Case: Hecla Mining Securities Class Action
Court: Southern District of New York
Class Period: March 19, 2018 through May 8, 2019
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On March 25, 2020, Kaplan Fox’s client the Gluck Family was appointed lead plaintiff.  The Court approved his selection of Kaplan Fox as lead counsel stating: “Kaplan Fox has extensive experience litigating securities class actions.” Kaplan Fox will prepare an updated and amended complaint setting forth all applicable legal claims on behalf of the Gluck Family and the class.  The Court’s order appointing lead counsel can be found below.

Hecla Mining Company is engaged in discovering, acquiring, developing and producing silver, gold, lead and zinc.

On March 19, 2018, Hecla announced it was acquiring three high-grade Nevada gold mines through the acquisition of Klondex Mines Ltd. (“Klondex”) for a mix of cash and stock worth $462 million. Defendant Phillips S. Baker, Jr. (“Baker”), Hecla’s President and Chief Executive Officer, represented that “Klondex’s three operating mines – Fire Creek, Midas and Hollister – are some of the highest-grade gold mines in the world” and that “[a]fter extensive due diligence, we see significant opportunity to improve costs, throughput and recoveries over time with our expertise.” Fire Creek, which started production in 2014, was the primary driver of the acquisition. Hollister was important for the prospective development and mining of the Hatter Graben, a large system of veins Hecla said it could reach from Hollister. Midas was an older mine that had been in production for decades but was still purportedly providing production and cash flow.

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.

Opinion & Order