Hecla Mining announces dividend and share repurchase program on top of dismal Q1 results
Hecla's Q1 net income was off 71% to $12.4 million due to a production suspension at Lucky Friday Mine, increased exploration expenses and other one-time charges.
Hecla's stock (NYSE:HL) was largely unchanged in a down day in the markets, off 0.77% to $3.85.
On the same day as announcing its Q1, the company announced a quarterly dividend of $0.0225 per share of common stock. It is also undertaking a share repurchase program.
As of March 31 this year, the company has cash and cash equivalents of $279 million.
The company estimated that care and maintenance costs incurred at the Lucky Friday totaled $6.2 million for the first quarter of 2012. After two fatalities at the mine in 2011, the company undertook 1,500 feet of rehabilitation work on one of the mine's shafts. The silver-lead-zinc mine in northern Idaho is one of the deepest underground mines in the US.
Looking forward, the company sees increased production for the rest of the year, with silver output growing by 50%.
"While our first quarter silver production at Greens Creek was impacted by ground support work that diverted equipment and personnel, we expect production to increase for the rest of the year," said Hecla's President and Chief Executive Officer Phillips S. Baker, Jr.
"The combination of Hecla's strong balance sheet, including a cash balance of $279 million and substantially no debt, and its long-lived, low cost mines which provide strong cash flow will allow us to deliver an expected 50% growth in silver production while also allowing the company to deliver value to shareholders through the Company's dividend and share repurchase programs."
Hecla Mining produces silver, gold, lead and zinc through its Greens Creek Mine and Lucky Friday Mine.
Image of headframe from Lucky Friday Mine by Plazak