What happened

Shares of silver and gold miner Hecla Mining (NYSE:HL) fell hard out of the gate on May 7, dropping as much as 10% in the first half hour of trading. By noon or so EDT, the stock price had worked its way back to roughly breakeven. The headline numbers weren't inspiring, as the swift price drop shows, but when you dig in a little bit, the news probably wasn't as bad as it first seemed.

So what

Hecla reported a loss of $0.03 per share in the first quarter of 2020. There were a lot of moving parts in that number, but it ended up being better than the $0.05-per-share loss in the same period of the previous year. The miner sold fewer ounces of gold and silver year over year, with average realized gold prices up by 20% but average realized silver prices down by 8%. There were timing issues involved in the silver price, which saw sales take place at a quarterly low for the metal. Also impacting performance were mine shutdowns related to COVID-19.

A man standing in the mouth of a mine with the sun in the background.

Image source: Getty Images.

That's the bad news, some of which is likely to linger into the second quarter. For example, the Casa Berardi Mine in Quebec, Canada, was shut down because of that country's attempts to contain the spread of COVID-19. It was partially reopened in mid-April but won't get back to full production until mid-May. Meanwhile, the San Sebastian Mine in Mexico was shut down by the government but is currently expected to reopen by the end of May.

Assuming that both are back to normal by the third quarter, the second half of the year should look much better than the first. Adding to that positive outlook is the Lucky Friday Mine, which settled a long-running labor dispute in January. The mine is currently getting back into operation. While Hecla clearly wasn't running on all cylinders in the first quarter, it hopes to be doing so by the time the third quarter starts.

Now what

Investors weren't wrong to view Hecla's first-quarter results negatively. In fact, the second-quarter results could be a little difficult to read, too. But if things keep moving forward as expected, the market could have been a little too negative out of the gate on May 7. Only time will tell, of course, but since the stock managed to work its way back to roughly breakeven and was still holding that level at 2 p.m., it seems cooler heads, willing to think at least another three to six months out, have prevailed.