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« Silver-prices.net: Portfolio Update 22 June 2008 | Main | Pan American Silver Corporation: Buy! »
Thursday
Jun192008

Hecla Mining sells Gold Properties in Venezuela!

Hecla logo

Hecla Mining Company has just announced that it is sell its Venezuelan activities to Rusoro Mining Limited for $25 million, of which £20 million is in cash and remainder in shares of Rusoro common stock.

Company President and CEO, Phillips S. Baker, Jr., said that:

"The sale of our Venezuelan properties is part of our strategy to reduce the financing put in place to acquire Greens Creek. Prior to this transaction, Hecla repatriated approximately $39 million in cash that generated a $14 million foreign exchange loss. This transaction generates immediate cash from both the sale of the assets and the repatriation of $25 million of cash from our Venezuelan subsidiaries."

"Our operations in Venezuela were very important to Hecla in the early 2000s, during a time when precious metals prices were depressed. But more recently that operation has become a much smaller proportion of our company's value, as revenues from our U.S. silver properties grew. In fact, in 2007, the La Camorra unit contributed just 3% of our annual gross profit."

Our initial reaction to this news is that it is a very good move and dramatically reduces Hecla’s exposure to political uncertainties that exist in Venezuela. The news comes after the close of business so we will have to wait until tomorrow to find out what the market makes of it.

We also draw your attention to this snippet:

“We will continue to consider gold properties in politically secure countries that leverage our expertise as an underground miner."

Politically secure! Those words tell us everything.

If you own this stock or have an opinion please drop us a line and express your opinion, as it will be of benefit to our entire readership.

Hecla Mining Limited trades under the symbol of HL on the New York Stock Exchange.

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Reader Comments (3)

Hecla management is wise to quit business in Venezuela due to their political unrest. Wouldn.t take but an order from Chavez to continue the nationalization of all foreign businesses. I have owned HL off and on for several years and was concerned in particular for this venture. Happy to see them out....

June 21, 2008 | Unregistered CommenterGary Dirks

The news came out Thursday and Friday was a SLIGHT sell to $8.21 on light volume , but if you look at the Friday results , MUCH HIGHER than avg vcolume came in from 3 p.m. to 4 p.m. and the stock shot up to close higher on strong volume. That is good buying. I have been looking at HL in a decending wedge patter...it is at the apex and if it breaks upward anytime soon to break that downtrend line...indicates the downtrend could be over followed by a climb back to old highs near $13...now THAT would be a sweet gain. watching mining stocks next week with FED speaking. happy trading friends

June 22, 2008 | Unregistered CommenterRobert

Strange how a government that could not explore and find precious metals in the first place now wants in on the mining business after all the hard work and expenditure had been performed by other parties.

June 22, 2008 | Unregistered CommenterDavid

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