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Why Hecla Mining Stock Fell 13% in March

By Reuben Gregg Brewer - Apr 8, 2021 at 9:49AM

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The precious metals miner was out of favor last month, but that's not so shocking. Here's why.

What happened

Shares of silver and gold miner Hecla Mining (HL -5.35%) fell just shy of 13% in March, according to data from S&P Global Market Intelligence. The price move was an up-and-down affair, however, which makes complete sense when you step back and look at the big picture.

So what

Hecla Mining's production is a mixture of metals, like most miners. Gold makes up 47% of the business and silver 34%, with the rest a mixture of zinc (13%) and lead (the remainder). However, Hecla has hitched its wagon to the silver train, actively touting itself as the largest silver producer in the United States, accounting for two-thirds of the country's total silver production. It has also tied its dividend to the price of silver. So while gold is a bigger contributor, the company is often viewed as a silver miner.   

A miner holding up a silver nugget.

Image source: Getty Images.

In March silver prices started high, fell, rose back toward the early-month highs, and then fell again to finish the month near the lows. Gold followed a similar course, as it were, but the moves weren't as dramatic. That's not unusual, given that silver tends to be the more volatile of the two precious metals. Hecla's shares also tracked along with silver's move, as miners are generally leveraged to the price moves in the commodities they produce.    

Now what

The story here is that what happened in March is exactly what you would expect, so there's really nothing to read into. Long-term investors looking at precious metals stocks like Hecla, meanwhile, should probably view it more for its diversification benefit than as a way to time commodity prices. As March showed, timing silver and gold price moves is a difficult task prone to quick reversals.

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Stocks Mentioned

Hecla Mining Company Stock Quote
Hecla Mining Company
HL
$4.42 (-5.35%) $0.25

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