COEUR D’ALENE, Idaho--(BUSINESS WIRE)--
Hecla Mining Company (NYSE:HL)
(“Hecla”) announced today that a wholly owned subsidiary of Hecla
(“Hecla Sub”) has entered into a credit agreement (the “Credit
Agreement”) with Dolly Varden Silver Corporation (“Dolly Varden”)
and another significant shareholder of Dolly Varden, Robert L. Gipson,
as lenders (the “Lenders”) providing for a senior, non-revolving
secured loan (the “Loan”) of CDN$1,500,000. Pursuant to the
Credit Agreement, Hecla Sub will act as agent on behalf of the Lenders
and the Lenders have severally and not jointly agreed to advance
CDN$750,000 each to Dolly Varden. An additional CDN$500,000 may be made
available to Dolly Varden in the discretion of the Lenders, and in that
event, each Lender will have the option to advance its pro rata share of
such additional amount. The net proceeds of the Loan will be used by
Dolly Varden for: (i) exploration of the Dolly Varden project in
north-western British Columbia; and (ii) working capital purposes.
Pursuant to the Credit Agreement, the Loan will be secured by promissory
notes and first ranking security over all of Dolly Varden’s assets. The
Loan will bear interest at a rate of 5% per annum, will be repayable
after one year and may be repaid earlier with no penalty.
In connection with the Credit Agreement, and as consideration for the
advance of its portion of the Loan, Hecla has acquired control over
1,250,000 warrants of Dolly Varden (the “Warrants”), constituting
50% of the Warrants issued by Dolly Varden pursuant to the Credit
Agreement. Each Warrant entitles the holder to acquire one common share
of Dolly Varden at a price of $0.30 per share and is exercisable for a
period of three years from the date of issuance.
The 1,250,000 common shares underlying the Warrants, if the Warrants are
exercised and such shares are issued, would represent 6.4% of the
outstanding common shares of Dolly Varden. Hecla currently exercises
control over 2,620,291 common shares of Dolly Varden, representing
approximately 14.3% of the outstanding common shares of Dolly Varden.
Assuming the exercise of only the Warrants that are held by Hecla Sub,
Hecla would exercise control over 3,870,291 common shares of Dolly
Varden or approximately 19.8% of Dolly Varden’s common shares.
The Warrants have been acquired by Hecla for investment purposes. Hecla
does not have any present intention to acquire ownership of, or control
over, additional securities of Dolly Varden. It is the intention of
Hecla to evaluate its investment in Dolly Varden on a continuing basis
and such holdings may be increased or decreased in the future.
In completing this investment Hecla is relying on Subsection 2.3(1) of
Canadian National Instrument 45-106 – Prospectus and Registration
Exemptions as Hecla is an accredited investor. For the purposes of
Canadian National Instrument 62-103, the address of Hecla is 6500 N.
Mineral Drive, Suite 200, Coeur d’Alene, Idaho, 83815, USA.
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, and is a gold
producer with an operating mine in Quebec, Canada. The Company also has
exploration and pre-development properties in six world-class silver and
gold mining districts in the U.S., Canada, and Mexico, and an
exploration office and investments in early-stage silver exploration
projects in Canada.
Cautionary Statements
Statements made which are not historical facts, such as regarding any
increase in the amount of the Loan and exercise of the Warrants, 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,
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. Hecla undertakes no obligation and has
no intention of updating forward-looking statements other than as may be
required by law.
For further information, or to obtain a copy of the early warning report
filed in connection with Hecla’s holdings in Dolly Varden, please
contact:
Jeanne DuPont
Corporate Communications Coordinator
Investor
and Public Relations
1-800-HECLA91 (1-800-432-5291)
hmc-info@hecla-mining.com
View source version on businesswire.com: http://www.businesswire.com/news/home/20150930006971/en/
Hecla Mining Company
Jeanne DuPont, 1-800-HECLA91 (1-800-432-5291)
Corporate
Communications Coordinator
Investor and Public Relations
hmc-info@hecla-mining.com
Source: Hecla Mining Company