As filed with the Securities and Exchange Commission on June 16, 1999
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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HECLA MINING COMPANY
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(Exact name of Registrant as specified in its charter)
Delaware 82-012646
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
6500 Mineral Drive
Coeur d'Alene, Idaho 83815-8788
(208) 769-4100
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(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
Michael B. White
Vice President, General Counsel and Secretary
Hecla Mining Company
6500 Mineral Drive
Coeur d'Alene, Idaho 83815-8788
(208) 769-4100
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(Name, address, including zip code, and telephone number,
including area code, of agent for service)
with copies to:
Roger V. Davidson, Esquire
Ballard Spahr Andrews & Ingersoll, LLP
1225 17th Street, Suite 2300
Denver, Colorado 80202
(303) 292-2400
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the Registration Statement becomes effective.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===============================================================================================================================
Proposed Maximum Proposed Maximum
Title of Each Class of Securities to be Amount to be Offering Price Per Aggregate Offering Amount of
Registered Registered(1) Share(2) Price Registration Fee
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.25par value, held by
Selling Shareholders 6,736,842 Shares $ 2.375 $16,000,000 $4,448
===============================================================================================================================
</TABLE>
(1) The estimated number of shares to be issued upon closing of purchase
agreement between Monarch Resources Limited and Hecla Mining Company.
(2) The proposed maximum offering price is estimated solely for the purpose of
determining the registration fee and calculated pursuant to Rule 457(c).
The average of the high and low prices of the common stock reported on the
New York Stock Exchange on June 15, 1999 were used for the estimate.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the
registrant shall file a further amendment which specifically states that
this Registration Statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>
The information in this prospectus is not complete and may be changed. The
Selling Shareholders may not sell these securities until the registration
statement filed with the SEC is effective. This prospectus is not an offer to
sell these securities and it is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
Subject to Completion, dated ______ ___, 1999
- --------------------------------------------------------------------------------
Prospectus
HECLA MINING COMPANY
6,736,842 Shares of Common Stock
The shares of common stock covered by this prospectus are being sold by
selling shareholders listed under the heading "Selling Shareholders." Those
Selling Shareholders previously acquired the shares of common stock from us
subject to certain limitations on resale regarding the number of shares and the
timing of sales discussed in detail in the "Plan of Distribution" section. We
will not receive any of the proceeds from the sale of these shares by the
Selling Shareholders or bear any selling expenses. However, we will bear the
costs relating to the registration of these shares, which we estimate to be
$35,000.
Our common stock is traded on the New York Stock Exchange under the trading
symbol "HL." The closing sales price of our common stock was $2.375 on June 15,
1999.
You should carefully consider the risk factors relating to these shares of
common stock that we describe starting on page 6 of this prospectus.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these shares or determined if this
prospectus is accurate or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is , 1999.
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Table of Contents
Page
----
About This Prospectus.................................................. 3
Where You Can Find More Information.................................... 3
Incorporation by Reference............................................. 4
Special Note Regarding Forward Looking Statements...................... 4
Risk Factors........................................................... 6
Hecla Mining Company................................................... 12
Recent Developments.................................................... 12
Use of Proceeds........................................................ 13
Selling Shareholders................................................... 13
Plan of Distribution................................................... 13
Legal Matters.......................................................... 15
Experts .............................................................. 15
Securities and Exchange Commission
Position on Certain Indemnification.................................. 16
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About This Prospectus
You should only rely on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. The Selling Shareholders are offering to sell, and
seeking offers to buy, shares of common stock only in jurisdictions where offers
and sales are permitted.
Where You Can Find More Information
This prospectus is part of a registration statement under the Securities
Act that we filed with the Securities and Exchange Commission for the shares of
common stock offered by the selling shareholders. This Prospectus, which is part
of the registration statement, permits certain information contained in the
registration statement to be omitted from this prospectus.
We file annual reports, quarterly reports and current reports, proxy
statements and other information with the SEC.
You may read and copy materials that we have filed with the SEC, including
the registration statement, at the following SEC public reference rooms:
450 Fifth Street, N.W.
Room 1024
Washington, D.C. 20549
You can call the SEC at 1-800-732-0330 for more information about the
public reference room.
