Hecla offers a $0.31 per share premium to Alamos, 68% more cash
Alamos, Aurizon’s largest shareholder, is seeking to force Aurizon
shareholders to take a lower bid by a small increase in its ownership
COEUR D’ALENE, Idaho--(BUSINESS WIRE)--
Hecla Mining Company (NYSE:HL)
(Hecla or the Company) today reaffirmed the premium value of its
proposed acquisition of Aurizon Mines Ltd. (TSX:ARZ) (NYSE MKT:AZK)
(Aurizon) announced on March 4, 2013, pursuant to an arrangement
agreement (Hecla Arrangement) with Aurizon. Hecla also cautioned Aurizon
shareholders that its largest shareholder Alamos Gold Inc. (Alamos) is
attempting to increase its ownership position to a level that would
prevent Aurizon shareholders from accepting a higher price. All
currencies are CAD$ unless otherwise noted.
“Alamos continues to try to distract Aurizon shareholders from the
simple fact that the Hecla Arrangement is currently valued at $0.31 per
share more than the Alamos offer, which is valued even lower than the
current share price of Aurizon. About two thirds of Hecla’s offer is
available in cash, Alamos’ is less than half,” said Phillips S. Baker
Jr., Hecla’s President and Chief Executive Officer. “Alamos’ avowed
attempt to block the Hecla arrangement by increasing its minority
position to a blocking position rather than letting shareholders decide,
illustrates the weakness of Alamos’ offer. We believe that Aurizon
shareholders will prefer a higher price, more cash and an interest in
Hecla to Alamos’ lower price, less cash and an interest in a company
with assets outside Canada and the U.S. We join the Aurizon board in
urging Aurizon shareholders not to tender to the Alamos transaction.”
Hecla is offering significantly more value than the Alamos offer
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A higher price - based on the closing share prices of Hecla and Alamos
on March 13, 2013, the Hecla Arrangement provides $0.31 more value
than the Alamos bid.
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More cash - the Hecla arrangement offers Aurizon shareholders greater
value certainty through a maximum $513.6 million in cash, which is 68%
higher than the maximum amount of cash offered by Alamos ($305 million
maximum cash). Roughly two thirds of the Hecla Arrangement is in cash
with Alamos’ bid being less than half.
Alamos’ statements appear to be misleading
Alamos has publicly stated its intention to use its minority stake in
Aurizon in order to “block” the higher-value Hecla Arrangement, rather
than offering full value to all Aurizon shareholders. Alamos claims
sufficient support to achieve its objective despite:
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the shares tendered having declined since the announcement of the
Hecla Arrangement,
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successively qualifying the level of purported support for the Alamos
bid via a March 12, 2013, news release and a March 13, 2013, filing
with the SEC, and
-
confirming that all shares tendered are subject to withdrawal.
Baker said, “Aurizon shareholders should not be misled by Alamos. The
number of shares tendered has continued to decline from the announcement
of the Hecla Arrangement. We are confident that if Aurizon shareholders
are not misled they will withdraw their tendered shares and take the
better offer.”
Hecla offers Aurizon shareholders ownership in a mining company with
a compelling future
A combination of Hecla and Aurizon creates a unique mining company with
expertise in operating deep underground mines, exploring and advancing
large exploration properties and increasing production.
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Operating mines – the combined company will own three low-cost,
long-life deep underground mines with growing production and well
defined exploration opportunities. Alamos has one surface mine with
undefined exploration potential.
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Superb mining-friendly jurisdictions – with mines in Quebec, Alaska
and Idaho, the combination provides shareholders with one of the
largest exposures to mines in multiple mining-friendly jurisdictions.
With the exception of major mining companies there are few other
mining companies with operations in three separate mining friendly
jurisdictions in similar time zones. Alamos has only one currently
producing operation in Mexico and is subject to permitting,
construction and other risks for its property in Turkey.
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Identifiable growth – Hecla’s investment of the last few years is
coming to fruition with production targeted to grow from 6.4 million
silver ounces last year (183,000 ounces gold and gold equivalent of
silver¹) to 8-9 million silver ounces this year (200,000 to 220,000
ounces gold and gold equivalent of silver¹) to 15 million silver
ounces by 2017 (340,000 ounces gold and gold equivalent of silver¹).
Aurizon is expected to increase the growth profile, with Casa Berardi
adding 125-130,000 gold ounces (6.3 to 6.5 million silver equivalent
ounces¹) this year and 150,000 gold ounces in 2014 when production
reaches normal rates.
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Complementary skills and mining experience – Hecla has been operating
underground mines for over 120 years and brings experience and depth
to the Aurizon team to build on an already successful Casa Berardi. In
contrast, Alamos does not currently operate any underground mines.
Given the vast majority of the value of Aurizon is held in an
underground mine with significant in-mine development programs
underway to extend mine-life, an experienced underground miner like
Hecla is far better positioned to enhance its value.
(1) Numbers converted using a gold to silver ratio of 50:1.
In addition, the ability of the combined company to raise the debt this
quickly is a testament to the quality of the assets. Hecla negotiated a
six-month window from closing before the gold hedging is required in
order to consider other financing alternatives that would eliminate the
hedge requirement.
