Hecla First Quarter 2006 Earnings Top $38 Million; 115% Increase in Gross Profit, 21% Decrease in Silver Cash Production Costs, 51% Increase in Gold Production; For the Period Ended March 31, 2006.COEUR D'ALENE, Idaho Coeur d'Alene (IPA: [kɚ də liːn]) is the county seat and largest city of Kootenai County, Idaho, United States. -- Hecla Mining Company (NYSE NYSE See: New York Stock Exchange :HL) today reported first quarter net income of $38.4 million, or $0.32 per share, compared to a net loss of $3.3 million, or $0.03 per share, during the same period of 2005. Hecla's gross profit more than doubled from the same period a year ago, the average total cash cost per ounce ounce, in zoology ounce, in zoology: see leopard. ounce, unit of measurement ounce: see English units of measurement. of silver production decreased 21% and gold production increased 51% over the first quarter of 2005. First quarter net income is primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to a gain of $35.6 million, net of income taxes, on the sale of a stock investment and increased gross profit due to rising metals prices. Excluding the gain on sale of investments, Hecla's net income totaled $2.8 million, or $0.02 per common share, an improvement of $6.1 million over the first quarter of 2005. Hecla's diversity of operations continues to deliver low-cost production and less risk. From its U.S.-based mines, Hecla continues to have extremely low silver production costs with first quarter production of 1.2 million ounces at an average total cash cost per ounce of $2.05. As a result, Hecla's estimated total average cash cost for silver in 2006 has been reduced to $2.25 per ounce. Gold production in the first quarter was over 42,000 ounces at an average total cash cost per ounce of $357, with a total average cash cost for the year expected in the range of $350-$375 per ounce of gold. The price of silver averaged $9.69 per ounce, with an average realized price of gold of $558 per ounce during the first quarter. Hecla's President and Chief Executive Officer, Phillips S Phil·lips A trademark used for a screw with a head having two intersecting perpendicular slots and for a screwdriver with a tip shaped to fit into these slots. . Baker, Jr., said, "This is the start of a great year. We continue to be on track to show further operational improvements, and precious and base metals prices are now above those experienced during the first quarter and all of last year. The price of silver is in the range to really show profits while at the same time allowing significant investments in the future through exploration. Our mines are easily supplying the cash flow we need to fund this effort. Our exploration work on the Hugh Hugh (pronunced hyuu) is a male given name. It is Germanic and means "Bright in Mind and Spirit" or "Thoughtful". It is related to the name Hugin( one of Odin's ravens, who represented Thought.) The following medieval rulers were named Hugh. Zone silver discovery in Mexico Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. is getting more exciting as each exploration dollar is spent, and we're we're Contraction of we are. we're we are making good progress on the Hollister Hollister can refer to: Places in the United States
Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , further delineating the new West Gallagher Gallagher may refer to: People
A stock or other security that is trading below its true value. Notes: The difficulty is knowing what the "true" value actually is. Analysts will usually recommend an undervalued stock with a strong buy rating. properties at these increased metals prices. Those factors, along with what we believe is a precious metals Precious Metals Valuable metals such as gold, iridium, palladium, platinum, and silver. Notes: Investing in precious metals can be done either by purchasing the physical asset, or by purchasing futures contracts for the particular metal. bull market with some legs on it, bodes well for our stock price." FIRST QUARTER 2006 HIGHLIGHTS -- Gross profit of $11.7 million, a 115% increase from the first quarter a year ago -- Revenues of $39.8 million, a 63% increase from the first quarter a year ago -- 1.2 million ounces of silver produced at an average total cash cost of $2.05 per ounce, a 21% decrease in production costs compared to the same period of 2005 -- 42,419 ounces of gold produced, a 51% quarter-on-quarter production increase, including production of 37,620 ounces from Venezuela Venezuela (vĕnəzwā`lə, Span. vānāswā`lä), officially the Bolivarian Republic of Venezuela, republic (2005 est. pop. 25,375,000), 352,143 sq mi (912,050 sq km), N South America. at an average total cash cost of $357 per ounce -- A 25% decrease in estimated silver total average cash cost for 2006 to $2.25 per ounce; estimate for total average cash cost per ounce of gold increased to a range of $350-$375 -- 38% increase in average silver price and 30% increase in average realized gold price compared to the first quarter 2005 -- The La Camorra mine reached its one-millionth Noun 1. one-millionth - one part in a million equal parts millionth common fraction, simple fraction - the quotient of two integers ounce of production -- Shares of Alamos The name Álamos can refer to the following:
-- Continued focus on exploration and pre-development, with increasing optimism Optimism See also Hope. Bontemps, Roger personification of cheery contentment. [Fr. Lit.: “Roger Bontemps” in Walsh Modern, 66] Candide beset by inconceivable misfortunes, hero indifferently shrugs them off. [Fr. toward the West Gallagher at Greens Creek in Alaska Alaska (əlă`skə), largest in area of the United States but third smallest (exceeding only Vermont and Wyoming) in population, occupying the northwest extremity of the North American continent, separated from the coterminous United States , the Hugh Zone discovery in Mexico and positive exploration drilling below the current resource at Lucky Friday in Idaho Idaho (ī`dəhō), one of the Rocky Mt. states in the NW United States. It is bordered by Montana and Wyoming (E), Utah and Nevada (S), Oregon and Washington (W), and the Canadian province of British Columbia (N). OPERATIONS AND EXPLORATION Overall, operations