Copies of our filings with the SEC are also available to the public over
the internet at the SEC's website at http://www.sec.gov. Our common stock is
listed on the New York Stock Exchange ("NYSE") and, as a result, we also file
our reports, proxy statements and other information with the NYSE.
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Incorporation by Reference
The SEC allows us to "incorporate by reference" the information that we
file, which means that we can disclose important information by referring to
those documents. The information incorporated by reference is an important part
of this prospectus, and information that we file later with the SEC will
automatically supersede this information. We incorporate by reference the
documents filed with the SEC (file number 1-8491) listed below and any future
filings made with the SEC under Sections 13(a), 13(c), 14 and 15(d) of the
Exchange Act, until this offering is terminated:
1. Annual report on Form 10-K for the year ended December 31, 1998;
2. Quarterly report on Form 10-Q for the quarter ended March 31, 1999;
3. Current reports on Form 8-K dated April 1, 1999 and May 18, 1999;
4. Proxy statement dated March 29, 1999 for our annual meeting of
shareholders held May 7, 1999; and
5. The description of our common stock which is contained in our
registration statement on Form 8-B filed with the SEC under the Exchange Act on
May 6, 1983.
We will provide, at no cost, to each person who receives a copy of this
prospectus, on the written or oral request of such person, a copy of any or all
of the documents (without exhibits) incorporated into this prospectus by
reference. Written or telephone requests for such copies should be directed to
our office: Michael B. White, Hecla Mining Company, 6500 Mineral Drive, Coeur
d'Alene, Idaho 83815, (208) 769-4100.
Special Note Regarding Forward Looking Statements
This prospectus and the documents incorporated by reference into this
prospectus contain forward-looking statements about our business. All statements
that we expect, believe or anticipate will or may occur in the future, including
the following matters are forward looking statements:
o year 2000 issues;
o future capital;
o development and exploration expenditures;
o reserve estimates;
o future production of metals;
o repayment of debt;
o business strategies; and
o expansion and growth of business operations.
These statements are based on assumptions and analyses made by us in light
of our experience and our perception of the following:
o historical trends;
o current conditions;
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o expected future developments; and
o other factors we believe are appropriate in the circumstances.
These statements are subject to a number of assumptions including the
following:
o risks and uncertainties, including the risk factors in this
prospectus;
o general economic and business conditions;
o the business opportunities that may be presented to and pursue
by us;
o changes in laws or regulations and other factors, many of which
are beyond our control; and
o availability to obtain project financing on favorable
conditions.
Significant factors that could prevent us from achieving our stated goals
include:
o declines in the market prices for our metals; and
o adverse changes in the regulatory environment affecting us.
You are cautioned that any of these statements are not guarantees of future
performance and that actual results or developments may differ materially from
those projected in the forward-looking statements.
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Risk Factors
Prior to making an investment decision, you should carefully consider,
together with the other information contained in and incorporated by reference
into this prospectus, the following risk factors.
We have incurred operating losses and we may incur continued losses for the
foreseeable future.
We have incurred losses from operations for each of the last eight years.
For the year ended December 31, 1998, we reported a net loss of approximately
$0.3 million (before preferred dividends of $8.1 million) or $0.01 per share of
common stock.
Our net losses for 1998 primarily reflect:
o decreases in the price of gold, lead and zinc;
o decreases in the production and sale of gold; and
o increases in cost of sales and production.
If the current prices of metals do not improve, we anticipate that these
losses will continue. Many of the factors affecting our operating results are
out of our control, and we cannot foresee whether our operations will generate
sufficient revenue for us to become profitable.
In addition to federal and state regulation, we are subject to private
litigation involving environmental matters.
On October 22, 1998, we were served with a lawsuit in the Superior Court of
Kern County, California. In the suit, 74 plaintiffs allege that during the
period from 1960 through the present, we caused personal injury and property
damage to the plaintiffs. The plaintiffs allege claims for general negligence,
nuisance, trespass, statutory violations, ultra-hazardous activities, strict
liability, and other torts and are seeking $29.6 billion in monetary damages
from us. We have provided notice and demand for defense/indemnity to our
insurance carriers providing coverage for the Cactus Gold Mine operation. To
date, the insurance carriers have not responded. Based on a preliminary review
of the allegations in the complaint, we believe that the allegations are
meritless and the damage claims are frivolous, and we will vigorously defend
ourselves against these claims. However, if plaintiffs are successful, this
litigation could have a material adverse effect on our operations, financial
condition and/or cash flows and could cause our business to fail.
