Make Kitco Your Homepage

Hecla Mining Lists 4Q Loss On Lower Prices, Sales

Kitco News

(Kitco News) - Hecla Mining Co. (NYSE: HL) Thursday reported a fourth-quarter net loss as silver output and the price of metals fell from the same period in 2017. 

Hecla listed a fourth-quarter loss of $23.8 million, or a nickel per share, and a full-year 2018 loss of $27.1 million or 6 cents. For both periods in 2017, the loss was $29.1 million or 7 cents.

Hecla said sales for the fourth quarter and full year were 15% and 2% lower, respectively, than the same periods in 2017. This was due to lower silver production as a result of lower grades and production at San Sebastian, plus lower average silver prices.

Hecla said it received $14.58 per silver ounce in the fourth quarter, compared to $16.87 a year earlier. The company listed fourth-quarter silver output of 2.7 million ounces, down 9% from 3 million in the same period a year ago.

The average gold price was $1,237 an ounce, down 3% year-on-year. Fourth-quarter gold output rose 16% to 70,987 ounces from 60,964.

For full-year 2018, the company fetched $15.63 per silver ounce, down from $17.23 in 2017. Production for all of 2018 was 10.4 million ounces, down 17% from 12.5 million.

The average gold price was $1,265 for the full year, slightly higher than in 2017. Full-year production climbed 13% to a company record of 262,103 gold ounces from 232,684.

Lead and zinc prices were lower year-on-year for both the fourth quarter and all of 2018.

For full-year 2019, Hecla projects silver output of 10 million ounces and gold production of 290,000.

The company said it posted a slight loss on base-metal derivative contracts in the fourth quarter, although it had a gain of $40.3 million for full-year 2018. Hecla listed a foreign-exchange gain of $7.5 million in the fourth quarter and $10.3 million for all of 2018.

The company spent more on exploration and pre-development, listing expenses of $9.4 million for the fourth quarter and $40.6 million for the full year. This compares to year-ago tallies of $7.3 million and $29 million.

The board of directors declared a quarterly dividend of $0.0025 per share of common stock, payable around March 13 to shareholders of record on March 5. 

A strike continues at the company’s Lucky Friday in Idaho, with silver production of just 13,026 ounces in the fourth quarter and 169,041 ounces for the full year. The labor action is nearly two years old now, having started in March 2017. Hecla listed suspension costs for the fourth quarter of $2.4 million and $20.7 million for the full year, including $1.3 million and $5 million, respectively, in non-cash depreciation.

Hecla earlier this month reported the highest silver, gold and lead reserves in its 128-year history. As of the end of 2018, the company lists record proven and probable gold reserves of 2.85 million ounces and silver reserves of 191 million ounces.

"Greens Creek and Casa Berardi are the economic engines of Hecla, and the continued increase in reserves and resources, extended mine life and positive changes to the mine plans are surfacing additional value at these operations,” said Phillips S. Baker, Jr., president and chief executive officer.

“This allows investment in our three other mines, which all have the potential to be long-lived with strong economics like Greens Creek and Casa Berardi. The turnaround of the Nevada operations continues with an increasing development rate at Fire Creek that should allow the mine to have operating consistency as we increase production. This is the same approach we took when we first acquired Greens Creek and Casa Berardi.”

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.