Cara Community GSM 50: Hecla Mining update

Hecla Mining (NYSE: HL) reviewed 11-09-2020

(All figures in USD)

Market Cap:       $2.8 Billion          Share Price:        $5.19

Shares outstanding: 537,655,291 as of Sep 2020

Cash and cash equivalents: $98.7 M as of 30 Sep 2020

Debt: $495.8 M (USD) as of 30 Sep 2020                 Credit facility: $50 M (USD)

Current operations: Yes.

Insider holdings: 1.8%                    Institutional:  312 institutions own about 59%


Investor Presentation:

CEO: Phillips S. Baker      HQs: Coeur d’Alene, ID, USA

Q3 highlights:

  • Cash & Equivalents improved from $75.9 M to $98.7 M
  • Reported earnings of $0.03 cents (USD). Revenues $199.7 M (USD)
  • Long-Term Debt increased from $468 M to $496 M in the quarter
  • Retired Senior Notes at 6.875% (due 2021) replaced with 7.25% Senior Notes (due 2028)
  • Sold silver at an average price of $25.32 in Q3
  • Production of 3.5 M oz. of silver and 41,170 oz. of gold in the quarter
  • Silver production guidance increased to 12.8-13.4 M oz for full-year 2020
  • Lucky Friday (Nevada) back online with 636.4 thousand ounces of silver in Q3
  • Consolidated AISC stated at $7.70 per Ag oz for first nine months of 2020, vs $6.05 (2019)
  • Hecla paid a quarterly dividend of US$0.01 and declared a “silver-linked” dividend of US$0.005 due to the average price of silver being above $25 per oz during the quarter

Bottom line:

  • Hecla has lost money in 4 of the past 5 years and had an especially difficult 2Q2019 in which the stock dropped to ~1.25, so Q3 is an improvement, but maybe ahead of the stock price rise
  • Great assets, a great pipeline of projects, but a high and costlier debt load
  • Senior Notes at 6.875% (due 2021) replaced with 7.25% Senior Notes (due 2028)
  • No position and none contemplated; however, the company made the Cara GSM 50 Top Picks


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