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Hecla Reports Record 2011 Revenue & Gross Profits

Stocks in this article: HL

Cautionary Statements

Statements made which are not historical facts, such as anticipated payments, litigation outcome, production, sales of assets, exploration results and plans, prospects and opportunities including reserves, resources, and mineralization, costs, and prices or sales performance are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “may”, “will”, “should”, “expects”, “intends”, “projects”, “believes”, “estimates”, “targets”, “anticipates” and similar expressions are used to identify these forward-looking statements. Forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from those projected, anticipated, expected or implied. These risks and uncertainties include, but are not limited to, metals price volatility, volatility of metals production and costs, environmental and litigation risks, operating risks, project development risks, political and regulatory risks, labor issues, ability to raise financing and exploration risks and results. Refer to the company's Form 10-K and 10-Q reports for a more detailed discussion of factors that may impact expected future results. The company undertakes no obligation and has no intention of updating forward-looking statements other than as may be required by law.

Cautionary Statements to Investors on Reserves and Resources

The United States Securities and Exchange Commission permits mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We use certain terms on this release, such as “resource,” “other resources,” and “mineralized materials” that the SEC guidelines strictly prohibit us from including in our filings with the SEC. U.S. investors are urged to consider closely the disclosure in our Form 10-K and Form 10-Q. You can review and obtain copies of these filings from the SEC's website at www.sec.gov.

For further information, please contact:

Mélanie Hennessey             Direct Main: 800-HECLA91 (800-432-5291)
Vice President - Investor Relations

Email: hmc-info@hecla-mining.com

Direct: 604-694-7729

Website: www.hecla-mining.com

 
Hecla Canada Ltd. Hecla Mining Company
970 - 800 W Pender Street 6500 N. Mineral Drive, Suite 200
Vancouver, British Columbia Coeur d'Alene, Idaho 83815
V6C 2V6 Canada

HECLA MINING COMPANY

Consolidated Statements of Income

(dollars and shares in thousands, except per share amounts - unaudited)

 
      Fourth Quarter Ended     Twelve Months Ended
December 31,     December 31, December 31,     December 31,
2011 2010 2011 2010
Sales of products $ 102,867   $ 134,460   $ 477,634   $ 418,813  
Cost of sales and other direct production costs 40,540 45,811 165,573 163,983
Depreciation, depletion and amortization 12,501   13,956   47,066   60,011  
53,041   59,767   212,639   223,994  
Gross profit 49,826   74,693   264,995   194,819  
 
Other operating expenses:
General and administrative 3,732 5,758 18,540 18,219
Exploration 7,947 5,439 26,959 21,605
Pre-development 2,694 4,446
Other operating expense 1,959 1,309 7,658 5,334
Loss on disposition of property, plants, equipment and mineral interests 80 80
Provision for closed operations and reclamation 1,864   195,409   9,747   201,136  
18,196   207,995   67,350   246,374  
Income (loss) from operations 31,630   (133,302 ) 197,645   (51,555 )
Other income (expense):
Gain (loss) on derivative contracts (919 ) (9,562 ) 37,988 (20,758 )
Gain on sale of investments 611 588
Loss on impairment of investments (140 ) (140 ) (739 )
Interest and other income (loss) 4 (11 ) (87 ) 126
Interest expense (491 ) (499 ) (2,875 ) (2,211 )
(1,546 ) (10,072 ) 35,497   (22,994 )
Income (loss) before income taxes 30,084 (143,374 ) 233,142 (74,549 )
Income tax benefit (provision) (11,515 ) 133,638   (81,978 ) 123,532  
Net income (loss) 18,569 (9,736 ) 151,164 48,983
Preferred stock dividends (138 ) (3,408 ) (552 ) (13,633 )
Income (loss) applicable to common shareholders $ 18,431   $ (13,144 ) $ 150,612   $ 35,350  
Basic income (loss) per common share after preferred dividends $ 0.07   $ (0.05 ) $ 0.54   $ 0.14  
Diluted income (loss) per common share after preferred dividends $ 0.06   $ (0.05 ) $ 0.51   $ 0.13  
Weighted average number of common shares outstanding basic 280,819   257,403   280,956   251,146  
Weighted average number of common shares outstanding diluted 294,133   276,136   297,033   269,601  
 
