Hecla MiningHL

Key highlights

• Profit boosted by investments: Reported earnings of $0.22 per share were helped by a $36 million gain from the rising value of marketable securities the company owns. Without these one-time investment gains and a $41 million tax expense, the business earned $157 million in operating profit, which is the money made from running the mines themselves.
• Record cash generation: The company generated a record $151 million in free cash flow, nearly triple the $57.1 million it produced a year ago. This surge was led by the Greens Creek mine, which set its own site record by contributing $147 million in cash after paying for its operations and equipment.
• Improved cost outlook: Management lowered its full year spending guidance for all-in sustaining costs, a measure of what it costs to produce an ounce of silver and keep mines running, to a range of $11.50 to $12.50 per ounce. This is an improvement from the prior expectations of $12.00 to $13.25 per ounce, driven by better results over the first nine months and higher credits from selling by-product metals like gold and zinc.
• Production targets tightened: Hecla raised the low end of its full year silver production goal to a range of 15.3 million to 16.1 million ounces, up from the previous bottom of 15.1 million ounces. This reflects a record performance at the Keno Hill mine, which produced 963,048 ounces of silver this quarter, a 54% increase over the previous quarter.
• Keno Hill output restricted: The company is intentionally slowing down the milling rate at Keno Hill to 300 tons per day to preserve its remaining 200,000 tons of waste storage capacity while it waits for new government permits. This restriction is expected to last until mid-2029, though the company plans to offset the lower volume by specifically mining and processing its highest-grade silver ore.
• Debt free balance sheet: Hecla ended the quarter with $692 million in cash, which is 43% higher than it held just three months ago. The company remains debt free and has secured a new $500 million credit line, a form of emergency borrowing capacity, that remains entirely unused.

Our take: This was a very strong quarter where record cash flow and a debt free balance sheet have put the company in its best financial position ever. While the temporary slowdown at Keno Hill to preserve storage space is a hurdle, the rising production at other sites and lower overall costs keep the long term growth story firmly on track.