hl20200918_8k.htm
false 0000719413 0000719413 2020-09-20 2020-09-20 0000719413 hl:CommonStockCustomMember 2020-09-20 2020-09-20 0000719413 hl:SeriesBCumulativeConvertiblePreferredStockCustomMember 2020-09-20 2020-09-20
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
____________________
 
FORM 8-K
 
Current Report
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
 
Date of Report (Date of earliest event reported): September 20, 2020
 
HECLA MINING COMPANY
(Exact name of registrant as specified in its charter)
 
Delaware
1-8491
77-0664171
(State or other jurisdiction
(Commission File Number)
(IRS Employer Identification No.)
of incorporation)
 
 
6500 North Mineral Drive, Suite 200
Coeur d'Alene, Idaho 83815-9408
(Address of principal executive offices) (Zip Code)
 
(208) 769-4100
Registrant's telephone number, including area code

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
Trading
Symbol(s)
Name of each exchange on
which registered
Common Stock, par value $0.25 per share
HL
New York Stock Exchange
Series B Cumulative Convertible Preferred Stock, par value $0.25 per share
HL-PB
New York Stock Exchange
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 
 

 
Item 7.01 Regulation FD Disclosure
 
On September 20, 2020, Hecla Mining Company (the “Company”) issued a news release announcing certain estimated preliminary production and financial results for the third quarter ending September 30, 2020. All measures of the Company’s third quarter 2020 operating and financial results and conditions contained in the news release are preliminary and reflect only the Company’s estimated third quarter 2020 results as of the date of the news release and should not be regarded as a representation by the Company as to its actual results for such quarter. Actual reported third party 2020 results are subject to the Company’s financial closing procedures, completion of the financial statements, and management’s final review as well as review by the Company’s independent registered public accounting firm and may vary significantly from the preliminary estimates included in the news release. A copy of the news release is attached as Exhibit 99.1 to this Current Report.
 
Management of the Company is planning on discussing the information set forth in the news release at the Denver Gold Forum on September 20-23, 2020.
 
In accordance with General Instruction B.2 of Form 8-K, the information in this Item 7.01, including Exhibit 99.1, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any of the Company’s filings or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
 
Item 9.01 Financial Statements and Exhibits.
 
(d) Exhibits
 
Exhibit
Number
 
Description
     
99.1
 
104
 
 
 
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
 
* Furnished herewith
 
2

 
SIGNATURE
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
HECLA MINING COMPANY
By:
/s/ David C. Sienko
David C. Sienko
Vice President and General Counsel
 
 
Dated: September 21, 2020
3
 
ex_204440.htm
NEWS RELEASE Exhibit 99.1

 

 

HECLA REPORTS STRONG PRODUCTION AND CASH GENERATION

Increases 2020 Production Estimates, Repays Revolving Credit Facility

 

FOR IMMEDIATE RELEASE

September 20, 2020

 

COEUR D'ALENE, IDAHO -- Hecla Mining Company (NYSE:HL) today announced preliminary production results, anticipated cash position at the end of the third quarter, repayment of the revolving credit facility and increased production estimates for the year.¹

 

HIGHLIGHTS

 

 

Estimated silver production between 3.2 million and 3.4 million ounces

 

Estimated gold production between 41,000 and 43,000 ounces.

 

Revolving credit facility repaid in full during the quarter.

 

Cash and Cash Equivalent position anticipated to exceed $90 million.

 

“We are very pleased with third quarter operational performance particularly as the mines continue safe practices to manage COVID-19,” said Phillips S. Baker, Jr., President and CEO. “Lucky Friday’s ramp up is as planned so this year’s production should double last year and is set up to potentially double again next year. The higher-than-expected silver grades at Greens Creek have driven silver production higher for the quarter and the annual estimate. Gold production was lower at Casa during the quarter where continued major planned maintenance activities in the mill reduced the processing days.”

 

Baker continued, “Our strong production for the quarter is expected to translate into robust cash flows in excess of $20 million even after repaying our revolver in full and the interest payments on the bonds. We are close to realizing our financial goal of having in excess of $100 million of cash and cash equivalents on the balance sheet. Finally, if our realized silver price is above $25 for September, we expect the silver-linked dividend to be paid pursuant to our enhanced dividend policy.”

 

Performance Comparison and Updated Outlook

 

Silver (Moz)

 

Gold (Koz)

 

Greens
Creek

Lucky
Friday

San
Sebastian

Total

 

Greens
Creek

Casa
Berardi

Nevada

San
Sebastian

Total

Estimated First 9
months 2020

8.0

1.1

0.8

9.9

 

37

86

32

6

161

                     

2020 Outlook

8.9-9.3

1.4-1.8

0.6-0.8

10.9-1198

 

46-48

119-124

24-29

6-7

195-208

                     

2020 Updated Outlook

10-10.3

1.6-1.8

0.8-0.9

12.4-13.0

 

47-48

114-124

32

6

199-210

 

(1)

See cautionary statement regarding estimated results and forward-looking statements at the end of this release.

