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Hecla Mining (HL) Gets Interim Order for ATAC Acquisition

Hecla Mining Company HL received an interim order from the Supreme Court of British Columbia related to its proposed acquisition of all of the issued and outstanding common shares of ATAC Resources Ltd. (“ATAC”). The acquisition is in sync with HL's strategy of acquiring large land packages in highly promising and tier-one mining jurisdictions.

Previously, on Apr 12, Hecla Mining announced that its wholly owned subsidiary, Alexco Resource Corp., entered a definitive deal with ATAC to acquire ATAC, and its Rackla and Connaught projects in Canada.

The Rackla and Connaught projects will solidify the company's position in Yukon. The ATAC buyout follows Hecla Mining’s strategic acquisition of Keno Hill, which is anticipated to be Canada's largest and highest-grade primary silver mine.

Under the agreement, HL's subsidiary will acquire all of ATAC's issued and existing shares for CAN$31 million ($22.97 million), or 0.0166 Hecla share per ATAC share (a total of 3,693,516 common shares of HL). Additionally, Hecla Mining will invest CAN$2 million ($1.48 million) in seed capital, equal to a 19.9% interest, for a new exploration company Cascadia Minerals Ltd.

Hecla Mining also entered voting support agreements with ATAC's directors and officers, and a few security holders. Under this agreement, the security holders are required to vote all of their ATAC shares and securities convertible or exchangeable into ATAC shares, as applicable, in favor of resolutions necessary to carry out the transaction.

HL has been gaining on the acquisition front for the past few quarters. It reported first-quarter 2023 adjusted earnings per share of 1 cent, in line with the Zacks Consensus Estimate as well as the year-ago quarter’s adjusted figure.

The company’s revenues increased 2.4% year over year to around $200 million in the quarter under review. The top-line figure beat the Zacks Consensus Estimate of $198 million. HL expects consolidated silver production of 17 million ounces for 2023 and is targeting to reach the 20-million-ounce mark in 2025.

Price Performance

Shares of Hecla Mining have gained 12.9% in the past year against the industry's 14.5% decline.

 

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

 

Zacks Rank & Stocks to Consider

Hecla Mining currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are AngloGold Ashanti AU, Gold Fields Limited GFI and Alamos Gold Inc. AGI. AU and GFI currently flaunt a Zacks Rank #1 (Strong Buy), and AGI carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for AngloGold Ashanti’s earnings per share is pegged at $1.94 for 2023. Earnings estimates have been revised 22% upward in the past 60 days. The company has gained 45% in a year.

The Zacks Consensus Estimate for Gold Fields’ fiscal 2023 earnings per share is pegged at $1.01. Earnings estimates have moved 6.3% north in the past 60 days. Its shares have gained 46.2% in the past year.

The Zacks Consensus Estimate for Alamos Gold’s earnings per share is pegged at 47 cents for 2023. Earnings estimates have been revised 14.6% upward in the past 60 days. AGI has gained 84.5% in a year.

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