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Rule 424(b)(5)
Registration No. 33-59659
PROSPECTUS SUPPLEMENT
(To Prospectus Dated September 5, 1995)
155,955 SHARES
HECLA MINING COMPANY
COMMON STOCK
($0.25 PAR VALUE)
The outstanding shares of common stock, par value $0.25 per share
("Common Stock") of Hecla Mining Company ("Hecla" or the "Company") are,
and the shares of Common Stock offered hereby (the "Shares") will be,
listed on the New York Stock Exchange (the "NYSE") under the symbol
"HL." On March 24, 1999, the last reported sale price of the Common
Stock as reported on the NYSE Composite Tape was $2.9375 per share.
SEE "RISK FACTORS" BEGINNING AT PAGE 7 OF THE PROSPECTUS ACCOMPANYING
THIS PROSPECTUS SUPPLEMENT, AND "RECENT DEVELOPMENTS BEGINNING AT PAGE S-
4 OF THIS PROSPECTUS SUPPLEMENT, FOR A DISCUSSION OF CERTAIN INFORMATION
THAT YOU SHOULD CAREFULLY CONSIDER BEFORE INVESTING IN THE COMMON STOCK.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC OR ANY
STATE SECURITIES COMMISSION NOR HAVE THESE ORGANIZATIONS DETERMINED THAT
THIS PROSPECTUS OR PROSPECTUS SUPPLEMENT IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
ISSUE PRICE
Per Share (blended) $3.20605
Total $500,000.00
The date of this Prospectus Supplement is March 25, 1999.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
PAGE
Forward-Looking Statements S-3
The Company S-4
Recent Developments S-4
Use of Proceeds S-4
Plan of Distribution S-5
U. S. Tax Consequences for Non-U.S. Shareholders S-5
Experts S-11
PROSPECTUS
PAGE
Available Information 2
Information Incorporated by Reference 3
The Company 5
Risk Factors 7
Use of Proceeds 20
Ratio of Earnings to Fixed Charges 20
Description of Debt Securities 20
Description of Preferred Stock 42
Description of Common Stock 44
Description of Depository Shares 44
Description of Warrants 48
Current Capital Structure 50
Certain Provisions of the Amended and Restated
Certificate of Incorporation and By-Laws 54
Certain U.S. Federal Income Tax Considerations 56
Plan of Distribution 71
Legal Opinions 73
Experts 73
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YOU SHOULD READ THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT IN
CONNECTION WITH THE MORE DETAILED INFORMATION AND CONSOLIDATED FINANCIAL
STATEMENTS AND NOTES THERETO INCORPORATED BY REFERENCE IN THE ACCOMPANYING
PROSPECTUS AND THIS PROSPECTUS SUPPLEMENT. IN DETERMINING WHETHER TO PURCHASE
THE SHARES BEING OFFERED, YOU SHOULD CAREFULLY CONSIDER THE INFORMATION
CONTAINED IN THIS PROSPECTUS SUPPLEMENT, THE ACCOMPANYING PROSPECTUS AND
INCORPORATED BY REFERENCE INTO BOTH DOCUMENTS. REFERENCES TO "HECLA" AND THE
"COMPANY" IN THE PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS INCLUDE
HECLA MINING COMPANY AND ALL OF ITS SUBSIDIARIES.
FORWARD-LOOKING STATEMENTS
Statements made in this Prospectus Supplement which are not historical
facts, such as anticipated production or sales performance are "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995, that involve risks and uncertainties, including, the timely development
of existing properties and reserves and future projects, the impact of metals
prices and metal production volatility, changing market conditions and the
regulatory environment, the impact of the Year 2000 computer issue, and the
other risks detailed from time to time in the Company's Form 10-K and Form 10-Qs
filed with the Securities and Exchange Commission. As a result, actual results
may differ materially from those projected or implied. These forward-looking
statements represent the Company's judgment as of the date of this filing. The
Company disclaims, however, any intent or obligation to update these forward-
looking statements as circumstances may change or develop.
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THE COMPANY
Hecla Mining was originally incorporated in 1891, and is principally
engaged in the exploration, development, mining and processing of precious and
other non-ferrous metals such as gold, silver, lead and zinc, and certain
industrial minerals. The Company has experienced losses from operation for the
year ended December 31, 1998, and each of the last eight years. See "Risk
Factors -- Recent Losses" in the accompanying prospectus.
Our principal executive offices are located at 6500 Mineral Drive,
Coeur d'Alene, Idaho 83815-8788, and its telephone number is (208) 769-4100.
RECENT DEVELOPMENTS
CURRENT STATUS OF BANK CREDIT AGREEMENT
As of March 24, 1999, the Company had borrowings of $45.9 million
(including $9.8 million in solid waste disposal revenue bonds) and the ability
to borrow approximately an additional $9.1 million under the Bank Credit
Agreement, subject to the Company continuing to comply with the Company's
covenants in the Bank Credit Agreement to which we can provide no assurance.
USE OF PROCEEDS
The net proceeds from the sale of the Shares offered hereby, after
deducting estimated expenses of this offering, should be approximately $475,000.
