Acadia’s connection with Hecla provides access to equity funds

At a time when most juniors are struggling to raise risk capital Acadia Mineral Ventures (TSE) has secured significant financial clout and has expanded its portfolio of gold properties. The company now holds ground all across Canada. By approving a deal with New York-listed Hecla Mining, Acadia has acquired Hecla’s Canadian exploration properties in exchange for what could, over the next three years, amount to a controlling 10 million shares in Acadia.

Acadia currently has about 10,780,606 shares outstanding, trading recently at about 19 cents.

More importantly, by surrendering control to Hecla, the deal could bring up to $5.2 million in equity to Acadia plus several other financial options for exploration work.

“We have significant cash flow from our operations in the U.S.; we have a $75-million line of credit available to us and we have about $12 million in cash,” Arthur Brown, chairman, president and chief executive officer of Hecla, told shareholders at Acadia’s most recent meeting in Toronto.

Brown is also a director of Acadia.

Hecla’s association with Acadia began with an option agreement in 1987 to earn a 66.5% interest in the Mooseland gold property in Nova Scotia. For this, Hecla must make further option payments totalling $900,000.

On top of this, Acadia has about $2 million in its treasury.

“The Mooseland property is no less attractive to us today than it was when we made the original agreement,” Brown says.

In 1989, a 3-compartment shaft was sunk to a depth of only 410 ft., well short of the planned depth, before work ceased due to lack of funds.

“At some point, yes, we will go ahead on the project. It is just a matter of looking at our priorities,” Brown says.

Among other properties, Acadia now has an option to earn a 60% interest in the former-producing Bachelor Lake mine in Desmaraisville, Que.

A decision on whether to go ahead with the second phase of a drilling program on that property is expected soon.