performed well during the first quarter and silver production is expected to increase during the second half of the year, as development of the 5900 level at the Lucky Friday silver mine is finished and ground rehabilitation rehabilitation: see physical therapy. is completed at Greens Creek. Hecla's anticipated 2006 production is approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 6 million ounces of silver and 150,000 ounces of gold. Baker said, "Our silver operations, all U.S. based, are outperforming our previous cost per ounce estimates and last year's already low costs. Our gold operations in Venezuela are giving us great cash flow as the La Camorra Unit begins to realize the benefits of Mina Isidora, although we have increased our cash cost per ounce estimate for gold production in 2006 because of currency exchange controls, lower productivity at the La Camorra mine and royalties Not to be confused with Royal family. Royalties (sometimes, running royalties) are usage-based payments made by one party (the "licensee") to another (the "licensor") for ongoing use of an asset, most typically an intellectual property (IP) right. tied to the price of gold. We are taking a number of steps to minimize In a graphical environment, to hide an application that is currently displayed on screen. For example, in Windows and Mac, the application's window is removed from the screen and represented by an icon on the Windows Taskbar. In the Mac, the icon is placed in the Dock. See Win Minimize windows. the impact of currency restrictions and to improve productivity." Greens Creek -- Of the total silver mined by Hecla during the first quarter of 2006, half came from the Greens Creek silver mine in Alaska, operating since 1986, in which Hecla holds an approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. 30% interest. For the first quarter of 2006, Greens Creek provided 614,094 ounces of silver for Hecla's account, at the very low average total cash cost per ounce of negative $1.28, the result of high by-product by·prod·uct or by-prod·uct n. 1. Something produced in the making of something else. 2. A secondary result; a side effect. by-product Noun 1. credits from gold, zinc zinc, metallic chemical element; symbol Zn; at. no. 30; at. wt. 65.38; m.p. 419.58°C;; b.p. 907°C;; sp. gr. 7.133 at 25°C;; valence +2. Zinc is a lustrous bluish-white metal. It is found in Group 12 of the periodic table. and lead. A ground control rehabilitation program Noun 1. rehabilitation program - a program for restoring someone to good health program, programme - a system of projects or services intended to meet a public need; "he proposed an elaborate program of public works"; "working mothers rely on the day care continued at Greens Creek during the first quarter, which slightly impacted production at the mine, just as it did during the fourth quarter of 2005. This program should be complete by the second half of the year, with a commensurate com·men·su·rate adj. 1. Of the same size, extent, or duration as another. 2. Corresponding in size or degree; proportionate: a salary commensurate with my performance. 3. increase in production. Assay ASSAY. A chemical examination of metals, by which the quantity of valuable or precious metal contained in any mineral or metallic mixture is ascertained. 2. By the acts of Congress of March 3, 1823, 3 Story's L. U. S. 1924; of June 25, 1834, 4 Shars. cont. Story's L. U. S. results from approximately 25% of the 130 holes drilled into the West Gallagher have been received. The exploration program has clearly identified a significant ore-grade resource in the West Gallagher. A large, lower-grade mineralized min·er·al·ize v. min·er·al·ized, min·er·al·iz·ing, min·er·al·iz·es v.tr. 1. To convert to a mineral substance; petrify. 2. To transform a metal into a mineral by oxidation. 3. area surrounds the ore-grade resource. The resource continues to be open to the west and the south. Geophysical ge·o·phys·ics n. (used with a sing. verb) The physics of the earth and its environment, including the physics of fields such as meteorology, oceanography, and seismology. work shows a large conductor conductor Any of various substances that allow the flow of electric current or thermal energy. A conductor is a poor insulator because it has a low resistance to such flow. to the west, strongly indicating additional ore ore, metal-bearing mineral mass that can be profitably mined. Nearly all rock deposits contain some metallic minerals, but in many cases the concentration of metal is too low to justify mining the ore. . The potential is good for a minable resource, typical in size to the other productive ore zones at Greens Creek. Greens Creek personnel are currently developing additional drill platforms and will begin drilling the indicated extensions in the third quarter. A resource estimate based on the drilling to date is expected by the fourth quarter. Lucky Friday -- The Lucky Friday mine, operating since 1942 in northern Idaho, produced 626,792 ounces at an average total cash cost of $5.31 per ounce of silver during the first quarter of 2006, continuing its improvement from the fourth quarter of last year as the mine works toward achieving its planned annual production rate of 4 million ounces by the middle of 2006. The first full year of production at that rate is expected to be 2007. The 35% increase in silver production and considerably lower costs compared to the fourth quarter 2005 are a result of the new development on the 5900 level of this deep underground mine, where some early production has been achieved. However, the bulk of the production in the first quarter was still from the nearly mined-out 4900 level. Once most of the production is coming from the new 5900 level later in the year, it is anticipated that costs will decrease and production will increase even more because the new development is in the heart of the identified reserve, reducing haulage time. Five exploration holes completed in the first quarter all returned ore grade Ore grade is a measure that describes the concentration of a valuable natural material (such as metals or minerals) in its surrounding ore. Ore grade is used to assess the economic feasibility of a mining