COEUR d'ALENE - Hecla Mining Co. said Monday it has entered into an agreement to acquire 14 million shares of a resource exploration company based in Canada for about $2.5 million.
The acquisition will give Hecla control over approximately 15 percent of the outstanding common shares of Canamex Resources Corp. Hecla will appoint one representative to Canamex's board of directors and will provide technical assistance.
Canamex is focused on the exploration of two gold properties, the Bruner gold project located in Nye County, Nevada, and the Aranka North gold project located in Guyana, in northern South America.
"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 President and CEO Phillips S. Baker Jr.
Greg Hahn, the president and COO of Canamex, said, "Hecla brings a wealth of exploration, development and operating history to the relationship, which will be invaluable as we move our Bruner gold project forward."
According to the agreement with Hecla, at least 75 percent of the $2.5 million will be used in connection with the exploration and development of the Bruner property in Nevada. No more than 25 percent may be used for general corporate purposes by Canamex.
Hecla acquired the common shares of Canamex for investment purposes. The company doesn't have any present intention to acquire ownership or control over additional securities of Canamex, Hecla said.
Baker said, "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."
In August, Hecla acquired 20 million shares of Dolly Varden Silver Corp., for $3.2 million.
Dolly Varden is a mineral exploration company engaged in exploration and development of silver projects in northwest British Columbia.
Hecla cited Dolly Varden's properties at the time of the acquisition.
Also in August, Hecla failed to acquire all of the outstanding common shares of U.S. Silver Corp., which would have given Hecla control of U.S. Silver's properties in Idaho's Silver Valley. Hecla made a $100 million offer for all of the outstanding shares of U.S. Silver.
U.S. Silver's common shareholders voted to approve another deal.