Item 1.01 - Entry into a Material Definitive Agreement
On July 21, 2022 Hecla Mining Company (“we,” “our,” “us,” or
the “Company”) entered into a Credit Agreement (“New Credit
Agreement”) with the various financial institutions and other
persons from time to time party thereto as lenders (the “Lenders”),
Bank of Montreal and Bank of America, N.A. as letters of credit
issuers, and Bank of America, N.A., as administrative agent for the
Lenders and as swingline lender, to replace our Prior Credit
Agreement (as hereinafter defined). The New Credit Agreement is a
$150 million senior secured revolving facility, with an option
to be increased in an aggregate amount not to exceed
$75 million. The revolving loans under the New Credit
Agreement will have a maturity date of July 21, 2026. Proceeds
of the revolving loans under the New Credit Agreement may be used
to refinance the Prior Credit Agreement and for general corporate
purposes. The interest rate on outstanding loans under the New
Credit Agreement is, at the option of the Borrowers, one month,
three months or six months Term SOFR (which is the one month, three
months or six months Term SOFR Screen Rate published two U.S.
government securities business days prior to the commencement of
the applicable interest period plus (x) 0.10% for an interest
period of one-month’s
duration, (y) 0.15% for an interest period of three-month’s
duration and (z) 0.25% for an interest period of six-month’s duration) plus the
Applicable Margin or Base Rate (which is the highest of
(i) the Bank of America prime rate, (ii) the Federal
Funds rate plus .50% and (iii) Term SOFR plus 1.00%, subject
to the interest rate floors set forth therein) plus the Applicable
Margin. The “Applicable Margin” means (a) for the first fiscal
quarter ending after the closing date, in the case of Term SOFR
loans, 2.25% per annum, and, in the case of Base Rate loans, 1.25%
per annum, and (b) thereafter, between 2.00% and 3.50% for
Term SOFR loans or between 1.00% and 2.50% for Base Rate loans
depending on our total leverage ratio. We are required to pay
quarterly in arrears a commitment fee of between 0.45000% to
0.78750%, depending on our total leverage ratio, of the actual
daily amount by which the Aggregate Revolving Commitments exceed
the sum of the Outstanding Amount of Revolving Loan and the
Outstanding Amount of L/C Obligations. We are also required to pay
a participation fee for letters of credit issued under the New
Credit Agreement in an amount between 2.00% and 3.50% based on our
total leverage ratio, as well as a fronting fee to each issuing
bank at an agreed upon rate per annum on the average daily dollar
amount of our letter of credit exposure.
We and certain of our subsidiaries are the borrowers under the New
Credit Agreement, while certain of our other subsidiaries are
guarantors of the borrowers’ obligations under the New Credit
Agreement. As further security, the credit facility is
collateralized by a mortgage on the Greens Creek mine, the equity
interests of our subsidiaries that own the Greens Creek mine or are
part of the Greens Creek Joint Venture and our subsidiary Hecla
Admiralty Company (the “Greens Creek Group”), and by all of the
Green Creek Group’s rights and interests in the Greens Creek Joint
Venture Agreement, and in all assets of the joint venture and of
any member of the Greens Creek Group.
The New Credit Agreement contains representations and warranties
made by us. The assertions embodied in those representations and
warranties are qualified by information in confidential disclosure
schedules that we have exchanged in connection with signing the New
Credit Agreement. While we do not believe that they contain
information securities laws require us to publicly disclose other
than information that has already been so disclosed, the disclosure
schedules do contain information that modifies, qualifies and
creates exceptions to the representations and warranties set forth
in the New Credit Agreement. Accordingly, you should not rely on
the representations and warranties as characterizations of the
actual state of facts, since they are modified in important part by
the underlying disclosure schedules. The New Credit Agreement has
been incorporated by reference herein to provide you with
information regarding
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