Russell Lawlar
Thank you, Rob. I'll start on slide 6.
We make our capital allocation decisions with a long-term view and strategy in mind. As I reflect on the financial position of the company one year ago, we reported a net leverage ratio of 2.7 times. And our net cash balance was negative $60 million. One year later, I'm happy to report that we've improved the net leverage ratio more than one turn down to 1.5 times and improved the cash position of the company substantially with a balance of approximately $20 million at the end of the quarter.
I'll speak more about the details of the quarterly cash flow momentarily. This improvement came from many sources, including better price prices for both gold and silver. Production from Lucky Friday for the past 12 months and other capital allocation decisions such as eliminating the Silver Lake dividend.
During this time, we also continued our investment in the Keno Hill mine as we see this as our growth project which meets our return on investment criteria. We've made progress on these initiatives and as we look ahead, our plan is to implement strict return on capital criteria on our investments, ensuring stewardship of our investors' money with the intention of seeing improved consistency in our financial results and improved performance.
Our plan remains to deliver the balance sheet looking to improve both our net leverage ratio and also the outflow of interest expense. At Casa Berardi, we're still determining the best path forward there, where our strategic review options include the outright disposal, a joint venture to spin out, the potential of extending the underground, or accelerating future cash flows to take advantage of the current record gold prices via a prepayment or other financing arrangements or some combination of these alternatives.
And in any scenario, we continue to see potential opportunities to maximize the value of this asset. Looking at the graph on the right hand side of slide 6, we see Green's Creek and Lucky Friday continue their strong free cash flow generation with $42 million generated during the quarter. We're on a consolidated basis, our free cash flow is negative $18 million. However, if you look closer to the details, you'll see an inventory bill of $12 million and an increase in accounts receivable accounts receivable of $29 million.
These negative working capital adjustments were due to a few factors, but generally because our production improved toward the end of the quarter, which did not allow us to either sell all the inventory on hand or collect some of the funds for those sales for the products sold. Additionally, we had working capital outflow of approximately $16 million for accounts payable and other current liabilities, which is primarily the interest on our notes which we pay each February and August, along with incentive compensation payments and some other outflows for payables.
Although we see negative working capital in the first quarter, I expect to see some of these items will turn in the next quarter as we sell the inventory that was built up for collectors receivables, setting us up for a strong Q2.
Turning to slide 7, we generated record revenue of $261 million during the quarter with 45% of our revenue from silver, gold at 33% as we benefited from the improved gold price, and base metals coming in at around 22%. With silver prices increasing our silver margins improved from 54% in 2024 to 65% this quarter.
This record revenue and margin expansion of our silver operations also provided for record adjusted EBITA, which helped improve the net leverage ratio from 1.6 times at the end of last year to 1.5 times at the end of this quarter.
I'll now pass the call to Carlos for more detailed review of the performance of our operations.
Carlos Aguiar
Thank you, Russell. I'll start on slide 9. Green's Creek continues to demonstrate its consistency as a stable cash flow generator and producer. The mine produced 2 million ounces of silver in the first quarter, driven by 10% increase in the silver grain meat from the last quarter. The grade improved throughout the quarter to approximately 13 ounces per ton in March and remained strong entering the second quarter. Backfill and development activities also continue to improve throughout the quarter, which helped with the delivery of higher grade tons to the mall.
Negative cash costs of $4.08 per ounce and negative or in sustainable costs of $0.03 per silver ounce were significantly better than annual guidance. High impact product credits reduced costs, partially upset by increased fuel purchases due to the need for more side power generation than planted in the quarter.
Capital investment and Greens Creek totaled $10.8 million, which is expected to rise in the next two quarters due to the construction season ramping up activities, a common theme across our producing portfolio, as well as our exploration assets.
Production guidance for 2025 at Greensbury is maintained at 8.1million to 8.8 million ounces of silver. We are lowering Greens Creek cost guidance significantly, primarily attributable to a strong goal by product credits in the first quarter, with cash cost guidance reduced to $0.25 to $0.75 per ounce from the prior $2 to $2.50 range.
NIC guidance lowered to $6.50 to $7.25 from $8.75 to $9.50 per ounce. Capital investment guidance is unchanged at $48million to $51 million in sustaining capital and $10million to $12 million in world capital.