HECLA MINING COMPANY

Consolidated Balance Sheets

(dollars and share in thousands - unaudited)

 
        December 31, 2011     December 31, 2010
ASSETS              
Current assets:          
Cash and cash equivalents $ 266,463 $ 283,606
Investments 1,474
Accounts receivable 20,309 36,840
Inventories 26,195 19,131
Current deferred income taxes 27,810 87,287
Other current assets 21,967   3,683  
Total current assets 362,744 432,021
Non-current investments 3,923 1,194
Non-current restricted cash and investments 866 10,314
Properties, plants, equipment and mineral interests, net 923,212 833,288
Non-current deferred income taxes 88,028 100,072
Other non-current assets and deferred charges 17,317   5,604  
Total assets $ 1,396,090   $ 1,382,493  
               
LIABILITIES              
Current liabilities:
Accounts payable and accrued liabilities $ 37,831 $ 31,725
Accrued payroll and related benefits 12,878 10,789
Accrued taxes 10,354 16,042
Current portion of capital leases 4,005 2,481
Current portion of accrued reclamation and closure costs 42,248 175,484
Current derivative contract liabilities   20,016  
Total current liabilities 107,316 256,537
Capital leases 6,265 3,792
Accrued reclamation and closure costs 111,563 143,313
Other non-current liabilities 30,833   16,598  
Total liabilities 255,977   420,240  
               
SHAREHOLDERS’ EQUITY              
Preferred stock 39 543
Common stock 71,420 64,704
Capital surplus 1,215,229 1,179,751
Accumulated deficit (120,557 ) (265,577 )
Accumulated other comprehensive loss (23,498 ) (15,117 )
Treasury stock (2,520 ) (2,051 )
Total shareholders’ equity 1,140,113   962,253  
Total liabilities and shareholders’ equity $ 1,396,090   $ 1,382,493  
Common shares outstanding 285,290   258,486  
 
HECLA MINING COMPANY

Consolidated Statements of Cash Flows

(dollars in thousands - unaudited)

 
      December 31,     December 31,
        2011     2010
OPERATING ACTIVITIES              
Net income $ 151,164 $ 48,983
Non-cash elements included in net income:
Depreciation, depletion and amortization 47,348 60,235
Gain on sale of investments (611 ) (588 )
Loss on impairment of investments 140 739
Loss (gain) on disposition of properties, plants, equipment and mineral interests 80
Provision for reclamation and closure costs 7,004 196,262
Deferred income taxes 76,944 (141,707 )
Stock compensation 2,073 3,446
Amortization of loan origination fees 598 621
Amortization of intangible asset 1,380
(Gain) loss on derivative contracts (53,545 ) 20,795
Other non-cash charges, net 1,209 (495 )
Change in assets and liabilities:
Accounts receivable 16,531 (9,404 )
Inventories (7,064 ) 2,335
Other current and non-current assets 2,164 3,279
Accounts payable and accrued liabilities 1,466 10,896
Accrued payroll and related benefits 2,090 (3,376 )
Accrued taxes (5,688 ) 9,802
Accrued reclamation and closure costs and other non-current liabilities (172,855 ) (8,666 )
Other non-current liabilities   923     3,192  
Cash provided by operating activities   69,891     197,809  
               
INVESTING ACTIVITIES              
Additions to properties, plants, equipment and mineral interests (87,546 ) (67,414 )
Proceeds from sale of investments 1,366 1,138
Proceeds from disposition of properties, plants and equipment 113 29
Purchases of investments 9,448 1,459
Changes in restricted cash and investment balances   (3,200 )    
Net cash used in investing activities   (79,819 )   (64,788 )
               
FINANCING ACTIVITIES              
Proceeds from exercise of stock options and warrants 5,786 53,093
Acquisition of treasury shares (469 ) (693 )
Dividend paid to common shareholders (5,592 )
Dividends paid to preferred shareholders (3,822 ) (4,513 )
Loan origination fees paid (180 ) (200 )
Repayments of capital leases   (2,938 )   (1,780 )
Net cash (used) provided by financing activities   (7,215 )   45,907  
Net increase (decrease) in cash and cash equivalents (17,143 ) 178,928
Cash and cash equivalents at beginning of year   283,606     104,678  
Cash and cash equivalents at end of year $ 266,463   $ 283,606  
 
