Bill Herbert

Hecla Mining: Caught in a Bad Market

Jim, Ibejack, Marc -

Thanks for taking an interest and replying.

I am definitely interested in avoiding risk in this market, which is one of the cornerstones of the portfolio's strategy. It was unfortunate that HL management erred in handling their balance sheet - but that doesn't override the quality of the reserves or the very low share price. I am surprised that a savvy PE player didn't step in ahead of the bankers and make a nice deal for themselves, but that didn't happen, to Canaccord's benefit, I guess.

I would love to find a name that has great properties, under their control in mining-friendly areas of the USA, with experienced crews that as far as I know are dependable to deliver solid productivity in a rising price environment. You can find a number of companies that have lower labor costs, but do they have all the other attributes that HL has?

I would love to know of one - by all means share if you have come upon one. I'm taking the position that the extreme sell-off was part intense market panic and part fear of a bankruptcy if things turned really ugly. There have been many companies whose shares have been dumped viciously over the past six months - but as far as I can tell, HL should have good rebound potential. I liked the stock at $4, so even with the new configuration of the balance sheet, I can't resist it at $1.77!

Let's see how silver plays out, and how HL reacts to that, over the next few months.