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Hecla Mining Co. Message Board

  • phantasm08037 phantasm08037 Dec 29, 1999 11:45 PM Flag

    cumulative preferred

    . If money
    is that tight they should suspend the dividend until
    profitability improves. Of course cumulative means dividends
    will accrue until payments are resumed. Also, I am not
    aware of any Hecla bonds that trade in the US. The
    convertible bond was called some years ago.

    I think
    they would be better served to issue bonds backed by
    ounces of silver and gold themselves at 8 or 9 % and buy
    in preferred shares in the open market. What would
    be saved in dividends would more than make up for
    payments on the bonds. I'd certainly be a willing buyer of
    such collateralized bonds.

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    • HLPRB I read the HL board with great interest. I
      agree with you that it would make sense for HL to buy
      back as much of the preferred as they could get at
      these levels; but what puzzles me is why you would
      rather buy HL bonds(debt) that would pay 8 or 9% when
      you could buy HLPRB today that yields over 15%? If HL
      goes belly up, neither one will be worth much, not
      that I think HL is even close to going belly up or to
      defaulting on the HLPRB dividends.

      When HL recovers,
      HLPRB will show good capital gains in addition to the
      great dividend. Please explain your investment
      reasoning since I obviously am in the dark having bought
      HLPRB at 33 3/4 after watching it decline from

      If HL survives, HLPRB is a great buy at these levels
      IMO; granted not as good as e-stocks if one can pick
      the right ones. IMO HL has a better chance to survive
      than most of the e-stocks, but then what do I know.
      I'm down 33% if I sell today which I won't.

      • 1 Reply to axzl
      • axzl,

        The bonds I proposed were backed by
        the precious metals themselves. Presumably Hecla has
        some real, producing mines that could put metal aside
        to deliver in the event of calamity. They might be
        able to get better terms than 8 or 9 % with this kind
        of arrangement. Perhaps a joint issue with a refiner
        like Englehard would make the issue even sweeter for
        all concerned.

        I might put a security like
        this in my IRA where I value safety and can't write
        off losses. I'm really just proposing ideas to tide
        the company over until the inevitable turning of the
        tide. There are so many artificial forces retarding
        prices now that survival is the key to play again
        another day. Issuing more common at dogmeat prices would
        simply reveal how uncreative the management is. It would
        also bury hopes that substantial investors might take
        some of the common supply out of circulation and play
        for some real money. I'll look to learn more about
        the basic metal side of HL's business at the club
        site I saw in another post. Good luck with HL_pb. I
        think you will be OK in the end but might have to sweat
        through some ommitted, cumulative dividends as a worst
        case scenario. Oh yeah - I'll be sweating with you.

    • Its an interesting idea, but from what I can see
      they have sufficeint cash to make the payments and
      with the growth in the industrial sector shoudl be
      turning a profit even after they pay out the prefered. It
      is always beter to grow your way out of this kind of
      problem, rather then inflate your way out or go heavily
      into debt again.

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