UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the
Registrant
[X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ]
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Preliminary Proxy Statement
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Confidential, for Use of the
Commission Only (as permitted by Rule 14a-6(e)(2))
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[ ]
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Definitive Proxy Statement
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[X]
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Definitive Additional Materials
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[ ]
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Soliciting Materials under §
240.14a-12
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KLONDEX MINES LTD.
(Name of Registrant as Specified in its Charter)
N/A
(Name of Person(s) Filing Proxy
Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X]
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No fee required.
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[ ]
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Fee computed on table below per
Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction
applies:
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(2)
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Aggregate number of securities to which transaction
applies:
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(3)
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Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
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(4)
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Proposed maximum aggregate value of
transaction:
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(5)
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Total fee paid:
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[ ]
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Fee paid previously with
preliminary materials.
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Check the box if any part of the fee is offset as
provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date of its
filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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In connection with the mailing of the definitive proxy
statement of Klondex Mines Ltd. (the Company) and the solicitation of proxies
with respect to the proposals set forth in the definitive proxy statement, the
following telephone solicitation script was prepared for use by the Companys
proxy solicitation agent, D.F. King & Co., Inc., with shareholders of the
Company after the time of the mailing of the definitive proxy statement.
2
PROXY SOLICITATION
SCRIPT
KLONDEX MINES LTD.
Annual & Special Meeting of
Securityholders (Canadian Holder Script)
Record Date:
MAY 15, 2018
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Proxy Cut-Off:
JULY 10, 2018 @ 4:00 PM
(ET)
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TICKERS:
KDX / KLDX
CUSIP:
498696103
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Meeting Date:
JULY 12, 2018 @ 8:00 AM (ET)
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Hello my name is <insert your name>, I am calling
on behalf of Klondex Mines, Ltd. May I please speak with
<insert
shareholder name>
concerning his/her investment in Klondex Mines?
<
Pause for response>
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If YES
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If NO
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Thank you. Please note that this call is being recorded for
quality assurance purposes.
You should have recently received some very important
information regarding the Annual & Special Meeting of Securityholders
scheduled for July 12, 2018. At the meeting, Klondex Securityholders will
be asked, among other things, to consider and vote on a special resolution
approving a statutory Plan of Arrangement.
Under the terms of the Arrangement Agreement, Hecla
Mining Company will acquire all outstanding Klondex shares. In exchange,
each Klondex shareholder will receive, for each Klondex share,
consideration of US$2.47 in cash, or in shares of Hecla common stock, or a
combination of cash and Hecla shares.
In addition, for each Klondex share, shareholders
will also receive 0.125 of a share of Havilah Mining Corporation, a new
company formed to hold Klondexs Canadian assets.
The Board of Directors of Klondex Mines Ltd.
unanimously recommends that securityholders vote
FOR
the
Arrangement Resolution.
In connection with the Meeting, Klondex
Shareholders also are being asked to approve certain other matters,
including a stock option plan for Havilah, the election of the directors
of the Company, the appointment of auditors of the Company and a
non-binding advisory resolution on the Companys approach to executive
compensation.
The Board greatly appreciates your support and is
asking Securityholders to return their proxies in accordance with the
Boards Recommendations.
At this time, will you be voting along with the Boards
recommendation and vote
IN FAVOUR of
ALL
resolutions?
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May I please leave a toll free number in
case you have questions? Please dial 1-800- 330-8705. You may also visit
the following websites for more information.
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www.klondexmines.com
or
www.sedar.com
under Klondex Mines Ltd.
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Thank you and have a nice day.
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CLOSING:
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Thank you. If you have any questions or
require any assistance in voting your shares in the future, please do not
hesitate to call 1-800-330- 8705 or visit
www.klondexmines.com
or
www.sedar.com
for further details. Thank you and have a good <
insert appropriate closing
>.
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ANSWERING MACHINE:
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Hello. My name is <insert your
name> and I am calling on behalf of Klondex Mines Ltd. Kindly call us
toll free at 1-800- 330-8705. Thank you and have a nice day.
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IF YES OR POSITIVE RESPONSE:
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Great. Please remember proxies submitted must be received by
4:00 PM, Eastern Time, on July 10
th
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(PROCEED TO CLOSING)
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IF NO OR NEGATIVE RESPONSE:
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(OFFER TO REVIEW MEETING PROPOSALS) (AFTER
DISCUSSION)
Sir/Maam, given this information, will you be voting
along with the Boards recommendation?
