Hecla Mining and Klondex Mines report that Hecla’s acquisition of Klondex is complete. “With this acquisition, Hecla now has three high-grade mines in Nevada, one of the best mining districts in the world,” said Phillips S. Baker, Jr., President and CEO. “These assets immediately add production and cash flow, and because they are a good fit with Hecla’s expertise, we believe there is significant opportunity for improvement in the mines’ productivity and consistency.
“We welcome the former Klondex shareholders and employees to Hecla, as we continue to grow into the largest and strongest company in its long history.”
Hecla acquired the outstanding common shares of Klondex for approximately $153 million and 75 million shares of Hecla common stock extinguishing all rights to acquire Klondex common shares. Klondex shareholders who elected to receive share consideration will receive 0.6272 of a Hecla share in exchange for their Klondex shares. Klondex shareholders who elected to receive combined cash and share consideration or who failed to file an election on a timely basis will receive the combination consideration of $0.8411 in cash and 0.4136 of a Hecla share in exchange for their Klondex shares. Klondex shareholders who elected to receive cash consideration were subject to proration and will receive $0.8867 in cash and 0.4020 of a Hecla share in exchange for their Klondex shares. Klondex shareholders will also receive 0.125 of a common share of Havilah Mining Corp, a newly-formed entity that will retain Klondex’s Canadian operations, as part of the consideration received in exchange for each of their Klondex shares.
Havilah has been approved to list its common shares on the TSX Venture Exchange, with trading expected to commence at market open on July 25, 2018.
As part of the transaction, Hecla subscribed for 3,539,332 common shares of Havilah, on a private placement basis at a price of C$2.61 per share for a gross purchase price of C$9,242,800 (being the Canadian dollar equivalent of $7 million). The shares of Havilah acquired by Hecla represent 13.46% of the outstanding common shares of Havilah, after giving effect to the subscription.
Founded in 1891, Hecla Mining Co is a leading low-cost US silver producer with operating mines in Alaska, Idaho and Mexico, and is a growing gold producer with operating mines in Quebec and Nevada. The company also has exploration and pre-development properties in eight worldclass silver and gold mining districts in the US, Canada, and Mexico.
Klondex, which described itself as “North America’s premier narrow vein underground producer” was a junior-tier gold and silver mining company. It has 100% interests in three producing mineral properties: the Fire Creek mine, the Midas mine and ore milling facility, and the Hollister mine, all of which are located in the state of Nevada, USA. The company also has a 100% interest in the True North mine and mill in Manitoba, Canada and the Aurora Mine and ore milling facility, located in Nevada.
