Hecla Mining recently announced on April 6 its definitive agreement with ATAC Resources to acquire the company and its Yukon-based Rackla and Connaught gold projects. The company’s statement explained that Hecla’s subsidiary would acquire all of ATAC’s issued and outstanding shares for C$31 million, or 0.0166 Hecla shares for each share of ATAC (including 3,693,516 common company shares in aggregate).
In the agreement, Hecla Mining also plans to invest C$2 million toward seed capital, equating to 19.9% interest, going toward a new exploration company, Cascadia Minerals. With this transaction, Cascadia Minerals would be spun-out to ATAC’s shareholders with certain properties.
The total consideration for ATAC shareholders, including any implied share values from Cascadia Minerals, comes to C$39 million, according to Hecla Mining’s statement.
“The Hecla shares provide ATAC shareholders with a premium of 66% based on ATAC’s 20-day volume-weighted average price of C$0.0845 as of February 17, 2023, the last trading day preceding announcement of the letter of intent, or a 109% premium when including the value of Cascadia shares received,” the statement continued.
Hecla Mining hopes to further expand its silver production and development in Canada through this acquisition. Silver demand rates as we enter 2023 show promising levels, so Hecla Mining wants to capitalize on the opportunity with this venture.
“The acquisition of ATAC reflects the continued execution of our strategy of acquiring significant land packages in highly prospective and tier one mining jurisdictions,” Phillips S. Baker Jr., the president and CEO of Hecla Mining, explains. “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 the highest grade primary silver mine in Canada. We look forward to continuing our work with the First Nation of Na-Cho Nyäk Dun and the wider Yukon community.”
Hecla Mining began in 1981 and is now the largest silver producer in the United States. Headquartered in Coeur d’Alene, Idaho, the company operates mines in Idaho, Alaska, and Quebec, Canada, with a current project under development in Yukon. Aside from these operational mines, Hecla Mining also controls numerous pre-development and exploration projects throughout North America focused on expansion and efficiency.
ATAC Resources Ltd. is an exploration company based in Vancouver focused on expanding gold and copper production through exploration programs. The company’s primary focuses include Yukon, Canada, and Nevada, with its winning targets being the Connaught Property, Rackla Gold Property, Catch Property, Rosy Property, and PIL Property. ATAC’s most notable discovery was at its Rackla Gold Property in Yukon, uncovering the first Carlin-type gold in Canada.
Beyond this discovery, ATAC continues expanding its portfolio with additional properties including copper assets and its recent project in British Columbia. Along with these projects, ATAC also maintains the oxide gold Tiger Deposit yielding pre-tax PEA-level economics of $118.2 million and IRR of 54.5% at $1,400 per oz of gold.
With Hecla’s acquisition of ATAC, the company will assume a powerful Canada-based mining force, allowing it to expand operations north, improving silver, copper, and gold outputs.
Hecla Mining Company is not the only organization hungry for expansion as we progress through 2023’s soaring precious metal demand landscape. In recent news, Toronto-based Victoria Gold Corp. announced its gold production rates from Q1 2023 that blew last year’s levels out of the water by a whopping 55%. The company has been amping up production protocols to meet growing gold demand rates, and clearly, it’s been working given the 37,619 ounces of gold produced in Q1 2023 compared to 24,358 ounces in Q1 2022.
A few weeks before this release, another Toronto-based mining corporation, Aris Mining, began an exploration program to boost mining output at its Segovia Operations in Columbia. “For 2023, we have planned an exploration drilling program of 84,500 meters at Segovia focussed on increasing the mineral reserves and life of mine plan, extending the known resources at the four producing mines, and further exploring strategic high priority vein targets located adjacent to the current mining operations,” Neil Woodyer, Aris Mining’s CEO, explains.
At the same time, Conroy Gold and Natural Resources has embarked on a drilling program at its Clay Lake target in Ireland. So far, the company has already located over 1 million ounces of gold in just 20% of the target.
As demand for gold and silver continues rising with high inflation rates, increasing banking fears, and falling U.S. dollar values, we can expect more mining organizations to expand their efforts.