<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington D. C. 20549
-----------
FORM 8-K
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report
(Date of earliest event reported): July 28, 1994
Hecla Mining Company
- - -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware
- - -------------------------------------------------------------------------------
(State or other jurisdiction of incorporation)
1-8491 82-0126240
- - -------------------------------------------------------------------------------
(Commission File Number) (IRS Employer Identification No.)
6500 Mineral Drive
Coeur d'Alene, Idaho 83814-8788
- - -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(208) 769-4100
- - -------------------------------------------------------------------------------
(Registrant's Telephone Number)
Page 1 of 2 pages
<PAGE> 2
Item 5. Other Events.
On July 28, 1994, the Registrant issued the press release
attached hereto as Exhibit A, which is incorporated herein by this reference.
On July 29, 1994, in the case entitled Star Phoenix Mining
Company vs. Hecla Mining Company (which case is described in the press release
attached hereto as Exhibit A) the judge of the First Judicial District Court of
Idaho in and for Shoshone County, Idaho, which presided at the trial, issued an
order denying Hecla Mining Company's post-trial motions. Hecla Mining Company
filed a Notice of Appeal to the Idaho Supreme Court on August 1, 1994.
On August 2, 1994, the Registrant issued the press release
attached hereto as Exhibit B, which is incorporated herein by this reference.
Item 7. Financial Statements, Proforma Financial Information and Exhibits.
Exhibit A - Press Release dated July 28, 1994.
Exhibit B - Press Release dated August 2, 1994.
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
HECLA MINING COMPANY
By: /s/ Nathaniel K. Adams
---------------------------------
Name: Nathaniel K. Adams
Title: Attorney and Assistant
Secretary
Dated: August 4, 1994
Page 2 of 2 pages
<PAGE> 3
EXHIBIT INDEX
Sequentially
Exhibit Numbered
Number Description Page
- - -------- ------------ ---------
Ex-99.A Press Release dated July 28, 1994.
Ex-99.B Press Release dated August 2, 1994.
<PAGE> 1
(HECLA MINING COMPANY)
EXHIBIT A
SECOND QUARTER REPORT TO SHAREHOLDERS
For the Quarter Ending June 30, 1994
For Release: July 28, 1994
HECLA REPORTS SECOND QUARTER AND FIRST-HALF RESULTS
COEUR D'ALENE, Idaho -- Hecla Mining Company (HL & HL-B:NYSE)
reported net income today of $0.7 million for the second quarter of 1994 prior
to payment of preferred dividends. After a $2 million dividend to preferred
shareholders, the company recorded a net loss for the quarter of $1.3 million,
or 3 cents per common share. This compares with a loss of $2.8 million, or 7
cents per common share, for the same period in 1993.
For the first half of 1994, Hecla lost $9.0 million, or 22 cents a
share, on revenue of $67.7 million after a $4 million dividend to preferred
shareholders. This compares with a loss of $8.3 million, or 23 cents a share,
on revenue of $50.4 million for the first half of 1993. Preferred shares had
not yet been issued, so no preferred dividend was paid during the first half of
1993.
On June 14, 1994, Hecla redeemed all of its outstanding
zero-coupon subordinated Liquid Yield Option Notes (LYONs) due 2004 for $50.2
million. The LYONs redemption followed completion of Hecla's common stock
offering of 7.4 million shares which yielded net proceeds of approximately $64
million.
Also during the second quarter, a judgment was entered against
Hecla by an Idaho State District Court following a jury's verdict finding Hecla
liable for $10 million in compensatory damages and an additional $10 million in
punitive damages in a lawsuit filed by the Star Phoenix Mining Company. Star
Phoenix, a former lessee of the Star-Morning mine, sued Hecla over a dispute
relating to Hecla's 1990 termination of Star Phoenix's lease of the mine.
Hecla strongly believes that it had the legal right to terminate the lease and
that the evidence presented in the trial does not support the jury's verdict.
Hecla intends to vigorously appeal the trial court judgment.