(PAUSE FOR RESPONSE)
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IF YES
: PROCEED TO IF YES ABOVE
IF NO
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May I ask what is stopping you from
voting in favour and supporting the
Boards recommendation at this time
(NOTATE FEEDBACK)
I understand.
(PROCEED TO CLOSING)
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INSTRUCTIONS TO CALL CENTRE ASSOCIATES
DO
NOT DEVIATE FROM THIS DOCUMENT OR OFFER ANY PERSONAL COMMENT
.
This document has been reviewed by the client and/or their legal
advisers and must be adhered to
strictly. Do not provide what
you believe may be the answer. All information relayed must be based on
publicly available information. DO NOT OFFER ANY OPINION or
give advice, as this could be in breach of
the law.
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CORPORATE
PROXY FACT SHEET FOR:
KLONDEX MINES LTD.
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ANNUAL & SPECIAL MEETING DATES
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ANNUAL & SPECIAL MEETING LOCATION
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Record Date
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MAY 15, 2018
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TORONTO REGION BOARD OF TRADE
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Proxy Cut-Off
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JULY 10, 2018 @ 4:00 PM (ET)
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LENNOX HALL WEST, 4
TH
FLOOR,
77
ADELAIDE STREET WEST
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Meeting Date
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JULY 12, 2018 @ 8:00 AM (ET)
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TORONTO, ONTARIO M5X 1C1
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ADDITIONAL INFORMATION
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CONTACT INFORMATION
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Mail Date
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JUNE 12, 2018
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Inbound Line
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1-800-330-8705
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Ticker Symbol
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KDX / KLDX
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Collect Line
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1-212-771-1133
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CUSIP
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498696103
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Website
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www.klondexmines.com
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What are Securityholders being asked to vote
on?
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1.
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To consider pursuant to an interim order of the British
Columbia Supreme Court dated June 6, 2018 (the
Interim Order
)
and, if thought advisable, to pass, with or without amendment, a special
resolution of the Klondex Securityholders (the
Arrangement
Resolution
), the full text of which is set forth in Appendix B to
the management information circular (the
Circular
), to approve a
statutory plan of arrangement (the
Plan of Arrangement
) under
Section 288 of the
Business Corporations Act
(British Columbia)
(the
BCBCA
) (the
Arrangement
), subject to the terms and
conditions of an arrangement agreement dated March 16, 2018 entered into
among Klondex, Hecla Mining Company (
Hecla
) and 1156291 B.C.
Unlimited Liability Company, a wholly-owned subsidiary of Hecla, as
amended by an amending agreement dated June 4, 2018;
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BOARD OF DIRECTORS RECOMMENDATION -
FOR
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2.
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To consider and, if thought advisable, to pass, with or
without amendment, an ordinary resolution of the Klondex Shareholders, the
full text of which is set forth in Appendix N to the Circular, approving
a share option plan for Havilah Mining Corporation (the
Havilah Option
Plan Resolution
), all as more particularly set forth in the Circular,
provided that such resolution shall not become effective unless the
Arrangement becomes effective;
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BOARD OF DIRECTORS RECOMMENDATION -
FOR
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3.
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For Klondex Shareholders to elect directors of the
Company for the ensuing year (or, if the Arrangement Resolution is
approved and the Arrangement is completed, for the period up to the
effective time of the Arrangement);
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BOARD OF DIRECTORS RECOMMENDATION -
FOR
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4.
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For Klondex Shareholders to appoint the auditors of the
Company for the ensuing year and to authorize the directors of the Company
to fix their remuneration;
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BOARD OF DIRECTORS RECOMMENDATION -
FOR
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For Internal
Distribution Only
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Page
1
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5.
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For Klondex Shareholders to consider and, if deemed
appropriate, to pass, with or without variation, a non-binding advisory
resolution of the Klondex Shareholders on the Companys approach to
executive compensation;
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BOARD OF DIRECTORS RECOMMENDATION -
FOR
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6.
