Note 13 - Merger with Revett

6 Months Ended

Jun. 30, 2015

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

Note 13.    Merger with Revett

On June 15, 2015, we and Revett Mining Company, Inc. ("Revett") consummated the merger agreement pursuant to which we acquired all of the issued and outstanding common stock of Revett for total consideration of $20.1 million. The acquired entities hold 100% ownership of two properties and other interests in Northwest Montana, including: the Troy Mine, which is on care-and-maintenance and we intend to reclaim and close, and the Rock Creek project, a significant undeveloped silver and copper deposit which we believe provides long-term production growth potential if permitted and developed. The consideration is comprised of $0.9 million in cash used to fund Revett's operating activities prior to completion of the merger and $19.1 million in Hecla common stock. In the merger, each outstanding common share of Revett was exchanged for 0.1622 of a share of our common stock. Revett had 38,548,989 outstanding common shares, excluding 725,000 shares owned by our wholly-owned subsidiary which were canceled in the merger, resulting in 6,252,646 new shares of Hecla stock issued as consideration. The value of Hecla stock issued as consideration was based upon the closing price at the time of consummation of $3.06 per share.

The following summarizes the preliminary allocation of purchase price to the fair value of assets acquired and liabilities assumed as of the date of acquisition (in thousands):

Consideration:
Cash	$	949
Hecla stock issued (6,252,646 shares at $3.06 per share)		19,133
Total consideration	$	20,082
Fair value of net assets acquired:
Assets:
Cash	$	140
Accounts receivable		137
Inventory - supplies		629
Deferred tax assets		7,137
Property, plants, equipment and mineral interests		19,052
Reclamation insurance		16,800
Other assets		280
Total assets		44,175
Liabilities:
Accounts payable and accrued liabilities		1,218
Notes payable		4,061
Non-current reclamation liability		18,814
Total liabilities		24,093
Net assets	$	20,082

The $19.1 million fair value for "Property, plants, equipment, and mineral interests" is comprised of $4.1 million for plant and equipment, $4.6 million for land, and $10.3 million for mineral interests. We are currently still evaluating information underlying the estimated fair value of these assets.

The $18.8 million value for "Non-current reclamation liability" represents the estimated undiscounted costs for reclamation and closure of the Troy mine. Revett holds an environmental risk transfer program ("insurance policy") which would fund costs incurred for reclamation at the Troy mine up to a maximum limit of $16.8 million and prior to the expiration date of March 29, 2020. We believe it is probable that we will utilize the full amount of the insurance policy, and have therefore included the $16.8 million "Reclamation insurance" asset above for the fair value of the insurance policy.

The unaudited pro forma financial information below represents the combined results of our operations as if the acquisition had occurred at the beginning of the periods presented. The unaudited pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have occurred if the acquisition had taken place at the beginning of the periods presented, nor is it indicative of future operating results.

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands, except per share amounts)	2015			2014			2015			2014
Sales of products	$	104,065		$	117,502		$	225,425		$	243,295
Net income (loss)		(26,406	)		(16,034	)		(16,380	)		(5,227	)
Income (loss) applicable to common shareholders		(26,544	)		(16,172	)		(16,656	)		(5,503	)
Basic and diluted income (loss) per common share		(0.07	)		(0.05	)		(0.05	)		(0.02	)

The pro forma financial information includes adjustments to 1) eliminate acquisition-related costs totaling $2.3 million which are non-recurring and 2) reflect the issuance of Hecla stock as consideration in the acquisition. A net loss by the acquired entities since the acquisition date of $1.7 million is included in our net loss reported for the three- and six-month periods ended June 30, 2015.