Hecla Mining Company
Bernstein Liebhard LLP, a nationally acclaimed investor rights law firm, announces that a securities class action lawsuit has been filed on behalf of shareholders of Hecla Mining Corporation (“Hecla” or the “Company”) (NYSE: HL) between March 19, 2018 through May 8, 2019. The lawsuit seeks to recover Hecla shareholders’ investment losses
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New York, New York — Bernstein Liebhard LLP, a nationally acclaimed investor rights law firm, announces that a securities class action lawsuit has been filed on behalf of shareholders of Hecla Mining Corporation (“Hecla” or the “Company”) (NYSE: HL) between March 19, 2018 through May 8, 2019 (the “Class Period”) . The lawsuit was filed in the United States District Court for the Southern District of New York to recover damages for Hecla investors under the Securities Exchange Act of 1934. If you wish to serve as a lead plaintiff, you must move the court no later than July 23, 2019. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. Your ability to share in any recovery does not require that you serve as lead plaintiff.
According to the lawsuit, throughout the Class Period, Defendants failed to disclose that falsely and misleadingly represented that the Nevada operations would be “accretive” and cash flow positive, or at the very least “self-funding”, but this was not true. As admitted by the Defendants at the end of the Class Period, the Defendants knew from their extensive due diligence that the Nevada mines faced many undisclosed material problems that would prevent the operations from being cash flow positive, or even cash flow neutral. Specifically, Defendants were aware from their extensive due diligence that the Nevada operations had material problems in terms of excessive water, equipment availability, achieving enough development to have consistent production, and lack of characterization of ore types, among other things.
On May 9, 2019, Hecla shocked investors when, before the market opened, the Company issued a press release entitled “Hecla Reports First Quarter Results Nevada operations under review” (the “May 9 Press Release”), in which the Company disclosed a “comprehensive review” of its Nevada operations that it characterized during the ensuing conference call as “really just asking the question, are we going to get the return for the investment we’re making.” Indeed, Defendants admitted that the Nevada operations suffered from negative cash flow and other negative operating metrics, that Defendants were not sure if Hecla would ever get a positive return on its investment in the Nevada operations and that they might write off the Nevada operations. Additionally, the Company reported a net loss of over $25 million for the first quarter of 2019 based in large part on a gross loss of $13.8 million from its Nevada operations.
On May 9, 2019, following the disclosures that the Nevada operations were cash flow negative and subject to a comprehensive review to determine the best path forward for its Nevada operations given the poor economics, including the possibility of an impairment charge, the price of Hecla’s common stock declined by 23.5% over two trading days, from a closing price of $2.04 per share on May 8, 2019, to close at $1.56 per share on May 10, 2019. The stock price has not recovered and on May 23, 2019 closed at $1.38 per share.
Since 1993, Bernstein Liebhard LLP has recovered over $3.5 billion for its clients. In addition to representing individual investors, the Firm has been retained by some of the largest public and private pension funds in the country to monitor their assets and pursue litigation on their behalf. As a result of its success litigating hundreds of lawsuits and class actions, the Firm has been named to The National Law Journal’s “Plaintiffs’ Hot List” thirteen times and listed in The Legal 500 for ten consecutive years.
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Matthew E. Guarnero
Bernstein Liebhard LLP