America’s largest and highest-grade silver
producer adding Canada’s largest and highest-grade silver
reserve
Hecla Mining Company (NYSE:HL) (Hecla) and Alexco Resource Corp.
(NYSE American:AXU; TSX:AXU) (Alexco) are pleased to announce a
definitive agreement for Hecla to acquire all of the outstanding
common shares of Alexco that Hecla does not already own. Each
outstanding common share of Alexco will be exchanged for 0.116 of a
share of Hecla common stock implying consideration of US$0.47 per
Alexco common share and a premium of 23% based on the companies’
5-day volume weighted average price on the NYSE and NYSE American
on July 1, 2022. In addition, Hecla will (i) provide interim
financing to provide working capital and ensure the development and
exploration at Keno Hill continues to be advanced and (ii)
subscribe for additional common shares bringing its ownership stake
to 9.9%.
Hecla has also entered into an agreement with Wheaton Precious
Metals Corporation (WPM) to terminate its silver streaming interest
at Alexco’s Keno Hill property in exchange for US$135 million of
Hecla common stock conditional upon the completion of Hecla’s
acquisition of Alexco.
Benefits to Hecla Shareholders
- A large, high-grade silver property in the Yukon, a top 10
rated jurisdiction by the Fraser Institute
- A fully permitted property with infrastructure that includes a
400 tonne per day mill, on-site camp facility, all-season highway
access, and connection to the hydropower grid
- Increases Hecla’s silver exposure by increasing proven and
probable silver reserves 19% to 237 million ounces, measured and
indicated resources 24% to 257 million ounces and inferred
resources 7% to 523.7 million ounces
- Potential to be Canada’s largest silver producer
Benefits to Alexco Shareholders
- Delivers an immediate up-front premium to Alexco
shareholders
- Allows advancement of Keno Hill’s development with an immediate
and non-dilutive interim financing
- Partners with the United States’ largest silver producer
- Transitions from a single asset and its development risk to a
diversified production base of long-lived mines and a portfolio of
high-quality exploration projects
- A strong balance sheet to invest in Keno Hill and continue its
history of resource expansion
- Enhanced capital markets profile with increased analyst
coverage and trading liquidity
“At Hecla, we have followed the Keno Hill project closely for a
number of years, as it is one of the very few deposits that fit
seamlessly into Hecla’s strategy of owning and operating high-grade
properties in tier one jurisdictions,” said Phillips S. Baker Jr.,
President and CEO. “As the United States’ largest silver producer,
producing over 40% of silver mined in the U.S., it is natural that
Hecla acquires Keno Hill which could also make Hecla Canada’s
largest silver producer. Silver is a critical element to
decarbonize the economy and the need for domestic supply is
growing. Acquiring Keno Hill allows Hecla to further meet this need
with a secure high-grade silver development and exploration project
that has a small environmental footprint.”
“This transaction delivers significant benefits to our
stakeholders,” said Clynton Nauman, Chairman and CEO of Alexco. “By
partnering with Hecla, an industry leader in high-grade narrow vein
silver mining, we further position Keno Hill to achieve its full
potential. There is no doubt that we have fallen well behind the
development and production plan at Keno Hill – and our original
estimate of achieving commercial production in early 2022. There
are myriad reasons for those challenges, but fundamentally, they
all led to an increasing level of stress across our business, which
was having a negative impact on the share price, our finances, our
employees, and other stakeholders. As a much larger business, Hecla
has the organizational expertise and financial strength to build
Keno Hill to the level and capacity required, while being able to
continue to invest in exploration across the district, something
that we, as Alexco, independently would likely struggle to achieve.
Frankly, the opportunity now afforded to our employees, to the
First Nation of Na-Cho Nyäk Dun and the wider Yukon community as a
whole is superior to anything Alexco could offer in the short term.
I look forward to working with Phil and his team at Hecla to close
this transaction in September 2022.”
Terms of the Transaction
The agreement provides Alexco shareholders with 0.116 of a Hecla
share for each Alexco common share they hold as of the effective
date of the agreement. Hecla will issue approximately 18 million
common shares to Alexco shareholders. Upon completion of the
transactions with both WPM and Alexco, and assuming the July 1,
2022 5-day volume weighted average price of Hecla’s shares of
US$4.13, WPM and Alexco shareholders will own approximately 5.6%
and 3.0%, respectively, of the outstanding common shares of Hecla.
The exact number of Hecla common shares to be issued to WPM will be
calculated immediately before the closing date.
Hecla is providing Alexco with a US$30 million secured loan
facility and is purchasing 8,984,100 Alexco Shares at C$0.50 per
share, having an aggregate value of C$4,492,050, which will
result in 9.9% of Alexco Shares being held by Hecla or its
affiliates. A portion of the loan will be immediately drawn and the
remainder available on a revolving basis, and the use of proceeds
will be for agreed upon working capital and capital expenditures
purposes according to a plan jointly approved by Alexco and Hecla.
The loan and share purchase are intended to provide Alexco with
immediate working capital to continue development work at Keno Hill
and are not conditional upon the completion of the transaction.
Board of Directors’ Recommendations
The Board of Directors of Alexco and Hecla have both unanimously
approved the transaction. The Board of Directors of Alexco
unanimously recommends that Alexco shareholders vote in favor of
the transaction. Alexco’s directors and officers support the
transaction and have entered into customary voting support
agreements with Hecla agreeing to vote their Alexco shares in favor
of the transaction. WPM has also entered into a voting support
agreement with Hecla to vote its Alexco shares in favor of the
transaction, resulting in approximately 4.9% of Alexco’s
outstanding common shares being subject to voting support
agreements to support the transaction.
Cormark Securities Inc. provided an opinion to the Alexco Board
of Directors that the transaction is fair from a financial point of
view to Alexco shareholders as of the date of the arrangement
agreement, and subject to the assumptions, limitations and
qualifications in the opinion.
