MINING NEWS: Hecla Mining posts strong 2007 results

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Hecla Mining Co. Feb. 21 posted 2007 income applicable to common shareholders of $52.2 million, or 43 cents per common share, on revenue of $222.6 million. Though the results reflected nearly a 24 percent drop in yearly earnings from $68.6 million, or 57 cents per common share, on revenue of $218.9 million in 2006, Hecla observed that it was still the second-strongest outcome in the company’s 117-year-old history despite a significant reduction in gold production from its La Camorra unit as mining transitioned to a single deposit.

Revenue and cash provided by operations for 2007 set record highs for Hecla. The company’s average total cash cost for silver in 2007 was the lowest on record, at negative $2.81 per ounce, after by-product credits. The 2007 financial results included a non-cash charge in the second quarter of $46 million for environmental accruals, offset by a gain of $63 million on the sale of the Hollister Development Block. In 2006, earnings were positively impacted by a gain of $41 million on sales of investments and other assets.

“The resurgence in metals prices, operational excellence at our silver mines, a 25 percent improvement in safety, and exploration success all contributed to another remarkable year for Hecla in 2007,” said Phillips S. Baker, Jr., Hecla’s president and CEO. Hecla stressed that it ended 2007 with a strong balance sheet, with an 8.8:1 current ratio, no corporate debt and a record high of $400 million in cash and cash equivalents and short-term investments.

The company also reported a 10 percent increase in silver resources at year-end 2007.

Hecla said Feb. 12 that it has agreed to purchase the remaining 70.27 percent interest in Greens Creek from subsidiaries for $750 million. After the anticipated close of that transaction in the second quarter, Hecla will control 100 percent of the fifth-largest silver mine in the world, and its annual production will nearly double to about 11 million ounces of silver.

—Mining News