Off The Wire
Hecla: 1Q output goes as planned; 2020 guidance withdrawn
(Kitco News) - First-quarter production met Hecla Mining Co.’s (NYSE: HL) expectations, but officials are withdrawing 2020 output and cost guidance due to uncertainty tied to the COVID-19 pandemic, the company reported Tuesday.
Hecla said three of its five mines – those located in the U.S. – remain fully operational and represented 69% of its 2019 gold-equivalent output. Work at mines in Mexico and Quebec have been temporarily suspended due to government rules in response to COVID-19, as is the case with many other producers as well.
Silver production was 3 million ounces in the first quarter, while gold output came in at 57,238 ounces. This equaled silver-equivalent production of 10.3 million ounces or gold-equivalent output of 110,210 ounces.
Phillips S. Baker, Jr., president and chief executive officer, said the company undertook a “quick response” to institute protections at mines when the outbreak began. Hecla said there are no known COVID-19 cases among its workforce so far.
“While government orders have shut down two mines, our U.S. mines continue to operate as planned,” Baker said. “Our balance sheet is strong with over $200 million in cash, and no near-term debt maturities with our revolver debt not due until 2023 and senior notes in 2028.”
At the Greens Creek Mine in Alaska, output rose to 2.5 million silver ounces in the first quarter from 2.2 million in the same period a year ago. However, gold output dipped to 11,296 gold ounces from 14,328. Silver benefited from higher grades, while gold grades were lower, the company said. During the quarter, the mine began quarantining employees in a Juneau facility for 14 days before they start a 28-day rotation, and nobody is allowed on the mine site who has not been quarantined.
At Casa Berardi in Quebec, a suspension of operations has been extended to May 4 to comply with the provincial government’s stay-at-home order, Hecla said. Operations are being wound down at San Sebastian after the Mexican government’s order halting non-essential business until April 30.
Mining continues at the company’s Nevada operations and the Lucky Friday Mine in Idaho. In the case of Lucky Friday, the company is in the process of calling back and training the workforce following the end of a lengthy strike, officials said.