Hecla Mining Company (HL) M&A announcement summary

Deal rationale and strategic fit

• Acquisition of Casa Berardi Mine in Quebec expands into a tier-one mining jurisdiction, establishing a diversified, multi-asset gold producer with increased scale and free cash flow potential.

• Casa Berardi Mine's established reserves, long operating history, and substantial exploration upside align with technical expertise and support future growth.

• Aligns with recent successful Canadian transactions and enhances capital markets profile.

• Sale aligns with a strategic transformation to focus on premier silver assets and optimize the portfolio.

• Proceeds will be used to strengthen the balance sheet, reduce debt, and invest in growth initiatives at core silver operations.

Financial terms and conditions

• Upfront consideration totals $272 million: $160 million in cash ($60 million from treasury, $100 million from Franco-Nevada streaming), and $112 million in equity (9.9% stake).

• Deferred cash payments of $80 million: $30 million at 18 months and $50 million at 30 months post-closing.

• Contingent consideration up to $241 million, including gold price-linked and production-linked payments.

• Franco-Nevada stream: $100 million for fixed gold deliveries over five years, then 5% of production, plus 20% of spot per ounce delivered.

• Total consideration of up to $593 million, including all upfront, deferred, and contingent payments.

Synergies and expected cost savings

• Transaction is accretive on key operating and financial per share metrics, benefiting shareholders.

• Casa Berardi and Bomboré mines will be self-funding, with exploration and development financed from operational cash flows.

• Enables capital reallocation to high-return silver projects, supporting operational focus and efficiency.

• Value creation expected through multiple expansion and enhanced market profile.