Our earnings may be affected by metal price volatility.
A significant portion of our revenues are derived from the sale of gold,
silver, lead and zinc. As a result, our earnings are directly related to the
prices of these metals. Gold, silver, lead and zinc prices fluctuate widely and
are affected by numerous factors including:
o expectations for inflation;
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o speculative activities;
o relative exchange rate of the U.S. dollar;
o global and regional demand and production;
o political and economic conditions; and
o production costs in major producing regions.
These factors are beyond our control and are impossible for us to predict.
If the market prices for these metals fall below our costs to produce them for a
sustained period of time, we will experience additional losses and may have to
discontinue development or mining at one or more of our properties.
In the past, we have used limited hedging techniques to reduce our exposure
to price volatility, but we may not be able to do so in the future. See "--Our
hedging activities could expose us to losses."
The volatility of metals prices may adversely affect our development and
exploration efforts.
Our ability to produce gold and silver in the future is dependent upon our
exploration efforts, and our ability to develop new ore reserves. If prices for
these metals continue to decline, it may not be economically feasible for us to
continue our development of a project or to continue commercial production at
some of our properties.
Our development of new ore bodies may cost more and provide less return than we
estimated.
Our ability to sustain or increase our current level of production of
metals partly depends on our development projects--our ability to develop new
ore bodies and/or expand existing mining operations. Before we can begin a
development project, we must first determine whether it is economically feasible
to do so. This determination is based on estimates of several factors,
including:
o reserves;
o expected recovery rates of metals from the ore;
o facility and equipment costs;
o capital and operating costs of a development project;
o future metal prices;
o comparable facility and equipment costs; and
o anticipated climate conditions.
Development projects may have no operating history upon which to base these
estimates, and these estimates are based in large part on our interpretation of
geological data obtained from a limited number of drill holes and other sampling
techniques. As a result, actual cash operating costs and returns from a
development project may differ substantially from our estimates.
Our available cash and cash flows may be inadequate to fund expansion projects
and acquisitions or reduce our debt.
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Based on our estimate of metals prices for 1999, we currently believe that
our cash, operating cash flows and amounts available for us to borrow from our
revolving and term loan credit facility will be adequate to fund our
o anticipated minimum capital expenditure requirements;
o idle property expenditures;
o exploration expenditures; and
o preferred dividend requirement.
We will need additional cash to fund possible metals and industrial
minerals expansion projects, or acquisitions and to reduce our outstanding debt.
To help generate this additional cash flow, we plan to sell our MWCA subsidiary
and certain other assets. We have also implemented cost cutting measures in an
effort to further reduce our costs. If we cannot sell MWCA or if the sale
proceeds are insufficient, and we are unable to find alternative sources of
financing, such as equity offerings, we may not be able to pay for expansion
projects or acquisitions and we may be unable to reduce our outstanding debt.
Moreover, we cannot assure you that our cost cutting measures will be
successful.
Our mineral exploration efforts may not be successful.
Our ability to expand or replace depleted ore reserves depends on the
success of our exploration program. Mineral exploration, particularly for gold
and silver, is highly speculative. It involves many risks and is often
nonproductive. Even if we find a valuable deposit of minerals, it may be several
years before production is possible. During that time, it may become
economically infeasible to produce those minerals. Establishing ore reserves
requires us to make substantial capital expenditures and, in the case of new
properties, to construct mining and processing facilities. As a result of these
costs and uncertainties, we may not be able to expand or replace our existing
ore reserves as they are depleted by current production.
Our ore reserve estimates may be imprecise.
Our ore reserve figures are primarily estimates made by our technical
personnel and are not guarantees that we will recover the indicated quantities
of these metals. Our reserve estimates for properties that have not yet started
may change based on actual production experience. In addition, the economic
value of ore reserves containing relatively lower grades of mineralization may
be adversely affected by:
o declines in the market price of the various metals we mine;
o increased production costs; or
o reduced recovery rates.
