TIDMHOC
RNS Number : 6275Q
Hochschild Mining PLC
08 November 2012
________________________________________________________________________
8 November 2012
Hochschild Boosts Project Pipeline With Recommended All-Cash
Offer For Andina Minerals
Summary
-- Hochschild makes C$0.80 per share all-cash offer for all of
the issued and outstanding common shares of Andina Minerals
Inc.
-- Andina's Board has unanimously recommended that shareholders
accept the Hochschild offer
-- Andina's Directors, senior management and a significant
shareholder have entered into lock-up agreements with Hochschild
agreeing to support the transaction, representing approximately 14%
of Andina's common shares outstanding
-- Acquisition adds to Hochschild's extensive project pipeline,
with assets located in Chile, one of the Company's key targeted
mining jurisdictions
-- Acquisition is in line with Hochschild's stated strategy of
pursuing highly value accretive, early stage opportunities with
strong geological conditions and full control
Hochschild Mining plc ("Hochschild" or "the Company") is pleased
to announce a recommended cash offer of C$0.80 per share for all of
the issued and outstanding common shares of Andina Minerals Inc.
("Andina"). The equity value of the Hochschild offer is
approximately C$103 million on a fully-diluted basis and represents
a premium of approximately 106% to the 20-day VWAP for Andina
common shares for the period ending 7 November 2012 on the TSX
Venture Exchange ("TSXV").
Andina owns the Dorado Gold Deposit ("Dorado"), located at the
Volcan Gold Project in the prolific Maricunga gold belt in Chile as
well as a 49% interest in Hochschild's Encrucijada project close to
Dorado and a 50% share in Pampa Buenos Aires, a gold and silver
property in Northern Chile.
In February 2011, Andina published details of a Pre-Feasibility
Study carried out on the Dorado deposit disclosing initial Proven
and Probable mineral reserves of 6.6 million ounces of gold.
Hochschild intends to carry out extensive technical and geological
evaluation of the deposit over a significant period of time and
consequently during this process will re-classify the reported
reserves as resources. As reported in Andina's February 2011
Pre-Feasibility Study, the project has the following mineral
resources:
Classification Total In-Pit Resource
====================== ====================================================
Tonnes Gold grade (g/t Contained Gold Ounces
Au)
====================== ============ ===============
Measured 105,918,000 0.738 2,511,000
Indicated 283,763,000 0.698 6,367,000
Measured & Indicated 389,681,000 0.709 8,878,000
Inferred 41,553,000 0.502 671,000
---------------------- ------------ --------------- ---------------------
(1.) All quantities are rounded to the appropriate number of
significant figures, consequently sums may not add due to
rounding.
(2.) The estimate of mineral resources may be materially
affected by environmental, permitting, legal, title, taxation,
socio-political, marketing or other relevant issues.
(3.) The quantity and grade of reported Inferred Resources in
this estimation are conceptual in nature and there has been
insufficient exploration to define these Inferred Resources as an
Indicated or Measured Mineral Resource. It is uncertain if further
exploration will result in the upgrading of the Inferred Resources
into an Indicated or Measured Mineral Resource category.
(4.) The Dorado mineral resource estimate is effective as of 16
September 2010.
In addition, the Ojo de Agua area, close to the Dorado deposit,
hosts an inferred resource of 18.6 million tonnes grading 0.85 g/t
Au for total contained gold content of 510,000 ounces at a cut-off
grade of 0.5 g/t (October 2008) at the Andrea and Florencia
zones.
In July 2012, Andina announced that it had submitted an
Environmental Impact Assessment ("EIA") for the Dorado Gold Project
to the Chilean environmental authority, SEA ('Servicio de
Evaluacion Ambiental'), who are currently evaluating the submission
via SEIA ('Sistema de Evaluacion de Impacto Ambiental'). The next
stage in the permitting process will be the receipt of an "ICSARA",
being the formal document that contains the observations, comments,
requests for clarification and/or modifications made by the
regulatory authorities. Furthermore, the public consultation
coordinated by SEA will, under Chilean Law, continue as part of the
ongoing process.
