HECLA MINING COMPANY (HL): what the price assumes

In the published model solve dated 2026-Q2, anchored at $20.62, HECLA MINING COMPANY (HL) is priced for today's economics sustained for ~8.4 years. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-08-07.

Generated: 2026-09-07 · Exported: 2026-09-09 · Source: https://boothcheck.com/report/HL

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 8: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 12.5% cost of capital; growth searched up to the 25% self-funding ceiling.

How unusual the bet is: n/a

Valuation X-Ray

Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Growth Families that call it expensive: Asset, Earnings, Relative

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.9%); the inversion above states its own rate.

Per-Model Detail (n=17)

Solvency

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

• The by-products pay for the silver at Hecla's best mine: Greens Creek reported a silver cash cost of negative 17.11 dollars an ounce and a sustaining cost of negative 10.71 dollars an ounce after by-product credits in the June quarter, which is what a low position on the cost curve actually looks like.
• The fragile variable is the metal price rather than the mines, and it has already moved: June-quarter revenue of 334 million dollars was an expected pullback from a record March quarter, primarily reflecting lower realized silver and gold prices.
• Reserve estimates are load-bearing for reported profit as well as for planning, because estimates for reserves and resources are a key component in determining our units-of-production depreciation rates, with net book value of many assets depreciated over remaining estimated reserves, so a revision changes earnings without anything changing underground.

Bull Case

Every standard method used on Hecla is trying to value a pile of rock using an accounting number that was never meant to describe rock. Book value works out near 3.81 dollars a share, and the annual report is explicit that this figure is a depreciation schedule rather than an appraisal: estimates for reserves and resources are a key component in determining our units-of-production depreciation rates, with net book value of many assets depreciated over remaining estimated reserves. The net book value of the entire Lucky Friday property, plant, equipment and mineral interests was approximately $585.8 million at the end of 2025. Meanwhile the tailings facility at Greens Creek, which is where the plant puts what it has already dug up and processed, is estimated to hold 51 million ounces of silver and 600 thousand ounces of gold. That inventory appears in no line item anywhere.

The part the models genuinely cannot see is the cost curve. Hecla mines silver alongside zinc, lead and gold, and sells all of them. When the other metals are strong enough, the revenue from them exceeds the entire cash cost of running the mine, so the silver comes out at a negative cost. In the June quarter Greens Creek reported a cash cost after by-product credits of negative 17.11 dollars an ounce and a sustaining cost of negative 10.71 dollars an ounce. Across continuing operations, excluding Keno Hill, the figures were negative 8.10 dollars an ounce and 6.07 dollars an ounce. A producer at that end of the curve does not decide whether it survives a price fall. It decides which competitors do.

The balance sheet has been simplified to match. Hecla redeemed the remaining 263 million dollars of its 7.25% senior notes during the June quarter and ended it with no borrowings apart from finance leases, a cash position of 483 million dollars, and a fully undrawn 225 million dollar revolving facility with a further 75 million dollar accordion behind it. Interest expense for the first half of 2026 came to 8.1 million dollars against 22.3 million a year earlier.

The portfolio was simplified at the same time. Hecla sold the subsidiary that owned the Casa Berardi mine and other exploration properties in Quebec, Canada, to Orezone Gold Corporation (Orezone) for total undiscounted consideration of up to $601.7 million, and now reports that We are currently organized and managed in three segments: Greens Creek, Lucky Friday, and Keno Hill. Lucky Friday set a quarterly production record of 1.5 million ounces of silver in the June quarter, and preliminary work on a pyrite concentrate circuit at Greens Creek points to a further 1.0 to 1.2 million ounces of silver and 10 to 15 thousand ounces of gold a year once ramped.

The bull has to concede two things. Keno Hill has still not reached commercial production and its output guidance was trimmed this year, so one of the three segments is not yet doing what it was bought to do. And none of the cost advantage above changes the fact that the revenue line is set by a price nobody at Hecla sets. What the cost position buys is not immunity. It is the ability to keep producing while higher-cost operators stop, which is how mining cycles actually redistribute reserves.

Bear Case

The entire investment case rests on one number that Hecla does not control, and the accounts make its leverage obvious. Operating profit ran at about 42.4% of revenue in the twelve months to March 31, 2026. The zero-growth earnings method in the same set of inputs works from a five-year average operating income of roughly 0.16 billion dollars, against 690.5 million dollars in that trailing year. Almost the whole difference between those two figures is the price of metal, not the addition of a mine or a change in how one is run. Strip the price move out and the business underneath is much closer to the five-year average than to the trailing year.

That mechanism is not hypothetical. It fired in the June quarter. Revenue came to 334 million dollars, described by the company as an expected pullback from a record March quarter, primarily reflecting lower realized silver and gold prices. Income from continuing operations fell to 118 million dollars from 165 million in the prior quarter, and adjusted earnings before interest, tax, depreciation and amortisation from continuing operations fell 25% quarter on quarter. The direction reversed within a single reporting period, on prices alone.

