Hecla Mining has entered into a credit agreement with Dolly Varden Silver Corp. and another significant shareholder of Dolly Varden, Robert L. Gipson, as lenders providing for a senior, non-revolving secured loan of C$1.5 million. The loan will be used by Dolly Varden to explore its project in northwestern British Columbia and for working capital purposes. The loan will be secured by promissory notes and first ranking security over all of Dolly Varden’s assets. It 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, Hecla has acquired control over 1.25 million shares (valued at $0.30/share) of Dolly Varden, representing 6.4% of the outstanding common shares. The transaction brings Hecla’s interest in Dolly Varden to 19.8% of its common shares.