HECLA MINING COMPANY

Production Data

 
      Fourth Quarter Ended     Twelve Months Ended
December 31,     December 31,     December 31,     December 31,
        2011     2010     2011     2010
GREENS CREEK UNIT                          
Tons of ore milled 191,858 193,674 772,069 800,397
Mining cost per ton $ 50.85 $ 45.88 $ 49.31 $ 43.00
Milling cost per ton $ 29.41 $ 28.14 $ 30.69 $ 24.23
Ore grade milled - Silver (oz./ton) 13.5 13.2 11.5 12.3
Ore grade milled - Gold (oz./ton) 0.1 0.1 0.1 0.1
Ore grade milled - Lead (%) 3.4 3.6 3.5 4.1
Ore grade milled - Zinc (%) 9.5 9.9 9.8 10.7
Silver produced (oz.) 1,990,610 1,921,789 6,498,337 7,206,973
Gold produced (oz.) 13,745 16,111 56,818 68,838
Lead produced (tons) 5,048 5,383 21,055 25,336
Zinc produced (tons) 16,137 16,558 66,050 74,496
Total cash cost per ounce of silver produced (1) $ 0.42 $ (1.93 ) $ (1.29 ) $ (3.90 )
Capital additions (in thousands)       $ 12,551     $ 7,355       $ 41,657       $ 18,280  
LUCKY FRIDAY UNIT                          
Tons of ore processed 49,638 90,191 298,672 351,074
Mining cost per ton $ 67.62 $ 53.61 $ 60.76 $ 54.27
Milling cost per ton $ 20.79 $ 14.73 $ 16.96 $ 14.74
Ore grade milled - Silver (oz./ton) 10.8 9.7 10.7 10.3
Ore grade milled - Lead (%) 6.8 6.4 6.5 6.6
Ore grade milled - Zinc (%) 2.9 2.9 2.8 3.0
Silver produced (oz.) 500,614 819,317 2,985,339 3,359,379
Lead produced (tons) 3,146 5,356 18,095 21,619
Zinc produced (tons) 1,247 2,213 7,305 9,286
Total cash cost per ounce of silver produced (1) $ 9.68 $ 4.06 $ 6.47 $ 3.76
Capital additions (in thousands) $ 15,428 $ 15,840 $ 60,454 $ 54,370
 

(1) Total cash cost per ounce of silver represents non-U.S. Generally Accepted Accounting Principles (GAAP) measurement. A reconciliation of total cash costs to cost of sales and other direct production costs and depreciation, depletion and amortization (GAAP) can be found in the cash costs per ounce reconciliation section of this news release. Gold, lead and zinc produced have been treated as by-product credits in calculating silver costs per ounce.

 
HECLA MINING COMPANY

Reconciliation of Cash Costs per Ounce to Generally Accepted Accounting Principles (GAAP)(1)

(dollars and ounces in thousands, except per ounce - unaudited)

 
      Three Months Ended     Twelve Months Ended
December 31,     December 31,
        2011     2010     2011     2010
RECONCILIATION TO GAAP, ALL OPERATIONS                          
Total cash costs $ 5,677     $ (377 ) $ 10,934     $ (15,435 )
Divided by ounces produced   2,490     2,741     9,483     10,566  
Total cash cost per ounce produced $ 2.28   $ (0.14 ) $ 1.15   $ (1.46 )
Reconciliation to GAAP:
Total cash costs $ 5,677 $ (377 ) $ 10,934 $ (15,435 )
Depreciation, depletion and amortization 12,501 13,956 47,066 60,011
Treatment costs (22,758 ) (23,733 ) (99,019 ) (92,144 )
By-product credits 53,530 67,375 254,372 267,272
Change in product inventory 836 2,303 (4,805 ) 3,660
Suspension-related costs (2) 2,495 4,135
Reclamation and other costs   760     243     (44 )   630  
Cost of sales and other direct production costs and depreciation, depletion and amortization (GAAP) $ 53,041   $ 59,767     $ 212,639   $ 223,994  
                           