Transaction Conditions and Timing
The transaction will be implemented by a Court-approved plan of
arrangement under the Business Corporations Act (British Columbia)
and requires the approval of: (i) 66 2/3% of the votes cast by the
holders of Alexco’s common shares, (ii) 66 2/3% of the votes cast
by the affected securityholders of Alexco voting as a single class,
and (iii) if applicable, a majority of the votes cast by the
holders of Alexco’s common shares after excluding any votes of
Hecla and other persons required to be excluded under Canadian
Multilateral Instrument 61-101 Protection of Minority Security
Holders in Special Transactions, all at a special meeting.
The Alexco-Hecla and WPM-Hecla transactions are each subject to
applicable regulatory approvals and customary closing conditions.
The agreement provides for customary deal-protection provisions,
including a non-solicitation covenant on the part of Alexco, a
right for Hecla to match any superior proposal and a termination
fee of US$10 million, payable by Alexco to Hecla, under certain
circumstances.
It is anticipated that the special meeting will be held in
September 2022 with the acquisition expected to close later that
month.
Advisors and Counsel
BMO Capital Markets is acting as financial advisor to Hecla in
connection with the Transaction. Osler, Hoskin & Harcourt LLP
is serving as Canadian counsel to Hecla and K&L Gates is acting
as U.S. counsel to Hecla.
Cormark Securities Inc. is acting as financial advisor to
Alexco. Blake, Cassels & Graydon LLP is serving as counsel to
Alexco.
Conference Call Details
Hecla will host a conference call on July 5, 2022 at 8:30 a.m.
Eastern Time to discuss the acquisition. You may join the
conference call by dialing toll-free 888-330-2391. The participant
code is 4812168. Hecla’s live and archived webcast can be accessed
at www.hecla-mining.com under Investors.
About Hecla
Founded in 1891, Hecla Mining Company (NYSE:HL) is the largest
silver producer in the United States. In addition to operating
mines in Alaska, Idaho and Quebec, Canada, the Company owns a
number of exploration properties and pre-development projects in
world-class silver and gold mining districts throughout North
America.
About Alexco
Alexco is the owner and operator of the historic Keno Hill
Silver District in Canada’s Yukon Territory, one of the
highest-grade silver deposits in the world.
Important Additional Information About the transaction and
Where to Find It
This material relates to Hecla’s proposed acquisition (the
“Transaction”) of Alexco. Shares of Hecla’s common stock (the
“Hecla Shares”) issued in connection with the proposed Transaction
may be registered pursuant to a registration statement to be filed
with the SEC or issued pursuant to an available exemption. This
information is not a substitute for any registration statement or
any other document that Hecla may file with the SEC or that it or
Alexco may send to their respective shareholders in connection with
the offer and/or issuance of Hecla Shares. Investors are urged to
read any registration statement, if and when filed, and all other
relevant documents that may be filed with the SEC or with Canadian
regulatory authorities as and if they become available because they
will contain important information about the issuance of Hecla
Shares. Documents, if and when filed with the SEC, will be
available free of charge at the SEC’s website (www.sec.gov) and
under Hecla’s profile on the SEDAR website at www.sedar.com. You
may also obtain these documents by contacting Hecla’s Investor
Relations department at Hecla Mining Company; Investor Relations;
1-800-HECLA91 (1-800-432-5291); hmc-info@hecla-mining.com. This
release does not constitute an offer to sell or the solicitation of
an offer to buy any securities.
In connection with the proposed transaction, Alexco will file
proxy soliciting materials with the SEC and/or Canadian regulatory
authorities. The information contained in any such filing may not
be complete and may be updated, amended or changed. SHAREHOLDERS
ARE URGED TO READ SUCH MATERIALS WHEN AVAILABLE AND ANY OTHER
RELEVANT MATERIALS FILED WITH THE SEC AND/OR CANADIAN REGULATORY
AUTHORITIES CAREFULLY IN THEIR ENTIRETY BEFORE MAKING ANY VOTING OR
INVESTMENT DECISION WITH RESPECT TO THE PROPOSED TRANSACTION
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
TRANSACTION AND THE PARTIES THERETO.
Proxy solicitation materials will be mailed to Alexco’s
shareholders seeking their approval of the Transaction. Anyone may
also obtain a copy of such materials free of charge once available
by directing a request to: Alexco Resource Corp., Suite 1225, Two
Bentall Centre, 555 Burrard Street, Box 216, Vancouver, British
Columbia, V7X 1M9, Attention: Investor Relations or, Hecla Mining
Company, 6500 N. Mineral Drive, Suite 200, Coeur d’Alene, ID
83815-9408; Investor Relations; 1-800-HECLA91 (1-800-432-5291). In
addition, any relevant materials filed with the SEC will be
available free of charge at the SEC’s website at www.sec.gov and
under Alexco’s profile on the SEDAR website at www.sedar.com.
Interested persons may also access copies of such documentation
filed with the SEC by visiting Alexco’s website at
www.alexcoresource.com.
Participants in Solicitation
Hecla, Alexco, their respective directors and certain of their
respective executive officers may be considered participants in the
solicitation of proxies in connection with the proposed
transaction. Information about the directors and executive officers
of Hecla is set forth in its Annual Report on Form 10-K for the
year ended December 31, 2021, which was filed with the SEC on
February 23, 2022, its proxy statement for its 2022 annual meeting
of shareholders, which was filed with the SEC on April 12, 2022,
and its Current Report on Form 8-K, which was filed with the SEC on
May 27, 2022. These documents may be obtained free of charge from
the SEC’s website at www.sec.gov and Hecla’s website at
www.hecla-mining.com. Information about the directors and executive
officers of Alexco is set forth in its Management Information
Circular filed on SEDAR on May 5, 2022. This document may be
obtained free of charge from SEDAR at www.sedar.com and Alexco’s
website at www.alexcoresource.com. Other information regarding the
participants in the proxy solicitations and a description of their
direct and indirect interests, by security holdings or otherwise,
will be contained in the Alexco information circular and other
relevant materials to be filed on SEDAR and with the SEC when they
become available. These documents may be obtained free of charge
from SEDAR at www.sedar.com and the SEC’s website at www.sec.gov
and Alexco’s website at www.alexcoresource.com.