Short-term operating factors relating to our ore reserves, such as the need
to sequentially develop ore bodies and the processing of new or different ore
grades, may adversely affect our profitability. We use forward sales contracts
and other hedging techniques to partially offset the effects of a drop in the
market prices of the metals we mine. However, if the price of metals that we
produce declines substantially below the levels used to calculate reserves for
an extended period, we could experience:
o delays in new project development;
o increased net losses;
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o reduced cash flow;
o reductions in reserves; and
o possible write-down of asset values.
We face strong competition from other mining companies for the acquisition of
new properties.
Mines have limited lives. As a result, we continually seek to replace and
expand our reserves through the acquisition of new properties. Because we face
strong competition for new properties from other mining companies, some of whom
have greater financial resources than we do, we may be unable to acquire
attractive new mining properties on terms that we consider acceptable.
The titles to some of our properties may be defective.
Unpatented mining claims constitute a significant portion of our
undeveloped property holdings. The validity of these unpatented mining claims is
often uncertain and may be contested. In accordance with mining industry
practice, we do not generally obtain title opinions until we decide to develop a
property. Therefore, while we have attempted to acquire satisfactory title to
our undeveloped properties, some titles may be defective.
Our operations may be adversely affected by risks and hazards associated with
the mining industry.
Our business is subject to a number of risks and hazards including:
o environmental hazards;
o industrial accidents;
o labor disputes;
o unusual or unexpected geologic formations;
o cave-ins;
o rockbursts; and
o flooding and periodic interruptions due to inclement or hazardous
weather conditions.
Such risks could result in
o damage to or destruction of mineral properties or producing
facilities;
o personal injury;
o environmental damage;
o delays in mining;
o monetary losses; and
o legal liability.
For most of these risks, we maintain insurance to protect against these
losses at levels consistent with our historical experience and industry
practice. However, we may not always be able to pay for this insurance,
particularly if there is a significant increase in the cost of premiums.
Insurance against environmental risks is generally too expensive for us and
other companies in our industry, and, therefore, we do not maintain
environmental insurance. To the extent we are subject to environmental
liabilities, we would have to pay for these liabilities. Moreover, in the event
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that we are unable to fully pay for the cost of remedying an environmental
problem, we might be required to suspend operations or enter into other interim
compliance measures.
Our foreign operations are subject to additional inherent risks.
We currently conduct operations in Mexico and have exploration projects and
operations in Mexico and South America. We anticipate that we will continue to
conduct significant international operations in the future. Because we conduct
operations internationally, we are subject to:
o the effects of local political and economic developments;
o exchange controls;
o currency fluctuations; and
o taxation and laws or policies of foreign countries and the United
States affecting trade, investment and taxation.
We face substantial governmental regulation and environmental risks.
Our business is subject to extensive federal, state and local laws and
regulations. These laws and regulations also govern the possible effects of our
activities on the environment. We have been, and are currently involved in
lawsuits in which we have been accused of violating environmental laws, and we
may be subject to similar lawsuits in the future. New legislation and
regulations may be adopted at any time that results in additional operating
expense, capital expenditures or restrictions and delays in the mining,
production or development of our properties.
We maintain reserves for costs associated with mine closure, reclamation of
land and other environmental matters. At December 31, 1998, our reserves totaled
$29.8 million. We anticipate that we will make expenditures relating to these
reserves over the next several years. Future expenditures related to closure,
reclamation and environmental expenditures are difficult to estimate. It is
possible that, as new information becomes available, changes to our estimates of
future closure, reclamation and environmental contingencies could materially
adversely affect our future operating results.
Our hedging activities could expose us to losses.
We engage in hedging activities, such as forward sales contracts and
commodity put and call option contracts, to minimize the effect of declines in
metals prices on our operating results. While these hedging activities may
protect us against low metals prices, they may also limit the price we can
receive on hedged products. As a result, we may be prevented from realizing
possible revenues in the event that the market price of a metal exceeds the
price stated in a forward sale or call option contract.
Year 2000 compliance may adversely impact our business.
The year 2000 issue arises from the use by software developers of two
digits rather than four to denote year dates in software programs, computer
hardware operating systems and microprocessor-based embedded controls in
automated equipment. As a result, information systems that operate date
sensitive software or automated equipment that contains date sensitive
microprocessors may interpret "00" to signify 1900 rather than 2000, thereby
impairing the ability of the information systems or automated equipment to
correctly calculate, sequence, or recognize dates. This could result in serious
malfunctions or even complete failures of affected systems.