 

Hecla Mining Company ● 1-800-432-5291 ● hmc-info@hecla-mining.com 1

 

Greens Creek’s estimated nine months production has increased due to higher silver grades. The fourth quarter assumes planned grades. Lucky Friday is ramping up as expected so the lower end of the production range has been raised. San Sebastian mining is expected to be completed in the third quarter with processing concluding in the fourth quarter. Casa Berardi’s nine-month estimated production is low because of major planned mill maintenance activities but production in the fourth quarter should increase due to expected high-grade underground production from the East Mine. Nevada exceeded expectations as the developed stopes were mined out. For the remainder of the year, ore is being stockpiled for third-party processing expected in the fourth quarter. Gold production might not be realized until first quarter of 2021. Hecla’s per ounce cost estimates are unchanged at this time.

 

In September, the Company repaid $50 million on its revolving credit facility and has no remaining balance outstanding. During the third quarter, the Company received three of the four installments of C$12.5 million (US$9.2 million) each of Investissement Quebec’s C$50 million (US$36.8 million) senior secured note proceeds. The fourth installment is expected to be received in the fourth quarter. The Company’s cash and cash equivalents as of September 30, 2020, are estimated to exceed $90 million with the increase in cash for the third quarter expected to exceed $60 million.

 

ABOUT HECLA

 

Founded in 1891, Hecla Mining Company (NYSE:HL) is a leading low-cost U.S. silver producer with operating mines in Alaska, Idaho and Mexico, and is a growing gold producer with operating mines in Quebec and Nevada. The Company also has exploration and pre-development properties in eight world-class silver and gold mining districts in the U.S., Canada, and Mexico.

 

Cautionary Statements Regarding Estimated Results

 

In this news release we include certain estimated preliminary third quarter 2020 operating and financial results, including metals production and cash position. Each of these amounts is preliminary and reflects only the Company’s estimated third quarter 2020 results as of the date of this news release, based on information available as of September 20, 2020, and should not be regarded as a representation by the Company as to its actual results for such quarter. Actual reported third quarter 2020 results are subject to the Company’s financial closing procedures, completion of the financial statements, and management’s final review as well as review by the Company’s independent registered public accounting firm and may vary significantly from the preliminary estimates due to a number of factors, including, without limitation, additional or revised information, changes in accounting standards or policies or in how those standards are applied, and certain risks the Company faces, including, but not limited to those described under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 and in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020. You are cautioned not to place undue reliance on these preliminary estimates of our third quarter 2020 operating and financial results.

 

Cautionary Statements Regarding Forward Looking Statements

 

Statements made or information provided in this news release that are not historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of Canadian securities laws. Words such as “may”, “will”, “should”, “expects”, “intends”, “projects”, “believes”, “estimates”, “targets”, “anticipates” and similar expressions are used to identify these forward-looking statements. Forward-looking statements in this news release may include, without limitations, (i) estimates of silver production for the third quarter of 2020 on a consolidated basis and at each of the Greens Creek, Lucky Friday, San Sebastian, and Nevada Operations mines; (ii) estimates of gold production for the third quarter of 2020 on a consolidated basis and at each of Casa Berardi, Greens Creek and Nevada operations; (iii) estimates of lead and zinc production for the third quarter of 2020; (iv) quarter-end cash and cash-equivalent position which is dependent on the Company receiving cash receipts from sales of metals at its operations prior to September 30, which is expected, and zero balance on the revolving credit facility; (v) Lucky Friday expected to increase production and 2020’s total production expected to be twice that of 2019, and 2020 could also significantly increase; (vi) production from bulk sample in Nevada expected in fourth quarter; (vii) expected increased production at Casa Berardi due to expected high-grade production; (viii) cash flow generation for the quarter is expected to be in excess of $30 million which is dependent on the Company receiving cash receipts from sales of metals at its operations prior to September 30, which is expected; and (ix) expected payment of the silver-linked dividend in the event the Company’s realized silver price per ounce for the third quarter is above $25. The material factors or assumptions used to develop such forward-looking statements or forward-looking information include that the Company’s plans for development and production will proceed as expected and will not require revision as a result of risks or uncertainties, whether known, unknown or unanticipated, to which the Company’s operations are subject.

 

Hecla Mining Company ● 1-800-432-5291 ● hmc-info@hecla-mining.com 2

 

Forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from those projected, anticipated, expected, or implied. These risks and uncertainties include, but are not limited to, metals price volatility, volatility of metals production and costs, litigation, regulatory and environmental risks, operating risks, project development risks, political risks, labor issues, ability to raise financing and exploration risks and results. Refer to the Company's Form 10-K and 10-Q reports for a more detailed discussion of factors that may impact expected future results. The Company undertakes no obligation and has no intention of updating forward-looking statements other than as may be required by law.

 

For further information, please contact:

 

Russell Lawlar

Treasurer

 

Jeanne DuPont

Corporate Communications Coordinator

 

800-HECLA91 (800-432-5291)

Investor Relations

Email: hmc-info@hecla-mining.com

Website: www.hecla-mining.com

 

 

Hecla Mining Company ● 1-800-432-5291 ● hmc-info@hecla-mining.com 3