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Section 1: 8-K (FORM 8-K)

hl20180711_8k.htm

 

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): July 12, 2018

 

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)

N/A
(Former name or Former Address, if changed Since Last Report)

 

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(b))
     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))

 

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 2.02  Results of Operations and Financial Condition.

 

On July 12, 2018, Hecla Mining Company (the “Company”) issued a news release (“Release”) announcing preliminary production and financial results for the first quarter ended June 30, 2018.  All measures of the Company's second quarter 2018 operating and financial results and conditions contained in the Release are preliminary and reflect the Company’s expected results as of the date of the Release. Actual reported second quarter 2018 results are subject to management's final review as well as review by the Company's independent registered accounting firm and may vary significantly from current expectations because of a number of factors, including, without limitation, additional or revised information and changes in accounting standards or policies or in how those standards are applied. A copy of the Release is attached as Exhibit 99.1 to this Current Report and is incorporated herein by reference.  

 

Item 7.01  Regulation FD Disclosure

 

The Release described above also discusses the Company’s pending acquisition of Klondex Mines Ltd. (“Klondex”).

 

In accordance with General Instruction B.2 of Form 8-K, the information in Items 2.02 and 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 8.01  Other Events

 

On July 12, 2018, Klondex announced that its shareholders and other security holders had approved the previously announced plan of arrangement between the Company and Klondex at a special meeting of Klondex’s shareholders and option holders held on July 12, 2018.

 

Completion of the arrangement is subject to various conditions, including final court approval, and is expected to occur on July 20, 2018.

 

Item 9.01  Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit

Number

 

Description

     

99.1

 

News Release, dated July 12, 2018.*

     
   

* Furnished herewith

 

 

 

 

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.

 

Dated:     July 12, 2018

 

Hecla Mining Company


By:/s/ David C. Sienko                                                 

      David C. Sienko

      Vice President & General Counsel

 

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Section 2: EX-99.1 (EXHIBIT 99.1)

ex_117742.htm

 

Exhibit 99.1

NEWS RELEASE

 

 

 

HECLA REPORTS 2.6 MILLION OUNCES OF SILVER AND

60,313 OUNCES OF GOLD PRODUCTION IN SECOND QUARTER 2018

 

 

 

FOR IMMEDIATE RELEASE

July 12, 2018

 

COEUR D'ALENE, IDAHO -- Hecla Mining Company (NYSE:HL) today announced certain preliminary results¹ for the second quarter of 2018.

 

HIGHLIGHTS 

 

 

Silver production of 2.6 million ounces, and gold production of 60,313 ounces.

 

 

Silver equivalent production of 10.5 million ounces or gold equivalent production of 133,158 ounces.2

 

 

Lead production of 5,522 tons; zinc production of 14,299 tons.

 

 

Cash, cash equivalents and short-term investments of approximately $245 million at June 30, 2018, an increase of about $43 million over June 30, 2017.

 

“Hecla’s second quarter mine production exceeded expectations due to continued improvements in the mines,” said Phillips S. Baker, Jr., Hecla’s President and CEO. “Greens Creek had higher than expected grades and had about 5% of the tons coming from automated headings. Casa Berardi exceeded expectations due to higher grades and the flexibility of having sources of ore from the underground and the surface. San Sebastian production, while lower than last year, was higher than we expected due to higher grades. This outperformance put the cash position at the second highest in the past six years, which we expect to deploy to acquire Klondex early in the third quarter.”

 

(1)

See cautionary statement regarding preliminary statements at the end of this release.

(2)

Silver and gold equivalent calculation based on average actual prices for each metal in the second quarter as follows: $16.53 for Ag, $1,306 for Au, $1.08 for Pb, and $1.41 for Zn.

 

 

 

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

                                                            

 

 

 

Greens Creek

 

At the Greens Creek mine, 2.0 million ounces of silver and 13,720 ounces of gold were produced in the quarter. The higher silver and gold production, when compared to the second quarter of 2017, was due to higher ore grades as a result of mine sequencing. The mill operated at an average of 2,290 tons per day (tpd).

