The US-based mining company will invest C$2m ($1.48m) in seed capital, which equals 19.9% interest for a new exploration company, Cascadia Minerals

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Hecla Mining signs definitive agreement to acquire ATAC Resources. (Credit: ivabalk from Pixabay)

Hecla Mining has agreed to acquire all of the issued and outstanding shares of Canada-based exploration company ATAC Resources for a consideration of C$31m ($23m).

Hecla Mining said that consideration is also payable in shares and is equivalent to 0.0166 Hecla share per share of ATAC Resources.

The deal includes ATAC Resources’ Rackla and Connaught projects in Yukon, Canada.

The US-based mining company will invest C$2m ($1.48m) in seed capital, which equals 19.9% interest for a new exploration company, Cascadia Minerals.

Cascadia Minerals would be spun-out with certain properties to the shareholders of ATAC Resources, said Hecla Mining.

It will hold the remaining assets of ATAC Resources including the Idaho Creek, Catch, Rosy, and PIL projects that are subject to Hecla Mining will have the right of first refusal to acquire all the assets.

Hecla Mining president and CEO Phillips Baker said: “With this transaction, ATAC shareholders will now have exposure to the largest US silver producer and soon to be Canada’s largest, with operating mines in tier one jurisdictions and a portfolio of exploration projects across North America.”

The Hecla Mining shares to be offered will provide ATAC Resources’ shareholders with a premium of 66% based on the latter’s 20-day volume-weighted average price as of 17 February 2023.

ATAC Resources fully owns the Rackla gold property, which spreads across an area of 1,700km². Rackla is comprised of two separate projects, namely Rau and Nadaleen.

Before the definitive agreement, both parties entered into a non-binding letter of intent (LoI) in February 2023.

ATAC Resources president and CEO Graham Downs said: “Completion of this transaction will benefit ATAC shareholders as Hecla has the resources and development experience to advance Rackla in a less dilutive and timely fashion.

“Not only will shareholders maintain their exposure to the Rackla project, but shareholders will also gain additional exposure to Hecla’s operating mines and development projects in the Americas.”