operation: the cost of extracting a natural material from its ore is directly intercepts on one or more veins. All five intercepts are outside the current resource estimate. Baker said, "I fully expect to increase the known resource at the Lucky Friday, where we already have as much resource identified as has been mined during the past 33 years at this great silver mine. The main vein in the expansion area is very robust, as evidenced by assays from our deepest exploration hole at the 6900 level, which is already 1,000 feet below our current mining level and 500 feet below our current resource. In fact, based on the geology geology, science of the earth's history, composition, and structure, and the associated processes. It draws upon chemistry, biology, physics, astronomy, and mathematics (notably statistics) for support of its formulations. , we believe we will continue to see this type of mineralization Mineralization The process by which the body uses minerals to build bone structure. Mentioned in: Rickets mineralization, n the bioprecipitation of an inorganic substance. another 1,000 feet below the 6900 level and even beyond. This mine continues to provide good news in every aspect of the business: operations, safety and exploration." La Camorra -- Hecla has been operating the La Camorra Unit in Venezuela since 1999, made up of the original La Camorra mine and the newly developed Mina Isidora, which is located about 100 kilometers north of the La Camorra mine. All ore from both deposits is processed through the mill at the La Camorra mine, which produced its one-millionth ounce during the first quarter of 2006. In the first quarter of 2006, the La Camorra Unit produced 37,620 ounces of gold, a 72% increase over the first quarter a year ago, due primarily to Mina Isidora production. The average total cash cost per ounce of gold was $357, including approximately $22 per ounce for obsolete OBSOLETE. This term is applied to those laws which have lost their efficacy, without being repealed, 2. A positive statute, unrepealed, can never be repealed by non-user alone. 4 Yeates, Rep. 181; Id. 215; 1 Browne's Rep. Appx. 28; 13 Serg. & Rawle, 447. supply inventory, compared to $294 per ounce in the same period of 2005. As mining progresses deeper in the older La Camorra deposit where the grade is decreasing, there are fewer mining headings, limiting flexibility and production and resulting in a decrease in tons (Transparent Optical Networking Services) A marketing term for providing dark fiber to a customer. The customer is responsible for generating the transmission signal and interpreting it at the other end. See dark fiber. mined from that deposit. That lower volume, costs associated with mining deeper and unfavorable currency exchange controls have resulted in a mining cost per ton increase at the La Camorra Unit. This cost increase occurred despite completion of a shaft shaft (shaft) a long slender part, such as the diaphysis of a long bone. shaft n. 1. An elongated rodlike structure, such as the midsection of a long bone. 2. at the La Camorra mine, which was originally intended to alleviate Alleviate To make something easier to be endured. Mentioned in: Kinesiology, Applied some of the costs of mining at depth. Even so, at the current gold price, cash margins remain healthy. However, there is enough uncertainty in some of the cost factors that the 2006 estimate of average total cash cost of production for gold has been increased to $350-$375 per ounce. Late in the first quarter of 2006, Hecla began selling gold to the local market as required by Venezuelan law (which specifies that 15% of gold production be sold within the country). Hecla expects to sell the gold now inventoried over a number of quarters. Exploration on Hecla's Block B in Venezuela, where Mina Isidora is located, began again in the first quarter, after completing the fourth quarter reserve analysis. Drilling results are not yet available. On the El Dorado El Dorado, legendary country of South America El Dorado (ĕl`dərä`dō, –rā`–) [Span.,=the gilded man], legendary country of the Golden Man sought by adventurers in South America. concessions where the La Camorra mine is located, the immediate focus has turned from identifying deep resources to targeting shallower targets along strike of the deposit. There is good evidence of additional mineralization on the concessions that could be drilled from the surface once exploration permits are obtained. The small mining cooperative program The Cooperative Program is a unified funds collection program of the Southern Baptist Convention (SBC) designed to support SBC seminaries, mission agencies and denominational ministries. initiated by Hecla in Venezuela continues to reflect the company's values by helping the local communities and maintaining good government relations. The program includes funding and training small mining cooperatives  This article has too many unnecessary external links.Please help Wikipedia by organising, removing or transferring them to other articles. San Sebastian Sebastian, 1554–78, king of Portugal (1557–78), grandson and successor of John III. He was under the regency first of his grandmother (until 1562) and then of his uncle Henry (a cardinal and later king) until declared of age in 1568. -- The Hugh Zone, which is an extension of the Francine
Francine is a female given name. vein at Hecla's San Sebastian property near Durango Durango, city, Mexico Durango (d  räng`gō) or Victoria de Durango (vēktôr`yä thā), city (1990 pop. ,
