Last checked at 13 Feb 2009 18:10
13 February 2009
Hochschild Mining confirms participation in Lake Shore Gold financing
Hochschild Mining plc ("Hochschild") is pleased to announce its participation in the financing of its strategic alliance partner, Lake Shore Gold Corp. ("Lake Shore Gold"). Lake Shore Gold has entered into a bought-deal financing agreement with a syndicate of underwriters to raise approximately C$60 million. Hochschild has agreed to a commitment of approximately C$22 million and, in addition, has the right to participate in its pro-rata share of any over allotments. Hochschild's commitment will be funded entirely from existing cash. The transaction is expected to close in early March 2009 and is subject to TSX and other customary regulatory approvals.
Proceeds from the financing, which is fully underwritten, will be used for the advancement of Lake Shore Gold's mineral projects, including the Timmins project, and also for other exploration and general corporate purposes. On completion of the transaction, Hochschild's ownership of Lake Shore Gold will be maintained at 40%.
Miguel Aramburú, CEO of Hochschild Mining plc, commented:
"We continue to demonstrate our commitment to our partners by contributing approximately C$22 million in this fully underwritten financing arrangement. We are firm supporters of Lake Shore Gold, which is due to produce up to 30 koz ounces of gold in 2009, and remain extremely optimistic about the company's growth profile."
As at 30 September 2008, Lake Shore Gold's total assets were C$274,150,025. For the nine months ended 30 September 2008, Lake Shore Gold reported a net loss for the period of C$3,202,637.*
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 2008, prepared in accordance with Canadian GAAP.
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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.
About Lake Shore: Lake Shore Gold Corp. is a mineral development and exploration company that is moving towards gold production through its 100%-owned Timmins project, which has a 1.2 million ounce reserve (uncut) and where the Company is sinking a shaft and driving a ramp to access shallow mineralization. The Company has also refurbished its wholly owned Bell Creek mill, which it acquired in December 2007, and has a number of prospective exploration properties in Northern Ontario and Quebec. Lake Shore Gold's common shares trade on the Toronto Stock Exchange under the symbol LSG.
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.