
525,959 |
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
(8,689 |
) |
Fair value adjustments, net |
|
|
|
|
|
|
|
|
|
|
|
11,500 |
|
Foreign exchange loss, net |
|
|
|
|
|
|
|
|
|
|
|
(4,599 |
) |
Other income |
|
|
|
|
|
|
|
|
|
|
|
18,173 |
|
Income before income and mining taxes |
|
|
|
|
|
|
|
|
|
|
$ |
542,344 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital investments |
$ |
29,929 |
|
$ |
57,354 |
|
$ |
33,466 |
|
$ |
120,749 |
|
$ |
9,372 |
|
$ |
130,121 |
|
(a) Other operating expense items include general and administrative, exploration and pre-development, care and maintenance, provision for closed operations and environmental matters, and other operating expense, net.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended September 30, 2025 |
Greens Creek |
|
Lucky Friday |
|
Keno Hill |
|
Total Reportable Segments |
|
Other |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Metal sales |
$ |
418,209 |
|
$ |
201,659 |
|
$ |
90,581 |
|
$ |
710,449 |
|
$ |
— |
|
$ |
710,449 |
|
Environmental remediation services |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
29,875 |
|
|
29,875 |
|
Intersegment sales |
|
— |
|
|
— |
|
|
4,115 |
|
|
4,115 |
|
|
— |
|
|
4,115 |
|
Reconciliation of sales |
|
418,209 |
|
|
201,659 |
|
|
94,696 |
|
|
714,564 |
|
|
29,875 |
|
|
744,439 |
|
Elimination of intersegment sales |
|
— |
|
|
— |
|
|
(4,115 |
) |
|
(4,115 |
) |
|
— |
|
|
(4,115 |
) |
Total consolidated sales |
|
|
|
|
|
|
|
|
|
|
|
740,324 |
|
Salaries, wages and other benefits |
|
55,926 |
|
|
45,921 |
|
|
21,058 |
|
|
122,905 |
|
|
373 |
|
|
123,278 |
|
Contractors |
|
5,413 |
|
|
11,360 |
|
|
11,218 |
|
|
27,991 |
|
|
29,015 |
|
|
57,006 |
|
Materials and consumables |
|
78,495 |
|
|
33,720 |
|
|
19,957 |
|
|
132,172 |
|
|
511 |
|
|
132,683 |
|
Product inventory change |
|
(3,227 |
) |
|
(421 |
) |
|
2,063 |
|
|
(1,585 |
) |
|
— |
|
|
(1,585 |
) |
Other direct production costs |
|
30,895 |
|
|
225 |
|
|
2,656 |
|
|
33,776 |
|
|
4 |
|
|
33,780 |
|
Depreciation, depletion and amortization |
|
42,715 |
|
|
40,171 |
|
|
15,971 |
|
|
98,857 |
|
|
— |
|
|
98,857 |
|
Gross profit (loss) |
$ |
207,992 |
|
$ |
70,683 |
|
$ |
17,658 |
|
$ |
296,333 |
|
$ |
(28 |
) |
$ |
296,305 |
|
Other operating expenses (a) |
|
|
|
|
|
|
|
|
|
|
|
79,950 |
|
Income from operations |
|
|
|
|
|
|
|
|
|
|
|
216,355 |
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
(35,604 |
) |
Fair value adjustments, net |
|
|
|
|
|
|
|
|
|
|
|
27,666 |
|
Foreign exchange loss, net |
|
|
|
|
|
|
|
|
|
|
|
(3,724 |
) |
Other income |
|
|
|
|
|
|
|
|
|
|
|
4,697 |
|
Income before income and mining taxes |
|
|
|
|
|
|
|
|
|
|
$ |
209,390 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital investments |
$ |
31,335 |
|
$ |
48,253 |
|
$ |
42,228 |
|
$ |
121,816 |
|
$ |
3,123 |
|
$ |
124,939 |
|
(a) Other operating expense items include general and administrative, exploration and pre-development, care and maintenance, provision for closed operations and environmental matters, and other operating expense, net. Other sales for the three and nine months ended September 30, 2026 and 2025, consists solely of revenue from our environmental remediation services subsidiary in the Yukon. During the three and nine months ended September 30, 2026, Keno Hill sold $5.9 million (2025: $1.9 million) and $9.7 million (2025: $4.1 million), respectively, of precious metals concentrate to Greens Creek which is eliminated upon consolidation. Sales by metal for the three and nine months ended September 30, 2026 and 2025 were as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
Silver |
|
$ |
257,697 |
|
|
$ |
189,775 |
|
|
$ |
767,058 |
|
|
$ |
430,227 |
|
Gold |
|
|
54,368 |
|
|
|
50,748 |
|
|
|
154,550 |
|
|
|
120,979 |
|
Lead |
|
|
23,991 |
|
|
|
24,379 |
|
|
|
70,652 |
|
|
|
67,961 |
|
Zinc |
|
|
33,892 |
|
|
|
37,422 |
|
|
|
108,235 |
|
|
|
101,685 |
|
Copper |
|
|
680 |
|
|
|
880 |
|
|
|
1,100 |
|
|
|
2,250 |
|
Less: Smelter and refining charges |
|
|
1,826 |
|
|
|
(3,397 |
) |
|
|
662 |
|
|
|
(12,653 |
) |
Total metal sales |
|
|
372,454 |
|
|
|
299,807 |
|
|
|
1,102,257 |
|
|
|
710,449 |
|
Environmental remediation services |
|
|
22,366 |
|
|
|
16,191 |
|
|
|
37,847 |
|
|
|
29,875 |
|
Total sales |
|
$ |
394,820 |
|
|
$ |
315,998 |
|
|
$ |
1,140,104 |
|
|
$ |
740,324 |
|
The Company enters into sales contracts with third-party smelters, refiners and off-take customers which, in some cases, provide for a provisional payment based upon preliminary assays and quoted metal prices. The provisionally priced sales contracts contain an embedded derivative that is required to be separated from the host contract for accounting purposes. The host contract is the receivable recorded at the forward price at the time of sale. The embedded derivatives do not qualify for hedge accounting and are marked to market through earnings each period until final settlement. Sales of metals for the three months ended September 30, 2026 include net losses of $13.2 million (2025: $8.5 million net losses) and for the nine months ended September 30, 2026, net losses of $13.5 million (2025: $9.8 million), on derivative contracts for silver, lead, and zinc. See Note 8 for more information. The following table presents total assets by reportable segment as of September 30, 2026 and December 31, 2025 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
September 30, 2026 |
|
|
December 31, 2025 |
|
Total assets: |
|
|
|
|
|
|
Greens Creek |
|
$ |
637,735 |
|
|
$ |
640,011 |
|
Lucky Friday |
|
|
665,736 |
|
|
|
688,997 |
|
Keno Hill |
|
|
526,452 |
|
|
|
505,205 |
|
Total assets of reportable segments |
|
|
1,829,923 |
|
|
|
1,834,213 |
|
Other |
|
|
1,530,101 |
|
|
|
974,703 |
|
Assets of discontinued operations |
|
|
— |
|
|
|
751,729 |
|
Total assets |
|
$ |
3,360,024 |
|
|
$ |
3,560,645 |
|
|