Last checked at 10 Feb 2009 07:00
9 February 2009
Hochschild Mining responds to announcement released by Minera Andes Inc.
Hochschild Mining plc responds to the announcement released today by Minera Andes Inc ("MAI"), its JV partner at San José.
MAI announced a C$40.0 million private placement with Robert R. McEwen at a price of C$0.33 per share. Hochschild Mining plc believes that MAI shareholders should be made aware that, on 6 February 2009, the following firm proposals were made to the Special Committee of the Board of Directors of MAI.
A) Hochschild would acquire all of the outstanding common shares of MAI through a share transaction (including shares issuable pursuant to outstanding MAI options (the "MAI Shares")) by way of a Plan of Arrangement under the Business Corporations Act (Alberta) (the "Share Transaction"). Hochschild's offer of 0.22 shares of Hochschild for each share of MAI held, which at the closing price on 5 February 2009, implies a value of US$0.50 (C$0.62) for each MAI Share representing a 100% premium. The terms of this proposal would also provide for appropriate adjustments to be made to the terms of MAI warrants held on the date of the Share Transaction; or B) Hochschild would acquire MAI's 49% ownership interest in San José for a cash consideration equal to US$70 million. MAI would retain Los Azules and all other exploration properties. The purchase price represents a cash consideration of approximately C$0.45 per MAI share.
In addition, Hochschild offered to provide Minera Andes an extra ten business days to contribute its pro-rata portion of the cash call due on 17 February, as well as offering short-term bridge financing to Minera Santa Cruz, the joint venture company owned by Hochschild and MAI. This period of time was granted in order to allow Minera Andes the time necessary to obtain financing to meet the cash call and assess the proposals described above.
These firm proposals expire at 5pm London time (12pm Lima time) on 11 February 2009.
_____________________________________________________________________
Enquiries:
Hochschild Mining plc
Isabel Lütgendorf +44 (0)20 7907 2934
Head of Investor Relations
Ignacio Rosado +511 437 6007
Chief Financial Officer
Finsbury
Robin Walker +44 (0)20 7251 3801
Public Relations
About Hochschild Mining plc:
Hochschild Mining plc is a leading precious metals company listed on the London Stock Exchange (HOCM.L for Reuters / HOC LN for Bloomberg) with a primary focus on the exploration, mining, processing and sale of silver and gold. Hochschild has over forty years experience in the mining of precious metal epithermal vein deposits and currently operates five underground epithermal vein mines, four located in southern Peru, one in southern Argentina and one open pit mine in northern Mexico. Hochschild also has over sixteen long-term prospects throughout the Americas.
Certain statements in this announcement are or may be forward looking statements regarding Hochschild Mining plc's financial position and results, business strategy, production, plans and objectives. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which are beyond the Group's control. As a result, the Group's actual future financial condition, performance and results may differ materially from the plans, goals and expectations set forth in such forward-looking statements. Except as required by applicable law or regulation, the Group does not undertake any obligation to update or change any forward-looking statements contained in this announcement or any other forward-looking statement it may make.