S&P might lift Hecla Mining

S&P said it placed its ratings on Hecla Mining Co., including the B corporate credit rating, on CreditWatch with positive implications.

The agency said the B issue-level rating on the company's $500 million senior notes due 2021 was also placed on CreditWatch with positive implications.

The recovery rating is 3, indicating an expectation of meaningful (50%-70%; rounded estimate: 65%) recovery prospects in the event of a payment default.

S&P said the CreditWatch placement follows Hecla's announcement that it will acquire all outstanding shares of Klondex Mines Ltd. for $462 million, using a combination of cash and shares of Hecla common stock and a newly formed company consisting of the Klondex Canadian assets.

“We expect to resolve the CreditWatch within 90 days, after we assess the impact of this transaction on Hecla Mining's credit quality. This will include reassessing Hecla's competitive position, as well as expectations for credit measures,” the agency said in a news release.

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