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As of March 31, 1999, we have completed remediation and end-user testing
for 100% of our primary information systems (IS) and these systems are now year
2000 compliant. We have also completed inventories and assessments of non-IS
systems and we are currently implementing remediation efforts where necessary.
We are developing contingency plans for all major components in the event
of system failures caused by the Year 2000 issue. We are also using independent
consultants to oversee our Year 2000 project and the project is monitored by
senior management, who report to the Board of Directors at each respective
meeting.
We have also made inquiry of our critical suppliers and other essential
service providers concerning the Year 2000 issue, and will continue to monitor
their efforts to become Year 2000 compliant. However, these suppliers and
service providers may be adversely affected by the arrival of the Year 2000. We
cannot influence or control the efforts of third parties to address the Year
2000 issue, nor can we terminate our dependence on these third party suppliers
and service providers.
Under the reasonably likely worst case scenario, the Year 2000 issue could
render us temporarily unable to process and ship our products and could prevent
customers from ordering and paying on a timely basis which would have an adverse
effect on our business.
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Hecla Mining Company
Hecla Mining Company was originally incorporated in 1891, and is
principally engaged in the exploration, development and mining of precious and
nonferrous metals, including gold, silver, lead and zinc, and certain industrial
minerals. We own or have interests in a number of precious and non ferrous
metals properties and industrial metals businesses. Our principal producing
metals properties include:
o the Lucky Friday silver mine, located near Mullan, Idaho, which
is a significant primary producer of silver in North America;
o the Greens Creek silver mine, located near Juneau, Alaska, which
is a large polymetals mine;
o the Rosebud gold mine located near Winnemocca, Nevada; and
o the La Choya gold mine, located in Sonora Mexico, where we
discontinued mining in December 1998.
Our industrial minerals segment consists of:
o Kentucky-Tennessee Clay Company (ball clay and kaolin divisions);
o K-T Feldspar Corporation;
o K-T Clay de Mexico, S.A. de C.V.; and
o MWCA, Inc., which operates two divisions: the Colorado Aggregate
division and the Mountain West Products division.
Our industrial minerals segment is a significant producer of three of the
four basic ingredients required to manufacture ceramic and porcelain products.
At current production rates, we have over 20 years of proven and probable ore
reserves of ball clay, kaolin and feldspar.
In an effort to provide funds for possible metals and industrial minerals
expansion projects and to reduce our indebtedness, we have decided to attempt to
sell MWCA, Inc.
Our current strategy is to focus our efforts and resources on expanding our
gold and silver reserves and industrial minerals operations through a
combination of acquisition and exploration efforts. Our primary mining and
development operations are located in North America and Mexico.
Our principal business office is located at 6500 Mineral Drive, Coeur
d'Alene, Idaho 83815- 8788. The telephone number at that address is (208)
769-4100.
Recent Developments
Current Status of Bank Credit Agreement
As of June 14, 1999, we have borrowed approximately $33.8 million
(including $9.8 million on solid waste disposal revenue bonds) and we have the
ability to borrow approximately an additional $21.2 million under the Bank
Credit Agreement, subject to our continuing ability to comply with our covenants
in the Restated Bank Credit Agreement.
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Monarch Resources Transaction
On May 17, 1999, we executed with Monarch Resources Limited a purchase
agreement under which we will acquire substantially all of the assets of
Monarch.
Use of Proceeds
We will not receive any proceeds from the sale of the shares of common
stock by the Selling Shareholders. The net proceeds from the sale of these
shares will be received by the Selling Shareholders.
Selling Shareholders
The table below shows the following information for the selling
shareholders:
o number shares and the percentage the class of common stock
beneficially owned by them as of June 25, 1999;
o number of shares of common stock covered by this prospectus; and
o number of shares and the percentage of the class of common stock
to be retained after this offering, if any.
<TABLE>
<CAPTION>
Securities Owned Securities Owned
Prior to Offering(1)(2) After Offering(1)(2)
----------------------- --------------------
Shares of Number of Percent of
Name of Selling Shares of Common Stock Percent of Shares of Common
Shareholder Common Stock Offered Hereby Common Stock Common Stock Stock
----------- ------------ -------------- ------------ ------------ -----
<S> <C> <C> <C> <C> <C>
Monarch Resources 6,736,842 6,736,842 10.1% -0- -
Limited
</TABLE>
Plan of Distribution
We are registering the shares of common stock covered by this prospectus
for the benefit of the selling shareholders.
