For any questions, please contact Alexco
Resource's proxy solicitation agent and communications advisor,
Laurel Hill Advisory Group, toll free at 1-877-452-7184
(1-416-304-0211 outside North
America) or email assistance@laurelhill.com.
VANCOUVER, BC, Aug. 4, 2022
/CNW/ - Alexco Resource Corp. (NYSE American: AXU) (TSX:
AXU) ("Alexco" or the "Company") announced today that
it has filed and mailed the management information circular dated
July 28, 2022 (the "Circular")
and related meeting materials (collectively, the "Meeting
Materials") for its special meeting (the "Meeting") of
shareholders (the "Shareholders"), optionholders, restricted
share unit holders, and deferred share unit holders of Alexco
(collectively, the "Securityholders") to be held on
August 30, 2022, at 10:00 am (Pacific Time) (the "Meeting") in
connection with the proposed business combination with Hecla Mining
Company (NYSE: HL) ("Hecla"), announced on July 5, 2022.
The Meeting Materials contain important information regarding
the Transaction, how Securityholders can attend and vote at the
Meeting, that the Transaction is in the best interests of the
Company and is fair to Shareholders, and the background that led to
the Transaction and the reasons for the unanimous determinations of
the special committee of independent Alexco directors (the
"Special Committee") and the board of directors of Alexco
(the "Board"). The Meeting Materials have been filed by the
Company on SEDAR and EDGAR and are available under the Company's
profile at www.sedar.com and on EDGAR
at www.sec.gov. The Meeting Materials are also available on
the Company's website at Alexco - Investors - Special Meeting of
Shareholders
(https://alexcoresource.com/investors/special-meeting-of-shareholders/).
At the Meeting, Securityholders will be asked to consider and,
if deemed advisable, pass a special resolution (the
"Arrangement Resolution") to approve an arrangement
(the "Arrangement"), in accordance with the terms of an
arrangement agreement entered into by the Company and Hecla on July 4,
2022, as assigned and amended (the "Arrangement
Agreement") pursuant to which 1080980
B.C. Ltd. ("108"), a subsidiary of Hecla, will acquire all of the issued and
outstanding common shares of Alexco (the "Alexco Shares")
that it does not already own by way of a statutory plan of
arrangement.
Board Recommendation
The Board unanimously recommends that Securityholders vote
FOR the Arrangement resolution.
Pursuant to the terms of the interim order (the "Interim
Order") obtained on July 27, 2022
from the British Columbia Supreme Court (the "Court"),
Securityholders of record at the close of business on July 20, 2022 will be entitled to receive notice
of, attend and vote at the Meeting. Securityholders should
carefully review all of the Meeting Materials as they contain
important information concerning the Transaction and the rights and
entitlements of Securityholders thereunder.
Pursuant to the terms of the Interim Order, for the Arrangement
to become effective, the Arrangement Resolution will require
approval of at least (i) 66⅔% of the votes cast by Shareholders
present in person or represented by proxy and entitled to vote at
the Meeting; (ii) 66⅔% of the votes cast by Securityholders, voting
together as a single class, present in person or represented by
proxy at the Meeting; and (iii) a majority of the votes cast by
Shareholders other than votes attached to Alexco Shares required to
be excluded pursuant to Multilateral Instrument 61-101
– Protection of Minority Securityholders in Special
Transactions. The Circular regarding the Arrangement has been
filed with regulatory authorities and mailed to the Securityholders
in accordance with applicable securities laws.
The proposed closing date of the Arrangement is September 7, 2022, subject to obtaining Court,
Securityholder and regulatory approval and the satisfaction of
conditions set forth in Arrangement Agreement.
Transaction Details
Under the terms of the Arrangement, Shareholders will receive
0.116 common shares in the capital of Hecla (each common share, a "Hecla
Share") for each Alexco Share held (the "Consideration")
pursuant to the Plan of Arrangement. In addition, to enable Alexco
to maintain operations prior to completion of the Arrangement,
Hecla has provided Alexco with a
US$30 million convertible secured
loan facility, of which US$20 million
has been drawn as of the date of this release and has purchased,
through an affiliate, 8,984,100 Alexco Shares at C$0.50 per Alexco Share, having an aggregate
value of C$4,492,050, resulting in
9.9% of Alexco Shares being held by Hecla or its affiliates.
Reasons for the Arrangement
In evaluating and unanimously approving the Arrangement, the
Special Committee and the Board gave careful consideration to the
current position and condition and the expected and potential
future position and condition of the business of the Company, and
all terms of the Arrangement Agreement, including the conditions
precedent, representations and warranties and deal protection
provisions. The Special Committee and the Board considered a number
of factors including, among others, the following:
- Premium. The Consideration to be received
by Shareholders pursuant to the Arrangement represents a premium of
12% on a spot basis to the July 1,
2022 closing price, and 24% premium using the trailing 5-day
volume weighted average trading price on the NYSE American for
Alexco Shares and the NYSE for Hecla Shares as of market close on
July 1, 2022.
- Liquidity. Based on the immediate financing
requirements, the business, operations, financial condition and
prospects of the Company, as well as the current and prospective
environment in which the Company operates, including macroeconomic
conditions in Canada and globally,
there is a significant risk that the Alexco shares could continue
to trade below US$0.417, the closing
price as at July 1, 2022, over the
short to medium term. The Consideration provides Shareholders with
immediate liquidity at a price that may not be available in the
absence of the Arrangement.
- Strengths and Strategic Fit. If the Arrangement
is completed, it is expected that Shareholders will benefit
from:
(i) the consolidation of the assets of
Alexco and Hecla;
(ii) jurisdictional and project risk diversification; and
(iii) enhanced capital markets profile, financing capacity
and access to capital.