Ignacio Bustamante, Chief Executive, commented:
"The acquisition of Andina Minerals provides Hochschild with
further long-term optionality as well as geographical balance
within our extensive project pipeline with its principal asset,
Dorado, being located in one of our preferred mining-friendly
jurisdictions in the Americas. Although we recognise the challenges
associated with the project, we expect to conduct further
substantial geological and technical evaluation work on the deposit
and are confident that our experienced geological and operational
teams will develop its strong potential. Despite this transaction
representing approximately 4% of Hochschild's market
capitalisation, it could ultimately deliver significant
growth."
Terms of the Transaction
-- Andina shareholders to receive C$0.80 per common share in
cash
-- Transaction equity value of approximately C$103 million
-- Represents a 106% premium based on the 20-day VWAP of Andina
common shares on the TSXV for the period ending 7 November 2012
-- Completion of the transaction is subject to customary
conditions including acceptances from 66.67% of Andina's
shareholders and the absence of a material adverse change with
respect to Andina
-- A Support Agreement provides for customary provisions,
including a non-solicitation clause, right to match covenants in
favour of Hochschild and provides for the payment of a C$4.1
million termination fee to Hochschild under certain
circumstances
-- The transaction will be carried out as a take-over bid and,
as such a take-over bid circular and related documents will be
mailed to Andina shareholders on or before 21 November 2012
-- Andina's Directors, senior management and a significant
shareholder have entered into lock-up agreements with Hochschild
agreeing to support the transaction, representing approximately 14%
of Andina's common shares outstanding
-- Hochschild has also agreed to provide Andina with a loan of
C$1.75 million for general purposes until the transaction closes,
which is to be repaid by Andina if the acquisition is not
completed
Andina Board Recommendation
The Board of Directors of Andina has unanimously recommended
that holders of Andina common shares vote in favour of the
transaction.
__________________________________________________________________
Enquiries:
Hochschild Mining plc
Charles Gordon +44 (0)20 7907 2934
Head of Investor Relations
RLM Finsbury
Charles Chichester +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 almost fifty years' experience in
the mining of precious metal epithermal vein deposits and currently
operates four underground epithermal vein mines, three located in
southern Peru and one in southern Argentina. Hochschild also has
numerous long-term projects throughout the Americas.
About Andina Minerals Inc.
Andina Minerals' 100%-owned Dorado Gold Project is located in
Chile's Atacama Region, approximately 120km east of Copiapo. The
property is strategically located in the prolific Maricunga gold
belt, which hosts a number of important gold deposits, including
the Maricunga gold mine (Kinross), the La Coipa mine (Kinross), the
Cerro Casale deposit (Kinross/Barrick), and the Lobo-Marte deposit
(Kinross).
Forward looking Statements
This announcement contains certain forward looking statements
which may relate to matters such as the business, strategy,
investments, production, major projects and their contribution to
expected production and other plans of Hochschild Mining plc and
its current goals, assumptions and expectations relating to its
future financial condition, performance and results.
Forward-looking statements include, without limitation,
statements typically containing words such as "intends", "expects",
"anticipates", "targets", "plans", "estimates" and words of similar
import. By their nature, forward looking statements involve risks
and uncertainties because they relate to events and depend on
circumstances that will or may occur in the future. Actual results,
performance or achievements of Hochschild Mining plc may be
materially different from any future results, performance or
achievements expressed or implied by such forward looking
statements. Factors that could cause or contribute to differences
between the actual results, performance or achievements of
Hochschild Mining plc and current expectations include, but are not
limited to, legislative, fiscal and regulatory developments,
competitive conditions, technological developments, exchange rate
fluctuations and general economic conditions. Past performance is
no guide to future performance and persons needing advice should
consult an independent financial adviser.
The forward looking statements reflect knowledge and information
available at the date of preparation of this announcement. Except
as required by the Listing Rules and applicable law, Hochschild
Mining plc does not undertake any obligation to update or change
any forward looking statements to reflect events occurring after
the date of this announcement. Nothing in this announcement should
be construed as a profit forecast.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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