8-K
Hecla Mining Co/De/ (HL)
View as plain text
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
____________________
FORM 8-K
Current Report Pursuant to Section 13 or 15( d ) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 7, 2022
HECLA MINING COMPANY ****
(Exact Name of Registrant as Specified in Its Charter)
| Delaware | 1-8491 | 77-0664171 |
|---|---|---|
| (State or Other Jurisdiction<br><br> <br>of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
6500 North Mineral Drive, Suite 200
Coeur d'Alene , Idaho 83815-9408
(Address of Principal Executive Offices) (Zip Code)
(208) 769-4100
(Registrant's Telephone Number, Including Area Code)
N/A
(Former name or Former Address, if changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12(b))
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, par value $0.25 per share | HL | New York Stock Exchange |
| Series B Cumulative Convertible Preferred Stock, par value $0.25 per share | HL-PB | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.01. Completion of Acquisition or Disposition of Assets
On September 7, 2022, Hecla Mining Company (the “Company” or “Hecla”) and our wholly owned subsidiary, 1080980 B.C. Ltd. (“1080980”) completed the acquisition of Alexco Resource Corp. (“Alexco”) pursuant to the terms of the July 4, 2022 Arrangement Agreement among the parties, as amended (the “Alexco Agreement”). Under the terms of the Alexco Agreement, 1080980 acquired all the outstanding common shares of Alexco not owned by the Company or 1080980 for 17,992,875 shares of Hecla common stock, for a total consideration of approximately $68,912,711 (“Purchase Price”) based on a share exchange ratio of 0.116 of a Hecla common share for each Alexco common share. **** The Alexco Agreement, filed as exhibit 2.1 to our Current Report on Form 8-K filed on July 5, 2022, as amended by the Assignment and Amendment Agreement dated as of July 25, 2022 and filed as exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, are incorporated herein by reference.
Concurrently with entering into the Alexco Agreement, Hecla entered into a Stream Termination Agreement (the “WPM Agreement”) with Wheaton Precious Metals Corp. (“WPM”). Under the WPM Agreement, Hecla issued 34,800,989 shares of its common stock valued at US $135 million based on Hecla’s 5-day volume-weighted average price for the period ended on the first day prior to the Alexco closing in exchange for the termination of WPM’s silver streaming interest in Alexco’s Keno Hill silver mine located in the Yukon Territory, Canada.
The Alexco Agreement and Assignment and Amendment Agreement have been incorporated by reference herein to provide you with information regarding their terms. It is not intended to provide any other factual information about us. Such information can be found elsewhere in other public filings we have made with the Securities and Exchange Commission (“SEC”), which are available without charge at www.sec.gov.
The Alexco Agreement, Assignment and Amendment Agreement, and WPM Agreement contain representations and warranties the Company, 1080980, Alexco and WPM made. The assertions embodied in those representations and warranties are qualified by information in a confidential disclosure letter that Alexco has exchanged in connection with signing the Alexco Agreement. While the Company does not believe that it contains information securities laws require us to publicly disclose other than information that has already been so disclosed, the disclosure letter does contain information that modifies, qualifies, and creates exceptions to the representations and warranties set forth in the Agreement. Accordingly, you should not rely on the representations and warranties as characterizations of the actual state of facts since they are modified in important part by the disclosure letter. Moreover, information concerning the subject matter of the representations and warranties may have changed since the date of the Alexco Agreement, which subsequent information may or may not be fully reflected in public disclosures.
Item 3.02. Unregistered Sales of Equity Securities
As previously disclosed in our Current Report on Form 8-K filed on July 5, 2022, pursuant to the terms of the Alexco Agreement, the purchase price for the outstanding common shares of Alexco was to be paid using shares of Hecla common stock. At closing, we issued 17,992,875 shares of our common stock to Alexco shareholders, pursuant to an exemption from registration under Section 3(a)(10) of the Securities Act of 1933.
2
As previously disclosed in our Current Report on Form 8-K filed on July 5, 2022, pursuant to the terms of the WPM Agreement, on September 7, 2022 the Company issued 34,800,989 shares of its common stock to WPM, which are restricted for a minimum of 6 months from the date of issuance.