Details of the Hecla Agreement
Under the terms of the Hecla Agreement announced on March 4, 2013,
Aurizon shareholders may elect to receive in exchange for each Aurizon
share, $4.75 per share or 0.9953 of a Hecla share or a combination of
both, subject in each case to pro-ration based on a maximum cash
consideration of approximately $513.6 million and a maximum of
approximately 57,000,000 Hecla shares. Assuming that all shareholders
elect to receive either cash or Hecla shares, the consideration will be
fully pro-rated with each shareholder being entitled to receive $3.11 in
cash and 0.3446 of a Hecla share for each Aurizon share.
How to Withdraw Aurizon Shares from the Unsolicited Alamos Offer
Shareholders who have questions or who may have already tendered their
shares to the unsolicited Offer by Alamos and wish to withdraw them, may
do so by contacting Aurizon's Information Agent, Georgeson, Toll Free
(North America): 1-888-605-7616, Outside North America Call Collect:
1-781-575-2422 or Email: askus@georgeson.com.
About Hecla Mining Company
Hecla Mining Company (NYSE:HL)
is a leading low cost U.S. silver producer with operating mines in
Alaska and Idaho, exploration and pre-development properties in four
world-class silver mining districts in the U.S. and Mexico, and an
exploration office and investments in early-stage silver exploration
projects in Canada.
Additional Information and Where to Find It
This material relates to Hecla’s proposed acquisition (the
“Transaction”) of Aurizon. Shares of Hecla’s common stock (the “Hecla
Shares”) issued in connection with the proposed Transaction may be
registered pursuant to a registration statement to be filed with the SEC
or issued pursuant to an available exemption. This information is not a
substitute for any registration statement or any other document that
Hecla may file with the SEC or that it or Aurizon may send to their
respective shareholders in connection with the offer and/or issuance of
Hecla Shares. Investors are urged to read any registration statement, if
and when filed, and all other relevant documents that may be filed with
the SEC or with Canadian regulatory authorities as and if they become
available because they will contain important information about the
issuance of Hecla Shares.Documents, if and when filed with the
SEC, will be available free of charge at the SEC’s website (www.sec.gov).
You may also obtain these documents by contacting Hecla’s Investor
Relations department at Hecla Mining Company; Investor Relations;
1-800-HECLA91 (1-800-432-5291); hmc-info@hecla-mining.com.
This release does not constitute an offer to sell or the solicitation of
an offer to buy any securities.
In connection with the proposed transaction, Aurizon will file proxy
soliciting materials with the SEC and/or Canadian regulatory
authorities. The information contained in any such filing may not be
complete and may be updated, amended or changed. SHAREHOLDERS ARE URGED
TO READSUCH MATERIALS WHEN AVAILABLE AND ANY OTHERRELEVANT
MATERIALS FILED WITH THE SECAND/OR CANADIAN REGULATORY
AUTHORITIES CAREFULLY IN THEIR ENTIRETY BEFORE MAKING ANY
VOTING OR INVESTMENT DECISION WITH RESPECT TO THE PROPOSED TRANSACTION
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUTTHE
PROPOSED TRANSACTION AND THE PARTIES THERETO.
Proxy solicitation materials will be mailed to Aurizon’s shareholders
seeking their approval of the proposed transaction. Anyone may also
obtain a copy of such materials free of charge once available by
directing a request to: Hecla Mining Company 6500 N Mineral Drive, Suite
200, Coeur d’Alene, ID 83815-9408. 1-800-HECLA91 (1-800-432-5291)
Attention: Investor Relations. In addition, any relevant materials filed
with the SEC will be available free of charge at the SEC’s website at www.sec.gov
orinterested persons may access copies of such documentation
filed with the SEC by the Company by visiting the Investors section of
the Company’s website at www.hecla-mining.com.
Cautionary Statements
Statements made which are not historical facts, such as anticipated
payments, litigation outcome, production, sales of assets, exploration
results and plans, prospects and opportunities including reserves,
resources, and mineralization, costs, and prices or sales performance
are "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Words such as “may,” “will,”
“should,” “expects,” “intends,” “projects,” “believes,” “estimates,”
“targets,” “anticipates” and similar expressions are used to identify
these forward-looking statements. Forward-looking statements involve a
number of risks and uncertainties that could cause actual results to
differ materially from those projected, anticipated, expected or
implied. These risks and uncertainties include, but are not limited to,
risks associated with the completion of Transaction, the risk that
expected synergies or cost savings resulting from the Transaction may
not be achieved, metals price volatility, volatility of metals
production and costs, environmental and litigation risks, operating
risks, project development risks, political and regulatory risks, labor
issues, ability to raise financing and exploration risks and results.
Refer to the Company's Form 10-K and 10-Q reports for a more detailed
discussion of factors that may impact expected future results. The
Company undertakes no obligation and has no intention of updating
forward-looking statements other than as may be required by law.
Similarly, please refer to the securities filings of Aurizon for further
information concerning risks applicable to it and its forward-looking
information.
Hecla Mining Company
Investor Relations
Jim Sabala, Sr. VP and
CFO
or
Mike Westerlund, VP-Investor Relations
Direct
Main: 1-800-HECLA91 (1-800-432-5291)
hmc-info@hecla-mining.com
www.hecla-mining.com
Source: Hecla Mining Company