Hecla Mining Reports Second-Quarter Profit
(Kitco News)- Hecla Mining Co. (NYSE:HL) reported a profitable second quarter Thursday as the cash cost of producingan ounce of silver, after byproduct credits, was in negative territory.
The company also revisedits production guidance higher to account for the recent acquisition of theNevada properties from Klondex Mines Ltd.
Net income was $11.9 million, or 3 cents pershare, compared to a net loss of $24.2 million, or 6 cents, for the same periodin 2017. The April-June result was helped by a gain on base-metalsderivative contracts of $16.8 million and a foreign-exchange gain of $2.5million.
Excluding special items,the adjusted profit was $3 million, or a penny per share.
Silver output in thesecond quarter slipped to 2.6 million ounces from 2.8 million a year ago, whilegold output rose to 60,313 ounces from 52,561, the company reported. Lead andzinc output also rose. A strike at the Lucky Friday Mine in Idaho has slashedsilver output there since March 2017.
The average realized silver price was $16.61per ounce, down from $17.14 in the second quarter of 2017, Hecla said. Averagerealized gold, lead and zinc prices increased 3%, 19% and 13%, respectively.
The company reported cash costs, afterby-product credits, of minus 57 cents per silver ounce. Hecla said this was a319% decrease from a year ago. All in sustaining costs, after by-product credits,were $11.40 per silver ounce.
"The significant decline in our silvercash cost, after by-product credits per ounce, is a function of strong base-metalsprices and improved treatment charges,” said Phillips S. Baker, Jr., presidentand chief executive officer. He added that gold cash costs also fell due tohigher throughput at Casa Berardi.
Meanwhile, Hecla is in theprocess of integrating its Nevada operations after the Klondex acquisition.
"Our plan is to operate the mines and millas one unit, allocating the workforce and capital to generate margins and focuson profitability, not just on production for production's sake,” Baker said.“Fire Creek has the best margin of the three mines by a considerable amount, soramping it up is our priority.”
With the addition of the Klondex properties,the company revised upward its guidance for 2018. Silver-output guidance is now9.6 million to 10.8 million ounces, up from 9.5 million to 10.5 millionpreviously. Gold output is now seen at 262,000 to 284,000 ounces, compared to218,000 to 232,000 previously. Silver-equivalent output is now listed at 37.8million to 41.5 million ounces, compared to the previous range of 35 million to37.5 million.
The board of directors declared a quarterlycash dividend of $0.0025 per share payable around Aug. 31 to shareholders ofrecord on Aug. 24.
By Allen SykoraFor Kitco News
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