Hecla Mining Co (HL) Reports Solid 2023 Results with Second Highest Silver Production and Reserves
Revenue: Increased to $720.2 million in 2023, with higher realized prices for silver and gold.
Net Loss: Net loss applicable to common stockholders was $84.8 million for the year.
Silver Production: Second highest in company history at 14.3 million ounces.
Gold Production: Decreased due to Casa Berardi transitioning to surface only mining.
Adjusted EBITDA: Remained stable at $212.6 million, in line with the prior year.
Capital Expenditures: Increased to $223.9 million in 2023, reflecting investment in mine development and infrastructure.
Free Cash Flow: Negative $148.4 million, impacted by higher capital expenditures.
On February 14, 2024, Hecla Mining Co (NYSE:HL) released its 8-K filing, detailing its financial and operational performance for the fourth quarter and full year ended December 31, 2023. The company, a leading producer and explorer of silver, gold, lead, and zinc, with its primary revenue generated from the Greens Creek segment in Canada, reported significant achievements despite facing operational challenges.
Operational Highlights and Challenges
Hecla Mining Co (NYSE:HL) reported the second highest silver reserves in its history at 238 million ounces and a silver production of 14.3 million ounces. The company's Lucky Friday segment restarted production on January 9th, following a temporary suspension due to a fire. Notably, Hecla received a U.S. patent for its innovative Underhand Closed Bench (UCB) mining method, and Greens Creek achieved record throughput, contributing significantly to the company's cash flow.
Despite these achievements, the company faced challenges, including the suspension of production at Lucky Friday due to the fire and continued investment in ramping up Keno Hill. These factors led to a draw on the revolving credit facility, which Hecla expects to pay down in 2024 with all four mines in operation and the anticipated receipt of approximately $50 million in insurance proceeds.
Financial Performance
Hecla Mining Co (NYSE:HL) saw an increase in revenue to $720.2 million in 2023, attributed to higher realized prices for silver and gold. However, gold production declined as Casa Berardi began transitioning to a surface-only operation. The company reported a net loss applicable to common stockholders of $84.8 million for the year, with ramp-up and suspension costs increasing by $52.1 million due to the Lucky Friday suspension and Keno Hill's production ramp-up.
The company's Adjusted EBITDA remained stable at $212.6 million, in line with the prior year. The ratio of net debt to adjusted EBITDA increased to 2.6 due to higher net debt attributable to draws on the credit facility and the use of cash reflecting the company's investment in Keno Hill's development and the temporary suspension of operations at Lucky Friday.
Looking Forward
Hecla Mining Co (NYSE:HL) is optimistic about the future, expecting silver production to increase by 15-20% in 2024 and by 30% by 2026, positioning the company as one of the worlds fastest-growing silver companies. The company also highlighted the significant role of silver in the energy transition, with increasing demand for solar power generation.
For a detailed analysis of Hecla Mining Co (NYSE:HL)'s financial statements and performance, including income statements, balance sheets, and cash flow statements, investors and interested parties are encouraged to review the full 8-K filing.
Hecla Mining Co (NYSE:HL) will hold a conference call and webcast on February 15, 2024, at 10:00 a.m. Eastern Time to discuss these results, and a Virtual Investor Event on the same day from 12:00 p.m. to 1:30 p.m. Eastern Time.
For more information on Hecla Mining Co (NYSE:HL)'s earnings and future outlook, visit GuruFocus.com for comprehensive coverage and expert analysis.
Explore the complete 8-K earnings release (here) from Hecla Mining Co for further details.
This article first appeared on GuruFocus.