- Shareholders will also be able to continue to participate in
the potential upside from any exploration and development success
related to the properties of Alexco, as well as the other
properties of Hecla. It is
expected that Shareholders will hold approximately 3% of the Hecla
Shares on an outstanding undiluted basis upon completion of the
Arrangement.
- Process. The Arrangement with Hecla resulted from discussions that began
months ago. During that time, the management, and financial
advisors of Alexco communicated with several other parties
regarding potential transactions. Confidentiality agreements were
entered into with seven potential acquirors or merger
partners. Discussions were held with each. The Arrangement is the
most attractive of those alternatives. All potential
acquirors or merger partners expressed the view that existing
silver purchase agreement between Wheaton Precious Metals Corp.
and Alexco and certain of its subsidiaries (the
"Wheaton Stream Agreement") would require
amendment to ensure the financial viability of Alexco's
conventional mining and milling of silver-lead-zinc ore from
certain deposits in the Keno Hill District in Yukon, Canada (the "Keno Hill
Project"). Of all of the parties the Company approached,
only Hecla was
successful in negotiating satisfactory arrangements with Wheaton
with respect to the Wheaton Stream Agreement.
- Business and Industry Risks. The
business, operations, assets, financial condition, operating
results and prospects of Alexco are subject to
significant uncertainty, including risks associated with Wheaton's
silver purchase streaming rights on its Keno Hill Project, risks
associated with a negative working capital position, and risks
associated with obtaining the required financing on acceptable
terms or at all. The Special Committee concluded that the Company
immediately required additional financing and of the financing
alternatives, the Arrangement provided a more favourable outcome to
the Company and its stakeholders than any other option that was
reasonably available. Further, the Special Committee
determined that the Consideration under the Arrangement is more
favourable to Shareholders than continuing with Alexco's
current business plan in light of these risks and
uncertainties.
Shareholder Questions and Voting Assistance
For any questions or assistance with voting, shareholders can
contact Laurel Hill Advisory Group at 1-877-452-7184 (toll-free in
North America), 1-416-304-0211
(calls outside North America) or
by email at assistance@laurelhill.com.
About Alexco
Alexco is a Canadian primary silver company that owns and
operates the majority of the historic Keno Hill Silver District, in
Canada's Yukon Territory, one of the highest-grade
silver mines in the world.
Cautionary Note Regarding Forward-Looking Statements
This news release contains forward-looking statements, which
relate to future events or future performance. All statements,
other than statements of historical fact, included herein are
forward-looking statements. Forward-looking statements herein
include, without limitation, statements regarding the Meeting;
statements with respect to the consummation and timing of the
transaction; approval by Securityholders; the satisfaction of the
conditions precedent to the transaction; the Consideration to be
received by Shareholders; the expected benefits of the Arrangement;
Shareholders' estimated shareholdings in Hecla following the completion of the
Arrangement, and timing, receipt and anticipated effects of Court,
regulatory and other consents and approvals. Such forward-looking
statements reflect management's current beliefs and are based on
assumptions made by and information currently available to the
Company, including assumptions as to the ability of Alexco and
Hecla to receive, in a timely
manner and on satisfactory terms, the necessary regulatory, Court,
securityholder and other third party approvals; the satisfaction of
the conditions to closing of the Arrangement in a timely manner and
completion of the Arrangement on the expected terms; the expected
adherence to the terms of the Arrangement Agreement and agreements
related to the Arrangement Agreement; the adequacy of our and
Hecla's financial resources;
favourable equity and debt capital markets; and stability in
financial capital markets. By their nature, forward-looking
statements involve known and unknown risks, uncertainties and other
factors which may cause our actual results, performance or
achievements, or other future events, to be materially different
from any future results, performance or achievements expressed or
implied by such forward-looking statements. These risks,
uncertainties and other factors include, among others: the risk
that the Arrangement may not close when planned or at all or on the
terms and conditions set forth in the Arrangement Agreement; the
failure of the Company and Hecla
to obtain the necessary regulatory, Court, securityholder, and
other third-party approvals, or to otherwise satisfy the conditions
to the completion of the Arrangement, in a timely manner, or at
all, may result in the Arrangement not being completed on the
proposed terms, or at all; changes in laws, regulations and
government practices; if a third party makes a Superior Proposal
(as defined in the Arrangement Agreement), the Arrangement may not
be completed and the Company may be required to pay the Termination
Fee (as defined in the Arrangement Agreement); if the Arrangement
is not completed, and the Company continues as an independent
entity, there are risks that the announcement of the Arrangement
and the dedication of substantial resources of the Company to the
completion of the Arrangement could have an impact on the Company's
current business relationships and could have a material adverse
effect on the current and future operations, financial condition
and prospects of the Company; future prices of silver, gold, lead,
zinc and other commodities; market competition; and the
geopolitical, economic, permitting legal climate that Alexco and
Hecla operate in; and the
additional risks and uncertainties identified in Alexco's filings
with Canadian securities regulators on SEDAR in Canada (available at www.sedar.com) and with
the SEC on EDGAR (available at www.sec.gov/edgar.shtml). These
forward-looking statements are made as of the date hereof and,
except as required under applicable securities legislation, the
Company does not assume any obligation to update or revise them to
reflect new events or circumstances.
View original
content:https://www.prnewswire.com/news-releases/alexco-announces-the-filing-of-management-information-circular-in-connection-with-special-meeting-to-approve-acquisition-by-hecla-301600496.html
SOURCE Alexco Resource Corp.