The shares offered by the selling security holders may be sold from time to
time to purchasers directly by the selling security holder or by pledgees,
donees, transferees or other successors in interest receiving shares from a
selling security holder after the date of this prospectus. As used in this
section, the term "selling security holder" includes pledgees, donees,
transferees or other successors in interest. In addition, the selling security
holder may from time to time offer the shares through underwriters, brokers,
dealers or agents who may receive compensation in the form of underwriting
discounts, concessions or commissions from the selling security holder and/or
the purchasers of these shares for whom they may act as agent. The selling
security holders and any underwriters, brokers, dealers or agents who
participate in the distribution of these shares may be deemed to be
"underwriters" and any profits on the sale of these shares by them and any
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discounts, commissions or concessions received by underwriters, brokers, dealers
or agents might be deemed to be underwriting discounts and commissions under the
Securities Act. To the extent the selling security holders may be deemed to be
underwriters, they may be subject to statutory liabilities under the Securities
Act. Because selling security holders may be deemed to be "underwriters" within
the meaning of Section 2(11) of the Securities Act, the selling security holder
will be subject to the prospectus delivery requirements of the Securities Act.
The selling shareholders may sell our common stock at market prices
prevailing at the time of the sale, at prices related to the prevailing market
prices, at negotiated prices or other prices as the selling shareholders
determine from time to time. The selling shareholders may sell from time to time
some or all of their common stock in one or more of the following transactions
(which may involve block transactions):
o on the NYSE or on any other market on which the common stock may
from time to time be trading;
o in privately negotiated transactions;
o short sales;
o in ordinary brokers' transactions;
o in transactions involving cross or block trades or otherwise;
o through purchases by brokers, dealers or underwriters as
principal and resale by those purchasers for their own accounts
under this prospectus;
o through market makers or into an existing market for the common
stock;
o in other ways not involving market makers or established trading
markets, including direct sales to purchasers or sales effected
through agents;
o in transactions involving the writing of options, swaps or other
derivatives; or
o in any combination of the selling options described in this
prospectus, or by any other legally available means.
The selling shareholders may enter into hedging transactions with
broker-dealers who may engage in short sales of common stock in the course of
hedging the positions they assume. The selling shareholders also may enter into
option or other transactions with broker-dealers that require the delivery by
those broker-dealers of the common stock. Thereafter, the shares may be resold
under this prospectus.
In addition to selling its common stock under this prospectus, the selling
shareholders may:
o transfer their common stock in other ways not involving market
makers or established trading markets, including by gift,
distribution or other transfer; or
o sell their common stock under Rule 144 of the Securities Act,
if the transaction meets the requirements of Rule 144.
In addition to the general sale restrictions described in this section, we
have a greed with Monarch Resources Limited ("Monarch") pursuant to a Purchase
Agreement between Monarch and Hecla Mining Company dated May 17, 1999, that
Monarch shall not, in the aggregate, dispose of more than 25,000 of our common
shares during any one trading day. Moreover, so long as Monarch holds at least
20% of the shares that it obtains pursuant to the transactions contemplated by
the Purchase Agreement, Monarch shall provide us with reasonable advance notice
of the sale. Also, assuming we provide appropriate notice to Monarch, Monarch
shall not sell any of our shares within five days prior to any underwritten
public offering of our shares.
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The selling shareholders have the sole and absolute discretion not to
accept any purchase offer or make any sale of shares if they deem the purchase
price to be unsatisfactory at any particular time. We cannot assure you that all
or any of the shares offered in this prospectus will be issued to, or sold by,
the selling shareholders.
In their selling activities, the selling shareholders will be subject to
applicable provisions of the Securities Exchange and its rules and regulations,
including Regulation M, which may limit the activity of the selling shareholders
and the timing of purchases and sales of our common stock. Regulation M may
prohibit persons engaged in a distribution of securities from simultaneously
engaging in market making and certain other activities for these securities for
a specified period of time prior to the start of distributions, subject to
exceptions or exemptions. This may affect the marketability of the shares of our
common stock. Any selling shareholders who may be "affiliated purchasers" of
ours as defined in Regulation M, have been advised that they must coordinate
their sales under this prospectus with each other and us for purposes of
Regulation M.
