Hecla Mining Remains Profitable As Strike Continues
(Kitco News) - Hecla Mining Co. (NYSE: HL) remained profitable in the firstquarter despite the continuation of a strike at the Lucky Friday Mine in Idaho,the company reported Thursday.
Net income fell to $8.1 million, or 2 cents pershare, from $26.7 million, or 7 cents, in the first quarter of 2017. Thecompany listed several factors for the decline, including a tax benefit thathelped the year-ago results, the impact of the Lucky Friday and related suspensioncosts, increased exploration and pre-development spending, and $2.5 million forcosts related to the proposed acquisition of Klondex Mines Ltd.
Excluding special items, adjusted net income was $9.1 million, or 2 centsper share, Hecla reported.
"The investments we have made to improveour mines are resulting in more consistent operations, higher throughput,strong metals production and lower costs, increasing the financial strength ofHecla," said Phillips S. Baker, Jr., president and chief executiveofficer. "These improvements are reflected in the quarterly throughputwhich is a record at Casa Berardi and a near-record at Greens Creek, and lowercash costs, after by-product credits per gold and silver ounce.
“We continue to benefit from strong lead andzinc prices, and are seeing continued tightness in the concentrate markets,resulting in significant improvement in payment terms from the smelters, solower costs could remain for some time.”
The average realized silver price in the firstquarter was $16.84 per ounce, 6% lower than the $17.90 price a year ago.However, gold, lead and zinc prices increased 9%, 12%, and 18%, respectively.
Silver output - dented by the strike - was 2.5million ounces, down from 3.4 million in the same quarter of 2017. Lucky Fridayproduction fell 85% year-on-year to 99,780 ounces due to the labor walkout.
Gold output rose to 57,808 ounces from 56,113. All in sustaining costs, after by-productcredits, were $5.66 per silver ounce
Hecla said its 2018 production estimates have not been changed.However, officials say these likely will be revised when second-quarterearnings are released in order to include the expected impact from the additionof Klondex's Nevada operations or if by-product metal prices remain robust.
The board of directors declared a quarterly cash dividend of$0.0025 per share, payable around June 4 to stockholders of record onMay 24.
By Allen SykoraFor Kitco News
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