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« Hecla Mining Company: Bought March $5.00 Call Options | Main | Happy Christmas and a Precious Metals New Year »
Tuesday
Jan062009

Hecla Mining Company: Bought March Call Options!

HL Call Options 06 Jan 08

Today we purchased a small number of the March 2009 Call Options (HLCZ) for $0.75 per contract at a strike price of $2.50.

This trade is in anticipation of the broad markets moving forward and silver making up some ground on its big brother gold. Hecla Mining stock has been battered over the last six months but lately has made a bit of a come back and closed yesterday at $2.76.

We raised the question of the Hecla’s fall coming to an end in a recent post entitled: Is the Free Fall Over? when the stock closed at $1.25. However we decided to hold off making any purchases until we could see some signs of life. As recently reported the company remains on track to meet the estimate of approximately 9 million ounces of silver production in 2008, at an average total cash cost in the range of $3.50 per ounce, which should bode well for the company in these difficult market conditions. We have bought Call options on Hecla Mining in the past which have failed dismally so don’t go too mad on this one.

Hecla Mining Company trades on the NYSE under the symbol of HL and has a market capitalisation of $467.83 with 169.50 million shares outstanding and has approximately $79.11 million in cash.

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Have a sparkling week.


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Reader Comments (4)

I am interested in purchasing some mining stocks,possibly soon.
I just dont see where I click on the newsletter,or subsequent pages, to get the contact info I need.

January 6, 2009 | Unregistered Commenterjohn

I got lucky, and was able to buy the shares @1.25!!!...couldn't believe it. Almost like buying options.

But I also want to bring your attention to another beaten down mercilessly on only somewhat bad news: New Gold. NGD (Amex) Amapari was just put on care and maintenance or whatever they call it, until prices rise again. Bought shares @1.30 yesterday!!! still in the 1.40s now. Remember, this is the combo of Peak, Metallica Resources, and New Gold done earlier last year. You're getting the properties and expertise of ALL THREE for less than Metallica and New Gold were each selling for a year ago, with Peak thrown in. Great op, but don't wait long...itsa risin' fast. jt

January 6, 2009 | Unregistered Commenterjt

I suggest if you are interested in HL you look at the publicly traded(the float is pretty modest) Preferred C(yahoo symbol HL-PC). I own some. I forget the exact terms but it is a mandatory convertible that in 2 years will be converted into shares of HL. The conversion ratio changes based on the market price but at current pices it is 10+ shares. It is selling for around 10X the market price of the Common. But unlike the Common the preferred pays $6.50 per year so you will make approximately $13 in dividends plus whatever 10 shares of Common are then worth. Ignoring the time value of money you'd break even as long as the Common was north of around $1.50.

January 6, 2009 | Unregistered CommenterGeorge Arthur

Enjoy the newsletter.

I see HL as perhaps the best silver stock out there (the key for me is their low cost). You have written about Endeavour in the past. Would you be willing to compare what you see as the best 3 or 4 silver stocks available and indicate what was the driver to select HL over the others.

January 7, 2009 | Unregistered CommenterBC

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