Rodman & Renshaw Sees 52% Upside In Hecla Mining

Rodman & Renshaw’s Heiko F. Ihle believes Hecla Mining Company HL's long-term focus, along with its portfolio of “long-lived” assets, would offer investors good exposure to any future upside in silver and gold prices.

Ihle initiated coverage of the company with a Buy rating and price target of $9.

Revenue Diversification

“We support Hecla’s strategy of focusing on assets in politically safe jurisdictions such as the United States, Canada, and Mexico and like the fact that the firm’s assets produce a wide array of metals, which provides revenue diversification,” the analyst mentioned.

Ihle noted that while about 25 percent of Hecla Mining’s revenue came from lead and zinc, the remaining 75 percent was almost evenly split between gold and silver.

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“In our view, a well diversified asset base in geopolitically safe jurisdictions, coupled with an expanding production profile strongly positions Hecla to take advantage of what we view as a new bull market in the precious metals space,” the analyst stated.

Long-Term Focus

Ihle also pointed out that the company was focused on the long term, which was an important attribute, evident in Hecla Mining achieving increasing production and lower costs despite a depressed market in the past.

“From 2012 to 2015, when the majority of mining companies were merely trying to survive the worst bear market in recent memory, Hecla thrived and even acquired another producing asset: Casa Berardi,” Ihle went on to say.

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