Hecla Mining Company (HL) Earnings Call Transcript & Summary

Hi, I'm Phil Baker, President and CEO of Hecla Mining Company. In this webcast, I want to talk about how we approach dividends. It's unique among silver miners. I need to remind you that I will make statements subject to the cautions found on this slide and those found in our 10-K, 10-Q and other public filings. Now there are 7 characteristics that Hecla has that differentiates us from other silver mining companies. One of those characteristics is dividends. Only a few of us pay them, and Hecla is the only one that has a dividend that is specifically linked to silver. Hecla has been paying a dividend since 2011. We first started with a dividend linked to the silver price and quickly realized that we have robust enough cash flows in our company that could allow us to pay a dividend in almost any price environment. And as prices rose last year, we knew it was time to increase both the base dividend and a raise by -- which we raised by 50% and lower the trigger for the silver linked dividend. The trigger is $25. That adds $0.02 per share to the base dividend of $0.015. If the realized price is between $30 and $35, we add another $0.02, $35 and $40, another $0.04. On the right side of this slide, you can see the dollars that are paid in dividends, below $25, a modest $8 million of dividend payouts are made. But as the price of silver rises, the return to shareholder rises rapidly. Another way of looking at the dividend is the return on the silver we produce. That was a shareholder who thought about it this way and talked to me about it. At the $25 trigger, we are returning to shareholders about $1.60 or a yield on the silver of 5.7%. At $45 silver, it's $7.80 or a 16.5% yield. When you think of it this way, our dividend program makes Hecla a very attractive alternative to the ETFs or to physical silver. The traditional way to look at dividends is there a yield on the share price. Here, Hecla is in the group of companies that pay a dividend and is competitive with them on yield. What we have that none of them have, though, is the silver linked dividend. For the past 10 years, Hecla has paid roughly 10% of cash flows from operating activities. Because of the design of our silver linked dividend. When the price is surged, about 25% was returned to shareholders. While the Board approves the dividends every quarter, paying it as part of our plans. So dividends are another differentiator of Hecla from other mining companies, ETFs and physical silver. It's unique and provides exciting enhancement to investing in silver. I'll speak more on another webcast about some of the other attributes that distinguish Hecla as a premier silver investment. Thanks for watching this webcast.