Hecla Mining Remains Profitable As Strike Continues
Net income fell to $8.1 million, or 2 cents per share, from $26.7 million, or 7 cents, in the first quarter of 2017. The company listed several factors for the decline, including a tax benefit that helped the year-ago results, the impact of the Lucky Friday and related suspension costs, increased exploration and pre-development spending, and $2.5 million for costs related to the proposed acquisition of Klondex Mines Ltd.
Excluding special items, adjusted net income was $9.1 million, or 2 cents per share, Hecla reported.
"The investments we have made to improve our mines are resulting in more consistent operations, higher throughput, strong metals production and lower costs, increasing the financial strength of Hecla," said Phillips S. Baker, Jr., president and chief executive officer. "These improvements are reflected in the quarterly throughput which is a record at Casa Berardi and a near-record at Greens Creek, and lower cash costs, after by-product credits per gold and silver ounce.
“We continue to benefit from strong lead and zinc prices, and are seeing continued tightness in the concentrate markets, resulting in significant improvement in payment terms from the smelters, so lower costs could remain for some time.”
The average realized silver price in the first quarter 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 2.5 million ounces, down from 3.4 million in the same quarter of 2017. Lucky Friday production 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-product credits, 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-quarter earnings are released in order to include the expected impact from the addition of 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 on May 24.