Hecla amends loan, waiving preferred stock fee, revising capital expenditures covenant

By Sara Rosenberg

New York, June 30 - Hecla Mining Co. amended its credit facility, waiving through Sept. 15 the 3.75% semiannual fee paid in the 12% convertible preferred stock and loosening capital expenditures limitations to $75 million through year-end, according to a news release.

In addition, the amendment eliminated the requirement that the company retain a chief restructuring officer.

As part of the amendment, the company prepaid $18.2 million of its term loan, reducing the lending syndicate to two institutions and lowering borrowing costs.

At June 30, the company has now repaid $341.7 million of the $380 million drawn on the facilities.

"We are generating significant cash flow from our operations and made the decision to make a repayment, which lowers the amount owing and our borrowing costs. We are pleased with the recent changes to the credit agreement and cooperative spirit that enables Hecla to accelerate its exploration and capital spending programs and addresses our commitment to grow our production and reserve base," said Phillips S. Baker, Jr., president and chief executive officer, in the release.

"After the repayment, the cash on our balance sheet is similar to the amount we had at the beginning of the second quarter 2009, and I'm confident that this approach of reducing debt and investing in our projects is prudent and will create value for shareholders in the near term," Baker added.

Hecla is a Coeur d'Alene, Idaho-based miner, processor and explorer of silver and gold.

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