Item 8.01. Other Events
On September 7, 2022, the Company issued a press release announcing the closing of the Alexco acquisition and WPM Agreement, effective September 7, 2022. A copy of the news release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
____________________
* Filed herewith.
3
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| HECLA MINING COMPANY | |
|---|---|
| By: | /s/ David C. Sienko |
| David C. Sienko | |
| Vice President and General Counsel |
Dated: September 7, 2022
4
ex_421221.htm
Exhibit 99.1
NEWS RELEASE
HECLA COMPLETES ACQUISITION OF ALEXCO RESOURCE CORP
FOR IMMEDIATE RELEASE
September 7, 2022
COEUR D'ALENE, IDAHO -- Hecla Mining Company (NYSE:HL) (Hecla) and Alexco Resource Corp. (NYSE American:AXU; TSX:AXU) (Alexco) announced today completion of the Alexco acquisition.
“With the world’s increasing demand for silver for clean energy, Hecla is helping meet that demand as the world’s fastest growing established silver miner,” said Phillips S. Baker, Jr., Hecla’s President & CEO. “Since 2010, Hecla has increased silver production by more than 25%. With the additional production from Alexco’s Keno Hill, and the continued production growth from Greens Creek and Lucky Friday, we expect Hecla to produce 17-20 million ounces per year in the next few years, which is 30 to 55% more than 2021. Hecla’s silver production is in the United States where it already produces 40% of all the silver mined and, with Keno Hill, Hecla is on the path of being Canada’s largest silver producer as well.”
“The Keno Hill property is in a premier mining jurisdiction where the First Nation of the Na-Cho Nyak Dun and Yukon governments are supportive of mining. Like our other operations where we have had decades of mining and have become an integral part of the communities, we look forward to doing the same in the Yukon,” Baker added.
Baker said, "Keno Hill currently has an almost decade-long high-grade reserve life, which we expect to extend as we drill on identified resources. With the fully operational mill and development that is in place we don’t anticipate a large capital program to bring the mine into production. Over the coming months Hecla plans to invest in development, infrastructure, and equipment so there are adequate mining faces and good working conditions to bring Keno Hill to full and consistent production by the end of 2023.”
As part of the acquisition, Hecla issued 17,992,875 **** million shares of its common stock to Alexco shareholders for a total consideration of approximately $69 **** million based on a share exchange ratio of **** 0.116 of a Hecla share for each Alexco common share. Concurrent with the acquisition, the silver streaming interest at Alexco’s Keno Hill property held by Wheaton Precious Metals Corp was terminated in exchange for US$135 million of Hecla common stock, in the form of 34,800,989 million shares of Hecla common stock based on the 5-day VWAP of $3.88 **** per share. As part of the transaction, Hecla provided Alexco with a US$30 million secured loan facility, of which US$25 million was drawn when the transaction closed.
ABOUT HECLA
Founded in 1891, Hecla Mining Company (NYSE:HL) is the largest silver producer in the United States. In addition to operating mines in Alaska, Idaho and Quebec, Canada, the Company owns a number of exploration properties and pre-development projects in world-class silver and gold mining districts throughout North America.
Investor Relations, Hecla Mining Company • 1-800-432-5291• hmc-info@hecla-mining.com
1
Cautionary Statements to Investors on Forward-Looking Statements
This news release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbor created by such sections and other applicable laws, including Canadian securities laws. When a forward-looking statement expresses or implies an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, such statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by the forward-looking statements. Forward-looking statements often address our expected future business and financial performance and financial condition and often contain words such as “anticipate,” “intend,” “plan,” “will,” “could,” “would,” “estimate,” “should,” “expect,” “believe,” “project,” “target,” “indicative,” “preliminary,” “potential” and similar expressions. Forward-looking statements in this news release may include, without limitation: (i) Hecla could be the largest silver producer in the U.S. and Canada; (ii) the Keno Hill mine will resume production in the future; (iii) Hecla may produce 17-20 million ounces per year in the next few years; (iv) Keno Hill’s mine life may be extended; (v) Hecla does not anticipate a large capital program to bring Keno Hill into production and (vi) Hecla expects to invest in development, infrastructure, and equipment at Keno Hill to obtain adequate mining faces and good working conditions to make Keno Hill a consistent producer by the end of 2023. The material factors or assumptions used to develop such forward-looking statements or forward-looking information include that Hecla’s plans for development and production will proceed as expected and will not require revision as a result of risks or uncertainties, whether known, unknown or unanticipated, to which Hecla’s operations are subject.
