TIDMHOC
RNS Number : 5388D
Hochschild Mining PLC
26 June 2019
___________________________________________________________________________
Report on Payments to Governments 2018
Introduction
This Report provides an overview of the payments to governments
made by Hochschild Mining PLC and its subsidiaries (hereinafter
referred to as "Hochschild") in 2018 as required under the UK's
Report on Payments to Governments Regulations 2014 (as amended)
(the "UK Regulations"). The UK Regulations apply to large UK
incorporated companies like Hochschild that are involved in the
exploration, prospection, discovery, development and extraction of
minerals. This Report is also intended to satisfy the requirements
of the Disclosure Guidance and Transparency Rules of the Financial
Conduct Authority in the United Kingdom.
Basis for preparation
Legislation: This Report is prepared in accordance with the UK
Regulations.
Reporting entities: This Report includes payments to governments
made by Hochschild Mining PLC and its subsidiary undertakings
("Hochschild").
Activities: Payments made by Hochschild to governments arising
from activities involving the exploration, prospection, discovery,
development and extraction of minerals ("extractive activities")
are disclosed in this Report. For a fully integrated project, which
does not have an interim contractual cut off point where a value
can be attached or ascribed separately to the extractive activities
and to other processing activities, payments to governments will
not be artificially split but disclosed in full.
Government: Government includes any national, regional or local
authority of a country, and includes a department, agency or entity
that is a subsidiary of a government.
Project: Payments are reported at project level except that
payments that are not attributable to a specific project or are in
respect of obligations imposed at entity level are reported by
entity. Project is defined as operational activities which are
governed by a single contract, licence, lease, concession or
similar legal agreement, and form the basis for payment liabilities
with a government. If such agreements are substantially
interconnected, those agreements are to be treated as a single
project. "Substantially interconnected" means forming a set of
operationally and geographically integrated contracts, licences,
leases or concessions or related agreements with substantially
similar terms that are signed with a government giving rise to
payment liabilities. Such agreements can be governed by a single
contract, joint venture or other overarching legal agreement.
Indicators of integration include, but are not limited to,
geographic proximity, the use of shared infrastructure and common
operational management.
Payment: Of the types of payments required to be reported on
under the UK Regulations, the payments made by Hochschild in 2018
fall within the following categories:
-- Taxes: These are taxes paid by Hochschild on its income,
profits or production (which include resource severance tax),
including those settled by a government on behalf of Hochschild
under a tax-paid concession. In this year's report, the Special
Mining Tax and the Modified Mining Royalty (which are calculated
with reference to operating profit) have been included within
"Taxes" which is consistent with the Group's financial reporting.
For further information, please refer to Notes 13 and 34 to
Hochschild's 2018 Consolidated Financial Statements. Payments are
reported net of refunds. Consumption taxes, personal income taxes,
sales taxes, property and environmental taxes are excluded.
-- Royalties: These are payments for the rights to extract
mineral resources, typically at set percentage of revenue less any
deductions that may be taken.
-- Licence fees, rental fees, entry fees and other
considerations for licences and/or concessions ("Fees"): These are
fees and other sums paid as consideration for acquiring a licence
for gaining access to an area where extractive activities are
performed. Administrative government fees that are not specifically
related to the extractive sector, or to access to extractive
resources, are excluded. Also excluded are payments made in return
for services provided by a government.
OTHER
Operatorship: When Hochschild makes a payment directly to a
government arising from a project, regardless of whether Hochschild
is the operator, the full amount paid is disclosed even where
Hochschild as the operator is proportionally reimbursed by its
non-operating venture partners through a partner billing process
(cash-call).
Cash and in-kind payments: Payments are reported on a cash
basis. There were no in-kind payments made in respect of the
reporting year.
Materiality Level: For each payment type, total payments below
GBP86,000 to a government are excluded from this Report.
Exchange Rate: Payments made in currencies other than US Dollars
are translated for the purposes of this Report using the exchange
rate on the date of payment.
1. SUMMARY OF PAYMENTS TO GOVERNMENT (Unaudited) (in USD)
Countries Taxes Royalties Fees Total
--------------------- ------------ ------------ ----------- ---------------------------------------
Peru 7,824,010 627,018 796,369 9,247,397
Argentina 11,171,759 5,411,731 1,097,930 17,681,420
Totals $18,995,769 $6,038,749 $1,894,299 $26,928,817
2. PAYMENTS BY COUNTRY (Unaudited)
(a) Peru
* By Government Department (in USD)
Taxes Royalties Fees Total
----------------------------------- ------------ ----------- ------------------------- ------------
Superintendencia Nacional de
Administración
Tributaria 7,824,010 627,018 - 8,451,028
Instituto Geológico Minero
y Metalúrgico - - 796,369 796,369
----------------------------------- ------------ ----------- ------------------------- ------------
Totals $7,824,010 $627,018 $796,369 $9,247,397
* By Entity/Project (in USD)
Taxes Royalties Fees Total
Entity
Compañía Minera
Ares S.A.C. 7,824,010 627,018 400,439 8,851,467
Project
Arcata - - 242,205 242,205
Inmaculada - - 153,725 153,725
Totals $7,824,010 $627,018 $796,369 $9,247,397
(b) Argentina (in relation to the San Jose mine)
Taxes Royalties Fees Total
---------------------- ------------ ------------------------- ----------- ------------
Tesorería
General de
la Provincia de
Santa Cruz - - 125,508 125,508
Consejo Agrario
Provincial - - 972,422 972,422
Administración
Federal
de Ingresos
Públicos 11,171,759 - - 11,171,759
Rentas Generales de
la Provincia
de Santa Cruz - 5,411,731 - 5,411,731
---------------------- ------------ ------------------------- ----------- ------------
Totals $11,171,759 $5,411,731 $1,097,930 $17,681,420
* By Entity (in USD)
Taxes Royalties Fees Total
------------------------------------ ------------ ----------- ------------------------- ------------
Minera Santa Cruz S.A. 11,171,759 5,411,731 1,097,930 17,681,420
------------------------------------ ------------ ----------- ------------------------- ------------
Totals $11,171,759 $5,411,731 $1,097,930 $17,681,420
_________________________________________________________________________________________
Enquiries:
Hochschild Mining PLC
Raj Bhasin +44 (0)20 3709 3260
Company Secretary
Hudson Sandler
Charlie Jack +44 (0)20 7796 4133
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 fifty years' experience in the
mining of precious metal epithermal vein deposits and currently
operates three underground epithermal vein mines, two located in
southern Peru and one in southern Argentina. Hochschild also has
numerous long-term projects throughout the Americas
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of this information may apply. For further information, please
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END
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