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For Klondex Securityholders to authorize the adjournment
of the Meeting if necessary or appropriate, including an adjournment to
solicit additional proxies in the event that there are not sufficient
votes at the time of the Meeting or adjournment or postponement thereof to
approve the Arrangement Resolution (the Adjournment
Resolution);
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BOARD OF DIRECTORS RECOMMENDATION -
FOR
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PROPOSAL 1: To consider pursuant to an interim order
of the British Columbia Supreme Court dated
June 7,
2018
(the
Interim Order) and, if thought advisable, to pass, with or
without amendment, a
special resolution of the Klondex
Securityholders (the Arrangement Resolution), the full text of which is
set forth in Appendix B to the management information
circular, to approve a statutory plan of arrangement (the Plan of Arrangement)
under Section 288 of the
Business Corporations Act
(British
Columbia) (the BCBCA) (the Arrangement), subject to the terms and conditions
of an arrangement agreement dated March 16, 2018 entered into among Klondex,
Hecla Mining Company (Hecla) and 1156291 B.C. Unlimited Liability Company, a
wholly-owned subsidiary of Hecla, as amended by an amending agreement dated June
4, 2018;
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What is happening?
At the Meeting, Klondex Securityholders will be asked, among
other things, to consider and vote on a special resolution (the Arrangement
Resolution) approving a statutory plan of arrangement (the Plan of
Arrangement) pursuant to Section 288 of the
Business Corporations Act
(British Columbia) (the Arrangement), subject to the terms and conditions
of an arrangement agreement dated March 16, 2018 entered into among Klondex,
Hecla Mining Company (Hecla) and 1156291 B.C. Unlimited Liability Company
(Hecla Acquisition Subco), a wholly-owned subsidiary of Hecla, as amended by
an amending agreement dated June 4, 2018 (collectively, the Arrangement
Agreement).
Under the terms of the Arrangement Agreement, Hecla Acquisition
Subco will acquire all of the outstanding Klondex Shares (including Klondex
Shares issued to holders of In-the-Money Klondex Options and Klondex RSUs
pursuant to the Arrangement), and Klondex Shareholders will receive, for each
Klondex Share, consideration as set out in the Plan of Arrangement (the
Arrangement Consideration) consisting of: (i) the equivalent of US$2.47 in
either cash, shares of Hecla common stock (Hecla Shares), or a combination of
cash and Hecla Shares (the Hecla Consideration); plus (ii) 0.125 of a share
(the Havilah Shares) of Havilah Mining Corporation (Havilah), a new company
formed to hold Klondexs Canadian assets.
Who are the Securityholders referred to in the proposal?
The annual and special meeting (the Meeting) has been
scheduled for the holders (Klondex
Shareholders) of common shares
(Klondex Shares) in the capital of Klondex Mines Ltd. (Klondex or the
Company), holders of Klondex Options (Klondex Optionholders), holders of
Klondex Restricted Share Units (Klondex RSU Holders) and holders of Klondex
Deferred Share Units (Klondex DSU Holders), (collectively, the Klondex
Securityholders).
For Internal
Distribution Only
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Page
2
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What will Shareholders receive in the Arrangement?
Under the Arrangement, Klondex Shareholders will be entitled to
receive, for each Klondex Share held: (i) the Hecla Consideration and (ii) the
Havilah Consideration, consisting of 0.125 of a Havilah Share (after giving
effect to the Havilah Share Consolidation). References to Klondex Shareholders
include holders of In-the-Money Klondex Options and Klondex RSUs who receive
Klondex Shares pursuant to the Arrangement.
What does the Hecla Consideration consist of?
Klondex Shareholders, Klondex Optionholders and Klondex RSU
Holders may elect to receive, for each Klondex Share, either:
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(i)
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US$2.47 in cash (subject to proration) (the Cash
Consideration);
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(ii)
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0.6272 of a Hecla Share (subject to proration) (the
Share Consideration); or
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(iii)
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US$0.8411 in cash and 0.4136 of a Hecla Share (the
Combination Consideration).
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Can Securityholders expect to receive upon completion of
the Arrangement the same amount they choose upon election for either the Cash,
Share, or Combination Consideration?
The Cash Consideration and the Share Consideration are subject
to proration.
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Klondex Shareholders, Klondex Optionholders and Klondex
RSU Holders who do not elect, or fail to properly elect, to receive either
the Cash Consideration or the Share Consideration will be deemed to have
elected to receive the Combination Consideration.
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Klondex Shareholders, Klondex Optionholders and Klondex
RSU Holders who elect, or are deemed to elect, to receive the Combination
Consideration will not be subject to proration.
