Hecla Mining (hl)

[strongman shelford]

Hi, I would like to listen to your opinions about HL

predictions for 2008, PLEASE

:D

[balou2]

Well, for 2008, I'm not sure. Their balance sheet has been fairly solid. They also had several other large purchases, which long term look promising, but leave liabiabilities of >18M shares of common stock, which at this point would leave them in a bad position if exercised. Otherwise, they have a strong management group.

My biggest issue is that they recently took another long term revolving credit facility over $30M. This, on top of already existing $350M debt. Their total debt/equity ratio is not good IMO, and they are playing the risk that their new acquisitions will hit pay-dirt. I'm a little skeptical. One mine is basically dead this year, their Venezuelan contingent is having political and financial issues...but none of this is a deal breaker, just the dirt that exists.

They have a smart management group. If they hit it, their stock will rocket.

[balou2]

Took a bit of a beating today. Still up around the high. What do y'all think will be the long term ramifications of their sell-off of their Venezuelan gold mines?

[anomaly]

Took a bit of a beating today. Still up around the high. What do y'all think will be the long term ramifications of their sell-off of their Venezuelan gold mines?

It looks to me like Hecla is moving away from the issues miners have been having in Venezuela lately. I've liked Hecla since the Greens Creek acquisition and this surely doesn't put a damper on that.

Doubled my holdings in HL today @ $8.02.

[chux03]

HECLA is the oldest silver mining company in the US and as such has a tremendous amount of assets in the ground along with the expertise to extract the silver at one of thee lowest costs per ton in the industry.
Better yet...read all about HECLA right here in an earlier article from Seeking Alpha:

by Marc Courtenay

It is very hard to find a silver producer that is over 100 years old, has a balance sheet that includes 0 debt and $385 million of total cash, and is selling for around 14 times next year's conservative projected earnings.

Established in 1891 in northern Idaho's Silver Valley, Hecla Mining Company's (HL) rich history of mining has distinguished it as a respected precious metals producer. Hecla is the oldest U.S.-based precious metals mining company and the lowest-cost primary silver producer in North America. Now headquartered in Coeur d'Alene, Idaho, with a sister office in Vancouver, B.C., this international, publicly traded company is 117 years old.

Hecla recently announced its plan to acquire 100% of the fifth largest silver mine in the world – the Greens Creek mine in Alaska. Upon closing, the transaction will nearly double Hecla's annual silver production to approximately 11million ounces, while further decreasing its already low cash costs per ounce of production.

In 2007, Hecla was the lowest-cost primary silver producer in North America, producing 5.6 million ounces of silver at an average total cash cost of negative $2.81 per ounce. Hecla also produced 107,708 ounces of gold. The company has exploration properties and operating mines in five world-class silver and gold mining districts in the U.S., Venezuela and Mexico. Hecla's proven operating expertise, recent acquisitions, low-cost growth profile and excellent exploration potential emphasizes Hecla's position as a the low-cost, low-risk silver investment.

Hecla mines, processes and explores for silver and gold in Idaho, Colorado, Mexico and Venezuela. Hecla currently produces silver from two silver mines, Greens Creek and Lucky Friday, as well as mining gold at the La Camorra Unit in Venezuela. In 2007, the Greens Creek mine in Alaska contributed 2.6 million ounces of silver to Hecla's account, and the Lucky Friday mine in northern Idaho produced 3.0 million ounces. The La Camorra Unit in Venezuela produced 87,490 ounces of gold in 2007.

Hecla has long been well known in the United States as a quality producer of silver and gold. The name "Hecla" is commonly associated with both precious metals by investors. Hecla's common stock has been traded on the New York Stock Exchange for over 40 years under the symbol "HL."

So this is a company with a trailing-twelve-month profit margin growth of 28% and operating margins of 28%, and its year-over-year quarterly earnings growth was around 90%.

On Feb. 13, 2008 HL CEO Phil Baker Jr. told a conference that his company is trying hard to complete the acquisition of Greens Creek so they can own 100% of this bonanza.

"It took 20 years," said Baker, but "once Rio Tinto (NYSE:RTP) did the Alcan transaction we went into high gear to be able to pick up [Greens Creek]. Baker added, "We know the operation intimately and believe the operational risks are low."

"The cash cost per ounce of silver produced at Greens Creek, including byproduct credits, is among the lowest in North America."

Based on recent prices for metals, Hecla should recoup the $750 million purchase price within 5 to 6 years, and could potentially do so sooner if prices continue to improve. And according to CEO Baker, Greens Creek will generate large volumes of free cash. The estimates are $150 million to $200 million annually after taxes.

