Hecla Mining Cuts Spending, To Lay Off 25% Workforce In Nevada Unit

(RTTNews) - Hecla Mining Co. (HL) announced Thursday its actions to reduce spending in Nevada, consistent with its goal of operating on a cash neutral basis. The company said 25% of the Nevada workforce is being laid off.

The decision follows a review of the Nevada operations with the goal of turning it into a positive cash flowing unit.

The company projects a $25 million planned reduction in Company-wide capital, exploration and G&A for 2019. This includes expectations for Company-wide capital to reduce by $12 million, exploration by $9 million, and G&A and other costs by $4 million.

Despite the significantly reduced planned development investment in Nevada, the production continues in the unit.

The Company provided revised annual 2019 Nevada production estimates of 60,000 ounces at a cost of sales of $105 million, a cash cost, after by-product credits of $1,200 per gold ounce.

Phillips Baker, Jr., President and CEO, said, "... the Nevada operations have not generated the cash flow we had hoped for so we are curtailing most development and reducing the workforce with the goal of the operation generating positive cash flow in the second half of the year."

Further, Baker said the company expects the company-wide reduction in spending Hecla will generate sufficient cash flow to nearly eliminate the need to borrow under the revolver by year end.

In pre-market activity, Hecla Mining shares were trading at $1.42, down 1.39 percent.