Estimates or expectations of future events or results are based upon certain assumptions, which may prove to be incorrect, which could cause actual results to differ from forward-looking statements. Such assumptions, include, but are not limited to: (i) there being no significant change to current geotechnical, metallurgical, hydrological and other physical conditions; (ii) permitting, development, operations and expansion of Hecla’s projects being consistent with current expectations and mine plans; (iii) political/regulatory developments in any jurisdiction in which Hecla operates being consistent with its current expectations; (iv) the exchange rate for the USD/CAD being approximately consistent with current levels; (v) certain price assumptions for gold, silver, lead and zinc; (vi) prices for key supplies being approximately consistent with current levels; (vii) the accuracy of our current mineral reserve and mineral resource estimates; (viii) Hecla’s plans for development and production will proceed as expected and will not require revision as a result of risks or uncertainties, whether known, unknown or unanticipated; (ix) counterparties performing their obligations under hedging instruments and put option contracts; (x) sufficient workforce is available and trained to perform assigned tasks; (xi) weather patterns and rain/snowfall within normal seasonal ranges so as not to impact operations; (xii) relations with interested parties, including Native Americans, remain productive; (xiii) economic terms can be reached with third-party mill operators who have capacity to process our ore; (xiv) maintaining availability of water rights; (xv) factors do not arise that reduce available cash balances; and (xvi) there being no material increases in our current requirements to post or maintain reclamation and performance bonds or collateral related thereto.
In addition, material risks that could cause actual results to differ from forward-looking statements include, but are not limited to: (i) gold, silver and other metals price volatility; (ii) operating risks; (iii) currency fluctuations; (iv) increased production costs and variances in ore grade or recovery rates from those assumed in mining plans; (v) community relations; (vi) conflict resolution and outcome of projects or oppositions; (vii) litigation, political, regulatory, labor and environmental risks; (viii) exploration risks and results, including that mineral resources are not mineral reserves, they do not have demonstrated economic viability and there is no certainty that they can be upgraded to mineral reserves through continued exploration; (ix) the failure of counterparties to perform their obligations under hedging instruments; (x) we take a material impairment charge on our Nevada operations; (xi) we are unable to remain in compliance with all terms of the credit agreement in order to maintain continued access to the revolver, and (xii) we are unable to refinance the maturing senior notes. For a more detailed discussion of such risks and other factors, see Hecla’s 2021 Form 10-K, filed on February 23, 2022, with the Securities and Exchange Commission (SEC), as well as Hecla’s other SEC filings, including its Quarterly Report on Form 10-Q filed with the SEC on August 5, 2022. Hecla does not undertake any obligation to release publicly revisions to any “forward-looking statement,” including, without limitation, outlook, to reflect events or circumstances after the date of this news release or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws. Investors should not assume that any lack of update to a previously issued “forward-looking statement” constitutes a reaffirmation of that statement. Continued reliance on “forward-looking statements” is at investors’ own risk.
Investor Relations, Hecla Mining Company • 1-800-432-5291• hmc-info@hecla-mining.com
2
For further information, please contact:
Anvita M. Patil
Vice President - Investor Relations and Treasurer
Cheryl Turner
Communications Coordinator
800-HECLA91 (800-432-5291)
Investor Relations
Email: hmc-info@hecla-mining.com
Website: www.hecla-mining.com
Investor Relations, Hecla Mining Company • 1-800-432-5291• hmc-info@hecla-mining.com
3