ATAC acquiesces to Hecla's superior offer

ATAC Resources Ltd. and Hecla Mining Company Feb. 21 announced the mutual entering of a non-binding letter of intent for Hecla to acquire all issued and outstanding shares of ATAC.

Less than a week after facing pressure from Victoria Gold Corp. for its own bid to acquire ATAC, the company has chosen what it views as a more valuable transaction.

You can read about Victoria Gold's bid for ATAC at Victoria presses ATAC for acquisition in the February 17, 2023 edition of North of 60 Mining News.

Essentially bringing the public into its goal of acquiring ATAC after being declined twice, Victoria Gold gave ATAC until Feb. 17 to make a final decision, baring its deal to potentially interested ATAC shareholders, which expired after the company declined once again.

However, in an unexpected turn, ATAC turned around to sell to Hecla for C14 a share, two cents more than Victoria's original fixed offer.

"We believe the potential transaction will provide significant value to ATAC shareholders," said ATAC Resources President and CEO Graham Downs. "Hecla is an ideal acquirer for the Rackla Gold property, given its adjacent Keno Hill mining project and demonstrated commitment to the Yukon and its communities. As an established and successful multi-asset producer, Hecla has the resources, strengths and experience to meaningfully advance the known targets at Rackla and Connaught."

Payable in shares of Hecla common stock, ATAC shareholders will also receive shares in a new exploration company, for now called Spinco, which will hold all of ATAC's rights and interests in the Idaho Creek, Catch, Rosy, and PIL projects, as well as ATAC's cash balance following completion of the acquisition.

"The spin-out of a new copper-focused exploration company provides additional value to shareholders," added Downs. "With the foundation of our existing copper assets, Spinco will be well positioned to aggressively explore for copper – a key critical metal – throughout BC and Yukon."

Pursuant to the LOI, Hecla intends to make a C$2 million strategic investment into Spinco in which Hecla will acquire a right of first refusal to acquire any or all of Spinco assets and own 19.9% of Spinco's issued and outstanding common shares following completion of the investment.

The proposed transaction represents consideration to ATAC shareholders of C$31 million in Hecla shares and a value of approximately C$8 million in Spinco shares based on Hecla's C$2 million placement.

"We look forward to working with the Hecla team to negotiate a binding agreement for the proposed transaction, and in partnership subsequently advance the new Spinco," finished Downs.