Hecla Pockets $23 Million From Stock Sale

Hecla Mining Co. received a much-needed cash infusion Tuesday when Salomon Brothers purchased nearly 3 million shares of the Coeur d’Alene mining company’s common stock.

The New York-based broker bought 2.875 million shares of Hecla stock for $8.50 a share, netting the company about $23 million, said Bill Booth, vice president for investor and public affairs.

“We’ve been wanting to close this deal for some time,” Booth said. “We needed to time it as to not adversely affect the share price for our shareholders.”

Nearly 4 million Hecla shares changed hands on the New York Stock Exchange. The stock finished down 25 cents to $8.25.

Salomon Brothers bought the stock and then quickly sold it to investors, Booth said. Hecla now has 51 million outstanding common shares.

Hecla Manager of Corporate Communications Vicki Veltkamp said the small drop showed the stock’s stability through the Salomon Brothers deal, since such a large sale can push down the stock price. A rally in gold and silver prices, which has helped the stock pull out of yearlong lows in recent weeks, made the timing right to do the deal.

“I think it shows that investors believe in our projects,” Veltkamp said.

Hecla had fallen on hard times when it took a $104 million charge for the failed Grouse Creek Gold Mine in central Idaho. It’s stock plunged to new lows around the $6 a share level.

This new cash, Booth and Veltkamp said, will go toward two projects - Greens Creek gold/ silver mine in Alaska and the Lucky Friday expansion project. Hecla owns 30 percent of Greens Creek near Juneau, set to begin mining in early 1997.

The Lucky Friday mine in Mullan, Idaho, remains Hecla’s primary silver mine. The expansion into a new ore body could return the mine to its historic production highs, Booth said. Hecla should decide this year whether or not to pursue the expansion, he said.

, DataTimes