Poor Results Undermine Hecla Stock

Hecla Mining Co.’s stock price dropped 26 percent in the last two days after the company announced poor results at what it hoped to be its largest gold mine.

Hecla’s stock on the New York Stock Exchange fell $2.25 Thursday to close at $7.38, matching the low it reached in 1993. More than 2.7 million shares changed hands Thursday, compared with volume of about 400,000 on Wednesday.

After the market closed Wednesday, Hecla reported that results from its Grouse Creek gold mine in central Idaho were far short of expectations. The stock had lost 25 cents on Wednesday.

Grouse Creek was to have produced more than 100,000 ounces of gold this year, and for seven years beyond that.

New information from mining in the ore body revealed the grade of gold was far less than what Hecla geologists thought. Through nine months of this year, Grouse Creek had produced about 55,000 ounces of gold.

The mining company’s board of directors will meet Nov. 10 to discuss the next step for Grouse Creek.

Closing the mine, which employs 200 people, is an option. However, the company does not believe at this time that it will recommend that option to the board.

Initial mining in 1994 at Grouse Creek near Challis, Idaho, revealed encouraging gold deposits in the Sunbeam area of the property. However, as the company mined further, the grade and size of the ore body fell off dramatically.

Hecla’s stock has been as low as $6.75 a share in 1991. It has sold for as much as $16.13, also in 1991. A rapid drop in silver prices contributed to the weakness of most silver mining stocks during that time.

, DataTimes