Cautionary Statements to Investors on Forward-Looking
Statements
Forward-Looking Statements relating to
Hecla
This news release contains “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, which are intended to be covered by the safe harbor
created by such sections and other applicable laws, including
Canadian securities laws. When a forward-looking statement
expresses or implies an expectation or belief as to future events
or results, such expectation or belief is expressed in good faith
and believed to have a reasonable basis. However, such statements
are subject to risks, uncertainties and other factors, which could
cause actual results to differ materially from future results
expressed, projected or implied by the forward-looking statements.
Forward-looking statements often address our expected future
business and financial performance and financial condition and
often contain words such as “anticipate,” “intend,” “plan,” “will,”
“could,” “would,” “estimate,” “should,” “expect,” “believe,”
“project,” “target,” “indicative,” “preliminary,” “potential” and
similar expressions. Forward-looking statements in this news
release may include, without limitation statements or information
regarding the completion of Hecla’s acquisition of Alexco and that
it will close in the third quarter, the termination of WPM’s stream
on the Keno Hill project, the listed “benefits to Hecla
shareholders,” the listed “benefits to Alexco shareholders,” and
that Hecla has the organizational expertise and financial strength
to build Keno Hill to the level and capacity required, while being
able to continue to invest in exploration across the district. The
material factors or assumptions used to develop such
forward-looking statements or forward-looking information include
that the Company’s plans for development and production will
proceed as expected and will not require revision as a result of
risks or uncertainties, whether known, unknown or unanticipated, to
which the Company’s operations are subject.
Estimates or expectations of future events or results are based
upon certain assumptions, which may prove to be incorrect, which
could cause actual results to differ from forward-looking
statements. Such assumptions, include, but are not limited to: (i)
there being no significant change to current geotechnical,
metallurgical, hydrological and other physical conditions; (ii)
permitting, development, operations and expansion of the Company’s
projects being consistent with current expectations and mine plans;
(iii) political/regulatory developments in any jurisdiction in
which the Company operates being consistent with its current
expectations; (iv) the exchange rate for the USD/CAD and USD/MXN,
being approximately consistent with current levels; (v) certain
price assumptions for gold, silver, lead and zinc; (vi) prices for
key supplies being approximately consistent with current levels;
(vii) the accuracy of our current mineral reserve and mineral
resource estimates; (viii) the Company’s plans for development and
production will proceed as expected and will not require revision
as a result of risks or uncertainties, whether known, unknown or
unanticipated; (ix) counterparties performing their obligations
under hedging instruments and put option contracts; (x) sufficient
workforce is available and trained to perform assigned tasks; (xi)
weather patterns and rain/snowfall within normal seasonal ranges so
as not to impact operations; (xii) relations with interested
parties, including Native Americans, remain productive; (xiii)
economic terms can be reached with third-party mill operators who
have capacity to process our ore; (xiv) maintaining availability of
water rights; (xv) factors do not arise that reduce available cash
balances; and (xvi) there being no material increases in our
current requirements to post or maintain reclamation and
performance bonds or collateral related thereto.
In addition, material risks that could cause actual results to
differ from forward-looking statements include, but are not limited
to: (i) gold, silver and other metals price volatility; (ii)
operating risks; (iii) currency fluctuations; (iv) increased
production costs and variances in ore grade or recovery rates from
those assumed in mining plans; (v) community relations; (vi)
conflict resolution and outcome of projects or oppositions; (vii)
litigation, political, regulatory, labor and environmental risks;
(viii) exploration risks and results, including those mineral
resources are not mineral reserves, they do not have demonstrated
economic viability and there is no certainty that they can be
upgraded to mineral reserves through continued exploration; (ix)
the failure of counterparties to perform their obligations under
hedging instruments; (x) we take a material impairment charge on
our Nevada operations; (xi) we are unable to remain in compliance
with all terms of the credit agreement in order to maintain
continued access to the revolver, and (xii) we are unable to
refinance the maturing senior notes. For a more detailed discussion
of such risks and other factors, see the Company’s 2021 Form 10-K,
filed on February 23, 2022, with the Securities and Exchange
Commission (SEC), as well as the Company’s other SEC filings. The
Company does not undertake any obligation to release publicly
revisions to any “forward-looking statement,” including, without
limitation, outlook, to reflect events or circumstances after the
date of this news release or to reflect the occurrence of
unanticipated events, except as may be required under applicable
securities laws. Investors should not assume that any lack of
update to a previously issued “forward-looking statement”
constitutes a reaffirmation of that statement. Continued reliance
on “forward-looking statements” is at investors’ own risk.
Forward-Looking Statements Relating to
Alexco
Some statements (“forward-looking statements”) in this news
release contain forward-looking information concerning Alexco’s
anticipated results and developments in Alexco’s operations in
future periods, planned exploration and development of its
properties, plans related to its business and other matters that
may occur in the future, made as of the date of this news release.
Forward-looking statements may include, but are not limited to,
statements with respect to the completion of Hecla’s acquisition of
Alexco and that it will close in the third quarter, the termination
of WPM’s stream on the Keno Hill project, the listed “benefits to
Hecla shareholders,” the listed “benefits to Alexco shareholders,”
and that Hecla has the organizational expertise and financial
strength to build Keno Hill to the level and capacity required,
while being able to continue to invest in exploration across the
district, future remediation and reclamation activities, future
mineral exploration, the estimation of mineral reserves and mineral
resources, the realization of mineral reserve and mineral resource
estimates, future mine construction and development activities,
future mine operation and production, the timing of activities and
reports, the timing and results of development activity, the timing
and amount of estimated revenues and expenses, the success of
exploration activities, permitting time lines, requirements for
additional capital and sources and uses of funds. Forward-looking
statements are subject to a variety of known and unknown risks,
uncertainties and other factors, which could cause actual events or
results to differ from those expressed or implied by the
forward-looking statements. Such factors include, among others,
risks related to actual results and timing of exploration and
development activities; actual results and timing of mining
activities; actual results and timing of environmental services
activities; actual results and timing of remediation and
reclamation activities; conclusions of economic evaluations;
changes in project parameters as plans continue to be refined;
future prices of silver, gold, lead, zinc and other commodities;
possible variations in mineable resources, grade or recovery rates;
failure of plant, equipment or processes to operate as anticipated;
accidents, labor disputes and other risks of the mining industry;
First Nation rights and title; continued capitalization and
commercial viability; global economic conditions; competition; and
delays in obtaining governmental approvals or financing or in the
completion of development activities. Forward-looking statements
are based on certain assumptions that management believes are
reasonable at the time they are made. In making the forward-looking
statements included in this news release, Alexco has applied
several material assumptions, including, but not limited to, that
proposed exploration and development will proceed as planned, and
that market fundamentals will result in sustained silver, gold,
lead and zinc demand and prices. There can be no assurance that
forward-looking statements will prove to be accurate and actual
results and future events could differ materially from those
anticipated in such statements. Alexco expressly disclaims any
intention or obligation to update or revise any forward-looking
statements whether as a result of new information, future events or
otherwise, except as otherwise required by applicable securities
legislation.