 

Lucky Friday

 

At the Lucky Friday mine, 24,686 ounces of silver were produced in the quarter. There was no production in the second quarter of 2017, as limited production performed by salaried staff during the ongoing strike commenced in July 2017.

 

Casa Berardi

 

At the Casa Berardi mine, 42,721 ounces of gold were produced in the quarter, including 8,979 ounces from the East Mine Crown Pillar pit. The mine produced as expected, with an increase of 9,460 gold ounces compared to the second quarter of 2017. The mill operated at an average of 3,845 tpd.

 

San Sebastian

 

At the San Sebastian mine, 0.6 million ounces of silver and 3,872 ounces of gold were produced in the second quarter. Although silver and gold production compared to the second quarter of 2017 were lower, both still exceeded our estimates for the quarter due to the amount of higher-grade stockpile material processed. The mill operated at an average of 415 tpd.


PRODUCTION SUMMARY

 

 

Second Quarter Ended

 

Six Months Ended

 
 

June 30, 2018

June 30, 2017

 

June 30, 2018

June 30, 2017

 

PRODUCTION

   

Increase/

(Decrease)

   

Increase/

(Decrease)

Silver

2,596,424

2,807,474

(211,050)

5,130,518

6,176,901

(1,046,383)

Gold

60,313

52,561

7,752

118,120

108,674

9,446

Lead1

5,522

4,420

1,102

11,149

13,056

(1,907)

Zinc

14,299

12,966

1,333

29,510

28,503

1,007

Greens Creek  Silver

1,999,792

1,932,047

67,745

3,913,023

3,861,344

51,679

Greens Creek - Gold

13,720

12,704

1,016

26,837

26,726

111

Lucky Friday - Silver1

24,686

--

24,686

124,466

680,782

(556,316)

Casa Berardi - Gold2

42,721

33,261

9,460

82,898

69,068

13,830

San Sebastian - Silver

559,647

866,950

(307,303)

1,071,839

1,617,753

(545,914)

San Sebastian - Gold

3,872

6,596

(2,724)

8,385

12,880

(4,495)

 

(1)

Union workers at Lucky Friday have been on strike since March 13, 2017. Limited production being carried out by salaried staff.

(2)

Casa Berardi also produced 12,299 ounces of silver in the second quarter 2018 compared to 8,477 ounces of silver for second quarter 2017.

 

 

 

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

 

 

 

 

UPDATE ON ACQUISITION OF KLONDEX MINES LTD.

 

Today, after the Klondex Mines Ltd. (“Klondex”) annual and special meeting of securityholders, Klondex announced that its shareholders and securityholders approved the previously announced proposed statutory Plan of Arrangement between Hecla and Klondex. 

 

Subject to customary closing conditions in accordance with the Plan of Arrangement, the transaction is expected to close on or about July 20, 2018.

 

 

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 an operating mine in Quebec, Canada. The Company also has exploration and pre-development properties in seven 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.

 

Cautionary Statements Regarding Preliminary Results

All measures of the Company's second quarter 2018 operating and financial results contained in this news release, including cash, cash equivalents and short-term investments, are preliminary and reflect the Company’s expected results as of the date of this news release. Actual reported second quarter 2018 results are subject to management's final review as well as review by the Company's independent registered public accounting firm and may vary significantly from those expectations because of a number of factors, including, without limitation, additional or revised information and changes in accounting standards or policies or in how those standards are applied.

 

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. Such forward-looking statements or forward-looking information include statements or information regarding estimates of silver production for the second quarter of 2018 on a consolidated basis and at each of the Greens Creek, Lucky Friday and San Sebastian mines, and second quarter 2018 gold production at Casa Berardi, quarter-end cash position and the expected closing of the Klondex acquisition. 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.

 

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 10K 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:

 

Mike Westerlund

Vice President – Investor Relations

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
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