Hecla: Sales increased 27 percent in third quarter
COEUR d'ALENE - Hecla Mining Co. announced this week that its third-quarter net income was $3.5 million, or 1 cent per share.
That compares with a net loss of $8.6 million in the year-earlier quarter for the Coeur d'Alene-based company. The company had a net loss of $14.5 million in the second quarter of this year.
Sales during the quarter of $135.5 million marked a 27 percent increase compared with the year-earlier quarter.
"All three of our mines performed strongly in the third quarter, leading to higher production over the entire suite of metals we produce," said Phillips S. Baker Jr., Hecla's president and CEO. "Our significant lead and zinc production is a competitive advantage, as the diversification helps cushion revenues against weaker gold and silver prices."
Revenue increased by 27 percent due to improved production at the Casa Berardi gold mine in Quebec, which was acquired in June 2013, as well as greater production at Lucky Friday silver mine near Mullan.
The company's operating cash flow was $1.7 million, which included cash payments of $55.4 million to satisfy the remaining obligation for the Coeur d'Alene River Basin litigation settlement.
"Excluding the impact of the settlement payment, we had operating cash flow of $114 million in the first nine months of 2014, up from $5.1 million in the prior-year period," Baker said. "Over the first nine months of 2014 we increased our cash balances by $10 million, and expect to end the year with about $200 million in cash available."
The company recorded a net loss of $400,000 in the third quarter because metals prices rose above locked-in base metals contracts. That compares with a net loss of $4.6 million in the year-earlier quarter.
The company locks in the price on a portion of its base metals, lead and zinc, before they are produced. Hecla doesn't lock in prices on silver and gold.
Finally in the quarter, Hecla reported a $7.3 million foreign exchange gain because of its ownership of Casa Berardi. That compares with a $5.4 million foreign exchange loss in the second quarter of the year.