Moving to slide 12, Lucky Friday continues to demonstrate operational excellence, achieving a consecutive quarterly million record of almost 109,000 tons, surpassing our previous record in the fourth quarter of 2024.
The mine delivered consistent silver production of 1.3 million ounces in the first quarter, maintaining its position as a core production asset. When production remains strong, we experience cost pressures during the quarter with cash cost at $9.37 per ounce, and as of $20.08 per ounce after byproduct credits, primarily due to higher labor costs, profit sharing, consumables, and contractor costs. In response, we implemented cost control initiatives aiming to reduce reliance on high cost contractors.
Free cash flow generation in the first quarter was $8.4 million, negatively impacted by working capital exchange and the higher operating cost versus the prior quarter.
We are maintaining our 2025 production guidance of 4.7million to 5.1 million silver ounces, while adjusting our cost projections to reflect current realities. Looking ahead, we anticipate capital investment to increase in the next two quarters as warmer weather supports our seasonal construction activities.
Our focus remains on balancing operational consistency with discipline cost management to maximize locu Friday long-term value contribution to our portfolio.
Turning to slide 11, In a year produced over 770,000 ounces of silver. Within the quarter, the trole averaged 350 tons per day, remaining below the permitted limit of 440 tons per day.
We noted in February our power supplier for Kino Hill, Yukon Energy Corporation, suffered a failure in its power generation in October of last year at the Hydropower power plant in Whitehorse, which is not scheduled to be repaired until August of this year. Despite this and other challenges, Ino he delivered its first profitable quarter under Hecla ownership with 1 million in gross profit. Which resulted in no costs being transferred to ramp up into Hecla's costs.
War continues to bring the asset into a state of sustainable, profitable production. When the mill has proven to be capable of operating on a permitting capacity of 440 tons per day, our mining rates have lacked.
To improve our mining rates and put the mine on path towards achieving its current permitting capacity of 440 tons per day, we must advance permits and successfully continue to improve the development of the deposits and execute critical infrastructure projects, which include dry stack tailings, cementing tailings backfill plant, and water treatment plant upgrades.
Long term profitability and conservative matter price assumptions will require throughput rates of approximately 500 to 600 tons per day due to high fixed costs. This will require new permits, additional infrastructure investment, and execution of significant capital projects and mine development.
Beyond technical execution, our success also depends on continuing to strain our partnership with First Nation and the yukon government as a responsible long-term partner.
In 2025, we are reiterating our guidance for Kina Hill expecting silver production of 2.7 million to 3.1 million ounces and quarterly production cost of 15 million to 17 million.
Turning to slight one.
Casa produced about 20500 ounces of gold during the quarter at cash cost and a of $2,195 and $233 per ounce respectively. In the second half of 2025, the 1,608 is expected to demonstrate improved economics and generate a stronger cash flow and district ratio decrease, and reliance on contractors, with improvement to be achieved late in the third quarter.
Currently there's no change to the Casa Barati production guidance of 76,000 to 82,000 ounces of gold production in 2025.
Cash guidance and AC guidance is unchanged despite the first quarter cash cost and AC coming in above the four year guidance range on a pro rata basis, they are in line with the company's expectations and truly improving the second half of the year.
I'll now hand the call over to discuss exploration initiatives in Nevada that are ramping up this month.
Robert Krcmarov
Thank you Carlos.
As I deepen my understanding of our exploration portfolio, I'm particularly excited about our Nevada assets. We're investing over $3.3 million this year in a targeted exploration program at our high grade properties with two drill rigs now deploying at Midas.
Nevada strategy centers on a hub and spoke approach leveraging existing infrastructure across high grade historical districts, and MITAS stands out with its impressive production history of 2.2 million ounces of gold and 27 million ounces of silver at exceptional grades.
This 30,000 acre property features an extensive alteration footprint suggesting significant potential for new vein discoveries supported by an existing mill and tailing facility that really could become our northern Nevada hub.
Just 15 miles to the southeast, Hollister offers complementary potential as North America's third highest grade underground gold mine. With production grades averaging 0.8 ounces per ton of gold.
The Hadegrain resource area already contains a gold and silver resource with geological evidence indicating a fully preserved epithermal system likely holding its best mineralization at depth.
And these strategic assets combined with our systematic exploration approach represents a compelling opportunity to create meaningful shareholder value through resource expansion and potential future production.
