Hecla Mining Co. has dropped its bid to take over Dolly Varden Silver Corp., a small Canadian company with mining properties in British Columbia.
Hecla President and CEO Phil Baker said in a news release Monday that the decision is due to “Dolly Varden’s expensive debt financing” as well as the company’s proposed new loan arrangement, which “effectively acts as a poison pill, raising the cost of acquiring Dolly Varden by more than 50 percent.”
Coeur d’Alene-based Hecla will invest to maintain its 15.7 percent interest in Dolly Varden, the company said.
Hecla last month announced a cash offer to buy Dolly Varden’s remaining stock for 69 cents per share in Canadian dollars. That would cost about $12 million.
Dolly Varden owns historic mining properties near the town of Kitsault in northwestern British Columbia. Its shares trade on Canada’s TSX Venture Exchange.
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