Gold and Silver in Focus: Shares of Hecla Mining, Desert Gold, and Kinross Gold Offer Opportunities

Hecla Mining: On the Path to Becoming a Silver Champion

There are only a few true silver producers listed on the stock exchange. Often, the metal is merely a byproduct of gold, copper, or zinc mining. More than two-thirds of annual global production comes from these sources. For investors who want to invest directly in a pure-play silver miner, the selection therefore remains limited. Hecla Mining is one of the few companies that is fully committed to silver. And management is actively driving this strategy forward. For example, the Canadian gold mine Casa Berardi was sold. As a result, silver's share of production was already more than 70% in the first quarter.

But there was even more good news for shareholders. The company, founded in Idaho as early as 1891, reported more than USD 588 million in cash at the end of the quarter. Shortly after the end of the quarter, on April 9, the company announced the full repayment of a USD 263 million senior bond. As a result, Hecla Mining is free of long-term debt and has an undrawn USD 225 million credit line at its disposal. This will allow the company to finance expansion through acquisitions and its own development projects.

On the balance sheet, the company had a picture-perfect start to the new year. Thanks to high silver prices, revenue doubled to USD 411.43 million compared to the same quarter last year. Adjusted earnings per share were USD 0.24. EBITDA and cash flow are at record levels. However, this will not be repeatable this quarter due to the decline in the silver price. Nevertheless, the US-based company is in a strong position. This is because costs are low: in Q1, it produced 3.9 million ounces of silver at AISC costs of just USD 8.17 per ounce.

Hecla Mining aims to grow significantly and achieve annual production of more than 20 million ounces of silver. For this year, management issued guidance of 15.1 to 16.5 million ounces of silver. This growth is expected to come from the ramp-up of the Keno Hill Mine in the Yukon and optimizations at Lucky Friday. In addition, the company is working with a record exploration budget of USD 55 million this year, with a primary focus on Nevada. Hecla's share price has nearly halved since its peak in late January. Due to the company's heavy exposure to silver, prices often drop very quickly. However, if silver (and gold) remain stable or even rise, the stock can rebound just as quickly!

Desert Gold: The Lassonde Curve Points the Way

In the commodities industry, there is the famous Lassonde Curve. Geologist and entrepreneur Pierre Lassonde from Quebec developed a theory to illustrate the phases of a junior mining company based on its share price. And this curve is quite reliable. After the discovery of a deposit, the share price usually rises rapidly, often amid euphoria. If it turns out that mining operations are feasible, the second phase begins. This often corresponds to a protracted sideways movement in the stock price, during which operations focus primarily on technical studies and permits. The next surge follows as soon as mining operations begin. Desert Gold Ventures is at exactly this point. And this is also reflected in the share price. After the hype at the beginning of the decade, the price dropped sharply, followed by a very long sideways phase. Now, however, the company is on the verge of starting production at its flagship SMSZ project in Western Mali. The property spans a vast area of 440 km². Management is pursuing a highly capital-efficient strategy. Rather than working for years toward the construction of a large mine, the plan is to begin production through a phased approach.

Desert Gold has decided to begin operations at the Barani East sub-project. The initial plan is to build a simple, modular gravity processing plant. Initial capacity will be around 200 metric tonnes per day (tpd) and is scheduled to expand to 1,200 tpd by the end of the year. Technical acceptance of the plant took place in China back in April. The plant is expected to arrive at the port of Dakar in the coming days. Commissioning is then scheduled for mid to late July.

Following the "Lassonde curve," the company could now see a revaluation. As soon as the first cash flows are generated, Desert Gold will be on a completely different financial footing. This development is slowly being reflected in the share price as well. At the beginning of the year, the sideways trading phase ended, and the share price rose sharply. However, the market capitalization—equivalent to just around EUR 28 million—indicates that there is still plenty of room for growth. The stock's revaluation is still in its early stages. The research firm GBC is bullish on the stock and has set a price target of CAD 0.93. By comparison, a share currently costs around CAD 0.125. So, if you believe the analysts, this presents an opportunity to multiply your investment. And that may not be the end of it. The massive property—about half the size of Berlin—is still being explored. As such, there is potential for rising production over the medium to long term.

Kinross Gold: Technically Interesting Again

From a technical analysis perspective, Kinross Gold's stock is currently in a very interesting phase. The Canadian gold producer, with a market capitalization of around USD 31 billion, has shown extremely strong performance since early 2024. At its peak, the stock's price increased sevenfold. Since late January, a sharp correction has been underway, erasing nearly 30% of its market value.

Technically, the stock has broken below the overarching uptrend channel. It is now trading below the 50- and 100-day moving averages. In the long term, however, the outlook appears neutral. The share is currently battling around the psychologically important 200-day line and is trading just above it. In recent weeks, the chart has defined clear trading zones that investors can use as guidance for the coming weeks. On the upside, the strongest resistance is in the USD 30–31 range. This is where the previous highs and the 100-day line converge. A breakout above this level would clear the path to the year-to-date high. On the downside, the most recent local low is around USD 23.20, which swing traders can use to pick up bargains. Only a drop below the USD 21 mark would become critical. Declining volatility and neutral momentum currently point to stabilization. Conservative investors are therefore biding their time and will only enter the market once the resistance at USD 26.40 (based on the daily closing price) is sustainably broken. Those looking to trade aggressively can use limit orders in the support zone between USD 23.30 and USD 23.80 to establish positions.

Operationally, things are going well at Kinross Gold. In the first quarter, historic records were broken due to the high gold price. Attributable free cash flow reached USD 837.5 million, and adjusted net income rose to USD 843 million for the quarter. With cash reserves exceeding USD 2.2 billion, the company is in a very solid position and could also become active in the M&A market. In the medium term, the planned Lobo Marte mega-mine is expected to drive growth. The company is investing approximately USD 3 billion in this project in Chile's Atacama Desert. Gold is expected to be mined there for more than two decades starting in the early 2030s. Kinross expects cumulative production of 4.7 million ounces over the mine's lifetime.

With Hecla Mining, silver investors are betting on one of the few pure plays in the industry. Following the stock's halving, there are opportunities to pick up a few shares at a bargain price. Desert Gold is transforming from an exploration company to a gold producer. According to the Lassonde curve, this typically leads to significant price gains. Kinross looks technically interesting because the chart provides clear guidance on how to trade it.