Last checked at 27 Aug 2009 17:35
27 August 2009
Lake Shore Gold Corp. and West Timmins agree to business combination
The board of Hochschild Mining plc ("Hochschild") notes the recent announcement by Lake Shore Gold Corp ("Lake Shore Gold") of a definitive business combination agreement under which Lake Shore Gold would acquire all of the outstanding common shares of West Timmins Mining Inc. ("WTM"), and is fully supportive of the transaction.
Under terms of the agreement, which is subject to shareholder approval, WTM shareholders are to receive 0.73 Lake Shore Gold shares per WTM share, valuing WTM at approximately C$319 million.
The transaction will create the new large-scale, wholly-owned Timmins West Gold Mine Complex on the western Timmins mining trend, an extension of the world class Timmins mining trend where approximately 70 million ounces of gold have been produced over the last century. The Timmins West Gold Mine Complex will consist of Lake Shore Gold's adjacent 100%-owned Timmins Mine, with existing mine infrastructure, the Thunder Creek Joint Venture, where high-grade intercepts have been reported within 800 metres of the Timmins shaft, and an extensive land package of adjacent exploration properties, giving Lake Shore Gold a dominant position in this highly prospective area.
Hochschild currently owns 40% of Lake Shore Gold. The Board of Lake Shore Gold has committed to look at ways in which Hochschild can return to a 40% shareholding in the enlarged company. Hochschild will evaluate the merits of these and will make further communications if and when appropriate.
Eduardo Hochschild, Chairman of Hochschild Mining says:
"As Lake Shore Gold's largest shareholder we are delighted with the proposed business combination and are fully supportive of the transaction. This is a positive step for both companies and accelerates Lake Shore's development as Canada's next mid-tier gold producer. With impressive production targets and an aggressive exploration programme, this synergistic combination will create a wholly-owned mining complex with the potential for large-scale, long life operations."
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
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