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UPDATE 2-Hecla bets on high silver prices, sees higher spending
February 21, 2012 / 2:11 PM / 6 years ago

UPDATE 2-Hecla bets on high silver prices, sees higher spending

* Q4 EPS $0.07 vs loss $0.05/shr year ago

* Sees 37 pct higher 2012 capital expenditure

* Shares up 10 pct

Feb 21 (Reuters) - Hecla Mining Co posted a fourth-quarter profit and raised its full-year capital expenditure outlook 37 percent as it expects silver prices to remain high, sending its shares up 10 percent.

Coeur d‘Alene, Idaho-based Hecla, which sees capital expenditure of $140 million in 2012, said realized silver prices rose 56 percent last year.

Silver, which climbed to a record high of $49.51 per ounce in April 2011, was trading around $34.02 an ounce on Tuesday. Societe Generale said it expects silver prices to pick up through 2012 as it continues to shadow gold.

Hecla said it plans to invest $90 million at its Greens Creek mine in Alaska, where output rose 5 percent in the quarter.

BMO Capital Markets analyst Andrew Kaip said the company’s spending at Green Creek was higher than his expectations, but added that the mine was profitable.

“They are spending a lot of money, looking at increasing exploration expenditures... we are looking at a fairly capital intensive year,” Kaip said.

In January, federal regulators ordered Hecla to shut its Lucky Friday mine and the company laid off 200 workers.

Last month, Fresnillo, the world’s largest primary silver producer, beat its annual output target but trimmed its silver production targets in October.

Hecla stock, one of the top percentage gainers on the New York Stock Exchange, rose to $5.54 on Tuesday. They have gained 9 percent since Jan. 11, when the company cut its production outlook.

Net profit was $18.4 million, or 7 cents a share, compared with a loss of $13.1 million, or 5 cents a share, a year ago.

Revenue fell 23 percent to $102.9 million.

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