In June, the La Choya gold mine in Mexico produced approximately
6,000 ounces of gold, achieving its rated production capacity. The cash cost
per ounce of gold in June was $189 and the full cost was $285, meeting
projected cost estimates. "The business climate in Mexico is very positive,
and a national television network there recently featured our mine as an
exemplary model of industry working in harmony with the environment," said
Arthur Brown, chairman, president and chief executive officer. "We look
forward to a long and prosperous relationship with Mexico."
Construction of Hecla's new Grouse Creek gold mine in central
Idaho is approximately 70 percent complete, and the underground mine has been
in production since April. High-grade ore is being stockpiled for the mill,
which is scheduled to begin operation during the fourth quarter of 1994.
The company's Lucky Friday silver mine produced more than 484,000
ounces of silver during the second quarter, although costs were higher than the
comparable period in 1993. Anticipated maintenance on the underground ore
transfer stations contributed to the higher costs, but this work should be
completed during August.
Our industrial minerals operations achieved outstanding first-half
results, generating $4.6 million in gross profit on record sales of more than
$35 million.
Hecla is a 103-year-old mining company with operations principally
in the United States and Mexico. The company is a well-known silver producer
with a growing gold profile, and a major supplier of ball clay, kaolin and
feldspar. The common and preferred shares of Hecla are traded on the New York
Stock Exchange under the symbols HL and HL-B, respectively.
-HL-
RESULTS IN BRIEF
<TABLE>
<CAPTION>
(dollars in thousands, except Second Quarter Six Months Ended
per-share amounts) ----------------------------------- -----------------------------------
June 30, 1994 June 30, 1993(1) June 30, 1994 June 30, 1993(1)
------------- ---------------- ------------- ----------------
<S> <C> <C> <C> <C>
Total revenue $ 40,055 $ 26,490 $ 67,708 $ 50,420
Net income (loss) 702 (2,813) (4,949) (8,271)
Loss applicable to common
shareholders (1,311) (2,813) (8,974) (8,271)
Loss per common share (0.03) (0.07) (0.22) (0.22)
Sale of products
Gold operations 13,176 8,814 21,035 16,193
Silver operations 3,560 4,843 6,145 8,934
Industrial minerals 20,048 11,755 35,212 23,581
Specialty metals 1,264 610 1,996 1,093
Total sales 38,048 26,022 64,388 49,801
Gross profit (loss)
Gold operations 1,341 1,337 1,206 1,654
Silver operations (1,031) (2,544) (2,838) (5,336)
Industrial minerals 3,543 1,726 4,644 2,956
Specialty metals 168 (53) 59 (154)
Total gross profit (loss) 4,021 466 3,071 (880)
</TABLE>
AVERAGE METAL PRICES
<TABLE>
<CAPTION>
Second Quarter Six Months Ended
----------------------------------- ----------------------------------
June 30, 1994 June 30, 1993 June 30, 1994 June 30, 1993
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Gold (per ounce) $ 381.44 $ 360.41 $ 382.87 $ 344.94
Silver (per ounce) 5.38 4.26 5.33 3.96
Lead (per pound) 0.22 0.18 0.22 0.19
Zinc (per pound) 0.43 0.44 0.43 0.46
</TABLE>
(1) Financial information and production data previously reported have
been restated to reflect the acquisition of Equinox Resources Ltd.
accounted for as a pooling of interests.
