Hecla Urges U.S. Silver Shareholders To Take Action To Stop The RX Proposal

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7/30/2012 2:38 PM ET

Hecla Mining Co. (HL: Quote) announced that it has responded to the U.S. Silver Corporation Board of Director's recommendation regarding Hecla's offers to acquire all of the outstanding common shares for CDN$1.80 per common share in cash and to acquire each outstanding common share purchase warrant for CDN$0.205.

"There is nothing in the U.S. Silver Board's recommendation that changes our view that the RX transaction is inferior to the all cash Hecla Offer," said Hecla's President and Chief Executive Officer, Phillips Baker, Jr. "Both transactions represent a change in control of U.S. Silver. However, the Hecla Offer delivers significant, immediate and certain value and liquidity to U.S. Silver shareholders, whereas the proposed RX transaction delivers significant risks, considerable debt and assets of questionable value."

The Hecla Offer is conditional upon the proposed RX transaction not proceeding or such transaction otherwise terminating; U.S. Silver shareholders need to REVOKE proxies voted for the RX Proposal and vote AGAINST it immediately, before the August 2, 2012 proxy submission deadline.

Hecla said it continues to believe its offers for U.S. Silver are superior to the proposed RX transaction because the Hecla Offer to purchase all of the issued and outstanding common shares of U.S. Silver for CDN$1.80 per share in cash represents a premium of over 23% to the CDN$1.46 closing price of U.S. Silver common shares on the TSX on July 24, 2012 and a premium of 28% to the imputed offer price of CDN$1.41 under the proposed RX transaction, as at the same date.

The Hecla Offer's all cash consideration provides maximum optionality for U.S. Silver shareholders.

Also, since the Hecla Offer was announced on July 25, U.S. Silver common shares have traded at or close to the $1.80 offer price; that share price would be at significant risk if the proposed RX transaction proceeds and the Hecla Offer is terminated. As a point of reference, prior to the Hecla Offer, U.S. Silver was trading close to $1.40, the company said.

Hecla stated its Offer is not subject to financing and the company has sufficient cash on hand to complete the offers.

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by RTT Staff Writer

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