American silver producer Hecla Mining has agreed to take over Canada-based Alexco Resource in an all-stock deal worth $74m.

Alexco owns and operates one of the world’s highest-grade silver districts, the Keno Hill Silver District, in Yukon, Canada.

Situated 350km north of Whitehorse in Yukon Territory, the Keno Hill Silver District holds several mineral deposits and more than 35 historical past-producing mine sites.

According to the agreed terms, Alexco shareholders will secure 0.116 of a Hecla share for each share held.

In total, Alexco shareholders will receive around 18 million Hecla common shares.

Alexco chairman and CEO Clynton Nauman said: “This transaction delivers significant benefits to our stakeholders.

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“By partnering with Hecla, an industry leader in high-grade narrow vein silver mining, we further position Keno Hill to achieve its full potential. There is no doubt that we have fallen well behind the development and production plan at Keno Hill – and our original estimate of achieving commercial production in early 2022.”

Moreover, Hecla signed a deal with Wheaton Precious Metals (WPM) to terminate its silver streaming interest at Alexco’s Keno Hill property.

In exchange, WPM will receive $135m in Hecla shares.

Furthermore, Hecla will provide $30m of interim financing to fund working capital and the development of Keno Hill.

Hecla will also subscribe for an additional 8,984,100 Alexco common shares, which will bring its ownership stake to 9.9% ahead of the transaction.

Upon completion of the two transactions, shareholders of WPM and Alexco will respectively hold 5.6% and 3% of the outstanding common shares of Hecla.

Hecla Mining president and CEO Phillips Baker Jr said: “At Hecla, we have followed the Keno Hill project closely for a number of years, as it is one of the very few deposits that fit seamlessly into Hecla’s strategy of owning and operating high-grade properties in tier one jurisdictions.

“As the United States’ largest silver producer, producing over 40% of silver mined in the US, it is natural that Hecla acquires Keno Hill, which could also make Hecla Canada’s largest silver producer.”