Moving to slide 14, I'll close by reviewing our key deliverables for 2025.
To position heckler for sustainable growth and shareholder returns, we remain committed to our strategic priorities at Keno Hill. We anticipate unlocking long term value through discipline permitting processes and execution excellence and moving this high grade asset down the path towards reaching its transformative potential.
Concurrently we're implementing a robust capital allocation framework that prioritizes high return investments while maintaining operational efficiency and our commitment to safety and environment.
Our focus on generating strong free cash flow. Fits well with our deleveraging initiatives and offers opportunities to strengthen our balance sheet and enhance financial flexibility.
Finally, we continue to look to optimize our portfolio through rationalization efforts at Casa Barati and are actively evaluating strategic initiatives that align with our core competencies and value creation objectives.
We expect that by coordinating these actions we can maintain operational excellence and achieve financial strength and sustainable growth for years to come. And so with that operator I'd like to open the call to questions.
Operator
(Operator Instructions)
We will take your first question from the line of Heiko Ihle with HC Wainwright. Your line is open.
Heiko Ihle
Hey, it's Heiko Ihle with Wainright. I assume you can hear me okay.
Robert Krcmarov
We can Perfect
Heiko Ihle
You have a pretty diverse operational asset base, across borders. Just out of curiosity with all the recent talk about tariffs. I mean, you can't open a newspaper without reading about it and just international trade facing a variety of arguably self cost headwinds. Have there been any components or inputs or parts or anything that has been delayed, anything in particular where you've seen an outsized impact on pricing or availability anywhere across your minds?
Robert Krcmarov
Thanks for your question. Russell answer that one, but just bear in mind that roughly 50% of our costs are in labor. There will be some minor impacts on consumables and other things.
Russell Lawlar
That's right. Thanks. Thanks for the question.
Yeah, we think about the business, we've really got the items that we purchase and then the things that we sell, right? So. As we think about the things that we purchased, we do anticipate seeing higher costs for things like rebar and steel and those types of things just because the tariffs will hit that type of industry maybe more directly than others.
We haven't necessarily seen any lack of being able to get parts and things like that. Part of that is because we do try to look ahead and as tariffs were being announced and even talked about months ago, we tried to be proactive and Make sure that we had things, parts stocked.
I think more specifically about the parts that we do buy, most of the things we buy at each operation in that country and so I think that any tariffs on that in that regard would be kind of indirect where maybe you buy apart from a supplier that's manufactured in there plant in say Mexico or something like that. But currently right now, Mexico, Canada, the United States parts sourced out of those are generally exempt, so that's okay.
And as we think about parts that we get from China, there's not much, a few grinding balls and things like that, but frankly we've been, we have a kind of long lead time supply on those, so we've got a lot of those in stock. We haven't been hit directly yet.
The other on the other side of the equation is what we sell, which is our concentrates. We export all of our concentrates essentially some of those concentrates get exported from the United States to Canada and then some go either from Canada or the United States to Asia, and some of those concentrates, frankly do go to China.
The contracting strategy that we've had currently has really insulated us from any direct impact of those tariffs going into China. But I would expect in 2026 we may see the impact of tariffs, and what we'll see there, I think, is more, we'll see the cost to place that at a Western smelter might go up versus a smelter in China, but I don't expect any risk of us not being able to concentrate.
Does that does that answer your question fully.
Heiko Ihle
It does. I mean, I. Yeah.
It does, yeah, I mean, I've been in this industry long enough to remember the days when, it was impossible to get tires for trucks.
So it, this this stuff all sits freshly on my mind, I guess.
Completely different follow-up question. You mentioned the Yukon Energy Corporation repair for the turbine failure that's going to be happening in August. Obviously early for this question, but is the site going to be down altogether when that happens? And if so, how long do you think this will halt the operations? And again, any way you can quantify your best guess as to the financial impact as well.
Carlos Aguiar
The projection for the repairs of the turbine is expected to be in the Monte Palos and it's going to last six days. So we are planning to advance, and in our projections, we included that down time, right. And, we are on a schedule to advance some of the maintenance projects in that period of time with some restriction in the power source, but there are plenty of projects that can be, advanced during that period of time and of course the economic impact of those days right now are estimated at 90,000 ounces of silver and of course with some labor costs associated with that.
