Hecla Mining Company has recently announced the sale of its subsidiary that owns the Casa Berardi operation in Quebec, Canada to Orezone Gold Corporation for up to $593 million. The sale includes cash consideration of $160 million due upon closing, equity consideration of approximately 65.7 million Orezone common shares currently valued at approximately $112 million, and deferred cash consideration of $80 million payable in two installments. Additionally, there is contingent consideration of up to $241 million, comprised of production-based royalty payments, permit receipt payment, and gold price-linked payment.
This transaction is expected to strengthen Hecla's balance sheet and financial position. Upon closing, it is expected to be immediately ROIC accretive and deliver value to Hecla's shareholders. The company plans to allocate the cash proceeds towards debt reduction and balance sheet strengthening, enhancing its financial flexibility and capacity to invest in strategic growth initiatives, particularly the ramp-up of its Keno Hill and Tier 1 Greens Creek operation.
The sale aligns with Hecla's strategic transformation to focus on its premier silver assets and represents a disciplined portfolio optimization to focus capital allocation on its differentiated silver assets, which present significant growth and value creation opportunities.
As part of the transaction, Gencap Mining Advisory Ltd. acted as the financial advisor to Hecla, and Cassels LLP acted as legal counsel.
Founded in 1891, Hecla Mining Company is the largest silver producer in the United States and Canada. In addition to operating mines in Alaska, Idaho, and Quebec, Canada, the company is developing a mine in the Yukon, Canada, and owns a number of exploration and pre-development projects in world-class silver and gold mining districts throughout North America. Following these announcements, the company's shares moved 5.23%, and are now trading at a price of $26.54. Check out the company's full 8-K submission here.
