* Hecla to lock in prices during shipments: CFO
* Reduces 2013 capex by 13 pct, rival Coeur cuts by 18 pct
* Q2 adj loss $0.03/shr vs est profit $0.01/shr
* Hecla shares rise as much as 7 pct
Aug 8 Hecla Mining Co said it has started
to hedge its precious metal shipments after a drastic fall in
spot prices pushed the company to report a surprise loss.
Shares of the company rose as much as 7 percent on the New
York Stock Exchange on Thursday.
The No.2 U.S. silver miner by output said it sold 40 percent
of its silver production of 2.2 million ounces only in June and
at prices much below the average price for the quarter.
This magnified the lower realized price, Chief Financial
Officer James Sabala said on a post-earnings conference call
Realized silver prices fell 40 percent to $16.27 per ounce
for the company, while the broader spot market prices fell about
21 percent to average $23.17 per ounce.
Bigger rival Coeur, the largest U.S. silver miner by output,
said realized price fell about 23 percent to $22.86 per ounce.
Hecla also said it had a negative $15.1 million provisional
price adjustment due to the time lag between shipping the
concentrates for processing and actual sale of the metal.
"It takes about 4-6 weeks for (concentrates) to get
processed. The reality is that the metal prices were a lot lower
4-6 weeks into the second quarter," BMO Capital Markets Canada
analyst Andrew Caip said.
"So you are getting dinged for the differential."
Hecla currently hedges base metals such as lead and zinc
that it mines as a by-product of silver production.
The company cut its annual capital spending budget to $129
million from the $145 million it forecast in May for its Greens
Creek mine in Alaska and Lucky Friday mine in Idaho.
Coeur, which also posted a loss, lowered its capital
spending by 18 percent to $100 million-$110 million for 2013 and
expects to spend less than $80 million next year.
Miners around the world are under intense pressure to reduce
capital spending and operating costs due to volatile commodity
prices and lower-grade ores.
Excluding one-time items, Hecla posted a loss of 3 cents per
share, while analysts on average had expected earnings of 1 cent
per share, according to Thomson Reuters I/B/E/S.
Coeur posted a net loss of $35 million, or 35 cents per
share, compared with a profit of $23 million, or 26 cents per
share, a year earlier.
Metal sales at Coeur declined about 20 percent, while it
rose 27 percent at Hecla.