Mexico, now shows persistent Permanent. See persistent data, persistent name and persistent object. persistent - persistence mineralization along a 2-kilometer strike length. Baker said, "The Hugh Zone continues to give us encouragement that we have a large minable deposit, if the mineralization proves continuous. Our aim of doubling the potential resource looks very good and we expect to confirm that later this year." Drilling is still widespread on this very large deposit, which is located on the Francine vein about 300 meters beneath the silver-rich zone that Hecla mined out last year. The Hugh Zone remains open at depth and to the east and west, and drilling from the surface will continue in the second quarter. Preliminary analysis shows net smelter returns of up to $800 per ton at current metals prices in some of the higher-grade areas of the deposit. The average production cost during the life of the San Sebastian mine (which included the upper levels of the Francine vein) was approximately $90 per ton. More than two years of well-executed, systematic geologic ge·ol·o·gy n. pl. ge·ol·o·gies 1. The scientific study of the origin, history, and structure of the earth. 2. The structure of a specific region of the earth's crust. 3. A book on geology. work has begun to give Hecla a real understanding of the genesis of the deposits on the 200-square-mile San Sebastian property position. The current geologic understanding in the district is supporting a belief in the potential for more, and even bigger, deposits on these trends. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Baker, "Our holdings in the Saladillo Valley may well become the next major mining district in Mexico. Three factors make me say that: First, this property appears to be the intersection intersection /in·ter·sec·tion/ (-sek´shun) a site at which one structure crosses another. intersection a site at which one structure crosses another. of three major structural trends with a major intrusive in·tru·sive adj. 1. Intruding or tending to intrude. 2. Geology Of or relating to igneous rock that is forced while molten into cracks or between other layers of rock. 3. Linguistics Epenthetic. lying at this intersection. This is probably the key to the high-grade High-grade Credit quality of AAA or AA. high-grade Of, relating to, or being a bond with little risk of default on the part of the issuer. High-grade is usually reserved for bonds rated AAA or AA by the rating services. mineralization we have mined there in the past. Second, the Hugh Zone is evidence of a stacked Stacked is an American television sitcom that premiered on Fox on April 13, 2005. On May 18, 2006, Stacked was cancelled, leaving five episodes unaired in the United States. The last episode aired on January 11, 2006. mineralized system similar to the 1.3-billion-ounce Guanajuato Guanajuato, city, Mexico Guanajuato, city (1990 pop. 73,108), capital of Guanajuato state, W central Mexico. The city, with an altitude of c.6,600 ft (2,000 m), is situated in the Cañada de Marfil [ivory ravine], a precipitous ravine encircled by silver district just 340 miles to the southeast Southeast or south east is the ordinal direction halfway between south and east. It the opposite of northwest. Southeast or South East can refer to: Hollister Development Block -- Underground drilling at the Hollister Development Block gold exploration project in Nevada Nevada (nəvăd`ə, –vä–), far western state of the United States. It is bordered by Utah (E), Arizona (SE), California (SW, W), and Oregon and Idaho (N). commenced during the first quarter and is continuing in the second quarter. Approximately 15% of the planned drilling is complete, with assays pending. A decision on whether the high-grade gold deposit is continuous enough to be economically ec·o·nom·i·cal adj. 1. Prudent and thrifty in management; not wasteful or extravagant. See Synonyms at sparing. 2. Intended to save money, as by efficient operation or elimination of unnecessary features; economic: mined is expected in early 2007. Hecla is earning into a 50/50 joint venture participation on the project with Great Basin Great Basin, semiarid, N section of the Basin and Range province, the intermontane plateau region of W United States and N Mexico. Lying mostly in Nevada and extending into California, Oregon, Idaho, and Utah, it is bordered by the Sierra Nevada on the west, the Gold. FINANCIAL Hecla's balance sheet remains strong with no long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. and $54.2 million of cash and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments. In addition, Hecla has a $30 million credit facility to draw upon if acquisition or capital improvement opportunities arise. The company has no silver or gold production sold forward. During the first quarter, Hecla recognized an after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. gain of $35.6 million on the sale of Alamos Gold Inc. stock, which was subject only to a U.S. alternative minimum tax of 2% to a historical tax loss carryforward tax loss carryforward See carryforward. . Hecla had invested $21 million in the stock and sold the position in January 2006, for cash proceeds of $57 million. In the second quarter of 2006, income of $4.4 million is expected to be recognized from the sale of the Noche Buena gold exploration property in Mexico. A determination was made that the deposit did not fit Hecla's operating parameters, so the property was sold. OTHER In late April, the Idaho Supreme Court The Idaho Supreme Court is the state supreme court of the state of Idaho. The supreme court is composed of the chief justice and four associate justices. The decisions of the Idaho Supreme Court are binding on all other Idaho state courts, and the only other court that may ruled in favor of upon the side of; favorable to; for the advantage of. See also: favor Hecla on all counts in a lawsuit lawsuit: see procedure; tort. brought by Independence Lead Mines regarding the Lucky Friday mine. The Court agreed that Hecla had in all ways acted in a prudent manner in its management of the Lucky Friday. There is no avenue of appeal available to the plaintiffs, so the matter is now closed. During the first quarter, the Board of Directors of Hecla Mining Company appointed ap·point tr.v. ap·point·ed, ap·point·ing, ap·points 1. To select or designate to fill an office or a position: appointed her the chief operating officer of the company. 