Despite low-cost status, Hecla Mining also must wait for gold price recovery


Gold and silver miners - even low-cost producers such as Hecla Mining (HL +1.4%) - have been cutting costs to improve profits and attract investors, but BB&T analysts think it may not matter - even to those low-cost producers - unless the price of gold starts rising again.

In initiating HL with a Neutral rating, BB&T believes investors will treat Hecla like the other miners: They'll want to see austerity and further spending cuts when it introduces 2014 guidance along with its Q4 earnings release.

Given HL’s earnings leverage to silver and gold prices, the firm doesn’t see HL generating meaningful free cash flow or the stock appreciating materially from current levels until precious metals prices rebound.

ETFs: GDX, GDXJ, NUGT, DUST, GLDX, GGGG, RING, PSAU, JNUG, JDST.

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Comments (3)
  • Agbug
    , contributor
    Comments (1197) | Send Message
     
    thank you, Mr. Obvious
    16 Dec 2013, 12:56 PM Reply Like
  • Investor Talkroom
    , contributor
    Comments (553) | Send Message
     
    HL was loosing money for the last two years. When silver was selling at $35 HL was barely breaking even.
    They are not a low cost PM producer. HL is a large by-product producer.
    HL mines a lot of zinc and lead - as base metal prices go - so goes HL share price.
    16 Dec 2013, 04:18 PM Reply Like
  • rcfoods@gmail.com
    , contributor
    Comments (9) | Send Message
     
    I am a long time investor of HL, short of the time this co.has been in business.
    Over the last 100 years it has produced plenty of profits for their investors and continues to strive.
    Read their presentations and you will understand better what they are all about before you comment again.
    17 Dec 2013, 02:18 AM Reply Like
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