Monday - B.Riley has increased the price target for Hecla Mining (NYSE: HL) shares to $7, up from the previous $6, while keeping a Buy rating on the stock. The firm's decision follows an assessment of Hecla's second-quarter performance and an updated price deck.
On Monday, Hecla Mining Company (NYSE:HL), known for its silver production, was recognized for achieving its second-highest quarterly output. In the second quarter of 2024, the company produced 4.46 million ounces of silver. Notable increases in silver production were seen at Keno Hill and Lucky Friday, with gains of 39% and 23% quarter over quarter, respectively.
The mining company has also been focused on reducing its debt, having paid down $25.1 million in the second quarter. This repayment effort decreased Hecla's net leverage ratio from 2.7 times to 2.3 times. The financial discipline demonstrated by Hecla Mining is expected to strengthen its financial position.
B.Riley's analysts predict a positive outlook for Hecla Mining, anticipating that the company could reach the upper range of its 2024 guidance due to higher production volumes from its Keno Hill and Casa Berardi operations.
Consequently, the firm has revised its projections for Hecla's third-quarter and full-year 2024 adjusted EBITDA, increasing estimates from $70.2 million to $96.4 million for the third quarter, and from $271.4 million to $359.6 million for the full year.
The revised stock price target and sustained Buy rating reflect confidence in Hecla Mining's operational performance and its strategic focus on deleveraging. The new target of $7 represents a positive adjustment from the previous target, indicating an optimistic view of the company's financial prospects.
In other recent news, Hecla Mining reported record revenues and high silver production, marking the second-highest in the company's history. These developments follow the company's strategic focus on generating free cash flow, investing in operations, and reducing debt. The company's key mining operations, including the Greens Creek and Lucky Friday mines, have shown strong performance, with the latter expected to produce 5 million ounces of silver annually.
The Casa Berardi mine has increased its production guidance, while the Keno Hill mine surpassed its full-year 2023 production in just the second quarter of 2024. Hecla Mining is also in the process of finding a new CEO, emphasizing the maximization of the value of North American assets.
The company anticipates cost improvements in the second half of the year, coinciding with the start of production at the Flame & Moth deposit. However, Hecla Mining acknowledged the need to maintain current levels of cost investment at Keno Hill to ensure long-term value, and suspension costs related to Nevada and Mexico will continue.
Despite these challenges, the company remains committed to safety, environmental stewardship, and strategic investments, setting a strong outlook for its mining operations.
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