They did a financing 6 bucks but by then the market had turned and credit dried up. You remember things did turn fast.
Claude likes FR and Fortuna I think. HL he either does not like or is ambivalent ask him.
If you want to learn more about it visit their web site and read other stuff:
The absolute cheapest way to buy silver, however, is to buy it while it is still in the ground. You can do that by purchasing shares in companies that mine silver. One of these is Hecla Mining (HL). Hecla will be particularly attractive to “value” investors. The share price is currently very depressed in comparison to the potential of the company. Long time investors have waited a very long time, and have had their hopes burned away, multiple times. Such investors are exhausted at the cusp of the stock rising, and now just want to be rid of their stock. That is a perfect time to buy a company with a bright future.
Hecla will finally start capitalizing on all its hefty investments. Hecla is a long term bet, but huge gains may be in store for patient stockholders. As a result of buying a large new mine in Alaska, the company increased silver production by 54%, and increased its reserves to 325 million ounces. Little known is the fact that the new mine is also VERY rich in gold. Hecla will mine between 55-60,000 troy ounces of gold, as well as up to 11 million ounces of silver this year. It will also produce tons and tons of lead and zinc, but prices for those metals are unlikely to rise until after the depression is over, which may be a long time from now. Accordingly, the value of its lead and zinc production is unlikely to add much to Hecla’s profits.
Unlike some other mining companies, Hecla’s mines are now located exclusively in North America and Mexico, rather than politically unstable countries like Venezuela. Large losses were incurred, as a result of the past closure of Hecla’s gold mining operations inside Hugo Chavez’s Venezuela, and that is part of why investors are exhausted. But, that is ancient history now. The company still has $30 million in cash, locked up in that country, however, waiting to be repatriated.
It bears mentioning that Bank of America’s analysts recently “downgraded” the company from neutral to “underperform”. Most analysts look backward, not forward, and lack of foresight is their primary failing. Big bank analysts also tend to be notoriously incompetent, so I pay little or no attention to them. They tend to downgrade after a company has already been doing poorly and after investors have already lost a lot of money. Conversely, they upgrade once the stock is at its peak, and investors are unlikely to earn much more by buying the stock. Bank of America’s opinion on Hecla Mining, is incorrect. For example, it is based upon a silver price of about $11 per ounce in 2009. Based upon the current backwardation in silver, the sale price is more likely to average closer to $20 per ounce, at least in the second half of this year.
Let’s do the numbers. First, we’ll need to make some reasonable assumptions. Let’s assume that silver rises back to $20 per ounce, and gold goes to $1,300 per ounce by the second half of 2009. Hecla will produce a minimum of 55,000 ounces of gold this year, and probably 60,000. Sale of this gold will substantially lower the cost of producing silver, which is its primary product. Hecla will produce about 11 million ounces of silver. 11,000,000 x $20 = $220 million. Diesel oil and virtually all other things needed for running a mine are much cheaper this year, as compared to last year. Accordingly, average production cost per ounce of silver will probably be less than $7.00, after the gold and the base metal byproducts are sold. That leaves $143 million per year in operating profit. There are 169 million shares outstanding. That means profits in the range of $0.84 per year. If Hecla sells at the same 23 to 1 forward P/E ratio as Silver Wheaton (SLW), it may sell at roughly $19+ per share by the end of 2009.
If you believe, as I do, that heavy inflation is coming soon, both the base and precious metals that Hecla produces will become substantially more valuable than even my estimates. In contrast, debt, which Hecla has plenty of, will be increasingly cheap, as the U.S. dollar devaluates. Hecla is the most leveraged against high inflation of all the primary silver miners. With high inflation, Hecla will outperform most other mining stocks, and certainly far outperform the market as a whole. Other, somewhat less speculative companies that would also allow you to gain exposure to the rising price of silver, include other primary silver miners, such as Pan American Silver (PAAS), and Silver Wheaton.
Disclosure: Long Hecla Mining (HL) and silver bullion.
seekingalpha.com
prices-about-to-soar?source=yahoo
Good slide show
media.corporate-ir.net
HL could be a 10-20 bagger IMO but then it could also be a 1/10 bagger.
There are several errors in that article. One, HL has land in Mexico a past producer but not now an active mine. Two, I am not sure any money is still tied up in Venze land. Three, they have about 205 mill shares and 260 Fully diluted. |