We plan to use these net proceeds for general corporate purposes, which may
include repayment of indebtedness under the existing $55.0 million Bank Credit
Agreement.
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PLAN OF DISTRIBUTION
As of the date of this Prospectus Supplement, we have offered to sell
155,955 shares of our common stock at an averaged blended purchase price per
share of $3.20605 to an institutional investor. Net offering proceeds available
to us, after deducting estimated offering expenses of $25,000 will be
approximately $475,000. The per share price represents the average of recent
trading prices less a discount of 4.375%. We have not paid any other
compensation to any other person with respect to this sale.
U. S. TAX CONSEQUENCES FOR NON-U.S. SHAREHOLDERS
The following is a general discussion of certain United States federal
income and estate tax consequences of the ownership and disposition of our stock
by a person that is a Non-U.S Holder and should be read together with the
disclosure under "Certain U.S. Federal Income Tax Considerations" in the
accompanying Prospectus, including the section "-- Federal Tax Considerations as
a Real Property Holding Corporation" thereunder. For purposes of this
discussion, a "NON-U.S HOLDER" means any person that is not a "U.S. Holder."
DIVIDENDS
In the event that we pay dividends, any such dividends paid to a Non-
U.S Holder will be subject to withholding of United Stated federal income tax at
a rate of 30% of the amount of the dividend (or a lower rate prescribed by an
applicable income tax treaty). However, if the dividend is effectively
connected with the conduct of a United States trade or business by the
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Non-U.S Holder and the Non-U.S Holder properly files a valid withholding
certificate with the Company or its dividend-paying agent, then the dividend;
* will not be subject to income tax withholding;
* except to the extent that an applicable income tax treaty provides
otherwise; and
* will be subject to United States federal income tax at progressive
rates of tax.
In the case of a Non-U.S Holder that is a corporation, such effectively
connected dividend income may also be subject to the branch profits tax (which
is generally imposed on a foreign corporation on the repatriation from the
United States of effectively connected earnings and profits) at a 30% rate (or a
lower rate prescribed by an applicable income tax treaty).
Under current Treasury Regulations, dividends paid to an address
outside the United States are presumed to be paid to a resident of such country
for purposes of withholding (unless the payor has actual knowledge to the
contrary) and for purposes of determining the applicability of a tax treaty
rate. Holders that are partnerships or other fiscally transparent entities for
federal income tax purposes, and persons holding Common Stock or Warrants
through such entities, may be subject to restrictions on their ability to claim
benefits under United States tax treaties and should consult a tax advisor.
Under Treasury Regulations released October 6, 1997 and mandatorily applicable
to payments made after December 31, 1999 (the "Final Regulations"), however, a
Non-U.S Holder of Common Stock who seeks the benefit of an applicable treaty
rate would be required to satisfy applicable certification and other
requirements. In addition, under the Final Regulations, in the case of Common
Stock held by a partnership that is not a
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United States person, (x) the certification requirement would generally be
applied to the partners in the partnership and (y) the partnership would be
required to provide certain information.
A Non-U.S Holder that is eligible for a reduced rate of United States
withholding tax pursuant to an income tax treaty may obtain a refund of any
excess amounts currently withheld by filing an appropriate claim for refund with
the Internal Revenue Service.
We are required to report annually to the Internal Revenue Service and
to each Non-U.S Holder the amount of dividends paid to, and the income tax
withheld with respect to, such holder. Such information may also be made
available by the Internal Revenue Service to the tax authorities of the country
in which the Non-U.S Holder resides.
DISPOSITION OF COMMON STOCK
Generally, a Non-U.S Holder will not be subject to United States
federal income tax on the gain realized upon the disposition of such holder's
stock unless either;
* the Company is or has been a U.S. real property holding corporation
("USRPHC") for federal income tax purposes (which the we believes is
likely) and, as described below, the Non-U.S Holder held, directly or
indirectly, at any time during the five-year period ending on the date
of disposition, more than 5 percent of any class of stock of the
Company that is regularly traded on an established securities market
within the meaning of the applicable Treasury regulations;
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* the gain is effectively connected with a United States permanent
establishment maintained by the Non-U.S Holder;
* the Non-U.S Holder is an individual who holds the stock as a capital
asset, such holder is present in the United States for 183 days or
more in the taxable year of the disposition and either the Non-U.S
Holder has a "tax home" in the United States for United States federal
income tax purposes or the sale is attributable to an office or other
fixed place of business maintained by the Non-U.S Holder in the United
States; or
* the Non-U.S Holder is subject to tax pursuant to the provisions of
United States tax law applicable to certain Untied States expatriates.
FIRPTA
Under the Foreign Investment in Real Property Tax Act ("FIRPTA"), we
would be classified as a USRPHC if the fair market value of our U.S. real
property interests exceeded 50 percent of the fair market value of its real
property interests and other assets held for use in its trade or business. A
Non-U.S. Holder of stock would be subject to U.S. Federal income tax on gain
arising from a sale or other disposition of such stock or warrants if the
Company is or has been a USRPHC within the preceding five years (which we
believe to be likely) or the period of such holder's ownership of such stock, if
shorter. However, if the stock is regularly traded on an established securities
market (within the meaning of the applicable Treasury Regulations), a Non-U.S.