Robert Krcmarov
So we're in regular dialogue with Yukon Power. We know it's coming. We've planned for it and we're ready.
Perfect. That's.
Heiko Ihle
That's good to hear. I'll get back to you and give other people a chance Thank you.
Robert Krcmarov
Thank you.
Operator
Your next question comes from the line of Dalton Baretto with Cannacord cord. Your line is open.
Dalton Baretto
Yeah, thanks operator. Good morning, Robin. Thanks for taking my questions. I want to stay on keynote here It seems to me that the language used in your outlook for Keno has gotten significantly more uncertain, let's call it. I'm just trying to get some context around it. I'm specifically trying to understand that if you got the permits tomorrow on your community support.
How much capital and time would it require to get that operation sustainably to 600 tons per day? And then on the flip side, what sort of metal prices would you need to see in order to sort of curtail production while you do these these projects?
Thank you.
Robert Krcmarov
Good morning Dalton, and thanks for your question.
Our messaging at Keynote is really about it's an evolving work in progress. There's no doubt that we underestimated some things like costs and obviously we've had some unforeseen events like the neighboring heat leach that basically put permitting on hold. But having said that, I think we've made some real progress there building on what we accomplished last year. So you know we fixed the crushing system that was really slowing us down.
We got all the permits for expanding our tailing facility, which was crucial, and I think the big win for us was really running the mill for extended periods of time and consistently hitting about 400 tons per day and that was over several months. So that really proves our processing works, our processing set up works and that's kind of huge for our next steps and going forward.
Really we need to get our mining rate in sync with what our milk can handle, and we're going to do this by gradually ramping up both the Birmingham and Flame and mock deposits. We know we need permits for this, so we've recently welcomed a highly experienced sustainability executive, Patrick Malone, with decades of permanent experience who's already begun building a specialized team. We're also strengthening our technical capabilities to make sure that we get those permit applications right.
And I have to say our collaborative engagement with the First Nations has increased as well. So let me just recap. So we're focusing on expanding our water treatment plant, adding waste storage, enhancing our tailing facilities. We're also starting construction on tailings batchfield plant, and that's going to improve both productivity and safety.
The waste and tailing storage that is going to reach capacity by 2028. So getting those permits it's really time sensitive and so we're also working on increasing our capacity to have more workers as we scale up.
I should also mention that we've done a thorough assessment of what care and maintenance would look like, that's just good planning and we still believe that advancing Know who will make strategic sense, even though I can't tell you exactly when it's going to hit our profitability targets.
Reaching 600 tons per day, that is going to take a few years to get there. First, we need to sustainably mine at 400 tons per day. I'm talking metric tons here. And match that to the mill's capacity. Anything you want to add Carlos?
Carlos Aguiar
Yeah, this is work in progress, permitting you mentioned the tailings and capacity and of course we are really excited this year to start the construction of the backfield plant which is going to change and improve productivity in the near future.
Robert Krcmarov
And so you know our understanding of that ore body, it keeps improving and with each milestone it brings us really closer to unlocking the real value of this silver district which we're quite excited about. So it's still a work in progress.
Dalton Baretto
Got it.
Thank you, Rob. .
Russell Lawlar
You mentioned cost as well, and I would say that, we've invested quite a bit of capital in Keno Hill over the past few years, obviously we've all seen that. I think that, you look at the performance that we've seen over the past few years, we have seen improved or more consistent performance.
We need to improve that. We'll continue to make these investments that you know Carlos and Rob both mentioned. The tailing spatula plants and that should help us improve the rate that we can extract from the mine because right now in the past, frankly, it used to be that the mill wasn't able to keep up and now the mine isn't able to keep up with the mill so we just keep hitting those bottlenecks and so if we think about that, we will see capital continue into the future over the next few years as we do those types of projects, these infrastructure projects, and improve the developed state of the mind, but we should see that tail off as we as we kind of get further out into the future.
Keep in mind as well, we do have investment criteria that we are looking at and evaluating and Keno Hill continues to meet that, but we have to execute on these plans.
Dalton Baretto
Understood. Thank you for that, Ross my follow up, Ross, if I can direct that one to you as well. I appreciate your comments in terms of placing the Greens Greek concentrate and sort of finding an alternative to China. But in the March 20th executive order, one of the things that order talks about having the commerce department look into in addition to export tariffs on critical minerals, is also an export tax. And I'm wondering if that goes into play, what options do you have for replacing greens great concentrate? Thanks.