2. Philip Philip, tetrarch of Ituraea Philip, d. A.D. 34, tetrarch of Ituraea, son of Herod the Great. He was perhaps the ablest of the Herod dynasty. He is mentioned in the Gospel of St. Luke. C. Wolf C. Wolf is the official mascot of the Erie SeaWolves, a Minor League Baseball team in Erie, Pennsylvania. The SeaWolves are the Double A affiliate of the Detroit Tigers Major League Baseball team. C. Wolf's History C. Wolf made his debut June 20, 1995, at Jerry Uht Park. to the position of Vice President and General Counsel. Wolf will provide legal counsel for Hecla's business activities and is also responsible for the environmental and land departments. Wolf has more than 30 years of legal experience, the majority of it in the mining industry with Cyprus Cyprus (sī`prəs), Gr. Kypros, Turk. Kıbrıs, officially Republic of Cyprus, republic (2005 est. pop. 780,000), 3,578 sq mi (9,267 sq km), an island in the E Mediterranean Sea, c.40 mi (60 km) S of Turkey and c. Amax Minerals and Amoco Minerals Company. After Hecla's Annual Meeting of Shareholders, Wolf will also take over the position of Corporate Secretary. The Annual Meeting of Shareholders of Hecla Mining Company takes place this Friday, May 5, at 10:30 a.m. PT at the Coeur d'Alene Coeur d'Alene, city, United States Coeur d'Alene (kûrdəlān`), city (1990 pop. 24,563), seat of Kootenai co., N Idaho, near the Wash. line; inc. 1907. Inn in Coeur d'Alene, Idaho. At that meeting, Arthur Brown Arthur Brown may refer to:
His articles on science fiction have appeared in various publications since the 1970s. , is also retiring from the Board after 25 years of service to the company. Michael Michael, archangel Michael (mī`kəl) [Heb.,=who is like God?], archangel prominent in Christian, Jewish, and Muslim traditions. In the Bible and early Jewish literature, Michael is one of the angels of God's presence. B. White, who was Hecla's Corporate Secretary for 15 years, will also retire. Baker said, "The good counsel of all three of these very experienced men will be acutely missed, but they have certainly earned a long and happy retirement. We wish them all the best, and thank them for their integrity, loyalty and guidance." Hecla Mining Company, headquartered in Coeur d'Alene, Idaho, mines, processes and explores for silver and gold in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , Venezuela and Mexico. A 115-year-old company, Hecla has long been well known in the mining world and financial markets as a quality silver and gold producer. Hecla's common and preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. are traded on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the symbols HL and HL-PrB. Statements made which are not historical facts, such as anticipated payments, litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. outcome, production, sales of assets, exploration results and plans, costs, and prices or sales performance are "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995, and involve a number of risks and uncertainties that could cause actual results to differ materially from those projected, anticipated, expected or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. . These risks and uncertainties include, but are not limited to, metals price volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the , volatility of metals production and costs, exploration risks and results, political risks, project development risks, labor issues and ability to raise financing. Refer to the company's Form 10-Q Form 10-Q See 10-Q. and 10-K reports for a more detailed discussion of factors that may impact expected future results. The company undertakes no obligation and has no intention of updating forward-looking statements. Cautionary Note to Investors -- The United States Securities and Exchange Commission permits mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract To decompress. WinZip and other decompression utilities use the term to mean "pulling out" the original files from the compressed archive. See WinZip and data compression. or produce. We use certain terms in this news release, such as "resource," "reserve," and "inferred resource" that the SEC guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. strictly prohibit pro·hib·it tr.v. pro·hib·it·ed, pro·hib·it·ing, pro·hib·its 1. To forbid by authority: Smoking is prohibited in most theaters. See Synonyms at forbid. 2. us from including in our filing with the SEC. U.S. investors are urged to consider closely the disclosure in our Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. . You can review and obtain copies of these filings from the SEC's website at http://www.sec.gov/edgar.shtml.
HECLA MINING COMPANY
(dollars in thousands, except per share, per ounce and per
pound amounts - unaudited)
First Quarter Ended
--------------------
HIGHLIGHTS Mar. 31, Mar. 31,
2006 2005
----------------------------------------------------------------------
FINANCIAL DATA
----------------------------------------------------------------------
Sales:
Silver operations (2) $ 24,215 $ 14,744
Gold operations 15,575 9,690
---------- ----------
Total sales $ 39,790 $ 24,434
Gross Profit:
Silver operations (2) $ 9,986 $ 3,162
Gold operations 1,747 2,303
---------- ----------
Total gross profit $ 11,733 $ 5,465
Net income (loss) $ 38,394 $ (3,296)
Income (loss) applicable to common
shareholders $ 38,256 $ (3,434)
Basic income (loss) per common share $ 0.32 $ (0.03)
Cash flow used in operating activities $ (303) $ (6,985)
Net cash provided by (used in) operating
activities before exploration and
pre-development expenses (1) $ 4,579 $ (2,059)
----------------------------------------------------------------------
PRODUCTION SUMMARY - TOTALS
----------------------------------------------------------------------
Silver - Ounces 1,240,886 1,418,263
Gold - Ounces 42,419 28,122
Lead - Tons 5,209 4,896
Zinc - Tons 5,569 5,946
Average cost per ounce of silver produced (2):
Cash operating costs ($/oz.) 1.80 2.49
Total cash costs ($/oz.) (3) 2.05 2.60
Total production costs ($/oz.) 4.19 4.12
Average cost per ounce of gold produced (4):
Cash operating costs ($/oz.) 348 285
Total cash costs ($/oz.) (3) 357 294
Total production costs ($/oz.) 508 358
----------------------------------------------------------------------
AVERAGE METAL PRICES
----------------------------------------------------------------------
Silver - London Fix ($/oz.) 9.69 7.00
Gold - Realized ($/oz.) 558 429
Gold - London Final ($/oz.) 554 427
Lead - LME Cash (cents/pound) 56.3 44.4
Zinc - LME Cash (cents/pound) 101.9 59.7
(1) Net cash provided by (used in) operating activities before
exploration and pre-development expenses represents a non-U.S.
