The Dynamic Dividend

Hecla Declares First Silver-Linked Dividend

Hecla Mining Company (HL), which announced plans for a quarterly dividend tied directly to the price of silver back in September, declared its first payout this morning.

Hecla declared a quarterly dividend of $0.02 per share, based on the company’s average realized silver price of $37.02 during the third quarter of 2011.

The low-cost silver producer has said it will pay a quarterly dividend of $0.01 per share any time its average realized silver price during the preceding quarter tops $30.00 per ounce, and lift its payout by $0.01 per share for each incremental increase of $5.00 per ounce. Hecla had expected to realize an average silver price of $40.00 per ounce during its third quarter, so today’s dividend announcement is a bit of a disappointment.

Shares of HL closed Monday’s session trading at $6.74, where a quarterly dividend of $0.02 per share produces a 1.19% yield.

Earlier this year, Newmont Mining tied its dividend rate directly to the price of gold, a move that is really paying off for shareholders. The company raised its payout by 50% in July, and bumped it by another 17% last month.