HECLA MINING COMPANY $3.61 (New York symbol HL; TSINetwork Rating: Extra Risk) (208-769- 4100; www.hecla-mining.com; Shares outstanding: 342.2 million; Market cap: $1.3 billion) explores for, mines and processes silver and gold in the U.S. and Mexico. Most of its silver output comes from its Greens Creek mine in Alaska and its Lucky Friday mine in Idaho.
In the three months ended June 30, 2013, Hecla’s revenue rose 27.3%, to $85.3 million from $67.0 million a year earlier. The company lost $0.03 a share, compared to a profit of $0.01. The loss mostly came from lower silver prices and costs related to its recent acquisition of Aurizon Mines.
Aurizon acquisition is now complete
Hecla paid $796 million for Aurizon in a transaction that closed on June 1, 2013. Aurizon owns the Casa Berardi mine in Quebec and is also developing other gold properties.
Hecla received an average silver price of $16.27 an ounce in the latest quarter, compared to $27.05 a year ago. Silver prices have since moved up to $22.91 an ounce.
The company expects its two silver mines to produce 8 million to 9 million ounces this year, while Aurizon’s Casa Berardi project is on target to add 60,000 ounces of gold in the second half of this year.
All of Hecla’s mines have potential for higher production, including Casa Berardi, where Aurizon is deepening the mine shaft to boost output and extend the project’s life. However, Hecla is cutting its 2013 capital budget by 13%, to $178 million, while it waits for higher gold and silver prices.
Hecla Mining is a hold.
