Partners and Agreements
ABOUT HECLA MINING COMPANY
Azimut Exploration is pleased to have become partners with Hecla Mining Company (NYSE: HL) after it acquired former Azimut partner, Aurizon Mines Ltd, in 2013.
Hecla is a primary leading, low-cost silver producer with operating silver mines in the United States and Mexico, and is a gold producer with an operating mine (Casa Berardi) in Quebec, Canada. Expected 2016 production is 13.5 to 14.0 million ounces of silver and 207,000 ounces of gold.
In addition to its diversified silver and gold operating and cash-flow generating base, Hecla has a number of exploration properties and pre-development projects in six world-class silver and gold mining districts in North America.
Overview of original agreement
In September 2010, the Opinaca A and B properties became subject to a three-way agreement between Azimut, Everton Resources and Aurizon Mines Ltd (now Hecla Quebec Inc., a wholly owned subsidiary of Hecla Mining Co.), whereby Hecla has the option to acquire a 50% interest in the Opinaca A and B properties (later amended) by making cumulative cash payments of $580,000 and incurring a total of $6.0 million in exploration work over four years (later amended).
According to the original agreement, Hecla may earn an additional interest of 10%, for a total interest of 60%, by making cumulative cash payments of $300,000 and incurring at least $3 million in exploration expenditures over three years from the election date, and by delivering an independent pre-feasibility study on or before the fourth anniversary. Azimut Exploration will receive cash payments of $290,000 on the first option and $150,000 on the second option, and its resulting interest will be 20%. In addition, in the event that mineral resources of at least 2 million ounces of gold at an average grade of at least 6 g/t Au are discovered before the end of the eighth year of the initial option agreement, Hecla shall make a payment of $1.5 million in Hecla common shares, subject to regulatory approval. Azimut Exploration will receive 50% of these issued shares.
Amendments and option renewal on the Opinaca B Property
- On November 15, 2013, an amendment was made to extend the work schedule by two (2) additional years.
- On November 14, 2014, a second amendment was made to exclude all claims comprising the Opinaca A property from the agreement. All other terms remain unchanged.
- On November 25, 2015, Azimut Exploration announced that Hecla had renewed its option to acquire a 60% interest in the Opinaca B property.