Russell Lawlar
Oh, frankly, Don't know, I'll have to get back to you on that one. There's been various things that we've looked at, but I can't say that I have that on my radar, and I apologize for that.
Dalton Baretto
Great. Thanks, guys. I'll jump back and queue.
Operator
Your next question comes from the line of Michael Saperco with RBC Capital Markets. Your line is open.
Michael Siperco
Thanks very much. And thanks for taking my question. Maybe a couple on on the growth outlook and Rob, you talked about Nevada and what you're seeing there, I guess, can you give us a little bit more color about Maybe how you see that in the context of the portfolio. I know it's early and and maybe how what we should be expecting in terms of a timeline for either a study or an update on on what you see in terms of the potential in Nevada.
Robert Krcmarov
Good morning, Michael.
I'm going to hand you over to Kurt, but I have to say I was out there about a month ago and you know we have this permitted unused mill. We have tailing storage capacity and so really our approach is this hub and spoke model right now what we need to do is build up a critical amount of resources and then re-look at a path forward. Kurt, could you add some more please.
Kurt Allen
Yeah, thanks, Michael.
The program that we have at Midas this year, we're going to have two drill rigs. We've got about seven targets, and these are all high grade vein targets, we're thinking that we've kind of figured out the structural regime on the east part of the property there.
These are early-stage drill holes. It's going to tell us a lot, but we're focused on trying to identify the high grade portions of those veins, and I think it's going to be similar size, our potential is similar size to what was mined in the past.
Now Aurora is another project that we're currently in the permitting process, so we're doing a 5-year EA, an exploration EA there. We should have that by the end of the year, and that's going to open up the entire district there for exploration. So we're kind of waiting on that EA at Aurora.
And then Hollister, in in my years of experience, it's probably one of the largest surface expressions of an epithermal system. And we've got several targets there. We're not going to drill there this year. We're hoping to be able to do that next year, but I think, within a couple, 2 to 3 years, 4 years, depending on the results from this year and next year's programs, I think we'll be on to something and move those projects forward.
Robert Krcmarov
One of the most striking things when I was on site to Kurt's point, what defines the mineral system or the limit of the mineral system is how altered the rocks are. That shows you that fluids have been going through it. And so when I was on site, you stand on really intense alteration that Kurt was talking about and it's probably a couple of kilometers away from where all the pretty much all the previous historic mining and development and exploration's been focused, so that playground is huge.
And so that's what it's really got me excited. I think there's an opportunity where all the work has previously been focused around existing operations and really not that much outside of it.
Sorry, I cut you off, Michael.Go ahead.
Michael Siperco
No, that, that's good color. So I suppose I'm looking to understand and maybe lost track a little bit of where exactly you were in the advancement in Nevada. Like, is it fair to say that, in an optimistic scenario we'd be talking about a potential production scenario, let's say 4 or 5 years down the road? Is that the kind of time frame that you might have in mind if everything works out?
Robert Krcmarov
That's certainly possible just given that we have some permanent facilities. We obviously are underinvested in exploration at the moment and as I said on the last call, that's not through lack of quality targets or opportunities. It's just basically our focus on financial discipline and you know as our financial situation improves, I do see that we'll be. Investing a lot more in exploration and a lot of it will be focused at Nevada. I think there's some very good potential there, but to your 0.4 or 5 years, obviously we need to, we'll probably need some more permits. I don't know how long that's going to take, but it's not an unrealistic assumption.
Michael Siperco
Okay, and that's actually a perfect segue into my next question if I could in terms of your capital allocation priorities talking about deleveraging, you've talked about, potential for additional CapEx at Keno and Funded exploration which presumably will go higher as well as whatever other development activities can you kind of break that down for us like how do you look at organic reinvestment in assets versus your deleveraging efforts?
Russell Lawlar
Yeah, good morning and thanks, Mike. This is Russell. I'll take that question. It's always a balancing act, right? And I'll say we're fortunate because we have assets that do generate a substantial amount of cash in Lucky Friday and Greens Creek. And as we look at the economics for Casa Berardi, we're going through this strategic review right now, but we do anticipate the economics of that will improve and provide cash flow as well, especially at today's prices. Out later this year and into next. And so as we think about that cash flow, there's a balancing act between ensuring that you invest substantial capital into those operations that provide that cash flow, so Lucky Friday, Greens Creek, etc.
