06 Jul Hecla Mining to acquire smaller silver play Alexco Resource in all-stock deal
American silver producer Hecla Mining yesterday announced the acquisition of all the shares it doesn’t already own in Canada’s Alexco Resource, in an all-share deal valuing the junior silver play at US$74 million.
Hecla said the figure represents a premium of 23% based on Alexco’s five-day volume weighted average price on the New York Stock Exchange on July 1.
The deal will lead to the integration of Alexco’s Keno Hill Silver District in the Yukon into Hecla’s portfolio, potentially making the NYSE-listed firm the largest silver producer in Canada, according to Hecla’s chief executive Phillips Baker Jr.
“Silver is a critical element to decarbonize the economy and the need for domestic supply is growing,” Baker said in a statement. “Acquiring Keno Hill allows Hecla to further meet this need with a secure high-grade silver development and exploration project that has a small environmental footprint.”
Hecla will also pay Wheaton Precious Metals $135 million in its own shares for the company to terminate its silver streaming interest at Keno Hill.
The two transactions will boost Hecla’s already significant reserves – which reached the second highest level in the company’s 130-year history last year – to 200 million ounces.
Global demand for silver in industrial settings is set to jump 5% this year, according to forecasts published by the Silver Institute. The precious metal is used increasingly in solar panels, electric vehicles and other key green technologies.