Hecla Mining Company ( NYSE:HL) announced today that a wholly owned Canadian subsidiary of Hecla has entered into a subscription agreement to acquire 14,000,000 common shares of Canamex Resources Corp. (“ Canamex”). Subject to receipt of approval by the TSX Venture Exchange, the common shares will be issued to the wholly owned subsidiary of Hecla from treasury at a price of $0.18 per common share for total gross proceeds to Canamex of $2,520,000. Upon completion of the transactions contemplated by the subscription agreement (the “ Proposed Transaction”), the 14,000,000 common shares will represent and Hecla will exercise control over approximately 15% of the outstanding common shares of Canamex. In addition, Hecla will have the right to appoint one representative to the Board of Directors of Canamex and will be providing technical assistance to Canamex. Hecla will also have the right to participate in future equity offerings of Canamex in order to maintain Hecla's pro-rata equity interest in Canamex.
Canamex is a Canadian-based resource exploration company currently focused on the exploration of two gold properties, the Bruner gold project (the “ Bruner Project”) located in Nye County, Nevada and the Aranka North gold project located in Guyana.
“Hecla is pleased to be able to make a strategic investment in Canamex to participate in the re-emergence of a historic Nevada gold district with outstanding exploration and development potential,” said Hecla's President and Chief Executive Officer Phillips S. Baker, Jr. “This is one of many strategic investments in junior mining companies with strong management and outstanding exploration land packages that Hecla is contemplating as we seek to expand our exposure to under-explored silver-gold mining districts in the Americas.”
The Proposed Transaction is subject to certain conditions, including the approval of the TSX Venture Exchange.The common shares 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.