Hecla gets $400 million debt commitment for purchase of Greens Creek mine

By Sara Rosenberg

New York, Feb. 12 - Hecla Mining Co. has received a commitment for $400 million in debt financing to help fund its acquisition of Greens Creek mine near Juneau, Alaska, from Rio Tinto, company officials said in a conference call Tuesday.

Scotia Capital is the lead bank on the deal.

The debt has some flexibility as to how it will be structured so that market conditions can determine the best course of action, officials said in the call.

That being said, a portion of the debt will certainly be floating rate, with the company looking at pricing of Libor plus 200 basis points or less, officials continued.

The floating-rate portion is anticipated to have about five-year amortization, officials added.

Under the transaction agreement, Hecla will purchase all of the equity of the Rio Tinto subsidiaries that hold the 70.3% interest in the Greens Creek mine for $750 million, comprised of $700 million in cash and $50 million in Hecla common stock.

In 2007, on a 100% basis, Greens Creek produced about 8.6 million ounces of silver, 68,000 ounces of gold, 63,000 tons of zinc and 21,000 tons of lead.

Closing is expected to occur in the second quarter, subject to customary conditions, including expiration of the waiting period under the Hart-Scott-Rodino Act.

Hecla is a Coeur d'Alene, Idaho, miner, processor and explorer of silver and gold.

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