According to Hecla CEO Phillips S. Baker Jr., the sale of the Venezuelan properties is part of a strategy to reduce the financing it took to acquire Greens Creek. The transaction with Rusoro generates immediate cash from both sides: 1) the sale of the assets to Rusoro and 2) the repatriation of $25 million of net cash from Venezuela. And by exiting Venezuela, Hecla can concentrate on its operations in the U.S. and Mexico.

Here are more details that are driving the stock price. Hecla currently carries the Venezuelan properties at a book value of $39 million. Thus, the sale to Rusoro will result in a pretax loss on the sale in the range of $10-12 million (subject to normal postclosing adjustments). The $14 million foreign exchange loss will also be reported in second-quarter 2008 results.

This, plus the recent weakness in silver prices (similar to what I described with gold and NovaGold ), is the direct news that has been driving down Hecla stock.

By divesting itself of La Camorra, Hecla’s 2008 gold production will drop by about 70,000 ounces, from an earlier guidance estimate of 115,000 ounces. (Most of the balance of Hecla’s gold output comes from the Greens Creek mine.)

So 2008 is a transition year for Hecla. The Greens Creek news came quickly in the spring, and was an unexpected boon to the company’s long-term potential. That’s why we added Hecla to the OI portfolio.

The news from Venezuela was not unexpected, but it’s never good to have to walk away from a decent mine. And it does not really “hurt” Hecla over the long term. Really, adios, Senor Chavez.

Yes, overall, there will be a reduction in gold output for Hecla by selling Isidora. But Hecla is also enjoying a significant increase in silver production, due to Greens Creek. And while Hecla will no longer own a primary gold mine, the company will focus its efforts on mining silver and other metals in the U.S. and Mexico. Hecla will leverage its very deep and rich heritage and expertise as an underground miner.

So what should you do with Hecla? The situation is remarkably similar to how I view NovaGold, except that Hecla is not a “developer.” Hecla is a serious “producer.” If you take a long view of the silver market, this is a good time to accumulate more shares of Hecla.

Eventually, silver is going to resume an upward rise. When that happens, I think you will be glad you own shares in Hecla." This makes sense to us, although we might have to be more patient than I had first imagined. HL has smart leadership, awesome reserves, and low-cost silver production so there are plenty of reasons to be optimistic....just remember to keep your personal investment objectives and disciplines close at hand at all times.