Hecla Mining (HL) Completes ATAC Buy, Resumes Casa Berardi
Hecla Mining Company HL announced the completion of its previously announced acquisition of ATAC Resources Ltd. (“ATAC”). The acquisition is in sync with HL's strategy of acquiring large land packages in highly promising and tier-one mining jurisdictions.
In April 2023, Hecla Mining announced that its wholly owned subsidiary, Alexco Resource Corp., has entered into a definitive deal to acquire ATAC and its Rackla and Connaught projects in Canada. These projects will solidify Hecla Mining’s position in Yukon. The ATAC buyout follows Hecla Mining’s strategic acquisition of Keno Hill last year. It is anticipated to be Canada's largest and highest-grade primary silver mine. Keno Hill mine is expected to start production from the third quarter of 2023 and produce more than 2.5 million ounces of silver in the year.
Hecla acquired ATAC for a total consideration of approximately $18.8 million. It issued 3,676,904 shares to ATAC shareholders based on the share exchange ratio of 0.166 of Hecla share for each ATAC common share. Additionally, Hecla Mining invested CAD$2 million ($1.48 million) in seed capital, which is equal to a 19.9% interest, for a new exploration company Cascadia Minerals Ltd. Cascadia, which will be managed by the former management of ATAC, will explore specific properties in the Yukon and British Columbia.
Hecla Mining reported first-quarter 2023 adjusted earnings per share of one cent, in line with the year-ago quarter’s adjusted earnings per share figure. The company’s revenues increased 2.4% year over year to around $200 million in the quarter. Silver revenues were the second highest in the company’s history.in the quarter.
Hecla Mining produced four million ounces of silver in the first quarter of 2023, which is a 10% sequential increase. Silver output was the highest in any quarter since 2016. The company reported record quarterly gold production of 14,885 ounces at Greens Creek. Lead production was the second highest in the company's history.
HL expects consolidated silver production of 17 million ounces for 2023 and is targeting to reach the 20-million-ounce mark in 2025. The company already produces 45% of U.S silver and is poised to be Canada’s largest silver producer by 2024.
Operations Resume at Casa Berardi
Hecla also announced that mining and processing activities have resumed at the Casa Berardi mine since Jun 29. This follows the partial lifting of Quebec’s ban on access to the road to the Casa Berardi mine.
In June 2023, due to the forest fires in the Abitibi and Eeyou-Istchee region of the James Bay area, Quebec’s Ministry of Natural Resources and Forests had directed the closure of forest lands and certain roads. This included the access road to the Casa Berardi mine site.
HL will provide details of the impact of the suspension of Casa Berardi’s production and cost guidance at its upcoming second-quarter 2023 earnings release.
Price Performance
Shares of Hecla Mining have gained 43.9% in the past year, compared with the industry’s 0.7% growth.
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Zacks Rank & Stocks to Consider
Hecla Mining currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are Carpenter Technology Corporation CRS, Silvercorp Metals Inc. SVM and Osisko Gold Royalties Ltd OR. CRS and SVM sport a Zacks Rank #1 (Strong Buy) at present while OR carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Carpenter Technology’s current-year earnings is pegged at $1.04 per share, implying year-over-year growth of 6.3%. It has a trailing four-quarter earnings surprise of 198.1%, on average. The CRS stock has gained 104% in a year.
The consensus estimate for Silvercorp Metals’ current fiscal-year earnings is pegged at 27 cents per share, suggesting year-over-year growth of 28.6%. The stock has gained 25% in the past year.
The Zacks Consensus Estimate for Osisko Gold Royalties’ fiscal 2023 earnings per share is pegged at 47 cents. Earnings estimates have moved 6.8% north in the past 60 days. OR’s shares have gained 47% in the past year.
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