Hecla, ATAC come to definitive agreement

Hecla Mining Company April 6 announced that after several weeks of deliberation, it has reached a definitive agreement to move forward with the purchase of ATAC Resources Ltd.'s Rackla and Connaught projects, while also spinning out the Yukon-focused exploration company's earlier staged copper properties into Cascadia Minerals Ltd.

After declining a proposal from Victoria Gold Corp. at the beginning of February, ATAC announced shortly after its intention to sell its properties to Hecla instead – however, not all of them.

With all the kinks ironed out, Hecla's subsidiary Alexco Resource Corp. will acquire all the issued and outstanding shares of ATAC for roughly C$31 million (US$23 million), or 0.0166 Hecla share per share of ATAC, resulting in close to 3.7 million common shares.

Additionally, Hecla will invest C$2 million (US$1.5 million) in seed money, or roughly 19.9% interest, in Cascadia Minerals, which will host ATAC's Idaho Creek, Catch, Rosy, and PIL projects.

"The spin-out of a new copper-focused exploration company provides additional value to shareholders," said ATAC Resources President and CEO Graham Downs during the initial announcement. "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."

The total consideration for this transaction to ATAC, including an implied value for shares in Cascadia, comes out to roughly C$39 million (US$29 million).

This deal gives ATAC shareholders a stake in the largest silver producer in the U.S. and the largest Canadian silver producer once Hecla reaches commercial production at its recently acquired Keno Hill Mine in the Yukon. ATAC also feels that Hecla's technical expertise, balance sheet strength, and foothold in the Yukon make the company uniquely suited to advance its Rackla and Connaught projects.

"The acquisition of ATAC reflects the continued execution of our strategy of acquiring significant land packages in highly prospective and tier one mining jurisdictions," said Hecla President and CEO Phillips Baker Jr. "The Rackla and Connaught projects would further consolidate our position in Yukon after our strategic acquisition of Keno Hill, which we are developing, and is expected to be the largest and highest grade primary silver mine in Canada."