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If all Klondex Shareholders, Klondex Optionholders and
Klondex RSU Holders elect to receive the Cash Consideration or,
alternatively, all Klondex Shareholders, Klondex Optionholders and Klondex
RSU Holders elect to receive the Share
Consideration, then under the proration provisions in the Plan of Arrangement,
each Klondex Shareholder, Klondex Optionholder and Klondex RSU Holder would be
entitled to receive, for each Klondex Share, US$0.8411 in cash and 0.4136 of a
Hecla Share, in addition to 0.125 of a Havilah Share, for each Klondex Share.
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What does the Havilah Consideration consist of?
Under the Arrangement, Klondex Shareholders will be entitled to
receive, for each Klondex Share held, the Havilah Consideration, consisting of
0.125 of a Havilah Share.
Upon completion of the Arrangement, Havilah will hold all of
the legal and beneficial right, title and interest in Klondexs Canadian assets,
including True North and the Bison Manitoba properties, as well as additional
Manitoba and Ontario mineral interests.
Klondex will transfer all of its entire legal and beneficial
right, title and interest in and to the Havilah Property to Havilah in
consideration for the Havilah Shares, following which the Havilah Shares will be
to former Klondex Shareholders.
For Internal
Distribution Only
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Page
3
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Additionally, Hecla will subscribe for Havilah Shares in the
aggregate amount of US$7,000,000, such cash consideration to be contributed to
the stated capital account of Havilah. On completion of the Arrangement, former
Klondex Shareholders will own approximately 86.54% of Havilah and Hecla will own
approximately 13.46% of Havilah.
After completion of the Arrangement, the business and
operations of Havilah will be managed and operated as a
stand-alone
corporation. The principal executive office of Havilah will be located at 1055
West Hastings Street,
Suite 2200, Vancouver, British Columbia, V6E
2E9.
Will Havilah shares be publicly listed?
It is a condition to the completion of the Arrangement that one
of the TSX, the TSXV or the Canadian Securities Exchange conditionally approve
the listing of the Havilah Shares to be distributed under the Arrangement.
Havilah has applied to have the Havilah Shares listed on the TSXV. Listing is
subject to the approval of the TSXV in accordance with its original listing
requirements. The TSXV has not conditionally approved the listing of the Havilah
Shares on the TSXV and there is no assurance that the TSXV will approve the
listing application. There is no present intention to list Havilah Shares for
trading on any national securities exchange in the United States.
Will the Klondex Shares continue to be listed on the TSX
and the NYSE American after the Arrangement?
No. The Klondex Shares will be de-listed from the TSX and the
NYSE American when the Arrangement is completed.
How will the Arrangement benefit Securityholders?
The Klondex Board reviewed and considered a significant amount
of information and considered a number of factors relating to the Arrangement.
The following is a summary of principal reasons for the unanimous recommendation
of the Klondex Board that Klondex Securityholders vote FOR the Arrangement
Resolution:
Significant Premium.
The Hecla Consideration
represents a value of US$2.47 per Klondex Share, which represents a premium of
approximately 59% based on the 30-day VWAP of the Klondex Shares on the NYSE
American on March 16, 2018, the last trading day prior to the announcement of
the Arrangement, and a premium of approximately 72%
based on the closing
price of Klondex Shares on the NYSE American on March 16, 2018. In addition to
the Hecla Consideration, Klondex Shareholders will also receive 0.125 of a
Havilah Share for each Klondex Share held.
Meaningful Ownership in a Stronger Combined Company that
Can Better Maximize the Value of Klondex Assets.
The Arrangement will
provide Klondex Shareholders who receive Hecla Shares in connection with the
Arrangement with exposure to a diversified precious metals producer with
operating mines in Québec, Alaska, Idaho, Mexico and Nevada that has a proven
track record of successfully acquiring and optimizing underground assets, has a
broader asset and commodity base delivering cash flow diversification and risk
mitigation and superior financial strength and flexibility, with a lower cost of
capital, to support development and exploration programs at the Fire Creek Mine,
Hollister Mine and Midas Mine. It is expected that upon completion of the
Arrangement, existing stockholders of Hecla and former Klondex Shareholders will
own approximately 83.8% and 16.2%, respectively, of the outstanding Hecla
Shares.
For Internal
Distribution Only
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Page
4
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Alternatives Considered.