Holder of the stock, other than certain 5 percent holders (within the meaning of
applicable Treasury Regulations), would not be subject to FIRPTA tax on any gain
arising from a sale
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or other disposition of such stock. For purposes of this paragraph, a "5
percent holder" holds stock in an amount representing more than 5 percent of the
fair market value of the stock on any applicable determination date. If a Non-
U.S. Holder is subject to FIRPTA tax on gain arising from a sale or other
disposition of stock, a required withholding in respect of such tax will be
imposed at a rate of 10 percent of the amount realized.
ESTATE TAX
Stock owned or treated as owned by an individual who is not a citizen
or resident (as specifically defined for United States federal estate tax
purposes) of the United States at the time of his or her death will be
includable in the individual's gross estate for United States federal estate tax
purposes and thus subject to United States federal estate tax, unless an
applicable estate tax treaty provides otherwise.
BACKUP WITHHOLDING AND INFORMATION REPORTING
United States information reporting requirements (other than the
reporting of dividend payments for purposes of the 30% income tax withholding
discussed under "-- Dividends") and backup withholding tax generally will apply
to a dividend payment made outside the United States to a Non-U.S Holder, if the
dividend either is subject to the 30% withholding discussed above or is subject
to a reduced rate of such withholding tax under an applicable income tax treaty.
Otherwise, information reporting and backup withholding tax at a 3l% rate will
generally apply to dividends paid on the stock to a Non-U.S Holder who fails to
certify its non-U.S. status under penalties of perjury in the manner required by
United States law or otherwise fails to establish an exemption. Solely for
dividends paid on or prior to December 31,
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1999, however, the payor of such dividends may rely on the payee's foreign
address in determining that the payee is exempt from backup withholding, unless
the payor has knowledge that the payee is a U.S. person.
In addition, the payment of proceeds of the sale of stock to or
through the United States office of a broker will be subject to information
reporting and possible 31% backup withholding unless the holder certifies its
non-U.S. status under penalties of perjury or otherwise establishes an
exemption, provided that the broker does not have actual knowledge that the
holder is a U.S. person or that the conditions of any other exemption are not,
in fact, satisfied. Solely with respect to proceeds from the sale of stock paid
on or prior to December 31, 1999, however, the payor of such proceeds may rely
on the payee's foreign address in determining that the payee is exempt from
backup withholding, unless the payor has knowledge that the payee is a U.S.
person.
The payment of the proceeds from the sale of stock to or through the
foreign office of a non-U.S. broker that is not a U.S. related person generally
will not be subject to information reporting or backup withholding. For this
purpose, a "U.S. RELATED PERSON" is;
* a "controlled foreign corporation" for United States federal income
tax purposes; or
* a foreign person 50% or more of whose gross income from all sources
for the three-year period ending with the close of its taxable year
preceding the payment (or for such part of the period that the broker
has been in existence) is derived
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from activities that are effectively connected with the conduct of a
United States trade or business.
In the case of a payment of proceeds from the disposition of Common
Stock to or through a foreign office of a broker that is either a U.S. person or
a U.S. related person, applicable Treasury Regulations require information
reporting on the payment unless the broker has documentary evidence in its files
that the owner is a Non-U.S. Holder and the broker has no knowledge to the
contrary. Absent actual knowledge that the payee is a U.S. person, backup
withholding will not apply to payments made through foreign offices of a broker
that is neither a U.S. person nor a U.S. related person.
Any amounts withheld under the backup withholding rules from a payment
to a Non-U.S Holder will be allowed as a refund or a credit against such Non-U.S
Holder's United States federal income tax, provided that the requisite
procedures are followed.
EXPERTS
The consolidated balance sheets as of December 31, 1998 and 1997 and
the consolidated statements of operations and comprehensive loss, changes in
shareholders' equity and cash flows for each of the three years in the period
ended December 31, 1998, incorporated by reference in this Prospectus, have been
incorporated herein in reliance on the report, which includes an explanatory
paragraph concerning changes in the method of accounting for environmental
remediation liabilities in 1996, of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of that firm as experts in accounting and
auditing.
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No dealer, salesperson or other 155,955 SHARES
person has been authorized to give
any information or to make any
representations, other than those
contained in or incorporated by
reference in this Prospectus
Supplement or the Prospectus and, HECLA MINING COMPANY
if given or made, such information
or representation must not be
relied upon as having been
authorized by the Company.
Neither the delivery of this
Prospectus Supplement or the COMMON STOCK
Prospectus nor any sale made ($0.25 PAR VALUE)
hereunder shall, under any
circumstances, create an
implication that there has been no
change in the facts set forth in
this Prospectus Supplement and
Prospectus or in the affairs of
the Company since the date hereof.
This Prospectus Supplement and the
Prospectus do not constitute an
offer or solicitation by anyone in
any jurisdiction in which such
offer or solicitation is not
authorized or in which the person
making such offer or solicitation
is not qualified to do so or to
anyone to whom it is unlawful to
make such offer or solicitation.
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