The center piece of the transaction is Keno Hill (above), the high-grade silver property in the Yukon.

Hecla Mining Co. plans to acquire all of the shares of Alexco Resource Corp. that it does not already own. The all-stock transaction implies a consideration of $0.47 per Alexco common share. Hecla has also entered into an agreement with Wheaton Precious Metals (WPM) to terminate its silver streaming interest at Alexco’s Keno Hill property in exchange for $135 million of Hecla common stock conditional upon the completion of Hecla’s acquisition of Alexco.

The center piece of the transaction is Keno Hill, the high-grade silver property in the Yukon. The operation is fully permitted with infrastructure that includes a 400-metric-ton-per-day (mt/d) mill, on-site camp facilities, all-season highway access, and connection to the hydropower grid.

“We have followed the Keno Hill project closely for a number of years, as it is one of the very few deposits that fit seamlessly into Hecla’s strategy of owning and operating high-grade properties in tier one jurisdictions,” Hecla President and CEO Phil Baker said.

Hecla is the largest U.S. silver miner and the acquisition of Keno Hill could also make Hecla Canada’s largest silver producer. Keno Hill would grow Hecla’s silver exposure considerably by increasing proven and probable silver reserves 19% to 237 million ounces (oz), measured and indicated resources 24% to 257 million oz and inferred resources 7% to 523.7 million oz.

Hecla is providing Alexco with a $30 million secured loan facility and is purchasing nearly 9 million Alexco shares at C$0.50 per share. The loan and share purchase are intended to provide Alexco with immediate working capital to continue development work at Keno Hill and are not conditional upon the completion of the transaction.

The Alexco-Hecla and WPM-Hecla transactions are each subject to applicable regulatory approvals and customary closing conditions. The agreement provides for customary deal-protection provisions, including a non-solicitation covenant on the part of Alexco, a right for Hecla to match any superior proposal and a termination fee of $10 million, payable by Alexco to Hecla, under certain conditions.