Last checked at 7 Dec 2009 18:36
Completion of private placement in Lake Shore Gold
Further to its announcement on 19 November 2009, Hochschild Mining plc ("Hochschild") is pleased to announce that it has completed the transaction to increase its investment in Lake Shore Gold from 32% to approximately 36% (on a fully diluted basis) by way of a private placement. The Company has acquired 19.2 million common shares using existing cash for a total consideration of C$85 million or an average price of C$4.43 per share.
The transaction demonstrates Hochschild's ability to deliver on its strategy following the US$260 million capital raising undertaken in October 2009, which strengthened the Company's balance sheet and provided the funds for further acquisition opportunities.
Since 2008, Hochschild has invested a total of C$343 million in its 36% stake in Lake Shore Gold at an average price of C$2.68 per share. Hochschild's investment to date reflects its confidence in the significant production potential and long-term growth of Lake Shore Gold, which has a current market capitalisation of approximately C$1.2 billion.
On 6 November 2009, Lake Shore Gold completed its business combination with WTM creating the new large-scale, wholly-owned Timmins West Gold Mine Complex. Lake Shore Gold has announced a production target of 100,000 ounces of gold in 2010, building production over the following three years to upwards of 350,000 ounces annually over the next several years and accelerating its development as Canada's next mid-tier gold producer.
The proceeds from the private placement will be used by Lake Shore Gold to advance its key projects which include bringing the Timmins Mine to commercial production over the next 12 months and completing the expansion of the Bell Creek Mill to 3,000 tonnes per day as well as to increase its exploration spend.
Enquiries:
Hochschild Mining plc
Isabel Lütgendorf +44 (0)20 7907 2934
Head of Investor Relations
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 / HOC LN) 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 four underground epithermal vein mines, three located in southern Peru, one in southern Argentina and one open pit mine in northern Mexico. Hochschild also has numerous long-term prospects throughout the Americas.
About Lake Shore Gold
Lake Shore Gold is a rapidly growing mining company with large land positions on the west and east-sides of the Timmins gold mining camp. The Company is currently carrying out an underground advanced exploration program at its 100%-owned Timmins Mine project, where it has both a shaft and a ramp, and is commencing advanced exploration at the adjacent Thunder Creek property. The Bell Creek Mill, located on the east side of Timmins, has been refurbished to a capacity of 1,500 tonnes per day. The Company is also making progress with an underground advanced exploration program at its Bell Creek Complex, including the Bell Creek Mine, Schumacher and Vogel properties, which is moving forward to become the Company's second mining operation in the Timmins Camp. The Company continues to invest aggressively in exploration primarily in Timmins and in select other areas of Northern Ontario and Quebec, and owns a large land position in Mexico. The Company's common shares trade on the TSX under the symbol LSG. Ignacio Rosado, Chief Financial Officer and Ignacio Bustamante, Chief Operating Officer of Hochschild Mining plc are board members of Lake Shore Gold.
Forward looking statements:
The statement in this press release relating to the advancement and development of Lake Shore Gold's Timmins West project is a forward looking statement within the meaning of securities legislation. The statement is based on the public disclosure of Lake Shore Gold, dated 19 November 2009, which is available on SEDAR at www.sedar.com under Lake Shore Gold, and is subject to the statements by Lake Shore Gold about such forward looking statements and the assumptions and risks associated with it.