Stockhouse : Hecla Link: https://www.stockhouse.com/Community-News/2012/July/31/Hecla-CEO-steps-up-the-pressure-on-U-S--Silver
Phillips S. Baker says U.S. Silver should cancel an August 7 meeting to give its shareholders more time to consider a takeover offer from Hecla Mining.
As the clock ticks down to a key deadline, Hecla Mining Co. (NYSE: HL, Stock Forum) has posted an investor presentation on its website outlining the benefits of its offer to acquire U.S. Silver Corp. (TSX: T.USA, Stock Forum), a Toronto-based company with silver mining operations in Idaho.
Hecla is offering to acquire all of the outstanding common shares of U.S. Silver for $1.80 per in cash. It has also offered to pick up U.S. Silver’s outstanding warrants for 20.5 cents each.
Hecla says is offer is both a bet on the outlook for silver prices as well as a wager on exploration potential in Idaho’s Silver Valley, where U.S. Silver’s flagship Galena mine is located.
Aside from pointing out the benefits of its offer, Hecla has also outlined the risks associated with an alternative transaction in which U.S. Silver is planning to combine with RX Gold and Silver Inc. (TSX: V.RXE, Stock Forum).
As U.S. Silver shareholders are scheduled to vote for the alternative RX Gold transaction at a meeting in Toronto on August 7, Hecla Chief Executive Officer Phillips S. Baker is urging them to vote against the RX Gold deal.
Under the proposed U.S. Silver/RX Gold combination, 66 and 2/3% of the total votes cast by shareholders of each of U.S. Silver and RX Gold must be in favour of the deal in order for it to proceed.
Speaking to Stockhouse on Tuesday, Baker also said U.S. Silver should delay the August 7th meeting to give its shareholders more time to consider the Hecla offer.
The Hecla offer is conditional upon the proposed RX transaction not proceeding, the company has said in a press release. U.S. Silver, meanwhile, has so far rejected the Hecla offer, saying the combination with RX Gold is in the best interests of shareholders. But Baker said he disagrees.
“Our bid is full and fair and superior to the RX Gold proposal,’’ he said. “I urge shareholders of U.S. Silver to vote [against the RX Gold deal]. If they don’t, our $1.80-per-share offer goes away and their shares will go back to $1.40.’’
He was referring to the level at which U.S. Silver shares were trading on July 24, 2012, the day before Hecla announced its intention to bid for the Toronto silver company.
Unchanged at $1.81 on Tuesday, U.S. Silver has a market cap of $11.8 million, based on 61.2 million shares outstanding. The 52-week range is $3.65 and $1.10. Hecla traded at $4.59 on Tuesday.