* Second-quarter realized prices to be lower than first
* Average realized silver price/ounce falls 21 pct in first
* Hecla reiterates full-year cash cost outlook
* Shares fall as much as 5 pct
By Garima Goel
May 10 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
Baker said, however, that Hecla had not changed its total
full-year cash cost forecast from the $5 per ounce of silver it
announced in February.
This is because Hecla expects exceptionally steep costs at
Lucky Friday to fall as the mine ramps up to full production in
the third quarter. The mine is expected to produce about 2
million ounces of silver this year. ()
The biggest threat to Hecla's guidance on costs would be
continued weakness in prices for the lead and zinc that the
company mines as a by-product of silver, Baker said.
But Baker said he did not expect the cost of labor - the
largest component of Hecla's costs - to change materially in the
next few quarters.
Hecla's silver production rose 46 percent to 1.9 million
ounces in the quarter, driven by increased output at its other
mine - Greens Creek, which is located in Alaska.
Coeur d'Alene, Idaho-based Hecla said its profit dipped to
$11 million, or 4 cents per share, in the first quarter, from
$12.4 million, or 4 cents per share, a year earlier.
Excluding one-time items, the miner earned 1 cent per share,
missing the average analyst estimate of 4 cents, according to
Thomson Reuters I/B/E/S.
Profit was also hit by the recent acquisition of Aurizon
Hecla said in March it would acquire Aurizon for about $774
million to gain control of the Casa Berardi gold mine in Quebec.
Baker said he expects the deal to close in early June.
Local rival Coeur d'Alene Mines Corp, the No. 1 U.S.
silver miner, also missed analysts' estimates, weighed by lower
silver prices and production.
Hecla shares fell as much as 5 percent on Friday on the New
York Stock Exchange. Couer d'Alene shares also fell as much as 5
percent, while those of Silver Wheaton Corp fell 4