(more)
<PAGE> 2
HECLA MINING COMPANY EXHIBIT A (CONT'D)
SELECTED FINANCIAL INFORMATION
(in thousands, except per-share amounts)
<TABLE>
<CAPTION>
Second Quarter Six Months Ended
------------------------------------------------------------------------------
Income Statement Data: June 30, 1994 June 30, 1993(1) June 30, 1994 June 30, 1993(1)
------------- ---------------- ------------- ----------------
<S> <C> <C> <C> <C>
Sales of products $ 38,048 $ 26,022 $ 64,388 $ 49,801
Gross profit (loss) 4,021 466 3,071 (880)
General & administrative 1,780 1,781 6,339 3,535
Exploration & research 1,990 680 4,099 1,854
Depreciation & amortization 180 179 362 305
Provision for closed operations &
environmental matters 384 261 624 448
Loss from operations (313) (2,435) (8,353) (7,022)
Other income (expense):
Interest and other income 2,007 468 3,320 619
Gain (loss) on sale of investments (238) (120) 1,090 (189)
Miscellaneous income (expense) - - 31 - - 26
Interest expense:
Total interest cost (898) (1,377) (2,047) (2,920)
Less amount capitalized 786 706 1,751 1,371
Income (loss) before income taxes
& extraordinary loss 1,344 (2,727) (4,239) (8,115)
Income tax (provision) benefit 181 (86) 113 (156)
Extraordinary loss on early retirement of debt 823 - - 823 - -
Net income (loss) 702 (2,813) (4,949) (8,271)
Dividends on preferred stock (2,013) - - (4,025) - -
Loss applicable to common shareholders (1,311) (2,813) (8,974) (8,271)
Loss per common share (0.03) (0.07) (0.22) (0.22)
Weighted average number of common
shares outstanding 44,294 38,542 41,487 36,916
Common shares outstanding at end of period 48,074 38,649 48,074 38,649
- - -------------------------------------------------------
Cash Flow Data:
Cash flow from (to) operations (7,846) 877
Cash, cash equivalents and short-term
investments 54,600 108,534
------------- ---------------
June 30, 1994 Dec. 31, 1993(1)
- - ------------------------------------------------------- ------------- ---------------
Selected Balance Sheet Data:
Total current assets $ 99,704 $ 103,531
Properties, plants and equipment, net 243,798 229,055
Total assets 353,961 346,153
Working capital 76,107 81,223
Total current liabilities 23,597 22,308
Long-term debt 1,633 50,009
Total shareholders' equity 300,759 244,672
</TABLE>
PRODUCTION DATA
<TABLE>
<CAPTION>
Second Quarter Six Months Ended
------------------------------------------------------------------------------
June 30, 1994 June 30, 1993(1) June 30, 1994 June 30, 1993(1)
------------- ---------------- ------------- ----------------
<S> <C> <C> <C> <C>
REPUBLIC UNIT
Gold (oz.) 9,059 13,262 18,411 24,621
Silver (oz.) 70,752 72,709 135,633 131,082
Cash cost per oz. of gold $ 251.90 $ 191.70 $ 258.37 $ 207.11
Full cost per oz. of gold $ 319.27 $ 242.20 $ 324.27 $ 261.38
AMERICAN GIRL UNIT
Gold (oz.) 7,509 8,838 14,852 18,207
Silver (oz.) 4,161 4,867 7,955 9,215
Cash cost per oz. of gold $ 337.20 $ 302.77 $ 328.03 $ 277.22
Full cost per oz. of gold $ 357.85 $ 393.11 $ 352.41 $ 364.15
LUCKY FRIDAY UNIT
Silver (oz.) 484,029 528,268 943,216 1,191,827
Gold (oz.) 243 224 477 478
Lead (tons) 4,755 5,424 9,722 11,569
Zinc (tons) 1,068 1,270 1,845 2,717
Cash cost per oz. of silver $ 6.19 $ 5.18 $ 6.15 $ 4.69
Full cost per oz. of silver $ 7.44 $ 6.45 $ 7.40 $ 5.87
GREENS CREEK UNIT
Silver (oz.) - - 121,247 - - 551,107
Gold (oz.) - - 327 - - 2,826
Lead (tons) - - 106 - - 1,298
Zinc (tons) - - 282 - - 3,453
Cash cost per oz. of silver - - $ 6.35 - - $ 5.11
Full cost per oz. of silver - - $ 10.07 - - $ 7.16
OTHER UNITS (CACTUS AND LA CHOYA)
Gold (oz.) 13,648 2,593 16,532 4,014
Silver (oz.) 7,628 7,419 12,321 14,112
TOTAL PRODUCTION AND AVERAGE COSTS
Silver (oz.) 566,570 734,510 1,099,125 1,897,343
Gold (oz.) 30,459 25,244 50,272 50,146
Lead (tons) 4,755 5,530 9,722 12,867
Zinc (tons) 1,068 1,552 1,845 6,170
Average cash cost per oz. of gold $ 277.96 $ 231.71 $ 314.59 $ 236.16
Average full cost per oz. of gold $ 341.43 $ 297.92 $ 372.26 $ 303.82
Average cash cost per oz. of silver $ 6.19 $ 5.40 $ 6.15 $ 4.82
Average full cost per oz. of silver $ 7.44 $ 7.13 $ 7.40 $ 6.28
</TABLE>
Contact Bill Booth, Vice President - Investor and Public Affairs (208) 769-4100
<PAGE> 1
(HECLA MINING COMPANY LOGO)
EXHIBIT B
NEWS RELEASE
HECLA TO PROCEED WITH LUCKY FRIDAY EXPANSION
For Release: Tuesday, August 2, 1994
COEUR D'ALENE, Idaho -- Hecla Mining Company (HL & HL-B: NYSE)
today announced that it will proceed with a phased development of the Gold
Hunter deposit at the company's Lucky Friday mine near Mullan, Idaho. The
silver-rich deposit is located to the north of the current Lucky Friday
workings, more than a mile underground. The new ore was discovered in 1991
when an underground exploration program intercepted the downward extension of
the old Gold Hunter mine.
