Bull Of The Day: Hecla Mining

Just last week, when asked, Federal Reserve Chair Janet Yellen said that she “would not completely rule out the use of negative interest rates in some future very adverse scenario.”  The use of negative interest rates are already being utilized in Japan, and Central banks in Europe.  Currently Europe has a -0.4% interest rate, and Japan has a -0.1% interest rate.  Further, Bank of Japan Governor Haruhiko Kuroda stated that they could match the -0.4% interest rate in Europe if conditions become worse.  

Just imagine what people and Europe and Japan are facing; you have to pay to keep your money in the bank.  Because of this, many people in Japan and Europe are buying gold and silver instead of putting their money in a bank with negative interest rates.  This shift from putting money into the banks to buying precious metals has driven the demand for gold and silver, and that is why Hecla Mining (HL – Snapshot Report) is the Zacks Bull of the Day.

This Zacks Rank #1 (Strong Buy) is a leading low-cost U.S. silver producer with operating mines in Alaska and Idaho, and is a growing gold producer with an operating mine in Quebec, Canada. The Company also has exploration and pre-development properties in five world-class silver and gold mining districts in the U.S., Canada, and Mexico, and an exploration office and investments in early-stage silver exploration projects in Canada.

In the company’s most recent earnings report, they saw year over year gains in sales +10%, adjusted EBITDA +33% (highest level in three years), and record silver production of 4.6 million ounces.  Also, the company was able to decrease exploration and pre-development expenses by $1.7 million.  Further, due to the strong performance, the Board of Directors elected to declare a quarterly cash dividend of $0.0025 per common share.  

According to Phillips Baker Jr., President and CEO, “Consistent with our strategy to grow despite price weakness, the first quarter production was the highest in our 500 quarter history.  Our focus on high return growth like we have at San Sebastian gives Hecla leverage to increasing silver prices. And Casa Berardi’s growing production from the East Mine Crown Pillar pit should do the same for gold.”