Cautionary Statements to Investors on Reserves and
Resources
This news release uses the terms “mineral resources,” “measured
mineral resources,” “indicated mineral resources” and “inferred
mineral resources.” Mineral resources that are not mineral reserves
do not have demonstrated economic viability. You should not assume
that all or any part of measured or indicated mineral resources
will ever be converted into mineral reserves. Further, inferred
mineral resources have a great amount of uncertainty as to their
existence and as to whether they can be mined legally or
economically, and an inferred mineral resource may not be
considered when assessing the economic viability of a mining
project, and may not be converted to a mineral reserve. On October
31, 2018, the SEC adopted new mining disclosure rules (“S-K 1300”)
that is more closely aligned with current industry and global
regulatory practices and standards, including National Instrument
43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”)
which Hecla complies with because it also is a “reporting issuer”
under Canadian securities laws. While S-K 1300 is more closely
aligned with NI 43-101 than the prior SEC mining disclosure rules,
there are some differences. NI 43-101 is a rule developed by the
Canadian Securities Administrators, which established standards for
all public disclosure an issuer makes of scientific and technical
information concerning mineral projects. Unless otherwise
indicated, all resource and reserve estimates contained in this
press release have been prepared in accordance with NI 43-101, as
well as S K 1300.
Qualified Person (QP)
Kurt D. Allen, MSc., CPG, VP - Exploration of Hecla Mining
Company and Keith Blair, MSc., CPG, Chief Geologist of Hecla
Limited, who serve as a Qualified Person under S-K 1300 and “NI
43-101”, supervised the preparation of the scientific and technical
information concerning Hecla’s mineral projects in this news
release. Technical Report Summaries for each of the Company’s
material properties are filed as exhibits 96.1, 96.2 and 96.3 to
the Company’s Annual Report on Form 10-K for the year ended
December 31, 2021 and are available at www.sec.gov. Information
regarding data verification, surveys and investigations, quality
assurance program and quality control measures and a summary of
analytical or testing procedures for the Greens Creek Mine are
contained in a technical report titled “Technical Report for the
Greens Creek Mine” effective date December 31, 2018, and for the
Lucky Friday Mine are contained in a technical report titled
“Technical Report for the Lucky Friday Mine Shoshone County, Idaho,
USA” effective date April 2, 2014, for Casa Berardi are contained
in a technical report titled “Technical Report on the mineral
resource and mineral reserve estimate for Casa Berardi Mine,
Northwestern Quebec, Canada” effective date December 31, 2018 (the
“Casa Berardi Technical Report”), and for the San Sebastian Mine,
Mexico, are contained in a technical report prepared for Hecla
titled “Technical Report for the San Sebastian Ag-Au Property,
Durango, Mexico” effective date September 8, 2015. Also included in
these three technical reports is a description of the key
assumptions, parameters and methods used to estimate mineral
reserves and resources and a general discussion of the extent to
which the estimates may be affected by any known environmental,
permitting, legal, title, taxation, socio-political, marketing, or
other relevant factors. Information regarding data verification,
surveys and investigations, quality assurance program and quality
control measures and a summary of sample, analytical or testing
procedures for the Fire Creek Mine are contained in a technical
report prepared for Klondex Mines, dated March 31, 2018; the
Hollister Mine dated May 31, 2017, amended August 9, 2017; and the
Midas Mine dated August 31, 2014, amended April 2, 2015. Copies of
these technical reports are available under Hecla’s and Klondex’s
profiles on SEDAR at www.sedar.com. Mr. Allen and Mr. Blair
reviewed and verified information regarding drill sampling, data
verification of all digitally collected data, drill surveys and
specific gravity determinations relating to all the mines. The
review encompassed quality assurance programs and quality control
measures including analytical or testing practice, chain-of-custody
procedures, sample storage procedures and included independent
sample collection and analysis. This review found the information
and procedures meet industry standards and are adequate for Mineral
Resource and Mineral Reserve estimation and mine planning
purposes.
The disclosure of all scientific and technical information in
this news release concerning Alexco’s mineral properties has been
reviewed and approved Sebastien D. Tolgyesi, P.Eng., P.Geo. (Keno
Hill Operations Manager, Alexco), who is a Qualified Person as
defined by National Instrument 43-101 – Standards of Disclosure for
Mineral Projects.
Information About Each Company
Information in this news release about Hecla has been provided
by, and is the responsibility of, Hecla. For further information
about Hecla, please refer to Hecla’s SEC filings, including its
Annual Report on Form 10-K filed on February 22, 2022 and its
filings with Canadian securities regulatory authorities under its
issuer profile on SEDAR. Information in this news release about
Alexco has been provided by, and is the responsibility of, Alexco.
For further information about Alexco, please refer to Alexco’s
filings, including its Annual Report on Form 40-F filed on March
21, 2022 and its filings with Canadian securities regulatory
authorities under its issuer profile on SEDAR.
