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Hecla Mining: Stock Price Estimate at $100 Silver
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Key Assumptions
1. 2025 Production:
Silver: 20M oz.
Gold: 175K oz.
2. Prices:
Silver: $100/oz.
Gold: $4,000/oz.
3. Free Cash Flow (FCF): ~$1.6B annually.
4. Shares Outstanding: ~400M.
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Step 1: Revenue Estimation
1. Silver Revenue:
20M oz × $100/oz = $2,000M ($2B).
2. Gold Revenue:
175K oz × $4,000/oz = $700M.
3. Total Revenue:
$2B + $700M = $2.7B.
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Step 2: Market Cap Calculation
1. Using a 20x FCF Multiple:
Market Cap = $1.6B × 20 = $32B.
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Step 3: Stock Price Calculation
1. Stock Price:
Market Cap ÷ Shares Outstanding.
$32B ÷ 400M = $80 per share.
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Conclusion
If silver reaches $100/oz and gold reaches $4,000/oz, Hecla Mining’s estimated stock price could be approximately $80/share. This assumes continued strong production and successful project development.
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Additional Considerations:
Debt Management: Leveraging higher silver prices effectively.
Permitting: Success in permitting Montana projects could boost production.
Market Sentiment: Global economic conditions and silver demand will impact valuations.
This scenario represents a bullish case for Hecla Mining with significant upside potential tied to rising silver and gold prices.
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Disclaimer
The user RockeTeller has a position in NYSE:HL. Simply Wall St has no position in any of the companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.