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Hecla Reports Hedges In Options Market, Higher 2Q Silver Output

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(Kitco News) - Hecla Mining Co. (NYSE: HL) Thursday reported higher year-over-year silver production in the second quarter, a small dip in gold output, and hedges on the two metals in the options market.

The company listed second-quarter silver production of 3 million ounces, up 16% from 2.6 million from the same period a year ago. Gold production of 58,390 ounces was down 3% from 60,313.

The company listed silver-equivalent production of 11 million ounces or gold-equivalent production of 125,359 ounces.

Meanwhile, lead and zinc production came in at 5,514 and 13,315 tons, respectively. The lead output was roughly flat compared to 5,522 tons a year ago, while the zinc output was down 7% from 14,299.

The company said it established hedges that utilize put options on expected gold and silver sales through the first quarter of 2020, locking in a minimum average price of $1,400 per gold ounce and $15.13 per silver ounce.

“Our strong silver production reflects the continued outperformance of Greens Creek, which had higher grades and recoveries during the quarter as expected,” said Phillips S. Baker, Jr., president and chief executive officer. “San Sebastian is continuing to perform as expected as we continue the bulk sample test of the sulfide material. We expect gold production to be higher at both Casa Berardi and in Nevada in the second half of the year, particularly the fourth quarter.”

The CEO commented that at a time when gold and silver prices were increasing, the company purchased puts that assures a minimum price for projected gold and silver sales through the end of the first quarter of next year.

“This, combined with [an] amended revolving credit facility, should provide Hecla with adequate liquidity if prices are lower over the next several quarters,” Baker said. “That said, at these hedged prices, we don’t expect the revolver to be drawn at the end of the year.”

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.

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