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Rule 424(b)(5)
Registration No. 33-59659
AMENDED PROSPECTUS SUPPLEMENT
(To Prospectus Dated September 5, 1995)
4,582,852 SHARES
1,603,998 WARRANTS
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, including the Common Stock issuable
upon the exercise of the Warrants also being offered (the
"Shares"), will be listed on the New York Stock Exchange
(the "NYSE") under the symbol "HL." On May 11, 1999, the
last reported sale price of the Common Stock as reported
on the NYSE Composite Tape was $2.5625 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.
STRUCTURING PROCEEDS TO
ISSUE PRICE FEE COMPANY(1)
----------- ----------- -----------
Per Share $2.625 5% $2.494
Total $12,029,986 $601,499 $11,428,487
The date of this Prospectus Supplement is May 10, 1999, as
amended May 12, 1999.
(1) Before deducting expenses payable by Hecla estimated to be
$100,000.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
PAGE
Forward-Looking Statements S-3
The Company S-3
Recent Developments S-4
Use of Proceeds S-4
Plan of Distribution S-4
Description of the Warrants S-4
U. S. Tax Consequences for Non-U.S. Shareholders S-5
Experts S-8
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.
THE COMPANY
Hecla Mining Company 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 operations for
the three months ended March 31, 1999, and each of the last eight
years ending December 31. 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 our telephone
number is (208) 769-4100.
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RECENT DEVELOPMENTS
Current Status of Bank Credit Agreement
As of April 30, 1999, the Company had borrowings of
$49.8 million (including $9.8 million in solid waste disposal
revenue bonds) and the ability to borrow approximately an
additional $5.2 million under the Bank Credit Agreement, subject
to the Company continuing to comply with the Company's covenants
in the Restated Bank Credit Agreement to which we can provide no
assurance.
Monarch Resources Transaction
On May 10, 1999, the Company and Monarch Resources
Limited agreed to an extension of the deadline for the execution
of a definitive purchase agreement for Hecla to acquire
substantially all the assets of Monarch. The original deadline
for the execution of a definitive purchase agreement was May 10,
1999, but has been extended to May 17, 1999.
USE OF PROCEEDS
The net proceeds from the sale of the Common Stock
offered hereby, after deducting estimated expenses of this
offering, should be approximately $11,328,000. 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. Any proceeds which may eventually
be received from the exercise of the Warrants will be used for
general corporate purposes as well.
PLAN OF DISTRIBUTION
We have offered to sell 4,582,852 shares of our Common
Stock at a purchase price per share of $2.625 to a selected
number of institutional investors. Net offering proceeds
available to us, after deducting estimated offering expenses
of $100,000 and a structuring fee of 5% of the gross offering
price for all shares sold will be approximately $11,328,000.
The per share price represents the closing price of the Common
Stock on the New York Stock Exchange on May 10, 1999. We are
issuing 1,603,998 Warrants to the institutional investors, pro
rata, based on the number of shares of Common Stock purchased
by each. We have not paid any other compensation to any other
person with respect to this sale.
DESCRIPTION OF THE WARRANTS
We have also agreed to issue 1,603,998 Warrants to
purchase our Common Stock. Each Warrant entitles the holder to
purchase one (1) share of Common Stock at an exercise price equal
to the lesser of (i) $3.19 and (ii) 102% of the Volume Weighted
Average Price (based on a trading day from 9:30 a.m. to 4:00
p.m.) on the New York Stock Exchange as reported by Bloomberg
Financial LP using the AQR function for our Common Stock for each
New York Stock Exchange trading day (each such day, a "Trading
Day") during the ten (10) consecutive Trading Days immediately
preceding the date that notice of exercise is given to the
Company (the "Exercise Price"), subject to such adjustments as
are provided for in the Warrant Agreement
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by and between us and our Warrant Agent. The Warrants are
exercisable until May 11, 2002. No holder of Warrants as such,
will be entitled to vote or receive dividends or be deemed the
holder of shares of Common Stock for any purpose whatsoever until
such Warrants have been duly exercised and the purchase price has
been paid in full. The Warrants have no provision for either a
Call or Redemption and will, therefore, remain outstanding either
until they are exercised or they expire in accordance with their
terms. The Warrants will be entitled to the benefit of
adjustments in the Exercise Price and in the number of shares of
Common Stock delivered upon the exercise thereof upon the
occurrence of certain events, such as stock dividends, stock
splits, recapitalizations, consolidations, or mergers.
Additionally, under certain circumstances, the Exercise Price,
expressed in (i) hereinabove, may be adjusted downward based on
certain sales of our Common Stock at prices less than the
Exercise Price.
While registered, we do not anticipate that a market
will develop for the Warrants as we are not obligated nor do we
intend to list the Warrants so that they may trade on any
exchange. Each Warrant will be exercisable by surrendering the
Warrant Certificate with the formal Subscription Form on the
reverse side of the Warrant Certificate, properly completed and
executed, together with payment of the Exercise Price to the
Warrant Agent prior to their expiration. If prior to their
expiration a Warrant holder elects to exercise some, but not all
of the Warrants represented by his Warrant Certificate, a new
Warrant Certificate will be issued for the remaining number of
Warrants.
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 States 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 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
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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 United States person,
the certification requirement would generally be applied to the
partners in the partnership and 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
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;
- 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
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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 all of our real property interests and
other assets held for use in our 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 we are or have been a USRPHC within the preceding
five years 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 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, 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.
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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 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
50% or more derived 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 financial statements 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
concerning changes 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.
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No dealer, salesperson or other 4,582,852 SHARES
person has been authorized to give
any information or to make any 1,603,998 WARRANTS
representations, other than those
contained in or incorporated by HECLA MINING COMPANY
reference in this Prospectus
Supplement or the Prospectus and, COMMON STOCK
if given or made, such information ($0.25 PAR VALUE)
or representation must not be
relied upon as having been
authorized by the Company.
Neither the delivery of this
Prospectus Supplement or the
Prospectus nor any sale made
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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