What happened

Shares of silver- and gold-miner Hecla Mining (NYSE:HL) rose an amazing 52% in May, according to data from S&P Global Market Intelligence. The five-month gain between January and May was just about 39%, so the one-month advance in May was basically the big move here for the year. The upside was likely driven by a string of solid news out of the company, in addition to elevated commodity prices.

So what

Hecla reported first-quarter 2021 earnings in early May, and the reading was excellent. For example, sales increased 54% year over year and were the second highest in the company's history. Gross profit of $64.8 million represented an increase of $53.4 million. And earnings per share of $0.03 per share were up from a loss of $0.03 in the same period of the prior year.

Higher commodity prices and strong production both helped support results. The earnings news led to a price-target increase from $6.75 to $7.50 at CIBC.

A person in protective gear including a helmet mine light.

Image source: Getty Images.

In addition to that update, Hecla's board made a change to the company's silver-linked dividend policy. The direct effect was to increase the current dividend by 50%, which is a massive dividend hike by any stretch of the imagination. On an ongoing basis, the dividend will be $0.01 higher at each of the silver-price break points that the company has laid out. That likely made a solid earnings update even more pleasing for shareholders.

A week or so after the earning and dividend updates, Hecla released its first-quarter exploration report, which showed notable success and key developments. In fact, it looks like the company's Midas mine could have a longer life than originally thought.

The development success resulted in the company upping its exploration budget for the year by a sizable 33%. Hecla appears to be acting while the iron is hot, given the lofty gold and silver prices in the market today. 

Now what

When all is said and done, Hecla released a lot of good news in May and the stock reacted accordingly. That said, the stock has moved very far very quickly, likely pricing in a lot of the good news that's out there right now.

Long-term investors should probably tread with caution. In fact, if you're looking at Hecla as a way to hedge against market risk, it might be better to just stick with cash for now. Given the inherent volatility of the precious-metals space, it wouldn't be surprising to see mercurial investors shift to profit-taking mode, given the swift gain in May.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.