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Alberto Abaterusso
Alberto Abaterusso
Articles (1382) 

Hecla Mining Climbs on Casa Berardi's Record Gold Throughput

Casa Berardi accounts for 70% of the miner's total gold production

April 15, 2018 | About:

Following results on preliminary production for first quarter of 2018, Hecla Mining Co. (NYSE:HL) closed the week at $3.76, up 1.35% at the end of regular trading hours on April 13.

During the quarter, Hecla Mining produced 57,808 ounces of gold, a 3% increase on a year-over-year basis, and 2,534,095 ounces of silver, a 24.8% decline from the comparable quarter of 2017.

The miner also produces lead and zinc. From a year ago, the production of lead decreased by 3,009 tons to 5,627 tons. From its quarterly operations, Hecla Mining put out 15,211 tons of zinc versus a volume of 15,538 tons a year ago.

The company reported decreases in the production of silver and gold at each of its mines, except for Casa Berardi, where the throughput keeps on pacing at record.

The charts below illustrate the trend in Hecla Mining’s first-quarter precious and base metal production over the last five fiscal years:

Phillips S. Baker, Jr., president and CEO, commented on the company's quarterly production results: “Our mines are performing well due to the strength of our operating teams and consistent and disciplined capital programs that have improved these longlived mines.”

Greens Creek benefited from the use of innovative technologies and San Sebastian continued its transition to underground mining techniques.

Hecla recoreded $245 million in cash on hand and securities at the end of the first quarter. 

The catalyst to watch in 2018 is the completion of Klondex Mines’(KLDX) (TSX:KDX) acquisition in the second quarter of the current year. Klondex is a gold producer with underground activities in Nevada.

Following the annexation of Klondex’s Fire Creek, Midas and Hollister mines to its portfolio of activities, Hecla Mining will increase its annual gold equivalent production by about 162,000 ounces.

Hecla Mining hopes the most important financial and operating metrics will gradually increase because of the synergies with Klondex.

Hecla Mining has fallen 11% so far this year and has outperformed the Van Eck Vectors Gold Miners ETF (GDX) by 7%.


Hecla Mining has a market capitalization of $1.51 billion, a price-book ratio of 0.99 and an EV/EBITDA ratio of 11.52 times.

The mining industry has an average price-book ratio of 2.06 times and an EV/EBITDA ratio of 9.9 times.

Hecla Mining has a recommendation rating of 2.6 out of 5 and an average target price of $4.99 per share.

The 52-week range is $3.25 to $6.16.

Disclosure: I have no positions in any security mentioned in this article.

About the author:

Alberto Abaterusso
If somebody asks what being a value investor means, Alberto Abaterusso would answer, “The value investor is not just the possessor of the security that represents the company, but he is the owner of that company. As an owner of the company the value investor is actively involved in the dynamics of that company and his first concern is how to have sales progressively growing. Also, the value investor is probably one of the most demanding persons in the world concerning sales.”

Abaterusso is a freelance writer based in The Netherlands. He primarily writes about gold, silver and precious metals mining stocks. His articles have also been widely linked by popular sites, including MarketWatch, Financial Times, 24hGold, Investopedia, Financial.org, CNBS, MSN Money, Zachs, Reuters and others. Alberto holds an MBA from Università degli Studi di Bari (Italy), Aldo Moro.

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