Completion of private placement in LSG
December 07 2009 - 1:36PM
UK Regulatory
TIDMHOC
RNS Number : 7349D
Hochschild Mining PLC
07 December 2009
Completion of private placement in Lake Shore Gold
Further to its announcement on 19 November 2009, Hochschild Mining plc
("Hochschild") is pleased to announce that it has completed the transaction to
increase its investment in Lake Shore Gold from 32% to approximately 36% (on a
fully diluted basis) by way of a private placement. The Company has acquired
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.
The transaction 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$1.2 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 the 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.
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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