Hecla Mining Co. has entered into a non-binding Letter of Intent (LoI) to acquire ATAC Resources Ltd. and its Rackla and Connaught projects in Yukon, Canada for $22.9 million, payable in shares of Hecla common stock. The company intends to invest $1.47 million in a new exploration company (Spinco), which would hold the remaining ATAC assets.

“Hecla is an ideal acquirer for the Rackla gold property, given it’s adjacent to the Keno Hill mining project and Hecla’s demonstrated commitment to Yukon and its communities,” Said Graham Downs, president and CEO, ATAC Resources. “Hecla has the resources, strengths and experience to meaningfully advance the known targets at Rackla and Connaught. The spin-out of a new copper-focused exploration company provides additional value to shareholders.”

ATAC is a Canadian exploration company focused on exploring for gold and copper in Yukon, British Columbia and Nevada. Exploration activity on the 1,700 km2 Rackla property has resulted in indicated resource of 732,000 oz of gold at 4.12 grams per metric ton (g/mt) in 5.5 million mt and an inferred resource of more than 1 million oz of gold at 3.47 g/mt in 9.4 million mt for the Osiris Deposit. Rackla’s Tiger Deposit has a measured and indicated resource of 464,000 oz of gold at an average grade of 3.19 g/mt in 4.5 million mt.

Hecla said the key provisions of the LoI are non-binding and any acquisition would only occur pursuant to a definitive agreement with customary representations, warranties, covenants and conditions to closing. There can be no assurance that a definitive agreement will be entered into or that the proposed transaction will be consummated with ATAC. Hecla has entered into an exclusivity period of 30 days with ATAC.