COEUR d'ALENE - Coeur d'Alene-based Hecla Mining Co. on Tuesday announced it has terminated its offer for all outstanding shares of U.S. Silver Corp.
U.S. Silver announced earlier Tuesday that a sufficient number of its common shareholders had voted to approve a combination transaction with RX Gold and Silver.
U.S. Silver said in early June the combination of the two companies would create one called U.S. Silver and Gold Inc.
Hecla wanted to acquire all of the outstanding common shares of U.S. Silver, which would have given Hecla control of U.S. Silver's Silver Valley properties. The Galena, Coeur and Caladay mines in the Valley are either owned or operated or both by U.S. Silver.
Before U.S. Silver announced the shareholder decision, Hecla President and CEO Phillips S. Baker Jr. said in a press release that Hecla's $100 million offer represented a good strategic fit for Hecla. It offered to pay $1.80 Canadian per share.
"It would add another producing mine (Galena) and expand our highly prospective land package and development projects in the world-class Silver Valley of North Idaho," Baker said.
U.S. Silver controls a land package now totaling approximately 14,000 acres in the heart of the Coeur d'Alene Mining District.
U.S. Silver, with corporate offices in Toronto, said in a statement it was pleased to announce that at a special meeting of shareholders conducted Tuesday that its shareholders had approved the proposed combination transaction with RX Gold.
U.S. Silver will seek final approval of the plan from the Ontario Superior Court of Justice on Thursday.
Closing of the RX Gold transaction is expected to fully close on or about Aug. 13.
In other Hecla news, the company on Tuesday reported second-quarter net income of $2.4 million, compared with $33.2 million in the year-earlier period.
Baker said rehabilitation work to the Silver Shaft at the Lucky Friday silver mine progressed ahead of schedule and had gone past the 4,900-foot level.
A total of 20 additional miners have been hired and are returning to work this month, adding to the 75 hourly employees already working at the mine. Most miners at Lucky Friday were laid off in January, when the Silver Shaft was closed because of a federal regulator's safety concerns.
"Now, in addition to rehabilitating the shaft, we expect to soon begin construction on two bypasses on the 5,900-foot level, which positions us to restart (silver) production in early 2013," Baker said.
Throughout the second quarter, work through the 4,900-foot level included removal of cement-like material along the main shaft, installation of a new power cable, and additional work which is expected to improve the shaft's functionality and possibly improve its hoisting capacity.
Work along the entire 6,100-foot shaft is expected to be completed by December.
Baker said the company can restart planning work on the No. 4 Shaft, which would provide 3,000 feet of deeper access to higher grade ores and the potential for 30 years of future production.
So far, $90 million has been spent on the $206 million project, which is planned to access extensions to reserves, resources and additional exploration targets. That project is expected to be completed in early 2016.
Care-and-maintenance costs incurred at Lucky Friday totaled $6.5 million for the second quarter of this year, including depreciation of $1.6 million.