Mining News: News Nuggets: Hecla weathers challenging metals prices

Hecla Mining Company Feb. 23 reported US$443.6 million in sales and gross profit of US$38.5 million for 2015. The net loss applicable to common stockholders for the year was US$87.5 million, or US23 cents per basic share, and the adjusted net loss applicable to common stockholders was US$34 million, or US9 cents per basic share. Hecla’s average realized silver price for 2015 was US$15.57 per ounce, down 16 percent from 2014. The company’s average realized price for gold last year was US$1,150 per ounce, a drop of 9 percent from the previous year. The prices for the lead and zinc produced as a byproduct at its Greens Creek Mine in Alaska and Lucky Friday Mine in Idaho were also down. Recognizing the ongoing weakness in the price of silver, Hecla has enacted several measures to reduce costs and maintain its financial strength. The company expects to reduce non-payroll costs by approximately US$25 million in 2016. These cuts are expected to come from all areas of the business. In addition, senior management and board members have taken a 10 percent reduction in base salary and retainer fees and the Hecla President and CEO Phillips Baker Jr. has taken a 20 percent reduction in base salary. Despite the challenging metals markets, Hecla said it is well-positioned to take advantage of the recent rebound in precious metals prices. “We finished 2015 strongly, with robust performance at all our mines in the fourth quarter helping us set record silver and silver equivalent production for the year. And despite using probably the most conservative price assumptions in the industry, the company had its 10th consecutive year of growing silver reserves to the most in our history,” said Baker. “We believe we are one of few precious metals companies growing right now, not just in reserves but in production as well. Because our balance sheet allowed us to continue investing during the price decline of the last few years, we expect more than a 15 percent increase in silver production and about a 10 percent increase in gold production this year, positioning us to take advantage of the rally in prices we have seen in 2016.”

–Shane Lasley

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