US Silver investors welcome hostile Hecla with open arms
Hecla Mining Company (NYSE:HL) on Wednesday made an all-cash offer for US Silver Corporation (TSX-V:USA) in a bid to scupper its proposed merger with RX Gold & Silver (TSX-V:RXE).
Today investors duly drove US Silver's stock up 23% to trade a penny above Hecla's bid price giving the Toronto-based firm a market value of $111 million. Hecla is a $1.3 billion company while RX Gold & Silver is a relative minnow.
US Silver responded by saying it's studying the offer and for now the RX Gold & Silver deal stays in place.
According to Hecla it approached the US Silver board of directors with the offer on July 23 which prices the company at $1.80 per common share, a 28% premium over the "imputed offer price" of CDN$1.41 of a RX Gold & Silver tie-up.
US Silver's board of directors had previously approved a proposed merger with RX Gold & Silver in June, with shareholders scheduled to vote on the matter at a special meeting on August 7, 2012.
U.S. Silver responds to unsolicited offer
TORONTO, July 26, 2012 /CNW/ – U.S. Silver Corporation (TSX: USA) ("U.S. Silver" or the "Company") today responds to a press release issued on July 25, 2012 by Hecla Mining Company ("Hecla"), which announced Hecla's intention to make an all cash offer to acquire all of the outstanding common shares of U.S. Silver for C$1.80 per share and all of the outstanding common share purchase warrants of U.S. Silver for C$0.205 per warrant (the "Hecla Offer").
The Company's board of directors is in the process of reviewing and evaluating the announcement with its outside financial and legal advisors and will notify shareholders of any recommendation in respect of the Hecla Offer by the board of directors through a news release and circular in accordance with applicable securities laws.
The board of directors will update shareholders from time to time on developments relating to the Hecla Offer and the Company's proposed combination transaction with RX Gold & Silver Inc. ("RX Gold") announced on June 7, 2012. The combination agreement between U.S. Silver and RX Gold will remain in effect unless terminated by either party in accordance with its terms.
The Company has retained Cormark Securities Inc. as its financial advisors and Stikeman Elliott LLP as its legal advisors.
About U.S. Silver
U.S. Silver, through its wholly owned subsidiaries, owns and/or operates the Galena, Coeur, Caladay and Dayrock silver-lead-copper mines in Shoshone County, Idaho, with the Galena mine being the second most prolific silver mine in U.S. history. Total silver production from U.S. Silver's mining complex has exceeded 217 million ounces of silver production since 1953. U.S. Silver controls a land package now totalling approximately 14,000 acres in the heart of the Coeur d'Alene Mining District. U.S. Silver is focused on expanding the production from existing operations as well as exploring and developing its extensive Silver Valley holdings in the Coeur d'Alene Mining District.
SOURCE: U.S. Silver Corporation