Dallas, Texas 06/30/2015 (Financialstrend) – Hecla Mining Company (NYSE:HL) has completed the acquisition of Revett Mining Company. The acquisition allows the company to access the Rock Creek Project, which has one of the largest silver and copper deposits in North America.
Terms of Acquisition
The terms of the acquisition involved Hecla Mining Company (NYSE:HL) acquiring all Revett’s outstanding shares believed to be worth $19 million of its common stock. The transaction also paves the way for the delisting of Revett’s shares from the Toronto Stock Exchange, American Stock Transfer & Trust having acted as the exchange agent.
Revett Shareholders are to exchange each of their shares for 0.1622 of Hecla Mining Company (NYSE:HL)’s common stock. The acquisition comes on the heels of the company posting first-quarter profit of $12.4 million. Had the company produced more gold, its profit margins could have been better. However, reduced production in the quarter allowed the company to operate within an adjusted EBITDA.
Ramping Up Production
Hecla Mining Company (NYSE:HL) is planning to increase gold production over the remainder of the year at the back of the company carrying out silver and copper production at the Rock Creek Project. The company expects its cash flow to improve in the coming quarters attributed to returns from third party milling of high-grade mineralization. Annual silver production should be up by 60% by 2018.
Hecla will post its quarterly earnings for the quarter ending June 30, 2015, on July 30, 2015, with analysts from four brokerage firms expecting the company to post earnings per share of $-0.01. TheStreet currently rates the stock as a ‘Hold’ citing a mixture of strengths and weaknesses on the stock’s long-term prospects.
The increase in the stock’s net income in the previous quarter continues to build on the stock’s sentiments in the street. Hecla also enjoys a solid financial position backed by reasonable debt levels. However, weaknesses can be seen on a relatively poor performance compared to the S&P 500.