Last checked at 3 Dec 2010 07:00
______________________________________________________________________
3 December 2010
Disposal of remaining 6% stake in Lake Shore Gold
Hochschild Mining plc ("Hochschild" or "the Company") announces today that it has entered into an agreement to dispose of its remaining 6% stake in Lake Shore Gold Corp ("Lake Shore Gold") at a net price of C$3.70 per common share (the "Transaction"). The Transaction, which is subject to shareholder approval, represents a 37% gain on the average purchase price of C$2.70 per share. Total net proceeds of C$79,701,670.40 million will primarily be used to support the Company's organic growth strategy through investment in its extensive and rapidly expanding exploration pipeline, including funding Azuca and Inmaculada to production.
Under the terms of the agreement RBC Dominion Securities Inc. will purchase the remaining 21,540,992 common shares of Lake Shore Gold currently held by Hochschild. The Transaction is subject to shareholder approval at an Extraordinary General Meeting, details of which will be provided in a circular to be despatched in due course. On completion of the Transaction, Hochschild will cease to have an interest in Lake Shore Gold.
Ignacio Bustamante, CEO of Hochschild said:
"Today's transaction represents another important step for Hochschild and supports our ongoing strategy of delivering organic growth through exploration. Since we invested in Lake Shore Gold in 2007, attracted by its significant geological potential, we have realised a very profitable return and we will primarily apply these funds to progress our advanced projects Azuca and Inmaculada as well as to secure and develop early stage, highly value accretive projects which have significant upside potential and a clear path to control."
As at 30 September 2010, Lake Shore Gold's total assets were C$1.1 billion. For the nine months ended 30 September 2010, Lake Shore Gold reported a net loss for the period of C$7.4 million.*
For further details about Lake Shore Gold and for information about key individuals important to the business, please visit www.lsgold.com.
*Extracted from Lake Shore Gold's unaudited Third Quarter Report 2010.
___________________________________________________________________________
Enquiries:
Hochschild Mining plc
Jane Flynn +44 (0)20 7907 2934
Investor Relations Manager
Finsbury
Faeth Birch +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 a vision is to become a mid-tier gold producer through the successful exploration, development and operation of its properties in the Abitibi Greenstone belt in Northern Ontario and Quebec, starting with its strong base in Timmins, Ontario. In Timmins, the company is currently carrying out pre-production development at the Timmins Mine, where it is using both a shaft and ramp to mine the Timmins deposit, and has intersected mineralization underground at the adjacent Thunder Creek deposit, which is being developed using the same infrastructure and as part of the Timmins Mine project. Progress is also being made with an underground advanced exploration program at its Bell Creek Mine, located on the east side of the City of Timmins, which is moving forward to become the company's second mining operation in the Timmins Gold Camp. The company's wholly owned mill (located on the Bell Creek property) has been refurbished and is currently operating at 2,000 tonnes per day. The company continues to invest aggressively in exploration primarily in the Timmins Gold Camp and in its other properties in Northern Ontario and Quebec, and owns a large land position in Mexico. The company's common shares trade on the Toronto Stock Exchange under the symbol LSG.
Merrill Lynch International is acting exclusively for Hochschild and no-one else in connection with the Transaction and will not regard any other person as its client in relation to the Transaction and will not be responsible to anyone other than Hochschild for providing the protections afforded to customers of Merrill Lynch International, or providing advice in connection with the Transaction or any other transaction or arrangement referred to in this announcement.
Forward looking statements
This announcement includes statements that are forward-looking in nature. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Hochschild to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Any information contained in this announcement on the price at which shares or other securities in Hochschild have been bought or sold in the past, or on the yield on such shares or other securities, should not be relied upon as a guide to future performance.