Precious metals miner Hecla Mining (NYSE: HL) has posted a second quarter profit of US$11.9 million on sales revenue of US$147.3 million, powered in large part by a significant decline in silver cash costs.
This compares to a loss of US$24.1 million on sales revenue of US$134.2 million during the second quarter of 2017.
Hecla says the improved financial performance in the quarter was the result of a gain on base metal derivative contracts of US$16.8 million compared to a gain of US$2.5 million in the second quarter of 2017; net foreign exchange gain of US$2.5 million recorded in the second quarter of 2018 compared to a loss of US$3.9 million in the same period of 2017; and an income tax provision of US$400,000 compared to US$16.1 million in the second quarter of 2017, with the variance due to impacts of U.S. tax reform and lower foreign taxes.
During the second quarter, Hecla produced 2.6 million oz. silver, 60,313 oz. gold, 5,522 tonnes lead and 14,299 tonnes zinc. This compares with the year-ago quarterly output of 2.8 million oz. silver, 52,170 oz. gold, 4,420 tonnes zinc and 12,966 tonnes zinc.
Hecla operates the Greens Creek silver-gold mine in Alaska's Panhandle, the Lucky Friday silver mine in Idaho, the Casa Berardi gold mine in Quebec and the San Sebastian silver-gold mine in Mexico.
During the quarter Hecla closed its acquisition of Nevada-focused gold miner Klondex Mines, and took control of the junior's Nevada gold assets on July 20.
Hecla says it is "quickly moving forward with multiple initiatives aimed at improving operations" at the Klondex assets in Nevada, which are now reporting to a single vice-president and general manager, Kevin Shiell.
The aim is to create a single mine plan in Nevada with the Fire Creek, Midas, Hollister and Hatter Graben mines all feeding a central mill at Midas.
Hecla has boosted its expected capital outlay for 2018 to US$145 million, up from US$105 million due in large part to an extra US$20 million of expenditures to be made in Nevada. The company had US$245 million in cash and equivalents at mid-year.