In 1993, Hecla did a test mining project in the new ore zone and
completed a feasibility study to assess economic viability. The feasibility
study indicated that bringing the Gold Hunter into production could reduce
overall mining costs and more than double the silver output of the Lucky
Friday. Art Brown, chairman, president and CEO of Hecla said, "If expectations
are met, the Lucky Friday mine could add up to 3 million ounces of additional
silver production per year, returning the mine to historic production levels in
the range of 5 million ounces annually."
The Gold Hunter area, which is accessed from the company's
existing Lucky Friday facility, potentially contains 2-3 million tons of
mineralization grading 14 ounces per ton silver, 4.7 percent lead and 1.3
percent zinc. Brown said that additional drilling is required to better define
this mineralization and bring it into the minable resource category.
Phase I of the project, which will begin immediately, includes the
addition of 20 employees and a $4.7 million budget to drive 6,000 feet of
tunnel on the 4900 level of the Lucky Friday mine. The tunnel will access the
Gold Hunter deposit at depth and provide a platform for 22,000 feet of diamond
drilling to delineate the ore body. Phase I will be completed in the fourth
quarter of 1995. The Company will then make a decision whether to bring the
ore body into production. Brown said the new deposit could be efficiently
mined and processed using Hecla's existing facilities, providing a reduction in
overall costs of production at the Lucky Friday mine. If the Gold Hunter is
ultimately brought into production, Brown said the work force could expand to
approximately 200 employees by 1997. Total cost of the three-year project is
estimated to be in the $18 million range.
The Gold Hunter mine was first discovered in 1882 and was mined
between 1903 and 1947. The property is controlled by Hecla under a long-term
operating agreement with Independence Lead Mines Company, Wallace, Idaho, and
Abot Mining Company, Coeur d'Alene, Idaho. With its combined interests, Hecla
is entitled to a 79.08 percent interest in the net profits from the property.
Hecla will be obligated to pay a royalty of 18.52 percent of defined net
profits to Independence Lead Mines Company and 2.4 percent to Abot Mining
Company after Hecla has recouped its costs to explore and develop the property.
(more)
6500 Mineral Drive # Coeur d'Alene, Idaho 83814-8788 # 208/769-4100 # FAX
208/769-4159
<PAGE> 2
EXHIBIT B (CONT'D)
Hecla is a 103-year-old mining company with operations principally
in the United States and Mexico. The company is a well-known silver producer
with a growing gold profile and a major supplier of ball clay, kaolin and
feldspar. The common and preferred shares of Hecla are traded on the New York
Stock Exchange under the symbols HL and HL-B, respectively.
-HL-
Contact: W. Bill Booth, vice president - investor and public affairs,
208/769-4126
Mike Callahan, investor and public affairs assistant, 208/769-4102
6500 Mineral Drive # Coeur d'Alene, Idaho 83814-8788 # 208/769-4100 # FAX
208/769-4159
