Note

15:

Acquisitions

Acquisition of Mines Management

September

13,

2016,

we completed the acquisition of Mines Management and its subsidiaries through the merger of a wholly owned subsidiary of ours with and into Mines Management, pursuant to which we acquired all of the issued and outstanding common stock of Mines Management for total consideration of

$52.1

million. The acquired entities hold

100%

ownership of the Montanore project in Northwest Montana, a significant undeveloped silver and copper deposit which we believe provides long-term production growth potential if permitted and developed. Montanore is approximately

miles away from our Rock Creek project acquired through our acquisition of Revett Mining Company, Inc. in

June

2015.

The consideration was comprised of

$4.0

million in cash used to fund Mines Management's operating activities prior to completion of the merger and for settlement of outstanding warrants to purchase shares of Mines Management's common stock, and

$48.1

million in Hecla common stock. In the merger, each outstanding common share of Mines Management was exchanged for

0.2218

of a share of our common stock. Mines Management had

36,498,625

outstanding common shares and outstanding options to purchase

963,079

shares of Mines Management common stock, resulting in

8,309,006

new shares of Hecla stock issued as consideration. The value of Hecla stock issued as consideration was based upon the closing price at the time of consummation of

$5.79

per share.

The following summarizes the preliminary allocation of purchase price to the fair value of assets acquired and liabilities assumed as of the date of acquisition (in thousands):

Consideration:
Cash	$	4,025
Hecla stock issued (8,309,006 shares at $5.79 per share)		48,109
Total consideration	$	52,134
Fair value of net assets acquired:
Assets:
Cash	$	94
Property, plants, equipment and mineral interests		68,038
Restricted cash		1,185
Other assets		329
Total assets		69,646
Liabilities:
Accounts payable and accrued liabilities		2,357
Deferred tax liability		14,031
Non-current reclamation liability		1,124
Total liabilities		17,512
Net assets	$	52,134

The

$68.0

million fair value for "Property, plants, equipment, and mineral interests" is comprised of

$0.8

million for plant and equipment,

$0.1

million for land, and

$67.1

million for mineral interests.

The allocation of purchase price above is considered preliminary, as review by management of the valuation methodologies for mineral interests and the related deferred tax liability has not been finalized.

September

2016,

we issued

181,048

shares of our common stock for payment of approximately

$1.0

million in acquisition-related costs, which are included in

Acquisition costs

on our

Consolidated Statements of Operations and Comprehensive Income (Loss)

The unaudited pro forma financial information below represents the combined results of our operations as if the acquisition had occurred at the beginning of the periods presented. The unaudited pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have occurred if the acquisition had taken place at the beginning of the periods presented, nor is it indicative of future operating results.

	Year Ended December 31,
(in thousands, except per share amounts)	2016		2015
		(unaudited)
Sales of products	$	645,957	$	443,567
Net income (loss)		68,778		(89,806	)
Income (loss) applicable to common shareholders		68,226		(90,357	)
Basic and diluted income (loss) per common share		0.17		(0.24	)

The unaudited pro forma financial information includes adjustments to

eliminate acquisition-related costs totaling

$4.7

million for the year ended

December

31,

2016

which are non-recurring and

reflect the issuance of Hecla stock as consideration in the acquisition and for payment of acquisition costs. A net loss by the acquired entities since the acquisition date of

$32

thousand is included in our net income reported for the year ended

December

31,

2016.

Takeover Bid for Dolly Varden Silver Corporation

June

27,

2016,

we announced a takeover bid for all of the outstanding shares of Dolly Varden Silver Corporation ("Dolly Varden") not owned by us and our affiliates for cash of

CAD$0.69

per share. Dolly Varden owns

100%

of the Dolly Varden historic silver property in northwestern British Columbia, Canada. Our wholly owned subsidiary owns

4,478,087

Dolly Varden shares and warrants to purchase

1,351,762

Dolly Varden shares, representing approximately

18.5%

of Dolly Varden's shares outstanding on a partially diluted basis. Based on Dolly Varden's outstanding shares and options and warrants to acquire Dolly Varden shares, and excluding shares and warrants held by us and our affiliates, total consideration would have been approximately

CAD$13.6

million. In late

July

2016,

we withdrew the bid due to the failure of a required condition precedent to its consummation.

