Kaplan Fox Files Class Action to Recover Losses for Investors Who Purchased Hecla Mining Company Common Stock (NYSE: HL)
NEW YORK, May 24, 2019 /PRNewswire/ -- Kaplan Fox & Kilsheimer LLP (www.kaplanfox.com) has filed a class action suit in the United States District Court for the Southern District of New York against Hecla Mining Company ("Hecla" or the "Company") (NYSE: HL), Phillips S. Baker, Jr. ("Baker"), the Company's President and Chief Executive Officer and a Director of the Board, Lindsay A. Hall, the Company's Senior Vice President, Chief Financial Officer and Treasurer, and Lawrence P. Radford, the Company's Senior Vice President – Operations (collectively, the "Defendants").
The complaint alleges that Defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by the U.S. Securities and Exchange Commission, and is brought by plaintiffs on behalf of all persons and entities who purchased Hecla's publicly traded common stock between March 19, 2018 and May 8, 2019, inclusive (the "Class Period").
The complaint further alleges that, "Hecla purports to discover, acquire, develop, and produce silver, gold, lead and zinc." On March 19, 2018, the start of the Class Period, 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. Hecla's President and CEO, Defendant Baker, 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."
According to the complaint, during the Class Period, Defendants 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.
Further, according to the complaint, 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," 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."
On May 9, 2019, following the disclosures that Hecla's 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.
If you are a member of the proposed Class, you may move the court no later than 60 days from today to serve as a lead plaintiff for the proposed Class. You need not seek to become a lead plaintiff in order to share in any possible recovery.
Plaintiffs seek to recover damages on behalf of the proposed Class and are represented by Kaplan Fox & Kilsheimer LLP (www.kaplanfox.com). Our firm, with offices in New York, San Francisco, Los Angeles, Chicago, and New Jersey, has decades of experience in prosecuting investor class actions and actions involving violations of the Federal securities laws.
If you have any questions about this Notice, the action, your rights, or your interests, or would like a copy of the complaint, please e-mail attorneys Robert Kaplan ([email protected]), or Jeffrey Campisi ([email protected]), or contact them by phone, regular mail, or fax:
Robert N. Kaplan
KAPLAN FOX & KILSHEIMER LLP
850 Third Avenue, 14th Floor
New York, NY 10022
Toll-Free Telephone: (800) 290-1952
Telephone: (212) 687-1980
Fax: (212) 687-7714
E-mail address: [email protected]
Jeffrey P. Campisi
KAPLAN FOX & KILSHEIMER LLP
850 Third Avenue, 14th Floor
New York, NY 10022
Toll-Free Telephone: (800) 290-1952
Telephone: (212) 687-1980
Fax: (212) 687-7714
E-mail address: [email protected]
SOURCE Kaplan Fox & Kilsheimer LLP
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