HL stock is dropping today despite Hecla Mining (NYSE:HL) reporting its strongest-ever quarter in terms of gold production, and the return of Lucky Friday Union members to work after reversing a vote for strike action held in December.
Record Gold Production
In a statement posted to the company’s website yesterday, Hecla reported gold production of 272,873 ounces, an increase of 4%, and the highest figure ever recorded in the company’s history. Silver production came in at 12.6 million ounces, a 22% increase from the previous year. Despite the strong production returns, HL stock is currently down about 3% on the news.
“2019 marked a year of higher metal production and in the second half of the year, strong cash flow generation and an improved balance sheet,” said Phillips S. Baker, Jr., Hecla Mining’s President and CEO. “While gold & silver prices have increased, Greens Creek’s record silver production combined with the most gold production in Hecla’s history were the primary reasons for the cash flow strength.” HL stock is currently trading for $3.31.
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HL Stock Surges in Latter Half of 2019
Despite the declining share value today, 2019 was a fantastic year for Hecla and its investors as evidenced by the record-breaking gold returns. On top of that, the Idaho-based miner managed to reduce its net debt by 23% to $136 million USD in the latter half of the year, while also generating sufficient cash flow to repay $50 million USD drawn from a revolving line of credit in Q3 and exchanging $31 million USD of debt owed to Ressources Québec for 10.7 million shares of common stock. This excellent debt management drove gains of over 160% in HL stock since May.
The strong performance last year follows on from a difficult few months in 2018, which saw HL stock tank over 40% as escalating debt threatened the firm amid labor unrest.
One sticking point for the company was its ongoing strike with United Steelworkers Union members employed at its Lucky Friday mine in Idaho, which had been dragging on for over two years after 200 workers first voted to strike in March 2017. A previous proposal to resolve the strike had failed by just nine votes before a December resolution was approved by a vote of 86 to 78. Hecla Mining says it expects the restaffing of the mine to take place in stages and will be completed by the end of 2020, potentially boosting the chance of an even better year for HL stock.
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