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Hecla Mining Co. (NYSE:HL) announced that its wholly owned subsidiary has entered into a credit agreement with Dolly Varden Silver Corp. (TSXV:DV) and another significant shareholder of Dolly Varden.
Hecla Mining Co. (NYSE:HL) announced that its wholly owned subsidiary has entered into a credit agreement with Dolly Varden Silver Corp. (TSXV:DV) and another significant shareholder of Dolly Varden. Together, they will act as lenders to provide a senior, non-revolving C$1.5-million secured loan.
As quoted in the press release:
Pursuant to the Credit Agreement, Hecla Sub will act as agent on behalf of the Lenders and the Lenders have severally and not jointly agreed to advance CDN$750,000 each to Dolly Varden. An additional CDN$500,000 may be made available to Dolly Varden in the discretion of the Lenders, and in that event, each Lender will have the option to advance its pro rata share of such additional amount. The net proceeds of the Loan will be used by Dolly Varden for: (i) exploration of the Dolly Varden project in north-western British Columbia; and (ii) working capital purposes.
Pursuant to the Credit Agreement, the Loan will be secured by promissory notes and first ranking security over all of Dolly Varden’s assets. The Loan will bear interest at a rate of 5% per annum, will be repayable after one year and may be repaid earlier with no penalty.
In connection with the Credit Agreement, and as consideration for the advance of its portion of the Loan, Hecla has acquired control over 1,250,000 warrants of Dolly Varden (the “Warrants”), constituting 50% of the Warrants issued by Dolly Varden pursuant to the Credit Agreement. Each Warrant entitles the holder to acquire one common share of Dolly Varden at a price of $0.30 per share and is exercisable for a period of three years from the date of issuance.
Click here to read the full Hecla Mining Co. (NYSE:HL) press release.