According to the Complaint, Klondex Mines Ltd. ("Klondex" or the "Company"), together with its subsidiaries, acquires, explores, develops, and produces mineral properties in the United States and Canada. It primarily explores for gold and silver deposits.
On March 29, 2018, Klondex and Hecla Mining Company ("Hecla" or "Parent") issued a press release announcing the Proposed Transaction, in which Hecla will acquire all the outstanding shares of Klondex.
The terms of the Proposed Transaction were memorialized in a March 19, 2018, filing with the Securities and Exchange Commission (“SEC”) on Form 8-K attaching the definitive Agreement and Plan of Merger (the “Merger Agreement”). Under the terms of the Merger Agreement, Klondex will become an indirect wholly-owned subsidiary of Hecla, and Klondex stockholders will receive approximately $2.47 in cash for each share of Klondex common stock they own.
The Complaint alleges that Defendants breached their fiduciary duties to the Company’s stockholders by agreeing to the Proposed Transaction which undervalues Klondex and is the result of a flawed sales process. The Complaint further alleges that Defendants caused to be filed the materially deficient Preliminary Proxy on May 23, 2018 with the United States Securities and Exchange Commission (“SEC”) in an effort to solicit stockholders to vote their Klondex shares in favor of the Proposed Transaction.
On December 18, 2018, the Court issued an Order consolidating cases and appointing Lead Plaintiff and Counsel.