Hecla Mining Company (HL) Trade Alert – HL Incurs Net Loss for Q3 2008 on Higher Cash Costs
Hecla Mining Company (HL) shares closed yesterday at $2.72, up 13.81% from the previous close of $2.39. Hecla Mining, a precious metals company, engages in the discovery, acquisition, development, production and marketing of silver, gold, lead and zinc.
The company recently reported a net loss of $3.8 million for the third quarter of 2008 compared to net income of $13 million for the same period of 2007. It also reported a loss applicable to common shareholders of $7.2 million, or 5 cents per share, for the third quarter of 2008, compared to income applicable to common shareholders of $12.3 million, or 10 cents per share, for the third quarter of 2007.
The losses for the third quarter of 2008 were primarily attributable to higher cash costs per ounce due to increased smelter costs and diesel fuel prices, provisional price adjustments due to decreased metals prices and increased interest expense resulting from the company's acquisition of the remaining 70.27% of the Greens Creek joint venture in Alaska.
According to Hecla Mining, it has $161 million in debt remaining after completing the $750 million purchase of Greens Creek. However, the company remains on track to meet the estimate of approximately 9 million ounces of silver production in 2008, at an average total cash cost in the range of $3.50 per ounce.
The company owns a 100% interest in the Lucky Friday unit located in northern Idaho; a 29.7% interest in the Greens Creek unit located on Admiralty Island, near Juneau, Alaska; and a 100% interest in the San Sebastian unit in the state of Durango, Mexico.
It produces and sells metal concentrates to custom smelters; and unrefined gold bullion bars directly to customers or further refines before sale to precious metals traders.
In today's daily chart, HL's MACD reflects a weak bullish signal, with the indicator trending above the 9-day moving average signal line but still below the 0 level, indicating bearish moving averages. Trading within its Bollinger Bands, the stock reflects neither an overbought nor oversold condition relative to its recent price trend. With share prices currently below the stock's 13-day moving average, the bearish signal is more pronounced with decreasing the moving averages.