Against that, what the market is paying is about 16 times the operating profit of the twelve months to March 31, 2026, which requires operating profit to keep compounding at the ceiling the business can fund out of its own cash flow for roughly five and a half years. Roughly 32% of comparable fast growers held such a pace for a stretch that long. The near-term rate is not the difficulty, since Hecla has recently delivered it. The duration is. And of the standard approaches applied here, only the forward-growth family reaches the price at all: asset value, earnings power and peer multiples land far below it, and there is no usable read on where the peer multiple range sits, which makes the conclusion thinner rather than softer.

The company's own risk language is unusually direct about the exposure, and about where in the cycle it thinks it is. The annual report lists demand, political instability, inflation and recession among the drivers of metal prices and then states plainly that These factors are largely beyond our control and are difficult to predict. Elsewhere it refers to periods of significant price volatility, such as the current high price environment in which hedged customers face margin calls. A company describing its own operating environment as a high price environment is telling the reader which end of the cycle the trailing numbers were earned in.

Two structural points sit underneath. Silver concentrate is roughly 62% of the revenue mix, so there is little product diversification to soften a silver-specific move, and the share count has grown at about 5.5% a year over the past four years, meaning per-share progress lags the mine-level progress the bull case describes. There is also an accounting sensitivity worth naming: because assets are depreciated over remaining estimated reserves, a downward reserve revision raises depreciation and lowers reported profit without a single tonne moving.

Valuation

The disagreement among the methods here is about as clean as it gets, and it points at exactly one thing. Only the forward-growth approaches reach the current 16.54 dollars a share. The asset-value methods, the earnings-power method and the peer-multiple methods all land well below it. On any other kind of company that pattern reads as a premium paid for durability that static frames cannot represent. On a miner it reads more specifically, because the durability in question is the durability of a metal price, and that is the one input a mining company has no say in.

It is worth seeing why the static methods land where they do rather than dismissing them. The earnings-power approach takes a five-year average of operating income, roughly 0.16 billion dollars, taxes it and capitalises it forever with no growth. That five-year window covers a period when silver sold for a great deal less than it does now, so the method is answering a question about the average of a cycle. The asset methods start from book value near 3.81 dollars a share, which is development spending net of depreciation rather than any estimate of what remains in the ground. Both are arithmetically sound and both are working from a base a cyclical does not sit on for long.

Read the other way, the market is paying about 16 times the operating profit of the twelve months to March 31, 2026, which implies that profit compounding at the ceiling the business can self-fund for roughly five and a half years. That reading uses an 11.9% cost of capital, and a single percentage point of movement in that input shifts the required horizon by roughly a year and a half, so treat the duration as an order of magnitude rather than a figure. Three of the four available comparisons carried usable data, with no read available on the peer multiple range. What they do say is that the required pace sits within what Hecla has recently delivered, and that roughly 32% of comparable fast growers held such a pace that long. On that basis the assumption is broadly consistent with plausible growth rather than a stretch, which is a genuinely different verdict from the one the static methods imply.

Among domestic filers in the same business, Hecla currently converts revenue better than its closest comparison. CDE ran an operating margin of 38.7% on revenue of 2.57 billion dollars, and MUX 21.8% on 236 million, against Hecla's 42.4% on revenue near 1.57 billion. That ordering is a function of the same metal prices lifting all three, so it says more about relative cost position than about durable advantage.

The balance sheet has changed enough this year that the older figures no longer describe it. As of June 30, 2026 Hecla carried no borrowings other than finance leases, held 483 million dollars of cash, and had a 225 million dollar revolving facility entirely undrawn. Interest expense for the first half fell to 8.1 million dollars from 22.3 million a year earlier. The same period carried a 183.7 million dollar loss from discontinued operations as the Quebec business went to Orezone, which is why reported net income sits so far below operating profit for the trailing year and why the two lines should not be read as a single trend.

Catalysts

Hecla reported the June quarter on August 4, 2026. Revenue was 334 million dollars, income from continuing operations 118 million dollars or $0.18 a share against 165 million dollars or $0.25 in the March quarter, and adjusted earnings before interest, tax, depreciation and amortisation from continuing operations 199 million dollars, more than double the 93 million recorded a year earlier. Cash generated from continuing operations rose 61% to 175 million dollars, and free cash flow more than doubled to 136 million. Silver production from continuing operations was 4.2 million ounces, up 8% on the March quarter, at a cash cost after by-product credits of negative 8.10 dollars an ounce and a sustaining cost of 6.07 dollars an ounce, both excluding Keno Hill.

Guidance moved in two directions at once. Consolidated silver production for 2026 was narrowed to 15.1 to 16.1 million ounces from 15.1 to 16.5 million, with a lower Keno Hill outlook partly offset by improved expectations at Greens Creek and Lucky Friday, while cash cost and sustaining cost guidance were both lowered on first-half outperformance. The Lucky Friday surface cooling project was 88% complete and on track for September, and after quarter end Keno Hill received authorization to build the Phase 2 West extension of its dry stack tailings facility.

