Hecla Mining Reports Second-Quarter Profit
The company also revised its production guidance higher to account for the recent acquisition of the Nevada properties from Klondex Mines Ltd.
Net income was $11.9 million, or 3 cents per share, compared to a net loss of $24.2 million, or 6 cents, for the same period in 2017. The April-June result was helped by a gain on base-metals derivative contracts of $16.8 million and a foreign-exchange gain of $2.5 million.
Excluding special items, the adjusted profit was $3 million, or a penny per share.
Silver output in the second quarter slipped to 2.6 million ounces from 2.8 million a year ago, while gold output rose to 60,313 ounces from 52,561, the company reported. Lead and zinc output also rose. A strike at the Lucky Friday Mine in Idaho has slashed silver output there since March 2017.
The average realized silver price was $16.61 per ounce, down from $17.14 in the second quarter of 2017, Hecla said. Average realized gold, lead and zinc prices increased 3%, 19% and 13%, respectively.
The company reported cash costs, after by-product credits, of minus 57 cents per silver ounce. Hecla said this was a 319% decrease from a year ago. All in sustaining costs, after by-product credits, were $11.40 per silver ounce.
"The significant decline in our silver cash cost, after by-product credits per ounce, is a function of strong base-metals prices and improved treatment charges,” said Phillips S. Baker, Jr., president and chief executive officer. He added that gold cash costs also fell due to higher throughput at Casa Berardi.
Meanwhile, Hecla is in the process of integrating its Nevada operations after the Klondex acquisition.
"Our plan is to operate the mines and mill as one unit, allocating the workforce and capital to generate margins and focus on profitability, not just on production for production's sake,” Baker said. “Fire Creek has the best margin of the three mines by a considerable amount, so ramping it up is our priority.”
With the addition of the Klondex properties, the company revised upward its guidance for 2018. Silver-output guidance is now 9.6 million to 10.8 million ounces, up from 9.5 million to 10.5 million previously. Gold output is now seen at 262,000 to 284,000 ounces, compared to 218,000 to 232,000 previously. Silver-equivalent output is now listed at 37.8 million to 41.5 million ounces, compared to the previous range of 35 million to 37.5 million.
The board of directors declared a quarterly cash dividend of $0.0025 per share payable around Aug. 31 to shareholders of record on Aug. 24.