Hecla acquires Alexco Resource
Mining Company announced that has agreed to acquire all the shares of Alexco Resource Corp. that Hecla does not already own for 47 cents per share.
Hecla is the largest and highest-grade silver producer in the United States and Alexco is Canada’s largest and highest-grade silver reserve. In a statement posted on July 5, Helca said it has also entered into an agreement with Wheaton Precious Metals Corporation (WPM) to terminate its silver streaming interest at Alexco’s Keno Hill property in exchange for US$135 million of Hecla common stock conditional upon the completion of Hecla’s acquisition of Alexco.
Hecla will acquire a large, high-grade silver property in the Yukon, a top 10 rated jurisdiction by the Fraser Institute. A fully permitted property with infrastructure that includes a 400 t/d mill, on-site camp facility, all-season highway access, and connection to the hydropower grid. The acquisition increases Hecla’s silver exposure by increasing proven and probable silver reserves 19 percent to 237 million oz, measured and indicated resources 24 percent to 257 million oz and inferred resources 7 percent to 523.7 million oz.
The deal has the potential for Hecla to become Canada’s largest silver producer
The acquisition allows for the advancement of Keno Hill’s development with an immediate and non-dilutive interim financing and transitions Alexco’s properties from a single asset and its development risk to a diversified production base of long-lived mines and a portfolio of high-quality exploration projects.
“At Hecla, we have followed the Keno Hill project closely for a number of years, as it is one of the very few deposits that fit seamlessly into Hecla’s strategy of owning and operating high-grade properties in tier one jurisdictions,” said Phillips S. Baker Jr., President and CEO. “As the United States’ largest silver producer, producing more than 40 percent of silver mined in the U.S., it is natural that Hecla acquires Keno Hill which could also make Hecla Canada’s largest silver producer. Silver is a critical element to decarbonize the economy and the need for domestic supply is growing. Acquiring Keno Hill allows Hecla to further meet this need with a secure high-grade silver development and exploration project that has a small environmental footprint.”
“This transaction delivers significant benefits to our stakeholders,” said Clynton Nauman, Chairman and CEO of Alexco. “By partnering with Hecla, an industry leader in high-grade narrow vein silver mining, we further position Keno Hill to achieve its full potential. There is no doubt that we have fallen well behind the development and production plan at Keno Hill – and our original estimate of achieving commercial production in early 2022. There are myriad reasons for those challenges, but fundamentally, they all led to an increasing level of stress across our business, which was having a negative impact on the share price, our finances, our employees, and other stakeholders. As a much larger business, Hecla has the organizational expertise and financial strength to build Keno Hill to the level and capacity required, while being able to continue to invest in exploration across the district, something that we, as Alexco, independently would likely struggle to achieve. Frankly, the opportunity now afforded to our employees, to the First Nation of Na-Cho Nyäk Dun and the wider Yukon community as a whole is superior to anything Alexco could offer in the short term. I look forward to working with Phil and his team at Hecla to close this transaction in September 2022.”