generally accepted accounting principle (GAAP) measurement. The
following table presents a reconciliation between cash flow used
in operating activities to non-GAAP net cash provided by (used in)
operating activities before exploration and pre-development
expenses for the quarters ended March 31, 2006 and 2005:
Cash flow used in operating activities $ (303) $ (6,985)
Add exploration 3,388 2,792
Add pre-development expenses 1,494 2,134
------- --------
Net cash provided by (used in) operating
activities before exploration and
pre-development expenses $ 4,579 $ (2,059)
======= ========
(2) Includes gold produced at silver properties, which is treated as a
by-product credit in the calculation of silver costs per ounce.
(3) Total cash costs per ounce of silver and gold represent non-U.S.
generally accepted accounting principles (GAAP) measurements. A
reconciliation of total cash costs to cost of sales and other
direct production costs (GAAP) can be found in the cash costs per
ounce reconciliation section of this news release. For additional
information, see note (1) on the cash costs per ounce
reconciliation section.
(4) For the quarters ended March 31, 2006 and 2005, this includes gold
produced from third-party mining operations located near the La
Camorra mine, which is treated as a by-product credit and included
in the calculation of gold costs per ounce.
HECLA MINING COMPANY
Consolidated Statements of Operations
(dollars and shares in thousands, except per share
amounts - unaudited)
First Quarter Ended
-------------------
Mar. 31, Mar. 31,
2006 2005
--------- -----------
Sales of products $ 39,790 $ 24,434
-------- ---------
Cost of sales and other direct production costs 19,910 15,143
Depreciation, depletion and amortization 8,147 3,826
-------- ---------
28,057 18,969
-------- ---------
Gross profit 11,733 5,465
-------- ---------
Other operating expenses:
General and administrative 3,100 2,642
Exploration 3,388 2,792
Pre-development expenses 1,494 2,134
Depreciation and amortization 309 146
Other operating expenses 240 692
Provision for closed operations and
environmental matters 715 334
-------- ---------
9,246 8,740
-------- ---------
Income (loss) from operations 2,487 (3,275)
-------- ---------
Other income (expense):
Gain on sale of investments 36,422 - -
Interest and other income 607 430
Interest expense (127) (33)
-------- ---------
36,902 397
-------- ---------
Income (loss) from operations, before income
taxes 39,389 (2,878)
Income tax provision (995) (418)
-------- ---------
Net income (loss) 38,394 (3,296)
Preferred stock dividends (138) (138)
-------- ---------
Income (loss) applicable to common shareholders $ 38,256 $ (3,434)
======== =========
Basic and diluted income (loss) per common
share after preferred stock dividends $ 0.32 $ (0.03)
======== =========
Basic weighted average number of common shares
outstanding 118,756 118,381
======== =========
Diluted weighted average number of common shares
outstanding 119,288 118,381
======== =========
HECLA MINING COMPANY
Consolidated Balance Sheets
(dollars and shares in thousands - unaudited)
Mar. 31, Dec. 31,
2006 2005
----------------------------------------------------------------------
ASSETS
----------------------------------------------------------------------
Current assets:
Cash and cash equivalents $ 42,156 $ 6,308
Short-term investments and securities held for
sale 12,000 40,862
Accounts and notes receivable 22,267 17,595
Inventories 28,019 25,466
Other current assets 4,903 3,546
--------- ---------
Total current assets 109,345 93,777
Investments 3,780 2,233
Restricted cash and investments 20,576 20,340
Properties, plants and equipment, net 137,339 137,932
Other noncurrent assets 21,959 17,884
--------- ---------
Total assets $ 292,999 $ 272,166
========= =========
----------------------------------------------------------------------
LIABILITIES
----------------------------------------------------------------------
Current liabilities:
Accounts payable and accrued expenses $ 16,323 $ 16,684
Dividends payable 138 138
Accrued payroll and related benefits 9,942 10,452
Accrued taxes 3,505 2,529
Current portion of debt 1,060 - -
Current portion of accrued reclamation and
closure costs 6,365 6,328
--------- ---------
Total current liabilities 37,333 36,131
Long-term debt - - 3,000
Accrued reclamation and closure costs 62,178 62,914
Other noncurrent liabilities 9,437 8,791
--------- ---------
Total liabilities 108,948 110,836
--------- ---------
----------------------------------------------------------------------
SHAREHOLDERS' EQUITY
----------------------------------------------------------------------
Preferred stock 39 39
Common stock 29,775 29,651
Capital surplus 511,100 508,104
Accumulated deficit (357,836) (396,092)
Accumulated other comprehensive income 1,091 19,746
Treasury stock (118) (118)
--------- ---------
Total shareholders' equity 184,051 161,330