The Independent Committee and
the Klondex Board considered the financing options and other potential
alternatives and strategies available to Klondex if it did not enter into the
Arrangement Agreement and continued with a stand-alone plan, the financial
condition of Klondex, the fact that none of the potential investors that had
been contacted by Klondexs financial advisors appeared to be interested in
making a strategic investment in Klondex in the near-term, that discussions with
these counterparties were not progressing quickly and that none of these
entities had expressed an interest in acquiring all of Klondex, and determined
that entering into the Arrangement Agreement was the best alternative for
Klondex Securityholders and in the best interest of Klondex.
Enhanced Liquidity.
The Hecla Shares receivable under
the Arrangement will provide Klondex Shareholders with enhanced liquidity
compared to Klondex Shares. The Hecla Shares are listed on the NYSE, and Hecla
has significantly greater balance sheet strength, market capitalization and
trading liquidity than Klondex. As at March 16, 2018, Heclas market
capitalization was US$1.5 billion and Klondexs was US$259 million, while
Heclas average daily trading value during 2017 was US$29.1 million on the NYSE,
whereas Klondexs was US$10.3 million on the NYSE American.
Ownership of Havilah Shares.
Klondexs Canadian
assets, including True North, the Bison Manitoba properties as well as
additional Ontario and Manitoba mineral interests, will be transferred to
Havilah and Klondex Shareholders will receive Havilah Shares pursuant to the
Arrangement. In addition, Hecla will subscribe for US$7,000,000 of Havilah
Shares, representing a 13.46% interest in the outstanding common shares of
Havilah, providing important capital for Havilah. The Havilah Shares provide
Klondex Shareholders with continued exposure to Klondexs Canadian assets. It is
a condition to the completion of the Arrangement that one of the TSX, TSXV or
the Canadian Securities Exchange conditionally approve the listing of the
Havilah Shares to be distributed under the Arrangement.
What will I receive under the Arrangement if I am a
Klondex Option, RSU or DSU Holder?
Under the Arrangement:
(i)
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each In-the-Money Klondex Option outstanding immediately
prior to the Effective Time will be deemed to be unconditionally vested
and transferred to Klondex in exchange for that number of Klondex Shares
(rounded down to the nearest whole number) obtained by dividing (i) the
In-the-Money Amount of such option, by (ii) the Company Share Value, while
each Out-of-the-Money Klondex Option will be cancelled without any payment
therefor;
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(ii)
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each Klondex RSU outstanding immediately prior to the
Effective Time will be deemed to be assigned and transferred to Klondex in
exchange for one Klondex Share for each such Klondex RSU; and
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(iii)
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each Klondex DSU outstanding immediately prior to the
Effective Time will be cancelled in exchange for a cash payment equal to
the Company Share Value,.
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Each holder of In-the-Money Klondex Options and/or Klondex RSUs
who, pursuant to the Arrangement, receives Klondex Shares in exchange for their
In-the-Money Klondex Options or Klondex RSUs, as applicable, will, pursuant to
the Arrangement, be entitled to receive the Hecla Consideration and the Havilah
Consideration for each such Klondex Share to the same extent as Klondex
Shareholders (including making an election as to which form of Hecla
Consideration they wish to receive).
For Internal
Distribution Only
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Page
5
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Each Performance RSU will be settled by a cash payment to the
holder thereof on the Effective Date of the Arrangement of an amount determined
by Hecla to be properly due to such holder based on the terms of such
Performance RSU.
What will happen if the Arrangement is not approved by
Securityholders?
Klondex Securityholders will
be asked to consider, and if thought advisable, to approve the Arrangement
Resolution. In order for the Arrangement to become effective, as provided in the
Interim Order and by the BCBCA, the Arrangement Resolution must be approved by:
(a) at least two-thirds (66 2⁄3%) of the votes cast on the Arrangement
Resolution at the Meeting by Klondex Shareholders, present in person or
represented by proxy and entitled to vote at the Meeting; and (b) at least
two-thirds (66 2⁄3%) of the votes cast at the Meeting by Klondex Securityholders
voting together as a single class, present in person or represented by proxy and
entitled to vote at the Meeting above. If Kondex securityholders do not approve
the Arrangement Resolution the Arrangement will not be completed.
Who is Hecla?
