Hecla Mining Company (HL)

binv271828 (< 20) Submitted: 6/06/08 9:53 PM : Start Price: $12.54 HL Score: -36.60

Hecla Mining - US based junior / mid-level miner. Primarily a silver miner, but also produces gold, lead and zinc. Most of their mines are in Greens Creek, Alaska, Venezuela, and exploration activities in Mexico. They are producing more that 5.5 million oz of Silver per year at a cost of $-2.81 per oz. With the acquisition of Greens Creek, Hecla will be able to double its silver production to around 11 million oz of Silver / year. That is impressive. And with Silver and Gold prices about to break back out, that means very good new for the stock.

Gold and Silver - Relationship to the USD
Gold and Silver are money. Most people think they are commodoties, which is not inaccurate. To some degree they are; Gold is a reasonably useful industrial material, and silver is a highly useful industrial material. But gold and silver's value is because they have respresented wealth for so long. They are money, and they have value because they are non-dilutive.

Why is Gold and Silver going up? The question is incomplete. The complete question is why is gold and silver going up relative to the US Dollar. Remember, gold and silver are money. And like any form of money it must be valued relative to other currencies. Gold and Silver are going to continue their rise (in terms of USD) because of the extremely inflationary actions of the FED and the current government (and most likely the next government as well). It is a very sad and very unfortunate fact that the USD is being debased and devalued by the current government's fiscal policy. The US Dollar Index is on a very steady decline. There is no reason for it to rise in the current environment. The FED is printing money and trying to inflate the US out of its current economic dilemma. In order to make any kind of dent in inflation The FED has to take a much tougher stance. ... Their most recent "tough talk" on inflation... "We may not cut interest rates next meeting, and it might stay at 2% for the next serveral sessions"... Wow, that is the FED being "hawkish" on inflation. Meanwhile liquidity is being pumped into the system and the dollar is being devalued.

The recent gold and silver correction has provided a good buy-in opportunity. It is already on it's way out of the correction, having made up >50% of its retracement already. It is not too late yet. Once gold goes back over $1000 again, there is nothing on the horizon to hold it back. The FED has made it clear that dealing with inflation takes second seat to proping up the financial system. Unless something drastic (such as a major rise in interest rates) occurs, gold and silver will keep rising. And even with a major interest rate rise, that would only delay the upward progress. The US is still accumlating bad debt, and is still backing those loans by rapidly depreciating assests. Until there is a major recession and house prices come down substanitally from where they are AND the US economy transitions from consumption based to production based, the USD will continue its death spiral. Gold and Silver will continue to rise.

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