GREENS CREEK UNIT                          
Total cash costs $ 829 $ (3,705 ) $ (8,387 ) $ (28,073 )
Divided by ounces produced   1,990     1,922     6,498     7,207  
Total cash cost per ounce produced $ 0.42   $ (1.93 ) $ (1.29 ) $ (3.90 )
Reconciliation to GAAP:
Total cash costs $ 829 $ (3,705 ) $ (8,387 ) $ (28,073 )
Depreciation, depletion and amortization 11,032 11,531 41,013 51,671
Treatment costs (19,612 ) (18,773 ) (79,134 ) (73,817 )
By-product credits 46,375 52,914 205,961 214,462
Change in product inventory 720 2,248 (4,966 ) 3,685
Reclamation and other costs   745     218     (81 )   567  
Cost of sales and other direct production costs and depreciation, depletion and amortization (GAAP) $ 40,089   $ 44,433   $ 154,406   $ 168,495  
                           
LUCKY FRIDAY UNIT        
Total cash costs $ 4,848 $ 3,328 $ 19,321 $ 12,638
Divided by silver ounces produced   500     819     2,985     3,359  
Total cash cost per ounce produced $ 9.68   $ 4.06   $ 6.47   $ 3.76  
Reconciliation to GAAP:
Total cash costs $ 4,848 $ 3,328 $ 19,321 $ 12,638
Depreciation, depletion and amortization 1,469 2,426 6,053 8,340
Treatment costs (3,146 ) (4,960 ) $ (19,885 ) (18,327 )
By-product credits 7,155 14,461 48,411 52,810
Change in product inventory 116 54 $ 161 (25 )
Suspension-related costs (2) 2,495 4,135
Reclamation and other costs   15     25     37     63  
Cost of sales and other direct production costs and depreciation, depletion and amortization (GAAP) $ 12,952   $ 15,334   $ 58,233   $ 55,499  
 

(1) Cash costs per ounce of silver represent non-U.S. Generally Accepted Accounting Principles (GAAP) measurements that the Company believes provide management and investors an indication of net cash flow. Management also uses this measurement for the comparative monitoring of performance of mining operations period-to-period from a cash flow perspective. "Total cash cost per ounce" is a measure developed by gold companies in an effort to provide a comparable standard; however, there can be no assurance that our reporting of this non-GAAP measure is similar to that reported by other mining companies. Cost of sales and other direct production costs and depreciation, depletion and amortization, was the most comparable financial measures calculated in accordance with GAAP to total cash costs.

 

(2) Various accidents and other events resulted in temporary suspensions of production at the Lucky Friday unit during 2011. See the Lucky Friday Segment section for more discussion of these events. Care-and-maintenance, mine rehabilitation, investigation, and other costs incurred during the suspension periods not related to production have been excluded from total cash costs and the calculation of total cash cost per ounce produced.

 
HECLA MINING COMPANY

Reconciliation of Net Income Applicable to Common Shareholders (GAAP) to Earnings After Adjustments(1)

(dollars and ounces in thousands, except per share amounts - unaudited)

 
      Three Months Ended     Twelve Months Ended
December 31,     December 31,
2011     2010     2011     2010
Net income applicable to common shareholders (GAAP) $ 18,431     $ (13,144 ) $ 150,612     $ 35,350
Adjusting items:
(Gains)/losses on derivatives contracts 919 9,562 (37,988 )

20,758

Environmental accruals 336 193,183 4,990 195,558
Provisional price (gains)/losses (728 ) (9,804 ) 2,611 (11,817 )
Income tax effect of above adjustments   (184 )   (67,529 )   10,635     (71,575 )
Earnings after adjustments applicable to common shareholders $ 18,774   $ 112,268   $ 130,860   $ 168,274  
 
Weighted average shares - basic 280,819 257,403 280,956 251,146
 
Weighted average shares - diluted 294,133 276,136 297,033 269,601
 
Basic earnings after adjustments per common share $ 0.07 $ 0.44 $ 0.47 $ 0.67
 
Diluted earnings after adjustments per common share $ 0.06 $ 0.41 $ 0.44 $ 0.62
 

(1) Earnings After Adjustments and Earnings After Adjustments per share are non-GAAP measures which are indicators of our performance. They exclude certain impacts which are of a nature which we believe are not reflective of our underlying performance. Management believes that earnings after adjustments per common share provides investors with the ability to better evaluate our underlying operating performance.





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