On March 16, 2018, Hecla Mining Company and Klondex Mines Ltd. entered into an arrangement agreement whereby Hecla Mining will acquire all of the issued and outstanding shares of Klondex Mines pursuant to a plan of arrangement. Klondex shareholders may elect to receive either US$2.47 in cash (Cash Alternative) or 0.6272 of a Hecla share (Share Alternative), each full Hecla share being valued at the date of the agreement at US$3.94, subject in each case to pro-ration based on a maximum cash consideration of US$157.4 million and a maximum number of Hecla shares issued of 77.4 million. Klondex shareholders may also elect to receive US$0.8411 in cash and 0.4136 of a Hecla share and Klondex shareholders who fail to make an election will automatically receive US$0.8411 in cash and 0.4136 of a Hecla share. Klondex shareholders will also receive shares of a newly formed company (Klondex Canada) which will hold Klondex’s Canadian assets, including the True North and Bison Gold Resources properties. The transaction is expected to close during the second quarter of 2018.
Upon completion of the transaction, existing Hecla Mining and Klondex Mines shareholders will own approximately 83.8% and 16.2% of the combined company, respectively.
Cassels Brock is acting for Hecla Mining Company with a deal team that includes Gordon Chambers, John Christian and David Hansford (Securities, Mining and M&A) and Jim Morand (Tax).