Hecla Mining appeared set to succeed in its bid to acquire Aurizon Mines following a March 19, announcement from Alamos Gold that Alamos would allow its competing bid to expire and would not take up any Aurizon shares tendered to its offer. Aurizon’s board of directors continued to recommend that the company’s shareholders vote to approve acceptance of the Hecla offer at a shareholders meeting expected to take place in May.
Details of Hecla’s offer were set forth in an announcement dated March 4, stating that Hecla and Aurizon had entered into a definitive agreement pursuant to which Hecla would acquire all of the issued and outstanding common shares of Aurizon in a transaction having a total value of approximately C$796 million in cash and Hecla shares.
Assuming completion of the transaction, the combined company will have three operating underground mines: Hecla’s Greens Creek mine in Alaska and Lucky Friday mine in Idaho, and Aurizon’s Casa Berardi mine in Quebec.
Hecla President and CEO Phillips S. Baker Jr. said, “Hecla and Aurizon together create a unique precious metals company with three long-life, high-grade, low-cost mines in some of the best mining jurisdictions in the world. These three properties have in common strong exploration potential on very large and contiguous land positions as well as locations near communities that are supportive to mining.
“In addition, all three utilize similar mining methods, enabling Hecla to leverage the knowledge and experience from each mine across the organization. Hecla’s expertise in operating low-volume, high-value mines complements these assets, resulting in a value-added proposition for Hecla and Aurizon shareholders,” he said.
Hecla anticipates production of approximately 8 million to 9 million oz of silver in 2013 from its primary silver mines, while Aurizon expects the Casa Berardi mine to produce 125,000 to 130,000 oz of gold during the year. The combined company would have 150.1 million oz of proven and probable silver reserves and 1.18 million oz of proven and probable gold reserves.
Assuming Aurizon shareholders approve the transaction at the special meeting and all court and regulatory approvals are obtained, the transaction is expected to close in the second quarter of 2013. Current Aurizon shareholders will have approximately a 17% stake in the combined company.