Hecla Mining Co (NYSE: HL) (FRA: HCL) has chosen to sell its Quebec subsidiary and the Casa Berardi gold mine to Orezone Gold Corp (TSE: ORE) (OTCMKTS: ORZCF) (FRA: OEX) in a major deal valued at up to US$593 million.
Announced on Jan. 26, the payment includes US$160 million in cash upfront, about 66 million Orezone shares worth US$112 million, US$80 million in deferred payments over the next two and a half years, and potential bonuses up to US$241 million tied to production milestones and gold prices. Finalization of the deal is expected by the end of Q1.
The move will help Hecla streamline its operations and hone its focus on silver production amid a strong pricing environment for the less expensive precious metal. Core silver assets held by Hecla include the Greens Creek mine in Alaska and the Keno Hill development project in Canada’s Yukon Territory.
“This should retire their debt and allow them to focus on their silver production which is primarily U.S. based,” commented Michigan investor Shailesh Kumar.
Casa Berardi is an established underground and open pit gold mine in northern Quebec that has produced over 3 million ounces since the late 1980s. It is estimated to have over 10 years of life remaining.
In addition to full ownership of the large-scale asset, Orezone will be obtaining a suite of exploration properties spanning 19,000 hectares.
To fund the purchase, Orezone has partnered with Franco-Nevada Corp (TSE: FNV) (NYSE: FNV) (FRA: 3FO) on a new streaming deal. Franco is providing Orezone with US$100 million interest free in exchange for favourable purchasing rights from the mine. Franco-Nevada will be able to buy 1,625 ounces per quarter for five years at 20 per cent of the current spot price. Once that time period has concluded, Franco will be able to buy 5 per cent of the ounces produced at Casa Berardi with that steep discount.
It’s a win-win essentially. Orezone gets quick interest free cash and Franco-Nevada secures cheap gold that it can resell at full value.
This transaction highlights Hecla’s bet on silver as the metal continues outpacing gold in terms of growth.
“The sale of Hecla Quebec represents an important milestone in Hecla’s transformation as we concentrate capital allocation and operational focus on our world-class silver portfolio,” said Hecla CEO Rob Krcmarov in a news release.
@FrancoNevadaFNV latest $100 mil deal with Orezone NAV0 Gold price is $2,300/oz. At current $5K Gold, deal is worth $217 mil NAV. Royalties get away with highway robbery. That's why they are the best way to invest in Gold.
— Garrett Goggin, CFA & CMT (@GarrettGoggin) January 26, 2026
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