Hecla is a U.S.-based precious and base metals mining company
engaged in the exploration, acquisition, development, production and marketing
of silver, gold, lead and zinc. In business since 1891, Hecla is among the
oldest U.S.-based precious metals mining companies and one of the lowest-cost
primary silver producers in North America.
Hecla produces both metal concentrates, which it sells to
smelters and brokers, and unrefined gold and silver precipitate and bullion bars
(doré), which are sold as precipitate and doré, or are further refined before
sale, to refiners and precious metals traders. Hecla has producing precious
metals mining operations in Alaska, Idaho, Québec and Durango, Mexico and
additional development and exploration projects in Alaska, Idaho, Canada and
Mexico.
The Hecla Shares are listed for trading on the NYSE under the
trading symbol HL. The principal executive office of Hecla is located at 6500
North Mineral Drive, Suite 200, Coeur dAlene, Idaho, 83815-9408, United States
of America.
Are Shareholders entitled to Dissent Rights?
The Interim Order and Plan of Arrangement provides Registered
Klondex Shareholders with Dissent Rights in connection with the Arrangement.
What are the Canadian income tax consequences of the
Arrangement?
Information is contained within section 17 of the Circular.
Klondex Shareholders should consult their own tax advisors with respect to their
particular circumstances. In addition, holders of Options, RSUs and DSUs should
consult their own tax advisors with respect to their particular circumstances.
What are the U.S. federal income tax consequences of the
Arrangement?
Information is contained within section 18 of the Circular.
Klondex Securityholders should consult their own tax advisors with respect to
their particular circumstances.
For Internal
Distribution Only
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Page
6
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Should Securityholders send in the Election Document(s)
now?
Yes. It is recommended that: (a) all Registered Klondex
Shareholders complete, sign and return the Letter of Transmittal and Election
Form (printed on white paper), together with accompanying Klondex Share
certificate(s) or DRS Statement, to the Depositary as soon as possible; and (b)
all registered holders of Klondex Options and Klondex RSUs complete, sign and
return the Option/RSU Election Form (printed on grey paper) to the Depositary as
soon as possible.
To make a valid election as to the form of Hecla Consideration
you wish to receive, you must sign and return the applicable Election
Document(s) to the Depositary prior to the July 10, 2018 Election Deadline.
THE BOARD OF
DIRECTORS RECOMMENDS A VOTE
FOR
PROPOSAL 1
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PROPOSAL 2: To consider and, if thought advisable, to pass,
with or without amendment, an ordinary resolution of the Klondex Shareholders,
the full text of which is set forth in Appendix N to the Circular, approving a
share option plan for Havilah Mining Corporation (the Havilah Option Plan
Resolution), all as more particularly set forth in the Circular, provided that
such resolution shall not become effective unless the Arrangement becomes
effective;
Why are Shareholders being asked to approve a Share
Option Plan for Havilah?
At the request of the proposed directors of Havilah, and after
taking into consideration, among other things, the role a stock option plan or
similar share incentive plan plays in the motivation, attraction and retention
of key employees, directors and consultants of Havilah due to the opportunity
offered to them to acquire a proprietary interest in Havilah and after
consultation with its legal counsel, the Klondex Board has unanimously
determined to recommend to Klondex Shareholders that they vote FOR the Havilah
Option Plan Resolution.
THE BOARD OF
DIRECTORS RECOMMENDS A VOTE
FOR
PROPOSAL 2
|
PROPOSAL 3: For Klondex Shareholders to elect directors of
the Company for the ensuing year (or, if the Arrangement Resolution is approved
and the Arrangement is completed, for the period up to the effective time of the
Arrangement);
The Company has fixed the number of directors to be elected at
the Meeting at eight. Each director elected will hold office for the ensuing
year (or, if the Arrangement Resolution is approved and the Arrangement is
completed, for the period up to the Effective Time)
NAME OF NOMINEE
|
DIRECTOR SINCE
|
NAME OF NOMINEE
|
DIRECTOR SINCE
|
Rodney Cooper
|
2012
|
Paul Huet
|
2012
|
Mark Daniel
|
2015
|
William Matlack
|
2012
|
James Haggarty
|
2012
|
Charles Oliver
|
2015
|
Richard J. Hall
|
2014
|
Blair Schultz
|
2012
|
For Internal
Distribution Only
|
Page
7
|
THE BOARD OF
DIRECTORS RECOMMENDS A VOTE
FOR
PROPOSAL 3
|
PROPOSAL 4: For Klondex Shareholders to appoint the auditors
of the Company for the ensuing year and to authorize the directors of the
Company to fix their remuneration;
Why are Shareholders being asked to approve the
appointment of auditors?
