Hecla Mining Co. has announced that it has entered into a definitive agreement with ATAC Resources Ltd. to acquire ATAC and its Rackla and Connaught projects in Yukon, Canada.

Under the proposed transaction, the company’s subsidiary would acquire all of the issued and outstanding shares of ATAC for a consideration of C$31 million, or 0.0166 Hecla share per share of ATAC (consisting of 3,693,516 common shares of the company in aggregate). Hecla would also invest C$2 million in seed capital, equal to a 19.9 percent interest, for a new exploration company Cascadia Minerals Ltd., which would be spun-out with certain properties to ATAC’s shareholders as part of the transaction. The total consideration to the ATAC shareholders, including the implied value for the shares in Cascadia (C$0.036/share), is C$39 million.

The Hecla shares provide ATAC shareholders with a premium of 66 percent based on ATAC’s 20-day volume-weighted average price of C$0.0845 as of February 17, 2023, the last trading day preceding announcement of the letter of intent, or a 109 percent premium when including the value of Cascadia shares received.

The transaction would give ATAC shareholders ownership in the largest silver producer in the U.S. and the projected soon to be largest Canadian silver producer, as well as exposure to increased liquidity and an enhanced capital markets profile. Hecla’s technical expertise, balance sheet strength, and location of assets in Yukon makes Hecla uniquely suited to advance the Rackla and Connaught projects.

“The acquisition of ATAC reflects the continued execution of our strategy of acquiring significant land packages in highly prospective and tier one mining jurisdictions,” said Phillips S. Baker Jr., president and chief executive officer. “The Rackla and Connaught projects would further consolidate our position in Yukon after our strategic acquisition of Keno Hill, which we are developing, and is expected to be the largest and the highest grade primary silver mine in Canada. We look forward to continuing our work with the First Nation of Na-Cho Nyäk Dun and the wider Yukon community.”

Cascadia
As part of the proposed transaction, the company would make a C$2 million investment in Cascadia and would acquire a right of first refusal to acquire any or all of the Cascadia assets, and a number of units of Cascadia such that it would own 19.9 percent of Cascadia’s issued and outstanding common shares following completion of the transaction. Each Cascadia unit would contain one common share of Cascadia and one warrant. Each Cascadia warrant would entitle the company to purchase one additional Cascadia share for a period of five years at the same price as a Cascadia unit.

ABOUT HECLA
Founded in 1891, Hecla Mining Co. is the largest silver producer in the United States. In addition to operating mines in Alaska, Idaho, and Quebec, Canada, the company is developing a mine in the Yukon, Canada, and owns a number of exploration and predevelopment projects in world-class silver and gold mining districts throughout North America.

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