Hecla Mining Company (NYSE:HL) saw its shares rise modestly on Monday, but the gains were outpaced by silver exchange-traded funds as the company grappled with production shortfalls at its Keno Hill mine in Yukon.
Hecla shares last traded at $16.385, up 0.3%, while the iShares Silver Trust (NYSEARCA:SLV) climbed 1.8%. The Global X Silver Miners ETF (NYSEARCA:SIL) slipped 1.1%, and the VanEck Gold Miners ETF (NYSEARCA:GDX) was flat.
Spot silver fell 1.2% to $61.63 an ounce on Monday, after touching its highest level since June 23, according to Reuters. Jim Wyckoff at American Gold Exchange noted the U.S. dollar index was "a little higher today," which he called a bearish factor for gold and silver.
Keno Hill Production Below Target
Hecla's first-quarter silver production came in at 3.9 million ounces, which annualizes to 15.6 million ounces—within the company's 2026 guidance range of 15.1 million to 16.5 million ounces. However, the Keno Hill mine produced only 488,719 ounces in the quarter, well below its targeted run rate. At an annualized pace of 2.0 million ounces, Keno Hill missed the company's 2026 forecast of 2.9 million to 3.2 million ounces.
The company attributed the shortfall to weaker power supply due to harsh cold, lower ore grades, and delays in mine sequencing. Hecla said silver grades mined and milled at Keno Hill should improve in the second quarter.
Hecla's overall 2026 production target depends on either Keno Hill catching up or Greens Creek exceeding expectations. Greens Creek produced 2.18 million ounces in the first quarter (annualized 8.7 million ounces, above its 7.5-8.1 million ounce guidance range), while Lucky Friday produced 1.24 million ounces (annualized 4.9 million ounces, within its 4.7-5.2 million ounce range).
Strong Margins and Cash Flow
Despite the production challenges, Hecla's margins remain robust. Spot silver at $61.63 an ounce is well above Hecla's projected 2026 all-in sustaining cost (AISC) of $15.00 to $16.25 per ounce. The company's first-quarter AISC was just $8.17 per ounce, and its realized silver price was $82.70 per ounce, compared to the average London PM silver price of $84.39.
Hecla posted record free cash flow from continuing operations of $144 million in the first quarter. The company said capital spending would rise in the second quarter and remain high in the third as projects advance during the construction season.
The equity market valued Hecla at about $11.07 billion on Monday, or roughly $700 per guided silver ounce for 2026 output, based on the midpoint of the company's silver forecast. This is a rough gauge, as Hecla also produces gold, lead, and zinc and holds development projects.
Outlook and Infrastructure Plans
CEO Rob Krcmarov said after selling the Casa Berardi asset, the company is now "debt-free with a $225 million undrawn revolver." Hecla said hitting the 440 tons per day target at Keno Hill remains a medium-term goal, but will require additional infrastructure and changes to both the Quartz Mining License and Water License, a process expected to take several years.