So the possibility for HL to pay some dividends and/or make some more accretive acquisitions is tremendous with this kind of scenario. Great revenues and cash flow enable Hecla to expand other operations, as well.

In addition to consolidating ownership at Greens Creek, Hecla is upgrading operations at its properties in Idaho's Silver Valley. And I'm told Hecla is adding a former Colorado mine to its portfolio. They recently annouced a deal to earn up to a 70% j.venture interest in San Juan Silver Mining Venture in the Creede mining district in Colorado.

Through this they will be gaining access to a 48 million ounce silver resource, based on initial assessments. There is probably even more silver resource out there. The land package includes the old Bulldog mine of the former Homestake Mining Co.

So is there much downside to HL? My best estimate would be that if gold and silver prices drop 10% (which is entirely possible) over the summer months HL could dip down near $8 a share (which is not likely but also is possible).

If that happens, I, who already own a nice position, will be backing up the truck to complete my purchases to make Hecla one of the largest single positions in my portfolio.

Don't believe me though, do your own due diligence. Start at their user-friendly web site which I'll post in a moment, and notice they do have an Environment Policy.

That web address is http://www.hecla-mining.com/index.html. I think you might also want to look at their "Key Statistics" on the Yahoo Finance site to gain a quick overview of their financial condition and balance sheet.

By the way back on April 16th they announced they completed the acquisition of of Greens Creek from Rio Tinto. I'll conclude with quotes from that announcement.

As a result of the transaction, Hecla subsidiaries now hold 100% of the Greens Creek joint venture, which is believed to be the fifth largest silver mine in the world in terms of annual production. Hecla has held a 29.73% interest in Greens Creek for the past two decades. On an annualized basis, by 2009 the integration of the rest of the Greens Creek mine into Hecla is expected to:


nearly double Hecla's silver production to about 11 million ounces annually
increase silver reserves by more than 150%
increase gold reserves by 140%
significantly increase Hecla's cash flow from operations
decrease Hecla's already-low average cash costs per ounce of silver

Hecla's President and Chief Executive Officer Phillips S. Baker, Jr., said, "We think the Greens Creek mine and its 12-square-mile land package is an exceptional asset, with great low-cost, long-lived production, as well as tremendous upside exploration potential.

This asset transforms our company and provides us a solid base for additional growth well into the future." The acquisition is accretive to Hecla on important major operating and financial metrics, including production, cash costs per ounce, cash flow and silver, gold, zinc and lead reserves. As a result, Hecla has increased its production guidance for 2008 to approximately 9 million ounces of silver. Hecla's cash costs remain among the lowest of the North American primary silver producing companies, and in 2007 the average total cash cost was negative $2.81 per ounce of silver.

The $750 million purchase price consisted of $700 million in cash and $50 million in Hecla common stock. Hecla funded the cash portion of the payment with approximately $340 million from its existing cash and the remainder was funded through a $380 million debt facility provided by Scotia Capital.

The debt facility includes a $140 million three-year amortizing term facility and a $240 million bridge facility (of which Hecla drew $220 million at closing), which matures in six months. Baker said, "Our Greens Creek and Lucky Friday silver mines generate a great deal of cash flow at current metals prices, which is expected to enable us to pay off the debt in less than three years.

We have organized this financing to include a bridge facility that allowed us to eliminate a bank requirement to hedge a portion of our future zinc and lead production, and therefore avoid the earnings volatility associated with mark-to-market accounting. Over the course of the next several months, we will be evaluating various opportunities to retire the bridge loan."

Baker concluded, "As a participant in the Greens Creek joint venture for 20 years, Hecla has first-hand knowledge of its great value. Frankly, we have been trying to acquire Rio Tinto's interest for many years. I could not be more pleased with this transaction and am excited about what it means for our shareholders and for our company's future."

[balou2]

Thanks for posting this. I've been set on dropping some $$ in their company, based solely on their financial resources, debt structure and long term business plan, but this is a nice piece that rounds out the reasons to do so from so many different resources.

Too many folks do not realize how powerful a company is that carries 0 debt. Especially in a commodities market where capex rules so much.

[strongman shelford]

Short Positions In Hecla Mining Went Down A 10%.

