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Hecla CEO Baker forecasts further metals prices decline
As Hecla’s average silver prices fell 21% in the first quarter, Hecla CEO Phillips Baker forecast second-quarter realized prices will decline even more.
Author: Garima Goel
Posted: Monday , 13 May 2013
(REUTERS) -Hecla Mining Co, the No. 2 U.S. silver miner by output, cut its capital spending plan for the year by 5 percent and said it expects metal prices to extend their decline in the second quarter.
The company said first-quarter sales fell 16 percent to $76.5 million, well below analysts’ average estimate of $94.78 million, due mainly to lower silver prices and higher costs.
Hecla said its average realized silver prices fell 21 percent to $28.86 per ounce in the quarter.
“Our realized price will largely track the current spot price of the metal,” Chief Executive Phillips Baker told Reuters in a telephone interview.
“If you look at what has happened to the prices since the end of the first quarter, (they have) declined. So presumably our realized price will decline.”
Spot silver prices have fallen about 16 percent to $23.65 since March 28.
Miners around the world are under intense pressure to cut costs as they contend with volatile commodity prices, rising wages, labor unrest and lower-grade ores.
Like many other precious metals miners, Hecla is cutting capital spending as prices fall. The company lowered its planned capital spending for 2013 to $145 million from the $152 million it had forecast in February.
Cash costs for the company almost tripled to $7.02 per ounce in the first quarter, partly due to the start-up of production at its Lucky Friday mine in Idaho, which was shuttered for about a year.
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