To The Moon

U.S. stocks ended higher and the $NASDAQ(.IXIC)$ notched a record closing high for the second straight day on Friday as technology-related shares, including $Apple(AAPL)$ , gained and as investors were optimistic about potential interest rate cuts. The three major indexes also registered solid gains for the week.

The best-performing concepts is Silver. Considering the different perceptions of the stock, this time TigerPicks chose $Hecla Mining(HL)$ to have a fundamental highlight to help users understand it better.

$Hecla Mining(HL)$

$Hecla Mining(HL)$ is a silver producer in the United States and Canada. The Company discovers, acquires and develops mines and other mineral interests and produces and markets concentrates containing silver, gold, lead, zinc and copper; carbon material containing silver and gold, and unrefined dore containing silver and gold. The Company's segments include Greens Creek, Lucky Friday, Keno Hill and Casa Berardi.

Financial Results

Hecla Mining's trading to its highest since October after easily beating expectations for Q2 earnings and revenues while posting quarterly record free cash flow, driven by strong silver and gold production and standout performances at its Keno Hill and Lucky Friday mines.

Hecla said it generated record sales of $304M, record free cash flow of $103.8M, and record adjusted EBITDA of $132.5M, while improving net leverage to 0.7x, slashed from 1.5x in Q1 due in part to the partial redemption of $212M in 7.25% senior notes and full repayment of C$50M IQ notes.

The move will free up $17.8M/year in interest expense, "allowing us to refocus those funds towards strengthening our balance sheet while enabling strategic reinvestment into the highest return opportunities," Hecla President and CEO Rob Krcmarov said.

Q2 silver production surged 10% Y/Y to 4.52M oz while gold output jumped 34% to 45.9K oz; Q2 silver sales were flat Q/Q due mostly to concentrate inventory build at Greens Creek, while gold sales rose primarily due to a strong operational quarter at Casa Berardi.

Hecla (HL) said the Lucky Friday mine set a new quarterly milling record with nearly 114.5K processed, exceeding the previous record by 5%, and Keno Hill marked a milestone by achieving its first quarter of positive free cash flow.

Q2 silver all-in sustained cost fell to $5.19/oz of silver, primarily due to higher silver production, lower treatment charges, and higher by-product credits from higher gold production and realized gold prices.

Sentiment Analysis

• Analysts’ tone was largely positive, offering congratulations and focusing on operational execution, but also sought clarification on strategic shifts and debt reduction rationale.

• Management maintained a confident and constructive tone, frequently referencing optimization, value creation, and disciplined capital allocation, with Krcmarov repeatedly expressing "high confidence" in project delivery.

• Compared to last quarter, the tone from both analysts and management was more optimistic, with more questions on growth and expansion rather than operational uncertainties.

Quarter-over-Quarter Comparison

• Guidance language has shifted from cautious on Keno Hill’s targets to a more confident, quantified ramp-up plan.

• Q2 featured stronger financial performance, record cash flow, and expanded deleveraging actions, compared to Q1’s focus on cost pressures and cautious growth at Keno Hill.

• Analysts in Q2 emphasized project execution timelines and capital allocation, while Q1 included more questions on operational bottlenecks and cost inflation.

• Management expressed greater confidence and provided more definitive timelines for key projects than in the previous quarter.

Risks and Concerns

• Management identified mining capacity as a near-term constraint at Keno Hill, mitigated by systematic capital deployment in infrastructure and mine development.

• Permitting remains a risk for tailings and waste storage capacity, with Allen explaining, "In the end of 2028, we start to run into a capacity requirement. We need additional capacity for tailings... we're already chasing that."

• Casa Berardi’s future is contingent on the ongoing strategic review and the outcome of permit processes, with management noting the timeline and cost uncertainties.

Final Takeaway

Hecla Mining’s second quarter showcased record financial and operational outcomes, with management underscoring a disciplined approach to growth and capital allocation. The company’s strategic focus is on optimizing core assets, particularly Keno Hill, where a ramp-up to 440 tpd is targeted by 2028, supported by infrastructure investment and systematic risk mitigation.

Continued deleveraging, operational excellence at flagship mines, and a strong balance sheet underpin the company’s outlook, with further clarity on Casa Berardi’s future and ongoing portfolio reviews expected to drive shareholder value in upcoming quarters.

Stock Price Forecast:

Here are the target price forecasts for the next 12 months from analysts.

Based on 7 Wall Street analysts offering 12 month price targets for Hecla Mining Company in the last 3 months. The average price target is $8.04 with a high forecast of $12.50 and a low forecast of $6.50. The average price target represents a 5.79% change from the last price of $7.60.

Resource:

https://seekingalpha.com/news/4481971-hecla-targets-440-tpd-at-keno-hill-by-2028-amid-record-q2-free-cash-flow-and-debt-reduction

https://seekingalpha.com/news/4481489-hecla-mining-jumps-to-ytd-high-after-easy-earnings-beat-quarterly-record-free-cash-flow

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