[chux03]

Here's a HAPPY (and TRUE) tale involving Hecla Mining and my buddy of many years.
His dad worked for and retired from Hecla many years ago and dabbled once and awhile in various local mining stocks there in the Wallace Idaho area. My friend inherited his dad's stock certificates after his dad died and even though they were notarized and signed over, my friend never did get them formally changed in to his name.
One of the companies that he had a certificate from was Independence Lead Mines out of AZ (I think) even though they owned a mine or two there in Idaho. It was for 1000 shares @ just a buck or two per share when his dad bough it/them. Money wise, it wasn't much. He just received a letter after changing it over to his name from Hecla saying they had bought out ILM and the deal was for 1.2 shares of HL stock for every share of ILM, so he's getting 1200 shares of HL stock for that old stock certificate that he thought was worth nothing. He did get it transferred into his name when his sister who still lives in the Wallace area called him up several weeks ago excitedly telling him the deal was going to be for 12 shares of HL stock for every share of ILM. Well, that sounds like government accounting, doesn't it?? From $75,000 to $7500 worth of stock in a snap of the finger! :D Misplace that decimal point by one place and it could just ruin your day. But...in this case, my buddy's STILL SMILING at his good fortune of suddenly owning 1200 shares of HL and he may even buy more to "round it out" to maybe 2000, he says.
I'm glad that worked out for him...

[chux03]

Apparently, it's not going down much further, which is where I bought even more. HL and AXU (Alexco) were the only bright spots in what's left of my portfolio as SLW (Silver Wheaton) has taken a beating, me included though I bought in the mid $7's on the way down, so I'm not that concerned. I heard something about silver futures dragging them down today (but that sounds strange to me). Anyway, I expect HL to start rising, reflecting their purchase of Greens Creek from Rio Tinto. Exploration there has been better than even they expected, which will extend the mine life, adding many more ounces of silver too, further benefiting Hecla. While one hesitates to call anything, anywhere that looks like maybe a....bottom, overall HL shares have held in the mid $3's during these past few days. It would further seem like soon as silver starts it ascent, Hecla shares should also benefit from that. I would say in the affirmative if someone asked me what I thought about buying in to HL right now. And...that there's minimal downside risk and quite a bit of upward potential. I still find myself marveling about how could you go wrong buying and holding HL shares right now, at $3 and some change? Who says that ratty old paper money can't still buy something of real value?? Wow...Hecla in the mid $3's...who would have ever guessed this?? :)

[sliver]

I first owned Hecla back in the early 60's. I had to sell to go to college and didn't get back in until recently at $12. I think even at my price it will prove to be a good purchase and I'm thinking about getting more with the price so low. One of the things that is suppressing the price recently is the drop in copper price of which Green's Creek has a lot of. Their last statement reflects a lot of one time costs due to the Green's Creek purchase and won't be recurring. At today's price Hecla is really a screaming buy. Within a year I could see it easily in the high teens in stock price.

Sliver

[chux03]

IT'S TIME TO BACK UP THE TRUCK AND START FILLING IT UP WITH SHARES OF HECLA!!!!!!!!!!!! :)

$1.05 per share. Minimal downside risk with EXCELLENT upside potential. Do your own DD but one of the best silver miners out there is currently available at DIRT CHEAP PRICES!!!!! You snooze you lose with this one....

[chux03]

IT'S TIME TO BACK UP THE TRUCK AND START FILLING IT UP WITH SHARES OF HECLA!!!!!!!!!!!! :)

$1.05 per share. Minimal downside risk with EXCELLENT upside potential. Do your own DD but one of the best silver miners out there is currently available at DIRT CHEAP PRICES!!!!! You snooze you lose with this one....


Well....Hecla closed today at $2.32 a share, which I see would be OVER A DOUBLE had you happened to have purchased shares that day at $1.05 on November 12th.

ANYONE DO THAT??? :)

[m.palmer1@verizon.net]

I did! I did! Wish I'd bought more! I have no doubt it's still trading @ an incredible value for the longer term!

[chux03]

Hey CONGRATS!!!
I'm betting you'll be able to do that again too. My friend was kind of ticked that his check to his new brokerage account didn't clear in time for him to take advantage of this. I told him that there's plenty of upside left in this one, he'll do fine with his 10000 shares. He also sent in his 1000 shares of Independence Lead Mines stock to Hecla and is getting 1320 shares from them (HL) in return for those shares. So he's high on HL these days and looking at their share price, who could blame him for his good mood??

[m.palmer1@verizon.net]

Exciting times indeed!!! Hey Chux, I'm assuming your still all over BVG.Considering that my broker wants an arm & leg commision for BVG.V, I can't imagine any downside w/ BVGIF.PK , but I thought I'd ask anyway. :>) P.S. Do you know anything about KDSM ? Thanx!