The growth capital at Keno Hill, because you know for Keno Hill to hit those return on invested capital metrics that we've talked about, we need to invest in it. So we'll be doing those things while at the same time looking to lever, reduce the interest expense that we're paying now and as we do that, then we anticipate, seeing further cash flows from that.
And then frankly, the last thing that I haven't talked about is the expiration. So you know it is a balancing act between making sure that we're taking care of all of those items kind of all at the same time. In a strategic way, but I would say as we look out into the future, we anticipate those investments as we're thinking as we're planning out our cash flows, right? So we're planning those cash flows as it relates to those investments as it relates to investment in our operating assets or our exploration portfolio.
Michael Siperco
Okay, great, that's a good color. Thanks very much. I'll pass it on.
Operator
Your next question comes from the line of Andrew Doom with National Bank. Your line is open.
Andrew Doom
Hi Robin team, thanks for taking my question. Maybe just that Lucky Friday. I know the labor costs there have been, one of the main drivers of increasing costs over the last little while. Can you just give some more color on, what's driving those labor costs higher is it just wage inflation? Is there labor tightness.
Russell Lawlar
That you have to address, so just any color.
Robert Krcmarov
You can provide there.
I mean there's two main things there. One is that we have been using contractors, and that's something that we've got our focus and attention on to try and minimize the use of high cost contract labor.
The other thing is the profit sharing, which is a good problem to have. It means that we're actually generating profits. Anything else.
Russell Lawlar
I'll jump in and just to add on to what Rob said, the performance at Lucky Friday has been actually very strong, so the amount that we do pay under the profit sharing program as well as the, and I'm going to miss the acronym exactly, but the production bonus off there, the bonus we pay to the workers there has actually paid out above target based on the performance of Lucky Friday.
That's performance on that bonus is related to production, safety, environmental performance, and then there is a cost component there too. But when you take it all in balance, Lucky Friday has frankly outperformed and as a result we have seen those additional payments which we welcome. Those are those are the good problems to have like what Rob said.
Andrew Doom
Got it, thanks. And then maybe shifting to cash as well, so you left production and cash cost is the guidance unchanged, but there was an increase in that cost of sales in millions. So just wondering. What are you seeing from the operation to offset that. Increase in millions. Cost of sales with unchanged production and cash cost guidance.
Russell Lawlar
It's a good question. Thanks for asking, Andrew. So keep in mind that cost to sales number is both cash cost and non-cash cost, and it's a GAAP number, whereas the and it's so, as we present that number and we present non-gap numbers, we have to present the closest GAAP number to the non-GAAP number, which is cost of sales. And so that's the number that's presented there.
So it's a combination of It's a GAAP number. It's both non-cash and cash cost, but as we as we looked at Casa Berardi and we looked at the performance both in the in the first quarter and the what we expect for the remainder of the year and we updated, our expectations and our models, we really, frankly the model still predicts that we'll come out within our guidance and so therefore, although we did see costs increase as we have seen the, frankly, the stripping is a little bit behind where we expect it to be at this point. We still anticipate coming in under guidance. It'll just cost a little bit more.
Andrew Doom
Got it, thanks for that color. I'll jump back in the queue.
Operator
Your next question comes from a line of Nick Giles with B. Riley Securities. Your line is open.
Nick Giles
Thank you operator and good morning everyone. This is Henry Hurl on for Nick Giles. I wanted to start by asking if there are any updates on a potential sale of CoSA and then have a higher gold prices change the way that you're approaching this.
And then should we also think about any potential proceeds from the sale as earmarked for debt pay down Thanks.
Robert Krcmarov
Good morning, Henry.
It's not a foregone conclusion that we're going to sell. What we said was that we're looking at all strategic alternatives, and that includes an outright sale. It includes joint venturing, spinning out the asset, extending the underground mine, taking advantage of the current high gold prices. Whatever. And so that's a work in progress and what I said is that we'd provide an update sometime during Q2. Our work is still underway and we'll report by next quarter if not sooner.
Russell Lawlar
And as it relates to the proceeds, the way we would look at it is we would use proceeds to deliver, or we would anticipate doing that, so yeah, to just to cover that up as well.
