VANCOUVER — Hecla Mining Co. says it’s buying Vancouver-based gold miner Klondex Mines Ltd. for $605 million with a mix of cash and shares.
Idaho-based Hecla will gain control of Klondex’s Fire Creek, Midas, and Hollister underground gold mines in Nevada, while Klondex will spin out its True North mining operations in Manitoba into a new entity for existing shareholders.
Hecla says its focus is high-grade underground mines so Klondex’s operations will fit well into the company and add production while minimizing dilution.
Klondex produced 189,500 gold equivalent ounces in 2017, short of its guidance of between 210,000 and 225,000 ounces.
News of the deal helped send Klondex’s share price up 62.2 per cent to $2.92 in midday trading on the Toronto Stock Exchange, though well off the $7.54 high the stock traded at in September 2016.
Along with operations in Alaska, Idaho and Mexico, Hecla also runs the Casa Berardi mine in Quebec where it recently secured a $40 million loan for expansion from Investissement Quebec.
The Canadian Press