TIDMHOC
RNS Number : 2570R
Hochschild Mining PLC
26 June 2020
Introduction
This Report provides an overview of the payments to governments
made by Hochschild Mining PLC ("Hochschild") and its subsidiaries
(the "Group") in 2019 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 the Group.
Activities: Payments made by the Group 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 the Group in 2019
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. 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.
To clarify, the Group did not make any of the other types of
payments in 2019 to a government that are required to be disclosed
in accordance with the UK Regulations. Such payments are:
- Production entitlements
- Dividends
- Signature, discovery and production bonuses; and
- Infrastructure improvements
OTHER
Operatorship: When a member of the Group makes a payment
directly to a government arising from a project, regardless of
whether it is the operator, the full amount paid is disclosed even
where that Group member, 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 GOVERNMENTS (Unaudited) (in USD)
Countries Taxes Royalties Fees Total
---------------- ---------------- ----------- ----------- -------------------------
Peru 6,708,776 38,708 1,089,964 7,837,448
Argentina 6,308,948 6,273,936 1,095,166 13,678,050
Chile - - 283,050 283,050
Totals $13,017,724 $6,312,644 $2,468,180 $21,798,548
2. PAYMENTS BY COUNTRY (Unaudited)
(a) Peru
* By Government Department (in USD)
Taxes Royalties Fees Total
---------------------------------- ----------- ----------- ----------- ------------
Superintendencia Nacional
de Administración
Tributaria 6,708,776 38,708 - 6,747,484
Instituto Geológico
Minero y Metalúrgico - - 1,089,964 1,089,964
---------------------------------- ----------- ----------- ----------- ------------
Totals $6,708,776 $38,708 $1,089,964 $7,837,448
* By Entity/Project (in USD)
Taxes Royalties Fees Total
Entity
Compañía
Minera Ares S.A.C. 6,708,776 38,708 392,944 7,140,428
Project
Arcata - - 159,730 159,730
Inmaculada - - 256,051 256,051
Selene - - 136,063 136,063
Pallancata - - 145,176 145,176
Totals $6,708,776 $38,708 $1,089,964 $7,837,448
(b) Argentina (in relation to the San Jose mine)
Taxes Royalties Fees Total
---------------------------------- ----------- ----------- ----------- ------------
Consejo Agrario Provincial - - 1,095,166 1,095,166
Administración
Federal de Ingresos
Públicos 6,308,948 - - 6,308,948
Rentas Generales de
la Provincia de Santa
Cruz - 6,273,936 - 6,273,936
---------------------------------- ----------- ----------- ----------- ------------
Totals $6,308,948 $6,273,936 $1,095,166 $13,678,050
* By Entity (in USD)
Taxes Royalties Fees Total
---------------------------------- ----------- ----------- ----------- ------------
Minera Santa Cruz S.A. 6,308,948 6,273,936 1,095,166 13,678,050
---------------------------------- ----------- ----------- ----------- ------------
Totals $6,308,948 $6,273,936 $1,095,166 $13,678,050
(c) Chile (in relation to the Volcan project)
Taxes Royalties Fees Total
-------------------------- -------- ----------- --------- ---------
Tesorería General
de la República - - 283,050 283,050
Totals - - $283,050 $283,050
* By Entity (in USD)
Taxes Royalties Fees Total
-------------------------- -------- ----------- --------- ---------
Andina Minerals Chile
Ltd. - - 283,050 283,050
-------------------------- -------- ----------- --------- ---------
Totals - - $283,050 $283,050
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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