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Leading North American Low-Cost Silver Producer Hecla Mining Company (HL) Reports Q4 & Full-year 2020 Results

By John F. Heerdink, Jr.

Hecla Mining Company (NYSE:HL) is a leading, low-cost silver producer with operating silver mines in Alaska (Greens Creek), Idaho (Lucky Friday), and Mexico (San Sebastian) and is a growing gold producer with operating mines in Quebec, Canada (Casa Berardi) and Nevada (Fire Creek). In addition to its diversified silver and gold operating and cash-flow generating base, Hecla has a number of exploration properties and pre-development projects in eight world-class silver and gold mining districts in North America. With an active exploration and development program, the company has consistently grown its reserve base for future production, with 2020 reserves totaling 212 million ounces of silver and 2.7 million ounces of gold reserves, calculated using some of the lowest price assumptions in the industry. Established in 1891, Hecla is headquartered in Coeur d’Alene, Idaho, and has a sister office in Vancouver, B.C. The company’s common stock has been traded on the New York Stock Exchange for over 50 years.

Today Hecla announced Q4 and full year 2020 financial and operating results.

Phillips S. Baker, Jr., President and CEO of Hecla stated, “The COVID pandemic provided significant challenges to Hecla and the mining industry; however, due to our people and the jurisdictions we operate in, Hecla exceeded the high end of our pre-COVID silver guidance by 1.4 million ounces. We saw modest disruptions in Quebec and Mexico; however, these did not materially impact our business. During the year we refinanced our long-term debt now due in 2028, and through solid free cash flow generation, added cash to the balance sheet, reduced our net debt, and increased dividends. As we look to 2021, we see three significant value drivers. First, with Lucky Friday running at full production, positive results from the work at Casa Berardi, and the continued consistency of Greens Creek, we expect to grow silver production and generate significant free cash flow. Silver production from our United States silver mines is expected to go from 8 million ounces in 2018 to almost 15 million ounces by 2023, further increasing Hecla’s position as the most significant US silver producer. Second, we start the year with the 3rd highest reserves in our history despite disruptions to our planned exploration and definition drilling programs due to COVID‑19, and we expect reserve growth in 2021 from a normal drilling program. Finally, Hecla’s 2021 exploration program is following up on high-grade intercepts that have the potential to expand existing or develop new high-quality deposits in some of the world’s best mining jurisdictions. Examples of this are Midas’ Green Racer Sinter target where we have made a multi-ounce gold discovery in a never before drilled target and at San Sebastian’s El Bronco vein where we are seeing high-grade over significant widths.”

Hecla offered the following highlights:

  • Fourth quarter sales of $188.9 million; cash flow from operations of $64.9 million; free cash flow $28.3 million1 net income of $0.8 million; adjusted net income applicable to common shareholders of $13.0 million, or $0.02 per share2; and adjusted EBITDA of $55.8 million.3
  • 2020 silver production of 13.5 million ounces, up 7% and gold production of 208,962 ounces, down 23%, from 2019, which was Hecla’s highest annual gold production.
  • 2020 sales of $691.9 million (the highest in the Company’s history); cash flow from operations of $180.8 million; free cash flow of $89.8 million1; adjusted net income applicable to common shareholders of $23.1 million, or $0.04 per share2; net loss of $16.8 million; and adjusted EBITDA of $224.3 million.3
  • Third highest silver and gold reserves in Company’s 130-year history despite significant interruptions to 2020 exploration program due to COVID-19.
  • Exploration discoveries at Midas, Casa Berardi, San Sebastian, Heva Hosco, and Kinskuch expect to be further drilled in 2021.
  • Net debt reduction of approximately $81 million, or 17%, from March 31, 2020.
  • Year-end cash position of $130 million, an increase of $67 million from 2019 with the credit facility undrawn.
  • All-Injury Frequency Rate (AIFR) of 1.22 for 2020, lowest in the Company’s history and a reduction of 24% over 2019.
  • Lucky Friday returned to full production levels in the fourth quarter of 2020.
  • Production guidance increases projected silver production over 2020 production.

See complete results at Hecla’s website.

I recently hosted a Tribe Public Webinar Presentation and Q&A Event last week with Phillips S. Baker, Jr., President, and CEO of Hecla Mining Company (NYSE: HL) where we discussed The Silver Squeeze” while addressing questions from the Tribe and offering valuable insights on silver prices throughout history and the recent volatility that helped move silver related stocks and the ETF SLV. Please view it by clicking here.  
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(Read Original Story: Hecla Reports Fourth Quarter and Full-year 2020 Results in Hecla Mining Company)


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