Hecla reports record silver production for 2Q - loss minimised
Reduction of debt and strong cash flow have transformed U.S. silver miner Hecla into "a different company that it was six months ago," says CEO Phil Baker.
Posted: Thursday , 30 Jul 2009
RENO, NV -
Idaho's Hecla Mining Wednesday reported record quarterly silver production of 3 million ounces for the second quarter of this year, a 24% increase over the same period a year ago.
However, second quarter financial result showed a loss of $900,000, compared to a net loss of $44 million or negative 35-cents per share for the second-quarter 2008.
For the first half of this year, Hecla reported a net income of $2.99 million or 1-cent per share, a substantial improvement over the net loss of $32.31 million or negative 26-cents per share reported for the first half of last year.
In Hecla's quarterly results release, President and CEO Phil Baker said, "We continue to build on the operational success of the first quarter with record silver production at a very low cost per silver ounce produced, record revenue at metal prices significantly below those experienced in the first half of 2009 and one of the strongest quarter cash flows in our history."
"The strong cash flow together with a common share issue has allowed us to reduce debt and shift our attention to growth," he added. "Hecla is a different company than it was six months ago with no net debt and long-lived low-cost operations."
Cash flow from operations was reported at $20 million during the second quarter, the highest quarterly revenue in the 118-year-old company's history. During the quarter, Hecla also completed the private placement of common shares and share purchase warrants, which raised net proceeds of $57.4 million.
The silver miner than made prepayments totalling $75.3 million against term loans reducing total debt from $113.5 million to $38.3 million as of March 31st. The company now has a current cash balance of $60 million and working capital of $44.7 million.
Nevertheless, Hecla noted the average market price for silver during the second quarter dropped 220% to $13.73 per ounce, while the average price of gold increased 3% to $922/oz.
Hecla officials said the company will meet its full-year production guidance of 10 million to 11 million ounces of silver. Cash costs of $4.01 per ounce of silver in the first six months of this year are below the full year guidance of $6 per ounce. Hecla is revising full year cash costs down to $4.50/oz of silver.