Table A
Hecla’s Mineral Reserves –
12/31/2021(1)
Proven Reserves(1)
Silver
Gold
Lead
Zinc
Copper
Silver
Gold
Lead
Zinc
Copper
Asset
Tons (000)
(oz/ton)
(oz/ton)
%
%
%
(000 oz)
(000 oz)
(Tons)
(Tons)
(Tons)
Greens Creek (2,3)
2
9.6
0.08
1.7
4.5
-
18
0.1
30
80
-
Lucky Friday (2,4)
4,691
13.9
-
8.4
3.4
-
65,313
-
395,290
159,360
-
Casa Berardi Open Pit (2,5)
4,763
-
0.10
-
-
-
-
453
-
-
-
Casa Berardi Underground (2,5)
923
-
0.16
-
-
-
-
143
-
-
-
Total
10,378
65,331
596
395,320
159,440
-
Probable Reserves(6)
Silver
Gold
Lead
Zinc
Copper
Silver
Gold
Lead
Zinc
Copper
Asset
Tons (000)
(oz/ton)
(oz/ton)
%
%
%
(000 oz)
(000 oz)
(Tons)
(Tons)
(Tons)
Greens Creek (2,3)
11,074
11.3
0.09
2.5
6.6
-
125,201
946
282,220
725,830
-
Lucky Friday (2,4)
765
12.3
-
7.5
2.8
-
9,386
-
57,160
21,650
-
Casa Berardi Open Pit (2,5)
13,371
-
0.07
-
-
-
-
928
-
-
-
Casa Berardi Underground (2,5)
1,695
-
0.15
-
-
-
-
259
-
-
-
Total
26,905
134,587
2,133
339,380
747,480
-
Proven and Probable
Reserves
Silver
Gold
Lead
Zinc
Copper
Silver
Gold
Lead
Zinc
Copper
Asset
Tons (000)
(oz/ton)
(oz/ton)
%
%
%
(000 oz)
(000 oz)
(Tons)
(Tons)
(Tons)
Greens Creek (2,3)
11,076
11.3
0.09
2.5
6.6
-
125,219
946
282,250
725,920
-
Lucky Friday (2,4)
5,456
13.7
-
8.3
3.3
-
74,699
-
452,440
181,020
-
Casa Berardi Open Pit (2,5)
18,134
-
0.08
-
-
-
-
1,381
-
-
-
Casa Berardi Underground (2,5)
2,618
-
0.15
-
-
-
-
403
-
-
-
Total
37,283
199,918
2,730
734,690
906,940
-
(1) The term “reserve” means an estimate
of tonnage and grade or quality of indicated and measured resources
that, in the opinion of the qualified person, can be the basis of
an economically viable project. More specifically, it is an
economically mineable part of a measured or indicated mineral
resource, which includes diluting materials and allowances for
losses that may occur when the material is mined or extracted. The
term “proven reserves’ means the economically mineable part of a
measured mineral resource and can only result from conversion of a
measured mineral resource. Reserves are reported in accordance with
Section 1300 of Regulation S-K of the Securities Act of 1933, as
amended and NI 43-101. See footnotes 7 and 8 below.
(2) Mineral reserves are based on $17/oz
silver, $1600/oz gold, $0.90/lb lead, $1.15/lb zinc, unless
otherwise stated.
(3) The reserve NSR cut-off grades for
Greens Creek are $215/ton for all zones at Greens Creek except the
Gallagher Zone at $220/ton; metallurgical recoveries (actual 2021):
81.26% silver, 72.34% gold, 82.29% lead, 89.58% zinc
(4) The reserve NSR cut-off grades for
Lucky Friday are $216.19 for the 30 Vein and $230.98 for the
Intermediate Veins; metallurgical recoveries (actual 2021): 95.18%
silver, 94.62% lead, 89.97% zinc
(5) The average reserve cut-off grades at
Casa Berardi are 0.101 oz/ton gold (3.47 g/tonne) for underground
and 0.037 oz/ton (1.27 g/tonne) for open pit. Metallurgical
recovery (actual 2021): 84.82% gold; US$/CAN$ exchange rate:
1:1.275.
(6) The term “probable reserves” means the
economically mineable part of an indicated and, in some cases, a
measured mineral resource. See footnotes 8 and 9 below.
Totals may not represent the sum of parts
due to rounding
Hecla’s Mineral Resources –
12/31/2021(7)
Measured Resources(8)
Silver
Gold
Lead
Zinc
Copper
Silver
Gold
Lead
Zinc
Copper
Asset
Tons (000)
(oz/ton)
(oz/ton)
%
%
%
(000 oz)
(000 oz)
(Tons)
(Tons)
(Tons)
Greens Creek (11,12)
-
-
-
-
-
-
-
-
-
-
-
Lucky Friday (11,13)
8,652
7.6
-
4.9
2.5
-
65,752
-
425,100
213,480
-
Casa Berardi Open Pit (11,14)
96
-
0.04
-
-
-
-
4
-
-
-
Casa Berardi Underground (11,14)
2,272
-
0.15
-
-
-
-
351
-
-
-
San Sebastian - Oxide (15)
-
-
-
-
-
-
-
-
-
-
-
San Sebastian - Sulfide (15)
-
-
-
-
-
-
-
-
-
-
-
Fire Creek (16,17)
20
0.7
0.50
-
-
-
14
10
-
-
-
Hollister (16,18)
18
4.9
0.59
-
-
-
87
10
-
-
-
Midas (16,19)
2
7.6
0.68
-
-
-
14
1
-
-
-
Heva (20)
-
-
-
-
-
-
-
-
-
-
-
Hosco (20)
-
-
-
-
-
-
-
-
-
-
-
Star (21)
-
-
-
-
-
-
-
-
-
-
-
Total
11,060
65,867
377
425,100
