Enjoys record cash flow of $32.3 million
COEUR d'ALENE -- Hecla Mining Company earned $22.5 million for the third quarter -- 9 cents per diluted common share -- a dramatic turnaround from a year ago when it lost $7.2 million.
The company had revenue of $95.2 million in the third quarter, well up from $68.5 million for the same quarter in 2008.
For the first nine months of 2009, Hecla produced 8.6 million ounces of silver at a cash cost of $3 per ounce of silver produced after by-product credits.
"We had one of the best quarters in our hundred-year history generating strong cash flow that increased our current cash balance by $27 million to $85 million," said Hecla Mining Company President and Chief Executive Officer Phillips S. Baker Jr.
He credited the strong showing to the record revenue from acquiring the remainder of the Greens Creek mine which doubled Hecla's silver production and almost tripled zinc production and increased lead production.
In the U.S., Hecla is now the largest silver producer and the second and third largest producer of zinc and lead, respectively, he said.
Cash flow from operating activities increased 62 to $32.3 million in the third quarter of 2009, compared to $20 million for the second quarter of 2009 and $19.0 million in the third quarter of 2008.
Third quarter highlights:
• Records for revenue, gross profit, income from operations, cash flow from operating activities, lead and zinc production; second highest net income in Hecla's history
• Silver production of 2.7 million ounces, an 8.5 percent increase compared to the prior year period
• Cash costs of 85 cents per ounce of silver after by-product credits compared with cash costs of $4.46 per ounce in the third quarter of 2008 and cash costs of $3.38 per ounce in the second quarter of 2009.
• Record tonnage throughout at the Lucky Friday mine
• Strong financial liquidity with a cash balance of almost $85 million which has allowed Hecla to fully repay all outstanding debt in the fourth quarter of 2009
• Increased availability of hydropower is expected to reduce Greens Creek costs by approximately $2 million annually compared to costs incurred for power in the first three quarters of 2009
The Lucky Friday mine in North Idaho produced 930,258 ounces of silver during the third quarter of 2009, a 26 percent increase compared with silver production of 739,870 ounces in the third quarter of 2008.
"Increased silver production in the quarter is the result of grade control programs designed to minimize dilution which also tempers the use of backfill and reduces related costs," according to a press release.
During the third quarter of 2009, $2.7 million was spent on exploration. Drill programs were under way on Hecla's four main land packages located in Alaska, Idaho, Colorado and Mexico. \
"Our work in these districts began late in the quarter and is now in full swing," Baker said. "With the 40 percent increase in our exploration budget, we're drilling targets at every property. With an expanded and accelerated exploration program, I'm confident we are on the right track to discovery."
Baker said drilling continues to confirm increased grade and widths as Hecla goes deeper at the Lucky Friday.
"This should result in higher production, reduced costs and even better economics than what this mine has generated over its 67-year history," he said.