Nick Giles
Alright, yeah, thanks for that. And then, so how could the permitting timeline impact the strategic alternatives process, and then would you feel like you could get the full value for the asset despite kind of a setback of the permitting.
Robert Krcmarov
I mean there's no doubt that we have a permitting hiatus ahead of us. The Last time we communicated this, we said it was going to take about 5 years. I don't know if it's going to take 5 years. I don't know whether there's an opportunity to accelerate it or not, but it's certainly, you're going to discount those future cash flows. There's no doubt about that.
But again, since we started our strategic review, the gold price has moved up significantly, and so, we're looking at that through, basically refreshed lens of a much higher gold price.
Russell Lawlar
Yeah, that's right, essentially what we're doing is just looking to see how best we can, daylight as much value from Castle Berri as possible and the change in the gold price, will play into that.
Nick Giles
Got it thanks for the commentary and continue best of luck.
Robert Krcmarov
Thank you.
Operator
Your next question comes from the line of Joseph Freegger with Ross Capital Markets. Your line is open.
Joseph Freegger
Hey Robin team, thanks for taking my questions. Backing up a bit to Keno. Are you guys I guess sure that the mine can support an operate or mining rate of, 500 tons or 600 tons per day. I know it's always been a challenge there to get the mining rate up at the mine underground, like, so what's your level of confidence that even with the permits you could do that, in the future?
Robert Krcmarov
I think with the investments that we've spoken about getting to an increased mining rate like that is. I think we can achieve that whether it makes economic sense or not that's another matter.
Clearly a key part of this is getting flame and moth production ramped up. We also, a critical piece of increasing the production rate is really doing enough development. That's really what we have a focus on at the moment.
And to make sure that all of our scopes prepared and sequenced. I've got Matt with a snap. Is there anything you want to add?
Russell Lawlar
That, Rob. One of the ones that I would be most focused on is we can ramp up, we can get things going, but at this point we don't have permits to store all the waste, by accelerating production right now, we then run out of space. More pressure on our permitting it's a strategic choice at this point to not move things any faster than we've got it already going.
So to answer the direct question, we're very confident we can get up to the 440 pretty easily and the 600 will come eventually, but there are other constraints that are limiting our ability to do that right now.
Joseph Freegger
Okay, fair enough. And then, looking at the cost revisions at CASA and Lucky Friday, obviously they're reflective of a variety of factors that occurred already in Q1.
Like how confident are you guys that the revised number is now correct and is there a portion of this revision that's that is related to, profit sharing which would in the event gold and silver were to pull back that the cost would also pull back with that.
Russell Lawlar
Yeah, I would suggest that any time that we put our guidance out we're confident in those numbers. Unfortunately sometimes we do have to revise them. So you know we put the numbers out and we're confident that we can achieve those, or else you know we would put out the numbers that we believe we could achieve.
As it relates to profit sharing, yeah, I think that if you did see it pull back then you could.
See, lesser costs. I think more important than that would be continuing to execute on cost control and replacing contractors with employees and those types of things that are more meaningful to the company as a whole.
Okay, thanks.
Joseph Freegger
My other questions are already touched on. I'll turn it over.
Robert Krcmarov
Thank you.
Operator
Your next question comes from the line of Dalton Burrito with Canaccord. Your line is open.
Dalton Baretto
Yeah, thanks for taking my follow ups, guys.
Rob, in your prepared remarks, one of the things you mentioned was a disciplined allocation strategy or acquisition strategy, and I'm wondering if you can wrap some parameters around that for us, just anything around jurisdiction, commodity, asset size, stage, anything like that.
Thank you.
Robert Krcmarov
Sure, so.
When we think about M&A, we need to have some parameters, and this is something that's socialized with the board as well. And so we need to carefully look at our gold and silver mix, we're aware that, we're unique in our space in that that we have a greater proportion of our revenues come from silver and so primarily we want to remain a silver company and that's really what we're focused on. Do we have room for gold? Yes, we probably do.
But really we'd be looking at it exactly the same as we would any other investment. I think the Sorry, I lost my train of thought here. So with M&A, it's about not reacting to available opportunities and really doing proper and thorough due diligence. And then a key part of that is assessing what are the returns and how does that compete with internal growth projects as well. And so M&A is something that we're always looking at, but it'll become more of a focus as we delever. And as we get into a position of strength.
