On Tuesday, November 8, Hecla Mining Company (NYSE:HL), a leading silver producer, reported solid third-quarter earnings, production, and cash flow. Its costs declined immensely.
The Coeur d’Alene, Idaho-based silver miner reported sales of $179.93 million in the third quarter. In the same period a year ago, its sales were $104.94 million. This represents an increase of 71.45%.
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Hecla Mining’s net income was $25.78 million or $0.07 per diluted share. In the same period a year ago, it reported a net loss of $9.8 million or $0.03 per share.
Explaining the company’s operations, President and CEO Phillips S. Baker Jr. said, “Hecla’s quarterly production growth, record sales, cash provided by operating activities of $87 million and free cash flow of $28 million reflect how our commitment to invest when prices were lower allows us to now reap the benefits of having more production at higher prices.” (Source: “Hecla Reports Third Quarter 2016 Results,” Hecla Mining Company, November 8, 2016.)
Hecla Mining produced 10.3 million silver-equivalent ounces in the third quarter. This was up 17%. Its cash cost, after by-product credits, per silver ounce was $3.68. In the same period a year ago, this was $7.52 an ounce, or 51% lower.
Breaking it down further; Hecla Mining’s silver production amounted to 4.3 million ounces—up 67% year-over-year. It also produced 52,126 ounces of gold—up 19% year-over-year.
As per liquidity, Hecla Mining generated $87.0 million from operating activities, up 225%. It ended the quarter with a very strong balance sheet as well. Its cash, cash equivalents, and short-term investments amounted to $192.4 million at the end of third quarter.
Regarding the company’s future outlook, Baker said, “This quarter was just another step towards establishing new 125-year records in 2016. Our free cash flow and strengthening balance sheet allow us to immediately invest in more innovation, exploration and high-return projects. And with the acquisition of our second large undeveloped silver project, Montanore, we expect to generate additional value in the future.” (Source: Ibid.)
At the time of writing, Hecla Mining’s stock was trading at $6.90, up 4.35% from the previous day. HL stock’s 52-week higher is $7.26 and 52-weeks low of $1.45%.
