HOC Hochschild Mining Plc

 

TIDMHOC 
 
RNS Number : 7931C 
Hochschild Mining PLC 
19 November 2009 
 

 
 
 
 
________________________________________________________________________ 
 
 
19 November 2009 
Hochschild increases stake in Lake Shore Gold to 36% via a private placement 
 
 
  *  Hochschild acquires 19.2 million shares in Lake Shore Gold via a private 
  placement 
  *  Increases Hochschild's stake in Lake Shore Gold from 32% to 36% 
  *  Purchase demonstrates continued delivery of M&A strategy following Hochschild's 
  successful capital raising in early October 2009 
 
Hochschild Mining plc ("Hochschild") is pleased to announce that it has entered 
into an agreement with Lake Shore Gold Corp. ("Lake Shore Gold") (TSX:LSG) 
to increase its investment from 32% to 36% (on a fully diluted basis) by way of 
a private placement. The Company will acquire 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, representing a 10% premium over the reference closing price on 
17 November 2009 of C$4.02. 
 
 
Today's announcement 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$1.3 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 today's 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. 
The transaction is expected to close within the next few days. 
 
 
Miguel Aramburú, Chief Executive of Hochschild Mining plc, commented: 
 
 
"Today's announcement demonstrates continued delivery of our acquisition 
strategy following our capital raising last month. We are enthusiastic about the 
long term potential of Lake Shore Gold which is expecting to build production to 
upwards of 350,000 ounces of gold annually over the next several years. Since 
our initial investment in the company in February 2008, Lake Shore Gold has 
grown significantly and rapidly moved towards production with impressive targets 
and an aggressive exploration programme. We will continue to invest in high 
quality assets which maximise value for our shareholders in the long-term as 
well as offering exciting prospects in the short-term." 
 
 
As at 30 September 2009, Lake Shore Gold's total assets were C$336,809,000. For 
the nine months ended 30 September 2009, Lake Shore Gold reported a net loss for 
the period of C$5,066,000.* 
 
 
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 2009, prepared 
in accordance with Canadian GAAP. 
 
 
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. 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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