--------- ---------
Total liabilities and shareholders' equity $ 292,999 $ 272,166
========= =========
Common shares outstanding at end of period 119,093 118,594
========= =========
HECLA MINING COMPANY
Consolidated Statements of Cash Flows
(dollars in thousands - unaudited)
First Quarter Ended
-------------------
Mar. 31, Mar. 31,
2006 2005
----------------------------------------------------------------------
OPERATING ACTIVITIES
----------------------------------------------------------------------
Net income (loss) $ 38,394 $ (3,296)
Noncash elements included in net income (loss):
Depreciation, depletion and amortization 8,456 3,972
Gain on sale of investments (36,422) - -
(Gain) loss on disposition of properties, plants
and equipment (22) 14
Gain on sale of royalty interests (341) (550)
Provision for reclamation and closure costs 98 253
Stock compensation 271 161
Change in assets and liabilities:
Accounts and notes receivable (7,059) (619)
Inventories (2,553) (3,695)
Other current and noncurrent assets (2,098) (1,614)
Accounts payable and accrued expenses (352) (598)
Accrued payroll and related benefits 456 (575)
Accrued taxes 976 (24)
Accrued reclamation and closure costs and other
noncurrent liabilities (107) (414)
-------- --------
Net cash used in operating activities (303) (6,985)
-------- --------
----------------------------------------------------------------------
INVESTING ACTIVITIES
----------------------------------------------------------------------
Additions to properties, plants and equipment (7,885) (9,815)
Proceeds from sale of investments 57,423 - -
Proceeds from disposition of properties, plants
and equipment - - 17
Purchase of short-term investments (20,200) (44,694)
Maturities of short-term investments 8,200 42,721
Increase in restricted investments (236) (133)
-------- --------
Net cash provided by (used in) investing
activities 37,302 (11,904)
-------- --------
----------------------------------------------------------------------
FINANCING ACTIVITIES
----------------------------------------------------------------------
Common stock issued under stock option plans 846 161
Dividends paid to preferred shareholders (138) (138)
Other financing activities 81 - -
Borrowings on debt 4,060 - -
Repayments of debt (6,000) - -
-------- --------
Net cash provided by (used in) financing
activities (1,151) 23
-------- --------
Net increase (decrease) in cash and cash
equivalents 35,848 (18,866)
Cash and cash equivalents at beginning of period 6,308 34,460
-------- --------
Cash and cash equivalents at end of period $ 42,156 $ 15,594
======== ========
HECLA MINING COMPANY
Production Data
First Quarter Ended
-------------------
Mar. 31, Mar. 31,
2006 2005
----------------------------------------------------------------------
GREENS CREEK UNIT (Reflects Hecla's 29.73% share)
----------------------------------------------------------------------
Tons of ore milled 51,888 55,045
Days of operation 84 83
Mining cost per ton $ 34.52 $ 33.38
Milling cost per ton $ 23.79 $ 20.39
Ore grade milled - Silver (oz./ton) 15.53 21.42
Silver produced (oz.) 614,094 896,871
Gold produced (oz.) 4,728 6,200
Lead produced (tons) 1,615 1,847
Zinc produced (tons) 4,537 5,122
Average cost per ounce of silver produced (2):
Cash operating costs $ (1.78) $ 0.87
Total cash costs (1) $ (1.28) $ 1.05
Total production costs $ 1.95 $ 3.35
Capital additions (in thousands) $ 1,987 $ 420
----------------------------------------------------------------------
LUCKY FRIDAY UNIT
----------------------------------------------------------------------
Tons of ore processed 63,724 42,795
Days of operation 69 45
Mining cost per ton $ 51.13 $ 66.77
Milling cost per ton $ 11.38 $ 8.21
Ore grade milled - Silver (oz./ton) 11.01 12.99
Silver produced (oz.) 626,792 521,392
Lead produced (tons) 3,594 3,049
Zinc produced (tons) 1,032 824
Average cost of silver produced:
Cash operating costs $ 5.30 $ 5.26
Total cash costs (1) $ 5.31 $ 5.26
Total production costs $ 6.39 $ 5.46
Capital additions (in thousands) $ 2,101 $ 1,811
----------------------------------------------------------------------
LA CAMORRA UNIT
----------------------------------------------------------------------
Tons of ore processed 54,547 50,332
Days of operation 84 83
Mining cost per ton $ 123.24 $ 62.02
Milling cost per ton $ 16.59 $ 12.24
Ore grade milled - Gold (oz./ton) 0.701 0.448
Gold produced (oz.) 37,620 21,860
Average cost per ounce of gold produced:
Cash operating costs $ 348 $ 285
Total cash costs (1) $ 357 $ 294
Total production costs $ 508 $ 358
Capital additions (in thousands) $ 3,705 $ 7,338
(1) Total cash costs per ounce of silver and gold represent non-U.S.
generally accepted accounting principles (GAAP) measurements. A
reconciliation of total cash costs to cost of sales and other
direct production costs (GAAP) can be found in the cash costs per
ounce reconciliation section of this news release.
