Hecla Mining (HL) Q2 Silver & Gold Production Dip Sequentially
Hecla Mining HL reported silver production of 3.8 million ounces in the second quarter of 2023. Production was down 5% sequentially as a decline in output at Greens Creek mine due to lower grades offset the solid performance at Lucky Friday. Gold production was down 11% to 35,251 ounces compared with the first quarter of 2023, reflecting wildfire-related road closures at Casa Berardi.
Lead production was 13,071 tons, down 1% on a sequential basis. Zinc output went up 7% to 16,939 tons from the first quarter of 2023,
Mine Performances in Q2
The Lucky Friday mine reported silver production of 1.29 million ounces in the second quarter, attaining its highest level since the first quarter of 2000. Compared to the first quarter of 2023, production was up 2%, attributable to a 3% increase in grades, offset by a 2% sequential decline in throughput.
Mine throughput was impacted by the local utility’s unplanned replacement of the main electrical transformer. With mine throughput expected to increase to 1,160 tons per day (425,000 tons annually) in the fourth quarter, the mine remains on track to produce 4.5-5.0 million ounces of silver in 2023.
Silver production at the Greens Creek mine dipped 15% sequentially to 2.36 million ounces in the quarter due to lower grades. Gold production was up 10% from the first quarter of 2023 to 16,351 ounces due to higher grades. The mine is expected to achieve its production guidance of 9.0-9.5 million ounces of silver this year.
The Keno Hill mine produced 184,264 ounces of silver in the second quarter of 2023. The mine began ramping up to full production in the second quarter and is expected to produce up to 440 tons per day by the end of this year. Silver production from the mine is projected at more than 2.5 million ounces.
At the Casa Berardi mine, gold production declined 23% sequentially to 18,901 ounces. Production was lower as the mine had to be shut down due to wildfire-related road closures. Hecla Mining recently 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.
HL will provide Casa Berardi’s production and cost guidance at its upcoming second-quarter 2023 earnings release.
Guidance Maintained for 2023
In the first six-month period of 2023, HL’s total silver output was 7.9 million ounces. Production was up 13% year over year aided by upbeat performance at Lucky Friday and Greens Creek. Gold production was down 14% to 74,822 ounces from the year-ago comparable period. Zinc and lead production were up 3% and 9%, respectively, from the year-ago comparable period.
Hecla Mining affirms its silver production guidance at 17 million ounces for 2023. It is targeting to reach the 20 million-ounce mark in 2025. The company already produces 45% of U.S silver and is gearing up to be Canada’s largest silver producer by 2024.
HL’s Peer Performances in Q2
Endeavour Silver Corporation EXK recently announced that it produced 2.3 million silver equivalent ounces in the second quarter of 2023, which was 9.5% higher year over year. Consolidated silver production was up 10% year over year to 1,494,000 ounces, owing to increased silver production at the Guanacevi mine.
EXK’s gold production in the quarter rose 6% year over year to 9,819 ounces, driven by increased throughput at the Guanacevi and Bolanitos mines. Total production for the six months ended Jun 30, 2023, was 4.7 million silver equivalent ounces. Supported by this performance, the company anticipates 8.6-9.5 million silver equivalent ounces for the year.
Fortuna Silver Mines Inc.’s FSM silver production was down 24% year over year to 1,262,561 ounces in the second quarter of 2023. The decline mainly reflected the impact of the 15-day shutdown of operations at the San Jose mine due to the illegal blockade by the workers’ union.
FSM’s gold production however improved 4% year over year to 64,348 ounces. This upbeat performance was mainly attributed to the commencement of production at FSM’s newest flagship mine, Séguéla.
Price Performance
Shares of Hecla Mining have gained 61% in a year, compared with the industry's 13.7% growth.
Image Source: Zacks Investment Research
Zacks Rank
Hecla Mining currently carries a Zacks Rank #3 (Hold).
A better-ranked stock from the basic materials space is Carpenter Technology Corporation CRS, which currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology has an average trailing four-quarter earnings surprise of 30.9%. The Zacks Consensus Estimate for the company’s fiscal 2023 earnings is pegged at $1.04 per share. The consensus estimate for 2023 earnings has been unchanged in the past 60 days. Its shares have gained 111.9% in the last year.
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