Hecla Mining Co. said last week it agreed to sell its interest in northern Nevada's Hollister Development Block gold exploration project to its partner, Great Basin Gold Inc.
Great Basin, a company based at Vancouver, will pay $45 million in cash and $15 million worth of its common shares to buy out Hecla's interest.
The project is about 47 miles northwest of Elko in Nevada's prolific Carlin Trend mining district.
"We believe Hollister is a good project for us if we owned all of it, but when split in half, it is just not large enough to make a significant impact on Hecla's production, revenue or income," said Philips Baker, the president and chief executive officer of Hecla.
But he said Hecla's continued ownership of Great Basin stock will allow his company's shareholders to participate in any upside at the Hollister Development Block.
Hecla, which is based at Coeur D'Alene, Idaho, said it had spent about $30 million in the past two years developing an underground ramp and conducting underground exploration at the project.
Great Basin Gold has been involved in the project since 1997, when it purchased a 75 percent interest in the property which previously was known as the Ivanhoe Gold Property from Newmont Mining for $6 million. Two years later, Great Basin acquired the remaining 25 percent interest in the project when it purchased all the shares of Touchstone Resources.
Hecla got involved in the Hollister Development Block project in 2002, when it signed an option to acquire a 50 percent interest in the property by investing $21.8 million in exploration and development.