213,480
-
Indicated Resources(9)
Silver
Gold
Lead
Zinc
Copper
Silver
Gold
Lead
Zinc
Copper
Asset
Tons (000)
(oz/ton)
(oz/ton)
%
%
%
(000 oz)
(000 oz)
(Tons)
(Tons)
(Tons)
Greens Creek (11,12)
8,355
12.8
0.10
3.0
8.4
-
106,670
836
250,040
701,520
-
Lucky Friday (11,13)
1,841
7.6
-
5.1
2.4
-
14,010
-
93,140
44,120
-
Casa Berardi Open Pit (11,14)
420
-
0.03
-
-
-
-
14
-
-
-
Casa Berardi Underground (11,14)
4,976
-
0.14
-
-
-
-
685
-
-
-
San Sebastian - Oxide (15)
1,453
6.5
0.09
-
-
-
9,430
135
-
-
-
San Sebastian - Sulfide (15)
1,187
5.5
0.01
1.9
2.9
1.2
6,579
16
22,420
34,100
14,650
Fire Creek (16,17)
113
1.0
0.45
-
-
-
114
51
-
-
-
Hollister (16,18)
70
1.9
0.58
-
-
-
130
40
-
-
-
Midas (16,19)
76
5.7
0.42
-
-
-
430
32
-
-
-
Heva (20)
1,266
-
0.06
-
-
-
-
76
-
-
-
Hosco (20)
29,287
-
0.04
-
-
-
-
1,201
-
-
-
Star (21)
1,126
2.9
-
6.2
7.4
-
3,301
-
69,900
83,410
-
Total
50,168
140,663
3,088
435,500
863,150
14,650
Measured & Indicated
Resources
Silver
Gold
Lead
Zinc
Copper
Silver
Gold
Lead
Zinc
Copper
Asset
Tons (000)
(oz/ton)
(oz/ton)
%
%
%
(000 oz)
(000 oz)
(Tons)
(Tons)
(Tons)
Greens Creek (11,12)
8,355
12.8
0.10
3.0
8.4
-
106,670
836
250,040
701,520
-
Lucky Friday (11,13)
10,493
7.6
-
4.9
2.5
-
79,762
-
518,240
257,600
-
Casa Berardi Open Pit (11,14)
516
-
0.03
-
-
-
-
18
-
-
-
Casa Berardi Underground (11,14)
7,248
-
0.14
-
-
-
-
1,036
-
-
-
San Sebastian - Oxide (15)
1,453
6.5
0.09
-
-
-
9,430
135
-
-
-
San Sebastian - Sulfide (15)
1,187
5.5
0.01
1.9
2.9
1.2
6,579
16
22,420
34,100
14,650
Fire Creek (16,17)
134
1.0
0.46
-
-
-
128
61
-
-
-
Hollister (16,18)
88
2.5
0.58
-
-
-
217
51
-
-
-
Midas (16,19)
78
5.7
0.43
-
-
-
444
33
-
-
-
Heva (20)
1,266
-
0.06
-
-
-
-
76
-
-
-
Hosco (20)
29,287
-
0.04
-
-
-
-
1,201
-
-
-
Star (21)
1,126
2.9
-
6.2
7.4
-
3,301
-
69,900
83,410
-
Total
61,229
206,530
3,464
860,600
1,076,630
14,650
Inferred Resources(10)
Silver
Gold
Lead
Zinc
Copper
Silver
Gold
Lead
Zinc
Copper
Asset
Tons (000)
(oz/ton)
(oz/ton)
%
%
%
(000 oz)
(000 oz)
(Tons)
(Tons)
(Tons)
Greens Creek (11,12)
2,152
12.8
0.08
2.8
6.8
-
27,508
164
60,140
146,020
-
Lucky Friday (11,13)
5,377
7.8
-
5.8
2.4
-
41,872
-
311,850
129,600
-
Casa Berardi Open Pit (11,14)
7,886
-
0.05
-
-
-
-
383
-
-
-
Casa Berardi Underground 11,14)
2,239
-
0.18
-
-
-
-
408
-
-
-
San Sebastian - Oxide (15)
3,490
6.4
0.05
-
-
-
22,353
182
-
-
-
San Sebastian - Sulfide (15)
385
4.2
0.01
1.6
2.3
0.9
1,606
5
6,070
8,830
3,330
Fire Creek (16,17)
765
0.5
0.51
-
-
-
394
392
-
-
-
Fire Creek - Open Pit (22)
74,584
0.1
0.03
-
-
-
5,232
2,178
-
-
-
Hollister (18,18)
642
3.0
0.42
-
-
-
1,916
273
-
-
-
Midas (16,19)
1,232
6.3
0.50
-
-
-
7,723
615
-
-
-
Heva (20)
2,787
-
0.08
-
-
-
-
216
-
-
-
Hosco (20)
17,726
-
0.04
-
-
-
-
663
-
-
-
Star (21)
3,157
2.9
-
5.6
5.5
-
9,432
-
178,670
174,450
-
San Juan Silver (23)
3,594
11.3
0.01
1.4
1.1
-
40,716
36
51,750
40,800
Monte Cristo (24)
913
0.3
0.14
-
-
-
271
131
-
-
-
Rock Creek (25)
100,086
1.5
-
-
-
0.7
148,736
-
-
-
658,680
Montanore (26)
112,185
1.6
-
-
-
0.7
183,346
-
-
-
759,420
Total.
339,200
491,103
5,644
608,480
499,700
1,421,430
Note: All estimates are in-situ except
for the proven reserves at Greens Creek which are in surface
stockpiles. Mineral resources are exclusive of reserves.
(7) The term "mineral resources" means a
concentration or occurrence of material of economic interest in or
on the Earth's crust in such form, grade or quality, and quantity
that there are reasonable prospects for economic extraction. A
mineral resource is a reasonable estimate of mineralization, taking
into account relevant factors such as cut-off grade, likely mining
dimensions, location or continuity, that, with the assumed and
justifiable technical and economic conditions, is likely to, in
whole or in part, become economically extractable. It is not merely
an inventory of all mineralization drilled or sampled. Resources
are reported in accordance with Section 1300 of Regulation S-K of
the Securities Act of 1933, as amended and NI 43-101.
