ATAC Resources To Be Acquired By Hecla For $0.14 Per Share In All-Stock Deal

It appears that at least some mining majors are already starting to turn to the junior explorers to add gold ounces to their portfolio. ATAC Resources (TSXV: ATC) this morning revealed it has accepted an acquisition offer from Hecla Mining (NYSE: HL).

The transaction will see shareholders of ATAC receive 0.0166 common shares of Hecla, and 0.1 common shares of Cascadia Minerals, a new exploration firm to be formed, in exchange for each share of ATAC held. The figure is said to represent roughly $0.14 per ATAC share, a 66% premium as of the 20-day volume weighted average price as of February 17, before an LOI was announced between the two firms.

With the formation of Cascadia, the transaction effectively becomes a purchase by Hecla of the firms Rackla Gold project in the Yukon, which currently has a PEA with a pre-tax NPV(5%) of $118.2 million, and an IRR of 54.5%, as well as its Connaught project in the Yukon. Cascadia meanwhile will hold the PIL Property, the Rosy and Idaho Creek Projects, as well as the Catch property, which will become the firms flagship asset, with the firm focused on copper and gold. Notably, the cash balance of ATAC, as well as the existing management team, will also move to Cascadia.

READ: ATAC Resources: Victoria Gold Takes Public It’s Attempt To Acquire Firm

A C$2.0 million strategic investment will be made by Hecla into Cascadia, equating to a 19.9% ownership stake. Hecla will also maintain the right of first refusal to acquire any Cascadia projects in the future.

Cascadia is expected to apply to list on the TSX Venture.

The acquisition by Hecla is subject to shareholder approval, as well as customary regulator approvals. The transaction is currently slated to close late in the second quarter.

ATAC Resources last traded at $0.13 on the TSX Venture.


Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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