Hecla Mining (NYSE:HL) has acquired the remaining 30% interest in the San Juan Silver project in Colorado's Creede silver-producing district, for $33.8 million in stock.
Hecla, the largest silver producer in the US, said the sale-purchase agreement was between Hecla subsidiary Rio Grande Silver Inc. and three other companies – Emerald Mining & Leasing, Golden 8 Mining, and AgX Resources Inc.
Under the deal, RGS bought the joint venture's interest in about 55% of the 21-square-mile property encompassing three veins in return for 5.39 million shares of Hecla common stock. The stock is worth $33.8 million based on Hecla's Monday closing share price.
The San Juan silver project contains about 37 million ounces of silver and "significant lead", along with 20-plus miles of veins which hold "considerably more gold and silver resources," states Hecla. The property also contains the Bulldog mine, a ramp and administration buildings.
“This transaction is another step towards increasing our interest in district-sized land packages and silver production growth opportunities,” said Phil Baker, President and Chief Executive Officer.
“The San Juan Silver project offers tremendous upside and has progressed much quicker than we had anticipated. In the last six months, we received the permit to construct the new Bulldog decline to the mine workings, rehabilitated the Equity ramp and commenced the underground drilling program on the silver-gold targets in the Equity and Amethyst veins.”