Acquisition of Revett Mining Company, Inc.

June

15,

2015,

we completed the acquisition of Revett through the merger of a wholly owned subsidiary of ours with and into Revett, pursuant to which we acquired all of the issued and outstanding common stock of Revett for total consideration of

$20.1

million. The acquired entities hold

100%

ownership of

two

properties and other interests in north-west Montana, including: the Troy Mine, which is on care-and-maintenance and which we intend to reclaim and close, and the Rock Creek project, a significant undeveloped silver and copper deposit which we believe provides long-term production growth potential if permitted and developed. The consideration was comprised of

$0.9

million in cash used to fund Revett's operating activities prior to completion of the merger and

$19.1

million in Hecla common stock. In the merger, each outstanding common share of Revett was exchanged for

0.1622

of a share of our common stock. Revett had

38,548,989

outstanding common shares, excluding

725,000

shares owned by our wholly-owned subsidiary which were canceled in the merger, resulting in

6,252,646

new shares of Hecla stock issued as consideration. The value of Hecla stock issued as consideration was based upon the closing price at the time of consummation of

$3.06

per share.

The following summarizes the allocation of purchase price to the fair value of assets acquired and liabilities assumed as of the date of acquisition (in thousands):

Consideration:
Cash	$	949
Hecla stock issued (6,252,646 shares at $3.06 per share)		19,133
Total consideration	$	20,082
Fair value of net assets acquired:
Assets:
Cash	$	140
Accounts receivable		137
Inventory - supplies		472
Deferred tax assets		7,193
Property, plants, equipment and mineral interests		17,609
Reclamation insurance		16,800
Other assets		280
Total assets		42,631
Liabilities:
Accounts payable and accrued liabilities		975
Notes payable		4,061
Non-current reclamation liability		17,513
Total liabilities		22,549
Net assets	$	20,082

The

$17.6

million fair value for "Property, plants, equipment, and mineral interests" is comprised of

$4.1

million for plant and equipment,

$4.6

million for land, and

$8.9

million for mineral interests.

The

$17.5

million value for "Non-current reclamation liability" represents the present value of estimated costs for reclamation and closure of the Troy mine. Revett held an environmental risk transfer program ("insurance policy") which would have funded costs incurred prior to the expiration date of

March

29,

2020

for reclamation at the Troy mine up to a maximum limit of

$16.8

million. We therefore included the

$16.8

million "Reclamation insurance" asset above for the fair value of the insurance policy at the time of acquisition. However, in the

third

quarter of

2016,

we reached a settlement on the insurance policy for cash proceeds to us of

$16.0

million. The

$0.7

million difference between the settlement amount and the asset balance prior to settlement was recorded to expense.

	Year Ended December 31,
(in thousands, except per share amounts)	2015			2014
		(unaudited)
Sales of products	$	445,703		$	500,787
Net loss		(89,118	)		(44,099	)
Loss applicable to common stockholders		(89,670	)		(44,651	)
Basic and diluted loss per common share		(0.24	)		(0.12	)

The unaudited pro forma financial information includes adjustments to

eliminate acquisition-related costs totaling

$2.4

million for the year ended

December

31,

2015

which are non-recurring and

reflect the issuance of Hecla stock as consideration in the acquisition. A net loss by the acquired entities since the acquisition date of

$1.7

million is included in our net loss reported for the year ended

December

31,

2015.

Revett’s consolidated statement of operations and comprehensive income for the year ended

December

31,

2014

included a

$54.7

million expense for impairment of property, plant and equipment. Revett recognized the impairment as of

December

31,

2014,

with the estimated fair value of long-lived assets based on the merger agreement between Hecla and Revett. The impairment is not eliminated through an adjustment to the unaudited pro forma condensed combined statement of operations. However, it is a nonrecurring item and is not reflective of the operating results for the combined entities after consummation of the merger.