Note 13 - Acquisition of Aurizon Mines Ltd.

3 Months Ended

Mar. 31, 2013

Business Combination Disclosure [Text Block]

Note 13.    Acquisition of Aurizon Mines Ltd.

On March 3, 2013, we and Aurizon Mines Ltd. ("Aurizon")  entered into a definitive arrangement agreement pursuant to which we would acquire all of the issued and outstanding common shares of Aurizon for consideration valued at CAD$4.75 per share. Under the terms of the acquisition, each Aurizon common shareholder and optionholder (“Aurizon Securityholders”) may elect to receive either CAD$4.75 in cash (the “Cash Alternative”) or 0.9953 of a Hecla share (the “Share Alternative”) per Aurizon share, subject in each case to proration based on a maximum cash consideration of CAD$513.6 million and a maximum number of Hecla shares issued of 57,000,000.  Assuming that each Aurizon Securityholder elected either the Cash Alternative or the Share Alternative, each Aurizon Securityholder would be entitled to receive approximately CAD$3.11 in cash and 0.34462 of a Hecla share for each Aurizon share. Aurizon had 164,838,377 issued and outstanding common shares as of May 7, 2013. An additional 747,132 Aurizon common shares would be issued immediately prior to consummation of the acquisition related to the conversion of in-the-money Aurizon stock options, resulting in a total of 165,585,509 issued and outstanding Aurizon common shares at the time of consummation of the acquisition.  The actual value of consideration transferred will be based in part on the market price of Hecla's common stock on the date the acquisition is consummated. Based on the closing price of Hecla stock of CAD$3.29 per share on May 7, 2013 (and the CAD$/US$ exchange rate of 0.9923 on that date), total consideration would be CAD$700.9 (US$695.5) million.  A 10% change in the price per share of Hecla stock from its closing price on May 7, 2013 would result in a CAD$18.7 (US$18.6) million change in the amount of total consideration transferred in the acquisition.  On May 9, 2013, at a special meeting, the Aurizon Securityholders approved the acquisition by a vote that exceeded the required approval of at least 66 2/3% of the votes cast by the Aurizon Securityholders. Pending certain regulatory approvals and other customary conditions, we anticipate that the acquisition will be consummated in the second quarter of 2013.

The cash portion of the consideration in the acquisition will be funded primarily by net proceeds from a $500 million senior note issuance completed on April 12, 2013.  See Note 14 for more information.