On August 6, 2024, Hecla Mining Co (HL, Financial) released its 8-K filing for the second quarter of 2024, showcasing a robust financial performance driven by significant silver production. Hecla Mining Co produces and explores silver, gold, zinc, and other metals, with operations in the United States, Canada, and Mexico. The company’s primary revenue comes from its Greens Creek segment.
Performance and Challenges
Hecla Mining Co reported a 30% increase in sales from the previous quarter, reaching $245.7 million. This surge was attributed to higher quantities sold of all metals except zinc, and higher realized prices for all metals. The company’s gross profit saw a remarkable 168% increase to $51.4 million, driven by higher sales volumes and prices at Lucky Friday and Casa Berardi.
Despite these achievements, Hecla faced challenges such as increased production costs and the need for continued investment in operations and exploration programs. The company’s net income applicable to common stockholders was $27.7 million, a significant improvement from the previous quarter's loss of $5.9 million.
Financial Achievements
Hecla Mining Co’s financial performance highlights the importance of strong operational results and favorable market conditions in the metals and mining industry. The company generated $28.3 million in free cash flow, allowing it to reduce net debt by $25.1 million. Adjusted EBITDA reached a record $90.9 million, reflecting the company’s ability to leverage higher gross profits.
Income Statement and Key Metrics
Key details from Hecla’s financial statements include:
| Metric | 2Q-2024 | 1Q-2024 |
|---|---|---|
| Sales | $245.7 million | $189.5 million |
| Gross Profit | $51.4 million | $19.2 million |
| Net Income (Loss) | $27.7 million | $(5.9) million |
| Adjusted EBITDA | $90.9 million | $72.7 million |
| Free Cash Flow | $28.3 million | $(30.5) million |
These metrics are crucial for evaluating Hecla’s operational efficiency and financial health. The company’s ability to generate positive free cash flow and reduce debt underscores its strong financial management.
Operational Highlights
Hecla’s operational segments performed as follows:
- Greens Creek: Produced 2.2 million ounces of silver, with sales of $95.7 million and a gross profit of $38.9 million.
- Lucky Friday: Achieved its highest quarterly silver production since 2000, with 1.3 million ounces produced and sales of $59.1 million.
- Keno Hill: Continued ramp-up with 900,440 ounces of silver produced, resulting in sales of $29.0 million.
- Casa Berardi: Produced 23,187 ounces of gold, with sales of $58.6 million.
Commentary
"Hecla saw significant improvement in gross profit and free cash flow during the quarter - with our gross profit increasing more than 1.5 times over the prior quarter, and free cash flow generation of $28.3 million, which allowed us to reduce our net debt by $25.1 million," said Cassie Boggs, interim President and CEO.
Analysis
Hecla Mining Co’s strong performance in Q2 2024 highlights its resilience and operational efficiency in the face of market challenges. The company’s ability to increase production, manage costs, and leverage favorable market conditions has positioned it well for future growth. However, ongoing investment in operations and exploration will be crucial to sustaining this momentum.
For more detailed insights and to access the full earnings report, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from Hecla Mining Co for further details.
