Hecla Mining shares trail silver as estimate reductions focus attention on Aug. 4 results

Hecla was last seen trading around $15.02 on Monday afternoon, down roughly 0.8% from Friday’s close. At this level, its equity market capitalization stood at about $10.13 billion. The intraday price ranged between $14.69 and $15.53. The shares are trading approximately 56% below their 52-week high of $34.17, while remaining 167% above the 52-week low of $5.62. MarketWatch

As of July 15, short interest totaled 41.15 million shares, making up 6.19% of Hecla’s public float. The average daily volume was about 26.13 million shares. By 1:52 p.m. Eastern on Monday, trading volume hit 26.1 million shares. That is equivalent to about 1.6 days of average trading activity. While this may fuel greater price swings, it does not ensure a short squeeze will occur. MarketWatch

Hecla will release its second-quarter operational and financial results after the NYSE closes on August 4, with a conference call set for August 5 at 10 a.m. Eastern time. Market focus will be on silver production, Keno grade levels, operating costs, and cash following redemption. A straight-line annual run-rate would be 3.8–4.1 million ounces per quarter, but this figure does not represent official company quarterly guidance. Hecla maintained its full-year forecast of 15.1–16.5 million ounces after the end of the first quarter. Hecla Mining Company

Hecla’s continuing operations posted a profit of $164.7 million, or $0.25 per basic share. However, the company posted a $19.2 million net loss to common shareholders, translating to a basic per-share loss of $0.03. This was largely due to a $192 million non-cash write-down at Casa Berardi. Revenue from continuing operations totaled $411.4 million. Non-GAAP free cash flow from these operations was $143.7 million. Hecla Mining Company

Hecla continues to expect full-year silver production of 15.1–16.5 million ounces. Output for the first quarter totaled 3.9 million ounces, representing 24%–26% of the annual forecast. Greens Creek provided 2.2 million ounces, while Lucky Friday delivered 1.2 million, and Keno Hill supplied 0.5 million ounces amid ongoing power constraints and softer grades. Management has affirmed its guidance, with focus now turning to second-quarter performance. Hecla Mining Company

Hecla derived approximately 73% of its first-quarter continuing-operations revenue from silver. During that period, Hecla’s realized price for silver stood at $82.70 per ounce. CME September silver futures traded at $58.89 as of 9:22 a.m. Central on Monday, nearly 29% lower than the company’s realized price. The reported total-silver AISC falls in the $15.00–$16.25 range, resulting in a gap of more than $42. Keno Hill is not included in consolidated silver AISC as it continues ramping up. By-product credits also make that gap not directly comparable to a pure margin outlook.

At the end of March, cash stood at $587.6 million, with total debt at $266.3 million, resulting in $321.3 million net cash ahead of the April note redemption. Hecla subsequently paid down $263 million of 7.25% senior notes. The firm now carries no long-term debt. The available revolver remains at $225 million, alongside a $75 million accordion. Leverage on the balance sheet has significantly reduced, although operating risks persist. The August report will show the first balance sheet after the redemption at quarter end. Hecla Mining Company

Keno Hill delivered 0.5 million ounces of silver in the first quarter, representing only 16%–17% of its full-year guidance range of 2.9–3.2 million ounces. This output falls short of an even quarterly run-rate, though mine operations often fluctuate across periods. Lower power supply in Yukon and decreased grades of ore processed limited production. Management anticipated improvements in both mined and milled grades during the second quarter. Achieving the 440-tonne-per-day goal will still need upgrades to infrastructure and changes to licensing. Hecla described this process as multi-year, putting the focus on grade improvement in Q2 as the next milestone. Hecla Mining Company

Hecla outlines a medium-term scenario targeting approximately 20 million ounces of silver per year. Present 2026 forecasts are at 15.1–16.5 million ounces. The difference hinges mostly on scaling Keno to 440 tpd and a possible restart at Midas. Keno still requires several years for permitting and infrastructure. At Midas, Hecla is sharing exploration results but has not specified a production timeline. Thus, the 20 million ounce target remains a possibility rather than official guidance.

Hecla’s market capitalization stood at about $10.13 billion at Monday’s close. If the company’s non-GAAP first-quarter free cash flow is annualized, it comes to approximately $575 million. This puts the company’s valuation at roughly 17.6 times its annualized free cash flow. However, first-quarter realized silver prices averaged $82.70, which is significantly higher than current futures pricing. If silver remains close to $59, first-quarter results could exaggerate Hecla’s ongoing cash generation. This represents a current view rather than a reliable forecast. Hecla Mining Company