(8) The term "measured resources" means
that part of a mineral resource for which quantity and grade or
quality are estimated on the basis of conclusive geological
evidence and sampling. The level of geological certainty associated
with a measured mineral resource is sufficient to allow a qualified
person to apply modifying factors, as defined in this section, in
sufficient detail to support detailed mine planning and final
evaluation of the economic viability of the deposit Because a
measured mineral resource has a higher level of confidence than the
level of confidence of either an indicated mineral resource or an
inferred mineral resource, a measured mineral resource may be
converted to a proven mineral reserve or to a probable mineral
reserve.
(9) The term "indicated resources" means
that part of a mineral resource for which quantity and grade or
quality are estimated on the basis of adequate geological evidence
and sampling. The level of geological certainty associated with an
indicated mineral resource is sufficient to allow a qualified
person to apply modifying factors in sufficient detail to support
mine planning and evaluation of the economic viability of the
deposit. Because an indicated mineral resource has a lower level of
confidence than the level of confidence of a measured mineral
resource, an indicated mineral resource may only be converted to a
probable mineral reserve.
(10) The term "inferred resources" means
that part of a mineral resource for which quantity and grade or
quality are estimated on the basis of limited geological evidence
and sampling. The level of geological uncertainty associated with
an inferred mineral resource is too high to apply relevant
technical and economic factors likely to influence the prospects of
economic extraction in a manner useful for evaluation of economic
viability. Because an inferred mineral resource has the lowest
level of geological confidence of all mineral resources, which
prevents the application of the modifying factors in a manner
useful for evaluation of economic viability, an inferred mineral
resource may not be considered when assessing the economic
viability of a mining project and may not be converted to a mineral
reserve.
(11) Mineral resources are based on
$1700/oz gold, $21/oz silver, $1.15/lb lead, $1.35/lb zinc and
$3.00/lb copper, unless otherwise stated.
(12) The resource NSR cut-off grades for
Greens Creek are $215/ton for all zones at Greens Creek except the
Gallagher Zone at $220/ton; metallurgical recoveries (actual 2021):
81.26% silver, 72.34% gold, 82.29% lead, 89.58% zinc.
(13) The resource NSR cut-off grades for
Lucky Friday are $170.18 for the 30 Vein, $184.97 for the
Intermediate Veins and $207.15 for the Lucky Friday Vein;
metallurgical recoveries (actual 2021): 95.18% silver, 94.62% lead,
89.97% zinc.
(14) The average resource cut-off grades
at Casa Berardi are 0.089 oz/ton gold (3.06 g/tonne) for
underground and 0.036 oz/ton (1.22 g/tonne) for open pit;
metallurgical recovery (actual 2021): 84.82% gold; US$/CAN$
exchange rate: 1:1.275.
(15) Indicated resources for most zones at
San Sebastian based on $1500/oz gold, $21/oz silver, $1.15/lb lead,
$1.35/lb zinc and $3.00/lb copper using a cut-off grade of
$90.72/ton ($100/tonne); $1700/oz gold used for Toro, Bronco, and
Tigre zones. Metallurgical recoveries based on grade dependent
recovery curves: recoveries at the mean resource grade average 89%
silver and 84% gold for oxide material and 85% silver, 83% gold,
81% lead, 86% zinc, and 83% for copper for sulfide material.
Resources reported at a minimum mining width of 8.2 feet (2.5m) for
Middle Vein, North Vein, and East Francine, 6.5ft (1.98m) for El
Toro, El Bronco, and El Tigre, and 4.9 feet (1.5 m) for Hugh Zone
and Andrea.
(16) Mineral resources for Fire Creek,
Hollister and Midas are reported using $1500/oz gold and $21/oz
silver prices, unless otherwise noted. A minimum mining width is
defined as four feet or the vein true thickness plus two feet,
whichever is greater.
(17) Fire Creek mineral resources are
reported at a gold equivalent cut-off grade of 0.283 oz/ton.
Metallurgical recoveries: 90% gold, 70% silver.
(18) Hollister mineral resources,
including the Hatter Graben are reported at a gold equivalent
cut-off grade of 0.238 oz/ton. Metallurgical recoveries: 88% gold,
66% silver
(19) Midas mineral resources are reported
at a gold equivalent cut-off grade of 0.237 oz/ton. Metallurgical
recoveries: 90% gold, 70% silver. A gold-equivalent cut-off grade
of 0.1 oz/ton and a gold price of $1700/oz used for Sinter Zone
with resources undiluted.
(20) Measured, indicated and inferred
resources at Heva and Hosco are based on $1,500/oz gold. Resources
are without dilution or material loss at a gold cut-off grade of
0.01 oz/ton (0.33 g/tonne) for open pit and 0.088 oz/ton (3.0
g/tonne) for underground.
Metallurgical recovery: Heva: 95% gold,
Hosco: 87.7% gold.
(21) Indicated and Inferred resources at
the Star property are reported using $21 silver, $0.95 lead, $1.10
lead, a minimum mining width of 4.3 feet and a cut-off grade of
$100/ton; Metallurgical recovery: 93.38% silver, 93.33% lead,
86.96% zinc.
(22) Inferred open-pit resources for Fire
Creek calculated November 30, 2017, using gold and silver
recoveries of 65% and 30% for oxide material and 60% and 25% for
mixed oxide-sulfide material. Indicated Resources reclassified as
Inferred in 2019.
Open pit resources are calculated at $1400
gold and $19.83 silver and cut-off grade of 0.01 Au Equivalent
oz/ton and is inclusive of 10% mining dilution and 5% ore loss.
Open pit mineral resources exclusive of underground mineral
resources.
(23) Inferred resources reported at a
minimum mining width of 6.0 feet for Bulldog and a cut-off grade of
6.0 equivalent oz/ton silver and 5.0 feet for Equity and North
Amethyst vein at a cut-off grade of $50/ton and $100/ton; based on
$1400 Au, $26.5 Ag, $0.85 Pb, and $0.85 Zn.
Metallurgical recoveries based on grade
dependent recovery curves: recoveries at the mean resource grade
average 88% silver and 74% lead for the Bulldog and a constant 85%
gold and 85% silver for North Amethyst and Equity.
