Last checked at 13 Feb 2009 07:00
12 February 2009
Hochschild Mining extends the deadline of its offer to Minera Andes
Hochschild announces that, further to its press release of 9 February 2009, it has agreed to extend the deadline of its proposals to the Board of Minera Andes Inc ("MAI"), to purchase either the whole company or MAI's 49% interest in Minera Santa Cruz, the joint venture company owned by Hochschild and MAI. The offer is now open for acceptance until 10pm GMT on 13 February 2009. The terms of the offer remain the same and are detailed below.
In addition to its short-term bridge financing to Minera Santa Cruz and MAI, Hochschild has also offered additional financial relief to MAI, should MAI be prepared to proceed with either of the proposals.
As announced in its press release of 2 February 2008, MAI requires funding to meet its financial obligation under a bank loan as well as to cover a cash call of US$11.3 million by Minera Santa Cruz which will be used to finance the cash needs of the San José project.
The cash call was required from both Hochschild and MAI to cover a cash flow deficit created by (i) a furnace problem at San José that impacted production and thus cash flow for several days (ii) a delay in ramping up the plant to the expanded capacity of 1,500 tpd (iii) a delay in the reimbursement of VAT expenses by the Argentinean Government and (iv) the significant decrease in precious metals prices in the last quarter of 2008. Hochschild has already made its cash contribution and MAI now has until 3 March 2009 to contribute its share of the funding.
Notes to editors
On 9 February 2009 MAI announced a C$40.0 million private placement with Robert R. McEwen at a price of C$0.33 per share. Following this, Hochschild Mining made an announcement to inform MAI shareholders that, on 6 February 2009, the following firm proposals were made to the Special Committee of the Board of Directors of MAI. These firm proposals, shown below, will now expire at 10pm GMT on 13 February 2009.
"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. 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.
| Enquiries: | ||
| Hochschild Mining plc Isabel Lütgendorf Head of Investor Relations | + 44 (0)20 7907 2934 | |
| Ignacio Rosado Chief Financial Officer | + 511 437 6007 | |
| Finsbury Robin Walker Public Relations | + 44 (0)20 7251 3801 |
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.