$15 million negative adjustment should not have happened
Mr Phillips S. Baker Jr.; President and CEO
Taking the following into consideration:
1) You have a highly paid management staff with 200+ years of experience
2) Silver billion price is known to be volatile
3) There was a previous sharp drop in price between shipment and settlement in June 2008
So - Why wasn't the hedge already in place. Sounds like reactive management instead of the proactive management you are so highly paid for.
Same comment on the cost reduction program. Reactive and late to boot. Metals prices have been going down for a long time.
Now about Greens Creek. As hydro power is forecast to be low this year (you should have known this mid-winter from snowfall figures) why didn't you stockpile ore to be milled with the cheaper power?
Long Term hedging - Don't you dare unless your REALLY sure prices are dropping even more. Putting long term hedges in place at market lows will restrain the growth we are all investing for in a metals market that is expected to be rising. Historically the miners have done hedging 100% wrong, lets not repeat the error.
Looking forward to a 2014 stock price of $50 and a 5% dividend. Can you do it?
at one of the late 2012 hl presents at bs sessions a vp admitted they were bad at guessing the futures mkt. and that was an excuse for losses and poor earnings. i had hoped they would have stopped playing the futures mkts. and stuck to mining, though they have not been very good at that either the way they let lf collapse in 2011.
Good post Mike - I too, was dismayed to discover HL hedging heavily at these low prices.
If anyone should be aware of the majors closing their huge short COMEX positions over the last 6 months, it should be management. What else could that mean but higher PM prices??
I've always been flummoxed by insiders lack of conviction by share ownership - less than 1% - REALLY?
Tools, or Fools, come to mind - either way, the $USD seems to be under pressure. Physical PM demand has been outstripping supply for some time now, so I believe that HL share price has way more upside than downside, DESPITE management's apparent lack of confidence in the company.
If your not an optimist you should NEVER buy a miner.... way to many possibilities of loss.
BTW.... with good management and a rising metals price there is no reason HL could not be $50 and 5% dividend.
All it takes is for the owners of the company (us stock holders) to set the proper goals and then hold managements feet to the fire, We will need to put pressure on the board of directors to accomplish this.