PricewaterhouseCoopers LLP (PwC) were first appointed
auditors of the Company effective January 6, 2014 and re-appointed by the
Klondex Shareholders at the 2017 annual and special meeting of Klondex
Shareholders held on May 4, 2017. The Klondex Shareholders will be asked at the
Meeting to vote for the appointment of PwC as auditors until the next annual
meeting of Klondex Shareholders or until a successor is appointed, at a
remuneration to be fixed by the Klondex Board through the Audit Committee.
THE BOARD OF
DIRECTORS RECOMMENDS A VOTE
FOR
PROPOSAL 4
|
PROPOSAL 5: For Klondex Shareholders to consider and, if
deemed appropriate, to pass, with or without variation, a non-binding advisory
resolution of the Klondex Shareholders on the Companys approach to executive
compensation;
Why are Shareholders being asked to vote to approve a
non-binding advisory resolution on the Companys approach to executive
compensation?
The Klondex Board has adopted a policy that provides for an
annual non-binding advisory shareholder vote on the Companys approach to
executive compensation, known as Say on Pay. The Say on Pay policy is designed
to enhance accountability for the compensation decisions made by the Klondex
Board by giving Klondex Shareholders a formal opportunity to provide their views
on the Klondex Boards approach to executive compensation through an annual
non-binding advisory vote.
The Company will disclose the results of the vote as part of
its report on voting results for each annual meeting. The results will not be
binding; the Klondex Board will remain fully responsible for its compensation
decisions and will not be relieved of these responsibilities by the advisory
vote. However, the Klondex Board will take the results into account, as
appropriate, when considering future compensation policies, procedures and
decisions and in determining whether there is a need to modify the level and
nature of their engagement with Klondex Shareholders.
THE BOARD OF
DIRECTORS RECOMMENDS A VOTE
FOR
PROPOSAL 5
|
PROPOSAL 6: For Klondex Securityholders to authorize the
adjournment of the Meeting if necessary or appropriate, including an adjournment
to solicit additional proxies in the event that there are not sufficient votes
at the time of the Meeting or adjournment or postponement thereof to approve the
Arrangement Resolution (the Adjournment Resolution);
Why are Securityholders being asked to approve the
adjournment of the Meeting if necessary or appropriate?
At the Meeting, if there is a quorum but there are insufficient
votes to approve the Arrangement Proposal, the Klondex Board may deem it
necessary to move to adjourn the Meeting to enable the Companys management to
solicit additional proxies. In that event, Klondex Shareholders may be asked to
vote upon all proposals referenced herein other than the Arrangement Resolution.
If the Klondex Securityholders approve this proposal, the
Meeting (and any adjourned session of the Meeting) shall be adjourned and the
Company may use the additional time to solicit additional proxies, including the
solicitation of proxies from Klondex Securityholders that have previously voted
against Arrangement.
For Internal
Distribution Only
|
Page
8
|
THE BOARD OF
DIRECTORS RECOMMENDS A VOTE
FOR
PROPOSAL 6
|
PHONE:
|
To cast your vote by telephone with a proxy
specialist, call the toll-free number found on your proxy card.
Representatives are available to take your voting instructions Monday
through Friday 9:00 a.m. to 10:00 p.m. Eastern Time
|
|
|
TOUCH-TONE:
|
To cast your vote via a
touch-tone
voting line, call the toll-free number and enter the
control
number
found on your proxy card.
|
|
|
INTERNET:
|
To vote via the Internet, go to the website on
your proxy card and enter the
control number
found on the proxy
card.
|
|
|
MAIL:
|
To vote your proxy by mail, check the
appropriate voting box on the proxy card, sign and date the card and
return it in the enclosed postage-paid envelope.
|
Registered Holders
|
Color of proxy
|
|
|
Common Shares
|
Green
|
|
|
Options
|
Pink
|
|
|
RSUs
|
Blue
|
|
|
DSUs
|
Yellow
|
DF King is
mentioned on pages 5 and 41 of the Management Information Circular.
|
For Internal
Distribution Only
|
Page 9
|
Klondex Mines Ltd. (AMEX:KLDX)
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