Hecla makes cash offer in bid for Canadian mining company

Hecla Mining Co. has launched a takeover bid for Dolly Varden Silver Corp., a small Canadian company with mining properties in British Columbia.

Hecla already owns about 20 percent of Dolly Varden’s shares, but announced a cash offer Monday to buy the company’s remaining stock for 69 cents per share in Canadian dollars. Acquiring all of the shares would cost about $12 million.

Dolly Varden Silver Corp. owns historic mining properties near the town of Kitsault in northwestern British Columbia. Its shares trade on Canada’s TSX Venture Exchange.

Phil Baker, Hecla’s president and chief executive, said the company has the potential to be a significant silver producer in the future, but Hecla is concerned the company’s proposed new loan arrangement, which he said would dilute the value of existing shares.

Hecla set a 35-day deadline for its share offer, which requires that 50 percent of Dolly Varden’s shares are sold to Hecla, excluding the shares Hecla already owns.