Underwriters participating in any offering made pursuant to this Prospectus
may receive underwriting discounts and commissions, and discounts or concessions
may be allowed or reallowed or paid to dealers, and brokers or agents
participating in such transactions may receive brokerage or agent's commission
of fees.
In conjunction with sales to or through brokers, dealers or agents, the
selling shareholders may agree to indemnify them against liabilities arising
under the Securities Act. We know of no existing arrangements between the
selling shareholders, any other shareholder, broker, dealer, underwriter or
agent relating to the sale or distribution of our common stock.
We will amend or supplement this prospectus if required under the
Securities Act disclosing (i) the name of each selling security holder and of
the participating broker-dealer(s), (ii) the number of shares involved, (iii)
the price at which shares were sold, (iv) the commissions paid or discounts or
concessions allowed to the broker-dealer(s), where applicable, (v) that the
broker-dealer(s) did not conduct any investigation to verify the information set
out or incorporated by reference in the prospectus and (vi) other facts material
to the transaction.
Legal Matters
Ballard Spahr Andrews & Ingersoll, LLP, Denver, Colorado will pass upon the
validity of the shares common stock offered by this prospectus.
Experts
The consolidated financial statements of Hecla Mining Company incorporated
in this prospectus by reference to the Annual Report on Form 10-K for the year
ended December 31, 1998, have been so incorporated in reliance on the report
(which contains an explanatory paragraph describing the change in the method of
accounting for environmental remediation liabilities in 1996) of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
15
<PAGE>
Securities and Exchange Commission Position on Certain Indemnification
The Delaware General Corporation Law provides for indemnification by a
corporation of costs incurred by directors, employees, and agents in connection
with an action, suit, or proceeding brought by reason of their position as a
director, employee, or agent. The person being indemnified must have acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation.
Our Articles of Incorporation obligate us to indemnify our directors and
officers to the fullest extent permitted under Delaware law.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling us pursuant to
the foregoing provisions, we have been informed that, in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act and is therefore unenforceable.
16
<PAGE>
PART II
Information Not Required in Prospectus
Item 14. Other Expenses of Issuance and Distribution
--------------------------------------------
The estimated expenses of this offering, all of which are to be borne by
the registrant, are as follows:
Securities and Exchange Commission filing fee............ $ 4,448
Printing and engraving .................................. 2,500*
Accounting fees and expenses............................. 5,000*
Legal fees and expenses ................................. 20,000*
Blue sky fees and expenses (including related legal fees) 1,000*
Transfer agent fees ..................................... 500*
Miscellaneous ........................................... 1,552*
--------
Total.................................................... $ 35,000
========
*Estimated
Item 15. Indemnification of Directors and Officers.
------------------------------------------
The registrant's Articles of Incorporation eliminate the personal liability
of directors to the registrant or its shareholders for monetary damages for
breach of fiduciary duty to the extent permitted by Delaware law. The
registrant's Articles of Incorporation and By-Laws provide that the registrant
shall indemnify its officers and directors to the extent permitted by Delaware
law, which authorizes a corporation to indemnify directors, officers, employees
or agents of the corporation in non-derivative suits if such party acted in good
faith and in a manner such party reasonably believed to be in or not opposed to
the best interest of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
The Delaware General Corporation Law further provides that indemnification shall
be provided if the party in question is successful on the merits or otherwise.
Item 16. Exhibits
The following Exhibits are filed as part of this Registration Statement:
Exhibit
Number Description
- ------ -----------
3.1 Articles of Incorporation of Hecla Mining Company.***
5.1 Opinion of Ballard Spahr Andrews & Ingersoll, LLP**
23.1 Consent of Ballard Spahr Andrews & Ingersoll, LLP (included in
Exhibit 5.1 to this registration statement).**
23.2 Consent of PricewaterhouseCoopers LLP, independent public
accountants.*
- -----------------
* Filed herewith.
** To be filed by amendment.
*** Previously filed.
II-1
<PAGE>
Item 17. Undertakings
------------
A. Rule 415 Offering
The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the law or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) above do not apply if the
registration statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or Section 159d)
of the Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the Offering.