Dalton Baretto
Great, thanks, Rob. And if I can just ask on Libby, which I think is a massively underappreciated part of your portfolio right now, and I don't think sediment hosted high grade copper deposits really exist anymore. Sand this thing on the fast track, if permanent goes the way you hope, what's the approach? Are you going to go at it solo? Would you bring in a partner? How would you look at that?
Robert Krcmarov
I think I mean this is a material asset for us, you're aware of the inferred resource of about 180 million ounces of silver and About 1.7 billion pounds of copper, so we recognize it's significant, but it's also going to come with a very significant capital cost.
I don't know what it's going to be, but I imagine it's going to be closer to a billion dollars more than anything. And so I am interested in perhaps looking at partnering up with perhaps someone who has more of a focus on copper. Remember this is about 0.7%. Copper grade, which is quite significant and so if we could partner up with that would be something we'd certainly consider because I think the prize is large enough to share and that would mean that we could maintain our focus on our core business which is basically precious metals.
Dalton Baretto
Yeah, thanks, Rob. I don't think you'd find any shortage of interested parties. Thanks for taking my question.
Sure.
Operator
And your final question will come from the line of John Tumazos with John Tumao's very Independent Research. Your line is open.
John Tumazos
Rob, thank you. Following up on questions with Libby. How fast can Heckler move in sympathy to the fast 41? What are the steps to get it to definitive fees? Besides the infill drilling of the inferred resource.
Robert Krcmarov
Let me just outline the next immediate step. So you know we've obviously got the designation and that's going to enhance that long term potential and make sure that there's a bit more transparency on the process.
At the moment we've got a plan of operations that's under an environmental assessment and that's being reviewed by the US Forestry Service, and we expect a decision on that to be issued pretty soon now actually.
And if that's approved and they issue a Fonzie, so that's a finding of no significant impact, there's going to be a 45 day ejection period and then there's going to be a 30 day period that we could respond to that.
And depending on the nature of any objections received by the Forestry Service, there might be an updated plan of operations, and that would be that could be approved in Q3 of 2025. Once that process is finished, we'll basically have the authority to dewater and rehabilitate an existing 14,000 ft at it. About half of it's underwater. And we'd need to extend it by about 4,000 ft and do some lateral drifts so that we can do our exploration activities. So there's a ton of work that still needs to happen.
We do need to reestablish and re-validate the resource and then ultimately produce some sort of an economic study. So it's going to take quite a few years and a considerable amount of effort, but we do recognize the value of this asset portfolio.
John Tumazos
Rob, is this plan of operation. For exploration as opposed to tons per day mining for production and when you get, What do you think is the target concept for tons per day production? 2000, 10,000, 20,000 tons a day.
Robert Krcmarov
So it's a fairly flat lying ore body and it will likely be mined by Ruin pillar and so I don't know Matt, could you comment what a potential conceptual.
Andrew Doom
The previous work that had been done has been targeted at 12,500 tons a day, so it's a relatively large production. It's relatively low grade. I mean you've got to get the tons up, so you're in that 100 to 15,000 ton a day range for a pillar and what Limits us from driving any farther. You just can't develop the headings fast enough to get more, but it's in that range. It's not a 2000, 3000 ton and it's not 50,000 tons.
Robert Krcmarov
I do want to emphasize that this is purely conceptual. All we have is well hopefully the permission to conduct exploration activities. It doesn't imply any pathway to mining yet. We still have quite a few hoops to jump through.
John Tumazos
One last point, could you refresh me as to the tons per day when the Troy mine operated nearby. That was a similar flat lying ruin pillar.
Robert Krcmarov
I'm sorry, I don't have that.
Andrew Doom
I think that predates just about everyone in the room, so we'd have to look that one up for.
Russell Lawlar
You. That's right. We'd have to go back and take a look.
John Tumazos
I went there 42 years ago. I'm too old. Excuse me.
Operator
Well thank you so much. I will now turn the call back over to Rob Krcmarov for closing remarks.
Robert Krcmarov
Okay, thank you everyone for joining us on the call and thank you all for your questions. We look forward to updating you next quarter if not earlier. Have a good day.
Operator
Thanks everyone. This does conclude today's conference call. You may now disconnect.
