Morgan Stanley Downgrades US Steel, Cleveland-Cliffs; Reliance, Hecla Mining Release Results And More — Thursday's Top Mining Stories
Top Stories for Feb. 15, 2024:
1. Morgan Stanley analyst Carlos De Alba downgraded United States Steel Corporation (NYSE:X) from Overweight to Equal-Weight and raised his price target from $40 to $51.
Analyst Carlos De Alba also downgraded Cleveland-Cliffs (NYSE:CLF) from Overweight to Equal-Weight and lowered his price target from $21.50 to $20.
2. Cleveland-Cliffs announced that it will idle its tinplate production plant in Weirton, West Virginia, in April 2024 indefinitely.
The decision is a direct result of the International Trade Commission (ITC) rejecting the addition of special tariffs and subsidies on tin mill products that were proposed by the Department of Commerce.
Roughly 900 Cleveland-Cliffs employees impacted by the change will be allowed to relocate to other Cliffs facilities or offered severance packages.
Cleveland-Cliffs' Chairman, President and Chief Executive Officer Lourenco Goncalves said, "In what was our final effort to maintain tinplate production here in America, we proved that we are forced to operate on an uneven playing field, and that the deck was stacked in favor of the importers. Despite the Department of Commerce finding evidence of dumping and subsidization from respondent countries, the ITC shockingly ruled against imposition of tariffs, keeping the uneven playing field in place and making it impossible for us to viably produce tinplate.”
3. Reliance Steel & Aluminum Co. (NYSE:RS) rebranded to Reliance Inc. and reported fourth-quarter and full-year 2023 results.
The company reported its second-highest annual EPS at $22.64, with fourth-quarter EPS of $4.70. It also generated $1.67 billion in annual cash flow from operations,
In 2023, it bought back $479.5 million worth of its common stock and increased its quarterly dividend by 10% to $1.10 per share, totaling an annual dividend of $4.40.
Reliance also completed the acquisition of Cooksey Iron & Metal Company in early 2024 and announced an upcoming acquisition of American Alloy Steel, Inc.
Finally, the company is rebranding to Reliance, Inc. from Reliance Steel & Aluminum Co., to reflect its commitment to expanding beyond metal, while maintaining its core business model and values.
4. Hecla Mining Company (NYSE:HL) reported fourth-quarter and full-year 2023 results.
The company reported its second-highest silver reserves at 238 million ounces and silver sales of $720.2 million, with production reaching 14.3 million ounces. Meanwhile, Hecla secured a U.S. patent for its Underhand Closed Bench (UCB) mining method, enhancing its operational efficiency.
Lucky Friday resumed production early in the year, with insurance payouts following in February, while Greens Creek had a standout year with record operations, generating $157.3 million in cash flow and $121.6 million in free cash flow.
Casa Berardi transitioned to surface mining, surpassing expectations, and Keno Hill started production, focusing on safety and environmental improvements alongside infrastructure developments. Technical reports for Keno Hill and Casa Berardi highlighted the value of their assets.
Finally, safety performance exceeded industry averages, with an All-Injury Frequency Rate (AIFR) of 1.45, showcasing the company's commitment to safety across its operations.
President and CEO Phillips S. Baker Jr. said, "Hecla reported the second largest silver reserves, largest gold resource and second highest silver production and revenues in our history despite the Lucky Friday losing five months of production due to a fire.... Greens Creek delivered another year of strong and consistent performance as we increased throughput…. At Keno Hill, we slowed the ramp-up of the mine due to the safety and environmental performance; however, with the silver grade over twice the grade of our other mines, it still contributed significantly to our silver production and, as the technical report shows, it will contribute even more in the future."
5. Director of Dakota Gold Corp. (NYSE:DC) Robert Quartermain acquired 10,000 shares at an average price of $2.00 for a total of roughly $20,000.
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