Hecla Mining Co. plans to acquire all of the outstanding shares of junior gold-silver miner Klondex Mines Ltd. for US$462 million in cash and shares.
As part of the transaction, Klondex's Canadian assets will be spun out to its existing shareholders, according to a March 19 release. Klondex shareholders will receive US$2.47 per share in cash or 0.6272 of a share of Hecla for each share held.
At closing, existing Hecla and Klondex shareholders will own about 83.8% and 16.2% of Hecla's outstanding common stock, respectively.
Hecla will subscribe for US$7.0 million of common shares of the spun out Canadian assets of Klondex in exchange for a 13.46% equity interest, based on a pre-investment valuation of US$45 million. Klondex Canada also intends to apply for a listing on the TSX Venture Exchange.
CI Investments Inc. and Sentry Investments Inc., which together hold about 23.7% of Klondex, agreed to support the deal. The boards of Klondex and Hecla unanimously approved the transaction.
The transaction is expected to close in the second quarter.