(24) Inferred resource at Monte Cristo
reported at a minimum mining width of 5.0 feet; resources based on
$1400 Au, $26.5 Ag using a 0.06 oz/ton gold cut-off grade.
Metallurgical recovery: 90% gold, 90% silver.
(25) Inferred resource at Rock Creek
reported at a minimum thickness of 15 feet and a cut-off grade of
$24.50/ton NSR; Metallurgical recoveries: 88% silver, 92%
copper.
Resources adjusted based on mining
restrictions as defined by U.S. Forest Service, Kootenai National
Forest in the June 2003 'Record of Decision, Rock Creek
Project'.
(26) Inferred resource at Montanore
reported at a minimum thickness of 15 feet and a cut-off grade of
$24.50/ton NSR; Metallurgical recoveries: 88% silver, 92%
copper.
Resources adjusted based on mining
restrictions as defined by U.S. Forest Service, Kootenai National
Forest, Montana DEQ in December 2015 'Joint Final EIS, Montanore
Project' and the February 2016 U.S Forest Service - Kootenai
National Forest 'Record of Decision, Montanore Project'.
Totals may not represent the sum of parts
due to rounding
Table B
Alexco’s Mineral
Reserves
Probable Reserves
Silver
Lead
Zinc
Gold
Silver
Lead
Zinc
Gold
Deposit
Tonnes
(g/t)
%
%
(g/t)
(000 oz)
(M lbs)
(M lbs)
(000 oz)
Bellekeno
12,809
936
13.0
7.3
-
385
4
2
-
Bellekeno Surface Deposits
3,397
1,150
21.7
4.5
-
126
2
-
-
Lucky Queen
70,648
1,269
2.7
1.6
0.1
2,883
4
2
-
Flame & Moth
721,322
672
2.7
6.2
0.5
15,590
43
99
11
Bermingham
640,173
899
2.3
1.3
0.1
18,209
31
18
3
Total
1,438,349
804
2.6
3.8
0.3
37,193
84
122
14
Notes:
1.
Mineral Reserves reported herein
are dated May 26, 2021 (see Alexco’s news release “Alexco Announces
22% Increase to Silver Reserves; Updated Technical Report
Demonstrates Robust Economics at Keno Hill”) and do not include
depletion since that time.
2.
Mineral Reserves are reported
herein based on an NSR cutoff value using estimated metallurgical
recoveries, assumed metal prices and smelter terms, which include
payable factors, treatment charges, penalties, and refining
charges.
3.
Tonnage and grade measurements
are in metric units. Contained gold and silver ounces are reported
as troy ounces.
4.
The Bellekeno, Lucky Queen, Flame
& Moth and Bermingham deposits are incorporated into the
current mine plan supported by disclosure in the news release dated
May 26, 2021 entitled “Alexco Announces 22% Increase to Silver
Reserves; Updated Technical Report Demonstrates Robust Economics at
Keno Hill”.
5.
Rounding as required by reporting
guidelines may result in apparent summation differences between
tonnes, grade and contained metal content.
Alexco’s Mineral
Resources
Indicated Resources
Silver
Lead
Zinc
Gold
Silver
Deposit
Tonnes
(g/t)
%
%
(g/t)
(000 oz)
Bellekeno
213,000
620
5.5
5.5
n/a
4,246
Lucky Queen
132,300
1,167
2.4
1.6
0.2
4,964
Flame & Moth
1,679,000
498
1.9
5.3
0.4
26,883
Onek
700,200
191
1.2
11.9
0.6
4,300
Bermingham
1,562,700
939
2.6
1.7
0.2
47,210
Total
4,287,200
635
2.2
5.0
0.3
87,603
Inferred Resources
Silver
Lead
Zinc
Gold
Silver
Deposit
Tonnes
(g/t)
%
%
(g/t)
(000 oz)
Bellekeno
302,000
359
2.5
5.4
n/a
3,486
Lucky Queen
257,900
473
1.0
0.8
0.1
3,922
Flame & Moth
365,200
356
0.5
4.3
0.3
4,180
Onek
285,100
118
1.2
8.3
0.4
1,082
Bermingham
843,400
735
2.0
1.3
0.2
19,930
Total
2,053,600
494
1.6
3.3
0.2
32,600
Notes:
1.
All Mineral Resources are
classified following the CIM Definition Standards for Mineral
Resources and Mineral Reserves (May 2014) of NI 43-101.
2.
Indicated Mineral Resources are
inclusive of Probable Mineral Reserves estimates.
3.
Mineral Resources are not Mineral
Reserves and do not have demonstrated economic viability. All
numbers have been rounded to reflect the relative accuracy of the
estimates.
4.
The Mineral Resource estimates
comprising Lucky Queen and Flame & Moth, Onek and Bermingham
are supported by disclosure in the news release dated May 26, 2021
entitled “Alexco Announces 22% Increase to Silver Reserves,;
Updated Technical Report Demonstrates Robust Economics at Keno
Hill” and the Technical Report filed on SEDAR dated May 26, 2021
with an effective date of April 1, 2021.
5.
The Mineral Resource estimate for
the Bermingham deposit is based on Mineral Resource estimates
having an effective date of November 30, 2021.
6.
The Mineral Resource estimate for
the Lucky Queen, Flame & Moth and Onek deposits have an
effective date of January 3, 2017.
7.
The Mineral Resource estimate for
the Bellekeno deposit is based on an internal Mineral Resource
estimate completed by Alexco Resource Corp. and externally audited
by SRK Consulting Inc., having an effective date of January 01,
2021. This Mineral Resource estimate has been depleted to reflect
all mine production from Bellekeno to the end of December 2020 and
does not reflect any depletion from production that occurred in
2021.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220705005297/en/
Hecla: Anvita M. Patil Vice
President - Investor Relations and Treasurer 800-HECLA91
(800-432-5291) Investor Relations Email: hmc-info@hecla-mining.com
Website: www.hecla-mining.com
Alexco: Rajni Bala Investor
Relations and Communications Lead Phone: (778) 945-6577 Email:
info@alexcoresource.com Website: www.alexcoresource.com
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