At a time of lower commodity prices, the mining stocks with the greatest speculative appeal are those with new projects that enhance their value even before prices rebound. Today we look at Hecla Mining and Amerigo Resources, two mining firms that are moving ahead with large developments. In both cases these projects promise to expand production considerably. Hecla is beginning production at a Mexican silver mine that last operated a decade ago, and has also purchased one of North America’s largest undeveloped silver deposits. Amerigo has launched a new copper tailings project in Chile that could double its production by next year.

HECLA MINING COMPANY (New York symbol HL; www.hecla-mining.com) explores for, mines and processes silver and gold in the U.S. and Mexico. Most of the company’s silver output comes from its Greens Creek mine in Alaska and its Lucky Friday project in Idaho. Hecla’s Casa Berardi mine in Quebec supplies the majority of its gold production.

In the three months ended June 30, 2015, Hecla produced 2.48 million ounces of silver, down 1.5% from 2.52 million ounces a year earlier. Gold output rose 2.6%, to 44,692 ounces from 43,554. Cash flow per share fell 33.3%, to $0.06 from $0.09, on the lower silver production and prices.

The company aims to begin production at its San Sebastian project in Mexico early next year. The mine, which last operated between 2001 and 2005, is forecast to produce 8 million ounces of silver equivalent in its first two years from easily mined surface deposits. San Sebastian then has the potential to further expand its reserves.

In June 2015, Hecla agreed to buy Revett Mining Company (symbol RVM on New York) for $20 million in shares. The company is now moving ahead with permitting on Revett’s Rock Creek project in northwestern Montana.

Rock Creek is considered one of North America’s largest undeveloped silver and copper deposits, with up to 229 million ounces of silver and 2.0 billion pounds of copper. The project is about 50 miles north of Hecla’s Lucky Friday mine.

Like most precious-metals firms, Hecla’s shares will be heavily influenced by silver and gold prices. Meanwhile, its positive cash flow and improving production outlook give it speculative appeal.

Recommendation in Stock Pickers Digest: BUY

Mining stocks: Amerigo has used cash flow to pay off all of its debt

AMERIGO RESOURCES (Toronto symbol ARG; www.amerigoresources.com) processes copper and molybdenum from waste rock at Chile’s El Teniente, the world’s largest underground copper mine. The rock comes from the mine’s current production and tailings from the nearby Colihues deposit. This contract runs at least through 2037.

Amerigo gets 94% of its revenue by processing copper. The remaining 6% comes from molybdenum.

The companyhas started processing tailings from the Cauquenes tailings deposit, located near its current operations in Chile.

Cauquenes is a big growth project: Amerigo expects it to help double its production in 2016, to 90 million pounds of copper. Phase 1 is now in operation at a rate of 30,000 tonnes per day, and Amerigo expects that to rise to 60,000 by the end of this year, bringing the company’s overall output to over 70 million pounds of copper annually.

The Cauquenes expansion will cost $140 million in total. However, Amerigo has used its cash flow to pay off all of its debt over the last few years, and it currently holds cash of $18.3 million. This gave it the flexibility to arrange bank financing in Chile for Cauquenes.

Recommendation in Stock Pickers Digest: BUY for aggressive investors.

For our report on one of the world’s largest copper mining stocks, read Copper giant Freeport McMoRan gets activist pressure in tough commodities market.

For our advice on making investment decisions about major and junior mining stocks, read What are mining stocks?