II-2
<PAGE>
B. Filings Incorporating Subsequent Exchange Act Documents by Reference
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
C. Request for Acceleration of Effective Date
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, in the City of Coeur
d'Alene, State of Idaho on the 16th day of June, 1999.
HECLA MINING COMPANY
By: /s/ Arthur Brown
-----------------------------------------------
Arthur Brown
Chairman, President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Name Capacity Date
---- -------- ----
<S> <C> <C>
/s/ Arthur Brown Chairman, President and Chief Executive June 16, 1999
- ------------------------------------- Officer (principal executive officer)
Arthur Brown
/s/ John P. Stilwell Vice President - Chief Financial Officer June 16, 1999
- ------------------------------------- (principal financial officer)
John P. Stilwell
/s/ Lewis E. Walde Assistant Controller June 16, 1999
- ------------------------------------- (principal accounting officer)
Lewis E. Walde
/s/ John E. Clute Director June 15, 1999
- -------------------------------------
John E. Clute
/s/ Joe Coors Jr. Director June 15, 1999
- -------------------------------------
Joe Coors Jr.
/s/ Ted Crumley Director June 15, 1999
- -------------------------------------
Ted Crumley
/s/ Leland O. Erdahl Director June 15, 1999
- -------------------------------------
Leland O. Erdahl
/s/ Charles L. McAlpine Director June 15, 1999
- -------------------------------------
Charles L. McAlpine
/s/ Thomas J. O'Neil Director June 15, 1999
- -------------------------------------
Thomas J. O'Neil
<PAGE>
Name Capacity Date
---- -------- ----
Director June __, 1999
- -------------------------------------
Jorge E. Ordonez C.
/s/ Paul A. Redmond Director June 15, 1999
- -------------------------------------
Paul A. Redmond
</TABLE>
<PAGE>
POWER OF ATTORNEY
The undersigned directors of Hecla Mining Company (the "Corporation")
hereby appoint Arthur Brown, John P. Stilwell and Michael B. White, and each of
them, as their true and lawful attorneys-in-fact, with full power for and on
their behalf to execute, in their names and capacities as directors of the
corporation, and to file with the Securities and Exchange Commission on behalf
of the corporation under the Securities Act of 1933, as amended, any and all
Registration Statements (including any and all amendments or post-effective
amendments thereto) pursuant to which 6,736,842 shares of the Corporation's
Common Stock are to be registered for sale by Monarch Resources Limited.
This Power of Attorney automatically ends as to each appointee upon the
termination of his service with the Corporation.
In witness thereof, the undersigned have executed this Power of Attorney on
this ________ day of ________, 1999.
- ------------------------------------ ---------------------------------
John E. Clute Joe Coors Jr.
- ------------------------------------ ---------------------------------
Ted Crumley Leland O. Erdahl
- ------------------------------------ ---------------------------------
Charles L. McAlpine Thomas J. O'Neil
- ------------------------------------ ---------------------------------
Jorge E. Ordonez C. Paul A. Redmond
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
EXHIBITS
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933, AS AMENDED
Hecla Mining Company
---------------------------------------
(Name of Company as specified in charter)
<PAGE>
HECLA MINING COMPANY
FORM S-3 REGISTRATION STATEMENT
The following Exhibits are filed as part of the Registrant's Form S-3
Registration Statement pursuant to Item 601 of Regulation S-K.
Exhibit
Number Description
- ------ -----------
3.1 Articles of Incorporation of Hecla Mining Company***
5.1 Opinion of Ballard Spahr Andrews & Ingersoll, LLP.**
23.1 Consent of Ballard Spahr Andrews & Ingersoll, LLP (included in
Exhibit 5.1 to this registration statement).**
23.2 Consent of PricewaterhouseCoopers LLP, independent public
accountants.*
- --------------------
* Filed herewith.
** To be filed by amendment.
*** Previously filed.
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report, which includes an explanatory paragraph
concerning changes in accounting for environmental remediation liabilities in
1996, dated February 8, 1999, except for Note 5, as to which the date is
February 25, 1999 relating to the financial statements, which appears in Hecla
Mining Company's Annual Report on Form 10-K for the year ended December 31,
1998. We also consent to the reference to us under the heading "Experts".
/s/ PricewaterhouseCoopers LLP
Spokane, Washington
June 16, 1999
