Mining News
Hecla confirms letter of intent to acquire ATAC Resources, owner of gold projects in Yukon
(Kitco News) - Hecla Mining (NYSE:HL) today acknowledged that it has entered into a non-binding letter of intent (the "LOI") to acquire ATAC Resources and its Rackla and Connaught projects in Yukon, Canada.
According to a company statement, under the proposed transaction, Hecla would acquire all of the issued and outstanding shares of ATAC for C$0.14 per ATAC share, for a consideration of C$31 million, payable in shares of Hecla common stock.
The company said it intends to make a C$2.0 million strategic investment into a new exploration company which would hold the remaining assets of ATAC.
Hecla added that key provisions of the LOI are non-binding and any acquisition would only occur pursuant to a definitive agreement with customary representations, warranties, covenants and conditions to closing.
"There can be no assurance that a definitive agreement will be entered into or that the proposed transaction will be consummated with ATAC. The company has entered into an exclusivity period of 30 days with ATAC," it said.
Founded in 1891, Hecla Mining 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 pre-development projects throughout North America.
Known for its discovery of Canada's first Carlin-type gold at its Rackla Gold Property in Yukon (Osiris Deposit, 0.73 Moz Indicated at 4.12 g/t Au, 1.04 Moz Inferred at 3.47 g/t Au), ATAC recently diversified its property portfolio with additional copper assets and a project in British Columbia.
In addition to these projects, ATAC also holds the oxide gold Tiger Deposit, with PEA-level economics yielding a pre-tax NPV(5%) of $118.2 M and an IRR of 54.5% at a US$1,400/oz gold price.
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