Klondex shares surge on news of Hecla acquisition – by Niall McGee (Globe and Mail – March 20, 2018)

https://www.theglobeandmail.com/

Shares in struggling Canadian junior gold producer Klondex Mines Ltd. surged after U.S.-based Hecla Mining Co. announced it intends to pay a premium of almost 80 per cent to acquire the company in a transaction worth US$462-million.

Idaho-based Hecla’s cash and stock offer is worth US$2.47 a share (about $3.23) – a roughly 79-per-cent premium compared with Friday’s closing price.

Under the transaction, Hecla is acquiring Klondex’s U.S. gold mines, but its Canadian assets are set to be spun out into a separate publicly traded company, to be owned by existing Klondex shareholders.

Klondex operates the Hollister and Midas mines, as well as the Fire Creek project, all in Nevada. Vancouver-based Klondex shares closed up 59 per cent at $2.86 Monday on the Toronto Stock Exchange.

While the takeover offer represents a sizable premium to Klondex’s recent share price, it is vastly below the more than $7 each the shares were trading at little over a year ago. One reason the company’s stock had been under pressure is that it missed its gold production forecast last year.

For the rest of this article: https://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/klondex-shares-surge-on-news-of-hecla-acquisition/article38307921/

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