(2) Gold produced is treated as a by-product credit in calculating
silver costs per ounce.
HECLA MINING COMPANY
Reconciliation of Cash Costs per Ounce to Generally Accepted
Accounting Principles (GAAP)(1)
(dollars and ounces in thousands, except per ounce - unaudited)
First Quarter Ended
-------------------
Mar. 31, Mar. 31,
2006 2005
----------------------------------------------------------------------
GOLD OPERATIONS
----------------------------------------------------------------------
Total cash costs $13,209 $ 6,181
Divided by gold ounces produced 37 21
------- -------
Total cash cost per ounce produced $ 357 $ 294
======= =======
Reconciliation to GAAP (2):
Total cash costs $13,209 $ 6,181
Depreciation 5,531 1,329
Treatment & freight costs (1,594) (412)
By-product credits 410 306
Change in product inventory (3,711) (48)
Reclamation, severance and other costs (16) 31
------- -------
Costs of sales and other direct production costs
and depreciation, depletion and amortization
(GAAP) $13,829 $ 7,387
======= =======
----------------------------------------------------------------------
SILVER OPERATIONS
----------------------------------------------------------------------
Total cash costs (3) $ 2,540 $ 3,682
Divided by silver ounces produced 1,241 1,418
------- -------
Total cash cost per ounce produced $ 2.05 $ 2.60
======= =======
Reconciliation to GAAP:
Total cash costs $ 2,540 $ 3,682
Depreciation, depletion and amortization 2,616 2,498
Treatment & freight costs (6,953) (4,851)
By-product credits 15,327 10,078
Change in product inventory 653 (389)
Idle facility cost (3) - - 511
Reclamation, severance and other costs 45 54
------- -------
Costs of sales and other direct production costs
and depreciation, depletion and amortization
(GAAP) $14,228 $11,583
======= =======
----------------------------------------------------------------------
GREENS CREEK UNIT (Reflects Hecla's 29.73% share)
----------------------------------------------------------------------
Total cash costs $ (788) $ 939
Divided by silver ounces produced 614 897
------- -------
Total cash cost per ounce produced $ (1.28) $ 1.05
======= =======
Reconciliation to GAAP:
Total cash costs $ (788) $ 939
Depreciation, depletion and amortization 1,943 2,022
Treatment & freight costs (4,342) (3,442)
By-product credits 10,326 7,195
Change in product inventory (217) (61)
Reclamation, severance and other costs 42 41
------- -------
Costs of sales and other direct production costs
and depreciation, depletion and amortization
(GAAP) $ 6,964 $ 6,694
======= =======
----------------------------------------------------------------------
LUCKY FRIDAY UNIT
----------------------------------------------------------------------
Total cash costs $ 3,328 $ 2,743
Divided by silver ounces produced 627 521
------- -------
Total cash cost per ounce produced $ 5.31 $ 5.26
======= =======
Reconciliation to GAAP:
Total cash costs $ 3,328 $ 2,743
Depreciation, depletion and amortization 673 89
Treatment & freight costs (2,611) (1,409)
By-product credits 5,001 2,883
Change in product inventory (36) (328)
Reclamation and other costs 3 13
-------- -------
Costs of sales and other direct production costs
and depreciation, depletion and amortization
(GAAP) $ 6,358 $ 3,991
======= =======
----------------------------------------------------------------------
RECONCILIATION TO GAAP, ALL OPERATIONS
----------------------------------------------------------------------
Total cash costs $15,749 $ 9,863
Depreciation, depletion and amortization 8,147 3,827
Treatment & freight costs (8,547) (5,263)
By-product credits 15,737 10,384
Change in product inventory (3,058) (437)
Idle facility cost(3) - - 511
Reclamation and other costs 29 85
------- -------
Costs of sales and other direct production costs
and depreciation, depletion and amortization
(GAAP) $28,057 $18,970
======= =======
(1) Cash costs per ounce of silver or gold represent non-U.S.
generally accepted accounting principles (GAAP) measurements that
the company believes provide management and investors an
indication of net cash flow, after consideration of the realized
price received for production sold. Management also uses this
measurement for the comparative monitoring of performance of
mining operations period-to-period from a cash flow perspective.
"Total cash cost per ounce" is a measure developed by gold
companies in an effort to provide a comparable standard; however,
there can be no assurance that our reporting of this non-GAAP
measure is similar to that reported by other mining companies.
Cost of sales and other direct production costs and depreciation,
depletion and amortization are the most comparable financial
measures calculated in accordance with GAAP to total cash costs.
(2) Costs per ounce of gold are based on the gold produced by the La
Camorra mine and our Block B concessions only. During the quarters
ended March 31, 2006 and 2005, gold produced from third-party
mining operations located near the La Camorra mine and Block B
concessions was treated as a by-product credit and included in the
calculation of gold costs per ounce.
(3) The mill that processed San Sebastian ore was closed due to a
strike by mill workers during the first quarter of 2005, making
first quarter 2005 production statistics not meaningful, including
total cash cost per ounce produced. Mine and mill operations
ceased in October 2005. During the first quarter 2005, cost of
sales and other direct production costs of $511,000 were not
included in the determination of total cash costs for silver
operations.
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