Hecla will redeem its Series B preferred shares Dec. 11 and may sell new common stock

Hecla Mining Company, operator of the Greens Creek silver mine on Admiralty Island near Juneau, said Tuesday it will redeem all 150,736 outstanding shares of its Series B Cumulative Convertible Preferred Stock on Dec. 11 at $50.6806 per share. That comes to about $7.64 million, which Hecla said in a filing with the Securities and Exchange Commission it will pay from cash on hand. The company reported $692 million in cash and equivalents at the end of the third quarter, according to its third-quarter results filing. In that quarter, Greens Creek set a site record of $147 million in free cash flow.

The redemption price is $50 plus an estimated $0.6806 in dividends accrued since Oct. 1, the most recent dividend payment date. Hecla said it does not expect to declare another dividend before the redemption, and dividends stop accruing Dec. 11.

Holders have until 5 pm New York time on Dec. 10 to convert each preferred share into about 3.2154 shares of common stock, based on a $15.55 conversion price, but those who convert give up the accrued dividend. Full conversion would mean issuing roughly 484,700 new common shares. Shares not converted by the deadline will be redeemed for cash.

The filing shows Hecla also signed an agreement Tuesday to sell up to 50 million new common shares over time through sales agents, who would earn commissions of up to 1.5%. Hecla is not obligated to sell any. Its prospectus says it ended a similar agreement from February 2021, under which it sold about 59.8 million shares for about $348.5 million in net proceeds. Proceeds from any new sales would go to general corporate purposes, possibly including exploration, development and acquisitions, according to the prospectus.