The Dynamic Dividend

Hecla Mining Initiates Silver-Linked Dividend

Hecla Mining Company (HL) initiated a quarterly dividend this morning and announced that its payout will be tied to the company’s average realized silver price.

The low-cost silver producer will pay a quarterly dividend of $0.01 per share if 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. The company expects to realize an average silver price of $40.00 per ounce during its third quarter, which would put its first payout under the new policy at $0.03 per share.

Shares of HL are trading at $7.26, where a quarterly dividend of $0.03 per share produces a 1.65% 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 just yesterday announced enhancements to its policy that will further juice shareholder returns should the price of the yellow metal exceed certain thresholds.