Hecla Mining outlines strategy in Yukon
Hecla Mining [HL-NYSE] said it has cemented its position in the Canadian Yukon by completing a previously announced deal to acquire Atac Resources.
“With the Atac acquisition, we continue to execute on our strategy of acquiring large land packages with significant exploration potential in favourable mining jurisdictions,’’ said Hecla President and CEO Philipps S Baker Jr. “The Rackla and Connaught properties in the Yukon are a massive land package with over 1,830 square kilometres, almost half the size of Rhode Island, with identified gold, silver, and base metal mineralization,’’ he said.
“As a result of previous investment in exploration by Atac, Hecla is not obligated for the next decade to make significant expenditures to maintain control of land packages, so while we will advance the exploration as quickly as possible, we will have flexibility in our pace of spending.’’
Hecla is the largest silver producer in the U.S. Prior to acquiring Atac, Hecla acquired Alexco Resources and its flagship Keno Hill silver mine, which is also located in the Yukon.
“The [Atac] acquisition further cements our position in the Yukon, with our Keno Hill mine going into production in the third quarter,’’ said Baker Jnr. “Keno Hill is expected to produce more than 2.5 million ounces of silver in 2023 and to become Canada’s largest and highest-grade primary silver mine,’’ he said.
Hecla acquired all the outstanding shares of ATAC for US$18.8 million worth of Hecla share, resulting in the issuance of 3.67 million shares to Atac shareholders, based on an exchange ratio of 0.166 of Hecla share for each Atac share.
As part of the acquisition, Hecla acquired 5.5 million units consisting of a 19.9% stake in Cascadia Minerals Ltd., and full warrants with a five-year term for a $2 million cash investment. Cascadia will be managed by former management of Atac. Cascadia will explore specific properties in the Yukon and British Columbia, leaving Hecla with the right to appoint two directors to the Cascadia board.
Atac has previously said it will apply to have Cascadia shares listed on the TSX Venture Exchange.
Meanwhile, Hecla said it has successfully restarted operations at its Casa Berardi mine following a partial lifting of Quebec’s ban on access to a road that leads to the mine. The company was forced to suspend production due to the impact of forest fires in the region.
The impact of the suspension and restart on Casa Berardi’s production and cost guidance will be updated in the second quarter earnings release, the company has said.
On Monday, Hecla shares rose 2.7% or 14 cents to $5.25 on volume of 1.9 million. The shares are currently trading in a 52-week range of $7.00 and $3.41.