Hecla Mining will acquire Mines Management in all-stock transaction that should help in the efforts to bring a controversial silver and copper project near northwest Montana’s Cabinet Mountains Wilderness into production.
The Seattle Times reported that the acquisition Spokane-based Mines Management is worth roughly $37 million, based on Mines Management’s fully diluted shares. Hecla, by contrast, has a market capitalization of nearly $1.7 billion.
Mines Management shareholders get Hecla stock worth about 94 cents for each of their shares, representing a 41 percent premium to its recent average price.
Hecla intends to move forward on the Montanore mining project, “considered one of the largest undeveloped silver and copper deposits in North America,” the companies said in announcing the transaction.
The planned mine won U.S. Forest Service environmental approval this spring after years of local debate. Three environmental groups promptly sued the agency, claiming it ignored state and federal laws in granting the go-ahead.
Mines Management, which has not turned a profit in at least five years, hired investment bankers in March to explore its options. The Montanore project is the Spokane company’s primary asset.
“Hecla is the logical company to move Montanore forward,” Hecla President and CEO Phillips Baker said in a statement. “We have considerable experience operating Greens Creek in a National Monument which will, combined with our financial strength and commitment to the community and environment, help Montanore reach its full potential.”
Hecla’s website says its Greens Creek mine in southeast Alaska is “one of the largest and lowest-cost primary silver mines in the world, and is the cash generating engine of the company.”
The transaction is expected to close in the third quarter of this year.