[chux03]

I'm holding that pink sheet issue too - BVGIF. I have an account at Euro-Pacific and could probably get into the Canadian issue though I don't know if there would be any tactical advantage to holding those shares as opposed to the pink sheet shares or what that would cost. I'm sure there are "purists" who'd avoid any pink sheet action but again if you want to play, this is how you have to do it...here.
BVG....they've had 3 bonanza grade news releases and mere excellent releases too since October 2nd and yet because of low volume, it's stuck. I halfway expect a take-over offer/attempt from a large mining company as opposed to any sort of share price run-up because of the release of any more bonanza grade news. Maybe between the two (more good news and interest publicly expressed for BVG by a large miner) would get this thing on the move. But they still have the goods, nothings changed except more bonanza to excellent grade results and with the release of more news, ONE WOULD THINK this would finally leave the station. Interest shown by a big miner could clinch the deal...
Which sounds good anyway... :)

You buy any Silver Wheaton along with those Hecla shares awhile back??

[m.palmer1@verizon.net]

I did purchase a few shares of SLW, back at about $6, been watching it go down ever since! Seems to have found a tentative bottom in the mid to upper 2's last week. I have held off primarily because of rumors of assoc. mine closures & debt. After reading Motley's article fr. Tues., I will def. take adv. on any dips! :>)

[goldragon]

Technically HL and CDE is very bullish on all aspects if you use Fidelity or other site to do technical analysis. Fundamentally SLW is the best if you can use yahoo.com efficiently.
Believe me or not, you can use your results to check my prediction after one quarter or one year.

[goldragon]

Also the follows are what people should buy:
ABX
AEM
KGC
GG
+SLW

[m.palmer1@verizon.net]

I do have a decent position in CDE, but I keep reading posts etc. about poor mgmt., probable delisting & chronic sluggish perf. I also understand that they are poised for good things in the 1st half of next year. As attractive as the price is, I'm really on the fence with this one.

[goldragon]

Talking about CDE, I want to present the follows:
Among Sliver minings, The most oversold companies are CDE, MMG, HL, and SIL, for example, the 52 wks low over high are 7.7%, 4.7%, 7.4%, and 2% accordingly. However, only CDE and HL are extremely bullish technically. Both have heavy insider buying. Thus, HL and CDE will have good performance in the near future.

[goldragon]

I only said they (CDE, HL) will be very bullish in the near future, not future.
From analysts recommendation, SLW is much better than HL and CDE because SLW is much stronger fundamentally.

[hiyosilver]

I got in on HL at $1.10.

[goldragon]

hiyosilver, you are a good precious metal timer! Now you have more than doubled your money! A smart guy!

[goldragon]

hiyosilver,
I got in CDE @ 0.45, and SLW @ 2.80. I hope I can double my money before I sell all of them in the early part of the coming year and get in after a corretion after this rally.
Buying panic sell is the best way of value investors.

[hiyosilver]

I was actually looking at CDE when it went to 36 cents, then I realized I hadn't refunded my stock account which turned out to be a costly oversight. I'm hoping for another dip below it's present level to pick up more of it. I have to admit though that the NYSE threat of delisting it had my head spinning it around....

[chux03]

Hey, is there a minimum share price for a stock listed on the AMEX as well??

And how long does CDE have to get that share price up before being delisted?

Thanks...

[mirco59]

Hi, I would like to listen to your opinions about HL

predictions for 2008, PLEASE

:D

HL Strong Buy 9.48$ prediction 04-17-2009

[hiyosilver]

Hey, is there a minimum share price for a stock listed on the AMEX as well??

And how long does CDE have to get that share price up before being delisted?

Thanks...


I contacted Coeur directly, and was told they have 6 months to remedy that situation. I think the Amex minimum is $2 per share.

[chux03]

Well then Alexco is in trouble too. AXU on the AMEX and they're at .45 which seems kind of a low ball to me. They recently did a deal with Silver Wheaton for a share of their future silver production for $50M in cash to help finance that project at Keno Hill in the Yukon. It's another great company that's apparently on sale too.

www.alexcoresource.com/s/Home.asp

[hiyosilver]

If push came to shove, I guess a reverse split would be the only option....I don't think there will be a problem though....

[hiyosilver]

Hecla traded off over 10+ million shares for capital yesterday, and the stock fell near 30%.


http://biz.yahoo.com/bw/081211/20081211005485.html?.v=2

[paperplane]

looking good so far...