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Published by Jessica Casey,
Deputy Editor
Global Mining Review,
Thursday, 23 February 2023 12:00
Hecla Mining Company has entered into a non-binding letter of intent (LOI) to acquire ATAC Resources Ltd and its Rackla and Connaught projects in Yukon, Canada.
Under the proposed transaction, the company would acquire all of the issued and outstanding shares of ATAC for CAN$00.14 per ATAC share, for a consideration of CAN$31 million, payable in shares of Hecla common stock. The company intends to make a CAN$2 million strategic investment into a new exploration company (Spinco) which would hold the remaining assets of ATAC. The company would also acquire:A right of first refusal to acquire any or all of the Spinco Assets.A number of units of Spinco such that it would own 19.9% of Spinco’s issued and outstanding common shares following completion of the strategic investment. Each Spinco unit would contain one common share of Spinco (a Spinco share) and one warrant (a Spinco warrant). Each Spinco warrant would entitle the company to purchase one additional Spinco share for a period of five years at the same price as a Spinco unit.The 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.
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