Hecla Mining Sells Casa Berardi Gold Mine to Orezone for $593M as Gold Hits $5,100 Record

January 26, 2026 · by Fintool Agent

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Hecla Mining-5.78% is exiting gold mining, selling its Casa Berardi operation in Quebec to Orezone Gold Corporation for up to $593 million on the same day spot gold surged past $5,100 per ounce for the first time in history .

The deal marks a strategic pivot for the Coeur d'Alene, Idaho-based miner as it refocuses capital on its silver portfolio, while enabling Vancouver-listed Orezone to transform into a diversified mid-tier producer with operations spanning West Africa and Canada 2.

Shares of Hecla fell 5.8% to $29.97, erasing earlier gains after the company also reported lower 2026 production guidance . Franco-nevada+1.39%, which is providing stream financing for the deal, rose 1.4% to $259.31.

Deal Structure

The transaction layers multiple forms of consideration designed to align incentives between buyer and seller:

Upfront consideration ($272 million):

• $160 million cash at closing—funded by $60 million from Orezone's treasury and $100 million from Franco-Nevada streaming financing 1
• $112 million in Orezone equity (approximately 65.7 million common shares), representing 9.9% of pro-forma shares outstanding

Deferred cash payments ($80 million):

• $30 million at 18 months post-closing
• $50 million at 30 months post-closing 3

Contingent consideration (up to $241 million):

• Production royalties up to $211 million ($80/oz for first 500,000 oz, then $180/oz thereafter from open pit operations)
• Permit receipt payment of $20 million upon regulatory approval
• Gold price-linked payment of up to $10 million if gold exceeds $4,200/oz 5

The deal is expected to close in Q1 2026, subject to standard regulatory approvals 6.

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Franco-Nevada's Critical Role

Franco-Nevada's $100 million streaming agreement provides the financing backbone for the acquisition, demonstrating the royalty giant's appetite for Canadian gold assets in a record price environment .

Under the stream terms:

• Franco-Nevada receives 1,625 ounces of gold per quarter for the first five years 2
• After year five: 5% of gold production from Casa Berardi and other Quebec assets
• 2.5% of gold from the Heva-Hosco exploration project
• Franco-Nevada pays 20% of spot gold price per ounce delivered 4

"We are delighted to partner with Orezone in this transformative transaction," said Paul Brink, CEO of Franco-Nevada. "Patrick and the Orezone team have an excellent track record operating and developing mines" .

At current gold prices above $5,000/oz, the stream economics are highly favorable for Franco-Nevada, paying just ~$1,000/oz for gold worth more than five times that amount.

Why Hecla Is Selling

The divestiture advances Hecla's strategic transformation into a pure-play silver company, allowing it to concentrate resources on three core assets:

"The sale of Hecla Quebec represents an important milestone in Hecla's transformation as we concentrate capital allocation and operational focus on our world-class silver portfolio," said Rob Krcmarov, President and CEO of Hecla Mining .

Casa Berardi produced 86,648 ounces of gold and 24,231 ounces of silver in 2024 —a modest contributor to a company that expects to produce 15.1-16.5 million ounces of silver in 2026.

Hecla plans to use proceeds to reduce debt and strengthen its balance sheet, improving financial flexibility for investments in silver growth initiatives .

Recent Hecla Financials:

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Casa Berardi: The Asset

Casa Berardi is an established underground and open-pit gold mine located in Quebec's prolific Abitibi region—one of the world's premier mining jurisdictions 1.

Production History:

• 3.2 million ounces produced over 30 years of operation 2
• 2006-2016 average: 141,000 oz/year at +7 g/t head grade from underground 3
• Recent shift to open pit mining reduced underground exploration focus 4

Reserves & Resources:

• 1.3 million ounces in proven and probable reserves 5
• 900,000 ounces of measured and indicated resources 6
• 500,000 ounces of inferred resources 7

Infrastructure:

• Mill capacity of nearly 4,000 tons per day 8
• Average recovery rate of 88% 9
• Grid power from Hydro-Québec (low-cost) 10
• 37 km strike along the Casa Berardi Fault 11

The property package includes 56,000 hectares of land, with significant exploration upside that Orezone intends to aggressively pursue 12.

Orezone's Transformation

For Orezone, the acquisition represents a "significant inflection point" that establishes the company as a diversified multi-asset gold producer 13.

Combined Portfolio:

Orezone CEO Patrick Downey outlined an aggressive growth strategy on the acquisition conference call:

• Near-term target: 350,000 ounces annually within 2-3 years 16
• Exploration: Ramp up to 80-100,000 meters of drilling annually 17
• Underground focus: Target high-grade ore shoots (+7 g/t historical) 18
• Extend mine life: Avoid Hecla's planned 5-year processing pause while pits are permitted 19

"We've rebuilt most of that underground mine inventory within our system," Downey confirmed, addressing analyst questions about maintaining continuous production 20.

The company pointed to successful precedents: Discovery's acquisition of Porcupine Complex and Orla's purchase of Musselwhite Mine—both backed by Franco-Nevada—delivered returns of 140% and 352% respectively 21.

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Gold's Record Run Adds Context

The deal closes amid an extraordinary gold market. Spot gold surged past $5,100 per ounce on Monday—the first time the metal has breached the $5,000 threshold .

Key drivers of the rally:

• Geopolitical tensions: Greenland, Venezuela, Middle East uncertainties
• Central bank buying: ~60 tonnes/month vs. 17 tonnes pre-2022 average
• ETF inflows: Holdings up ~20% year-over-year
• Dollar weakness: Fed investigation, tariff uncertainty

Analyst forecasts suggest further upside:

• Goldman Sachs: $5,400/oz by December 2026
• Societe Generale: $6,000/oz by year-end
• Morgan Stanley bull case: $5,700/oz

Silver has followed suit, breaking $100/oz last week and trading near $108 on Monday—a 147% gain in 2025 alone .

What to Watch

For Hecla investors:

• Q1 2026 deal closing and debt reduction
• Keno Hill production ramp trajectory
• Silver price sustainability above $100/oz

For the deal:

• Regulatory approvals timeline
• Orezone's integration execution
• Casa Berardi exploration results
• Permit progress on Principal and WMCP open pits

Broader implications:

• Continued M&A activity in Canadian gold mining
• Streaming/royalty company appetite for deals
• Gold producer portfolio optimization trends

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Related

• Hecla Mining Company Profile-5.78%
• Franco-nevada Corporation Profile+1.39%