Two structural events frame the second half. On May 13, 2026 Hecla agreed to sell the subsidiary holding the Casa Berardi mine and its Quebec exploration properties to Orezone Gold Corporation for total undiscounted consideration of up to 601.7 million dollars, and it expects to file the final Quebec income tax return for the disposal during the third quarter of 2026. On the same day as the results the board declared a common dividend of $0.00375 a share, payable on or about September 10, 2026 to holders of record on August 26, 2026, alongside $0.875 on the Series B preferred. Separately, on July 29, 2026 the company reported drilling that extended the high-grade Bermingham Deep trend at Keno Hill toward the historic Hector-Calumet mine.

Peer Cohorts (Per Segment, With Filing Citations)

Core business (reported)

• CDE (COEUR MINING, INC.)
• FY2025 10-K: …liabilities at the date of its financial statements, the allocation of fair value to assets and liabilities assumed in connection with business combinations, the reported amounts of revenue and expenses during the reporting period, and mined reserves. There can be no assurance that actual results will not differ from…
• FY2025 10-K: …the State of Delaware and changed its name to Coeur Mining, Inc. Coeur's corporate headquarters are in Chicago, Illinois. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Risks and uncertainties As a mining company, the revenue, profitability and future rate of growth of the Company are substantially dependent on…
• PAAS (Pan American Silver Corp.)
• FY2025 40-F: …search for ore. Evaluation expenditures are incurred to establish the technical and commercial viability of mineral deposits and typically include costs associated with determining optimal methods of extraction and metallurgical and treatment processes, permitting, and preparing economic evaluations. Exploration…
• FY2025 40-F: 7. MANAGEMENT OF CAPITAL The Company's objective when managing its capital is to maintain its ability to continue as a going concern while at the same time maximizing the growth of its business and providing returns to its shareholders. The Company's capital structure consists of shareholders' equity (comprising…
• MUX (McEWEN INC.)
• FY2025 10-K: …basis. Such competition may result in our Company being unable not only to acquire desired properties, but to recruit or retain qualified employees or to acquire the capital necessary to fund our operation and advance our properties. Our inability to compete with other companies for these resources would have a…
• FY2025 10-K: …characteristics of the individual mines or projects within a geographic region are not alike, or by investee for those which are considered a reportable segment. As a result, these operating segments also represent the Company's reportable segments. The CODM reviews segment income or loss, defined as gold and silver…
• HMY (HARMONY GOLD MINING COMPANY LIMITED)
• FY2025 20-F: …- Holistic health and wellness " on pages 141 to 153 . Mining companies face strong competition and industry consolidation The mining industry is competitive in all of its phases. We compete with other mining companies and individuals for specialised equipment, components and supplies necessary for exploration and…
• FY2025 20-F: . These factors could materially and adversely affect our financial and operating results. We compete with mining and other companies for key human resources with critical skills and our inability to retain key personnel could have an adverse e ffect on our business The risk of losing senior management or being unable…
• AGI (ALAMOS GOLD INC.)
• FY2025 40-F: : there is sufficient geologic certainty of converting a mineral deposit into a proven and probable reserve. There is a history of conversion to reserves at operating mines; (ii) scoping, pre-feasibility or feasibility: there is a scoping study, pre-feasibility or preliminary feasibility study that demonstrates the…
• FY2025 40-F: …income when control has been transferred to the customer. The Company recognizes the time value of money, where there is a significant financing component and the period between the payment by the customer and the transfer of the contracted goods exceeds one year. Interest expense on deferred revenue is recognized in…
• KGC (KINROSS GOLD CORP)
• FY2025 40-F: …report on Form 40-F, include, but are not limited to, statements with respect to our guidance for production, cost guidance, including production costs of sales, all-in sustaining cost of sales, and capital expenditures; anticipated returns of capital to shareholders, including the declaration, payment, increase and…
• FY2025 40-F: . Emerging Growth Company ☐ If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to…
• BVN (BUENAVENTURA MINING CO INC)
• FY2025 20-F: …services. - Rental of mining concessions (until July 2024). - Holding of investment in shares. - Industrial activities. - Purchase and sale of mineral (Trading). F-93 Table of Contents Notes to the consolidated financial statements (continued) ​ The accounting policies used by the Group in reporting segments…
• FY2025 20-F: …borrowing costs. Inventories are classified as current or non - current depending on the length of time that management estimates will be needed to reach the production state of concentrate extraction for each mining unit. The current portion of the inventories is determined based on the expected amounts to be…
• CCJ (Cameco Corp)
• FY2025 40-F: …in Rule 12b-2 of the Exchange Act. Emerging growth company ☐ If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting…
• FY2025 40-F: …99.8 Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 99.9 Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 99.10 Consent of Alain D. Renaud, P. Geo. 99.11 Consent of Biman Bharadwaj, P. Eng. 99.12 Consent of Scott…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.