Hecla Increases Interest in Canamex Resources Corp.
COEUR D’ALENE, Idaho, Sep 30, 2014 (BUSINESS WIRE) -- Hecla Mining Company (NYSE:HL) announced today that a wholly owned subsidiary of Hecla has entered into a subscription agreement pursuant to which it has agreed to acquire 3,095,238 units of Canamex Resources Corp. (“Canamex”). Each unit is comprised of one common share and one-half of a common share purchase warrant ()Units”). Each common share purchase warrant is exercisable for a period of two years from the date of issuance at a price of $0.30 per share. The 3,095,238 common shares comprised in the Units to be acquired by Hecla Canada represent 2.4% of the outstanding common shares of Canamex upon completion of the private placement to Hecla (which itself will form part of a larger private placement which will be completed concurrently). The 1,547,619 common share purchase warrants comprised in the Units to be acquired by Hecla represent 42.6% of the common share purchase warrants to be issued by Canamex as part of the larger private placement. The Units will be issued to Hecla at a price of $0.21 per Unit for total gross proceeds to Canamex from Hecla of $650,000.
With the completion of the transactions contemplated by the subscription agreement referred to above, Hecla will exercise control over 17,237,149 common shares representing 13.3% of the outstanding common shares of Canamex and 1,547,619 common share purchase warrants. Assuming the exercise of only those common share purchase warrants held by Hecla, Hecla would exercise control over 18,784,768 common shares of Canamex or 14.4% of Canamex’s common shares.
The ancillary rights agreement (the “Ancillary Rights Agreement”) between Hecla and Canamex dated November 21, 2012, continues in effect. Pursuant to the Ancillary Rights Agreement, for so long as Hecla holds more than a 10% interest in Canamex (calculated in accordance with that agreement), Hecla has: (a) a right to nominate one person to Canamex’s board of directors, (b) a right to nominate one person to Canamex’s technical committee, and (c) a pre-emptive right to participate in any future proposed equity offering of Canamex in order to maintain its pro rata interest.
The common shares and common share purchase warrants comprised in the Units will be acquired for investment purposes by Hecla. Hecla does not have any present intention to acquire ownership of, or control over, additional securities of Canamex. It is the intention of Hecla to evaluate its investment in Canamex on a continuing basis and such holdings may be increased or decreased in the future.
In completing this investment Hecla is relying on Subsection 2.3(1) of Canadian National Instrument 45-106 – Prospectus and Registration Exemptions as Hecla is an accredited investor. For the purposes of Canadian National Instrument 62-103, the address of Hecla is 6500 N. Mineral Drive, Suite 200, Coeur d’Alene, Idaho, 83815, USA.
