- ATAC Resources (ATC) has signed a non-binding letter of intent to sell all its shares to Hecla Mining Company for approximately $39 million
- Hecla may acquire all shares of ATAC for $0.14 per share, which can be paid in Hecla common shares
- ATAC shareholders will also receive shares in a new exploration company formed from the proposed transaction
- The new spin-out company will hold all ATAC’s rights and interests regarding the Idaho Creek, Catch, Rosy and PIL projects
- ATAC Resources (ATC) is up 47.37 per cent, trading at $0.14 per share as of 11:02 a.m. EST
ATAC Resources (ATC) has signed a non-binding letter of intent to sell all its shares to Hecla Mining Company for approximately $39 million.
The proposed transaction will allow Hecla to acquire all shares of ATAC for $0.14 per share, to be paid in Hecla common shares. ATAC shareholders will also receive shares in a new exploration company formed from the proposed transaction.
ATAC’s President and CEO, Graham Downs, commented,
“The spin-out of a new copper-focused exploration company provides additional value to shareholders.”
ATAC stated the proposed transaction represents a consideration value of $31 million in Hecla shares and approximately $8 million in the spin-out company’s shares.
New company takes on known assets
The new spin-out company will hold all ATAC’s rights and interests regarding the Idaho Creek, Catch, Rosy and PIL projects. It will also take on ATAC’s cash balance following the completion of the acquisition.
According to ATAC, Hecla intends to invest $2 million into the spin-out company. This will grant Hecla a right of first refusal to acquire any or all the mentioned assets. Hecla will also acquire a to-be-determined number of spin-out units that equates to a 19.90 per cent interest.
Tradeoff for spin-out
A single unit of the spin-out company will include one common share and one warrant. Each warrant will entitle Hecla to purchase one additional share of the spin-out for a five-year period.
The letter of intent is effective from February 17th until either the signing of a definitive and binding agreement or March 15th. The proposed transaction is subject to shareholder and regulatory approvals.
ATAC Resources (ATC) is up 47.37 per cent, trading at $0.14 per share as of 11:02 a.m. EST.