Investors have been remarkably patient with Hecla Mining (NYSE:HL) despite a difficult 2017 thus far. Production volumes fell substantially through the first half of 2017 compared to the year-ago period for all four of the primary metals mined by the company, including silver, gold, lead, and zinc. Then again, 2016 was a record year.
But does it still make sense for the stock to be coasting on last year’s performance? After all, it’s October now. The ongoing strike at the Lucky Friday mine has significantly impacted operations. It’s been offline for two full quarters now, which has cost shareholders tens of millions of dollars in revenue and earnings. The stock has moved sideways in the last year throughout it all, better than many competitors can claim, but that’s nothing to brag about given the S&P 500‘s 18% rise in the same period.
As the losses pile up from the Lucky Friday strike, it may be time to start asking whether management’s handling of the issue is to blame for the stock’s performance.
Is management just being stubborn?
Here’s what investors know about the sequence of events stemming from the ongoing labor dispute at Lucky Friday, based on the June 19 complaint described below:
- The last agreement with the roughly 250 unionized workers at Lucky Friday (not all employees at the mine are represented by a union) expired on April 30, 2016.
- On Feb. 19 of this year, the unionized workers voted against the company’s contract offer.
- On March 13, these workers went on strike to protest unfair labor practices, which made it impossible to operate the mine. It has been offline ever since.
- On June 19, the National Labor Relations Board issued a complaint against Hecla Mining management for how it behaved leading up to the last contract offered to the unionized workers at Lucky Friday.
The strike has had a substantial financial impact on Hecla. Silver…