TIDMHOC
RNS Number : 4495P
Hochschild Mining PLC
19 October 2021
_____________________________________________________________________________________
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES,
AUSTRALIA, JAPAN OR SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE TO
DO SO WOULD BE IN BREACH OF APPLICABLE LAWS.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF REGULATION 11 OF THE MARKET ABUSE (AMMENT) (EU EXIT) REGULATIONS
2019/310.
For immediate release
19 October 2021
Proposed Demerger and Listing of Aclara Resources Inc. on the
TSX
Changes to Hochschild Mining's Board of Directors and Senior
Management
Hochschild Mining PLC ("Hochschild" or "the Company") (LSE: HOC)
(OTCQX: HCHDF) is pleased to announce its intention to demerge
shares representing 80% of the entire issued share capital of
Aclara Resources Inc. ("Aclara"), its indirect wholly-owned
subsidiary. As well as demerging Aclara from the group (the
"Demerger"), Aclara will seek to have listed on the Toronto Stock
Exchange ("TSX") its entire issued share capital (the "Aclara
Shares"). The Demerger is expected to be completed by year-end.
Aclara is a development-stage rare earth mineral resources
company with a strategic land package of mineral concessions in
Chile. Aclara is initiating the development of its resources
through a project called the Penco Module ("Penco"), formerly known
as Biolantanidos, which covers a surface area of approximately 600
hectares and contains ionic clays that are rich in rare earth
elements ("REE"). Aclara is currently focused on the development
and on the future construction and operation of Penco, which will
aim to produce a rare earth concentrate through a processing plant
that will be fed by clays from nearby deposits.
Following the Demerger, Hochschild Mining Holdings Limited ("HM
Holdings") (a wholly-owned subsidiary of the Company) will retain
20% of the Aclara Shares.
In connection with the Demerger, Aclara intends to conduct a
concurrent initial public offering of the Aclara Shares (the
"Aclara IPO") to raise additional funds to advance its exploration
and development activities and for working capital and general
corporate purposes. Aclara has applied to have the Aclara Shares
listed on the TSX ("Listing"). Listing is subject to the approval
of the TSX in accordance with its original listing requirements.
The TSX has not conditionally approved Aclara's listing application
and there is no assurance that the TSX will approve the listing
application.
The Demerger is conditional on certain requirements being
satisfied. Assuming such conditions are satisfied, the Demerger
will be effected by the Company distributing Aclara Shares
representing 80% of the entire issued share capital of Aclara to
shareholders of the Company ("Shareholders") by way of a
distribution in specie (the "Demerger Dividend"). Although the
process relating to the Aclara IPO and Listing is currently at an
early stage, the Company has decided to proceed with obtaining
approval from Shareholders for the Demerger Dividend, which will be
required in order for the Demerger and the Aclara IPO and Listing
to proceed.
Eduardo Hochschild, Chairman said:
"This is the logical next step forward for our rare earth
business. It is our belief that, as two standalone businesses, both
Hochschild and Aclara will have the greatest potential for
delivering long-term value creation. Each will have their own
strategic focus on their respective products, their own dedicated
management teams, separated access to capital and an independent
valuation whilst maintaining a strategic relationship that will
allow Aclara to benefit from Hochschild's track record on project
execution and ESG. Furthermore, we believe that current and future
Hochschild shareholders will also benefit from retaining a
meaningful stake in a business that offers an exciting proposition
in a high growth market."
The Company expects to post a Circular and Notice of
Extraordinary General Meeting to Shareholders later today. Once the
Company has posted these documents to Shareholders, the Company
will make a further announcement via a Regulatory Information
Service. These documents will also be made available on the
Company's website at:
http://www.hochschildmining.com
A preliminary prospectus related to the Aclara IPO was filed on
18 October 2021 with the securities regulatory authorities in each
of the provinces and territories of Canada, other than Quebec. In
addition, Aclara intends to file shortly a prospectus in Canada
qualifying the distribution of the Aclara Shares issuable pursuant
to the Demerger Dividend under applicable Canadian securities
laws.
Nature of Aclara's business
Aclara is a development-stage rare earth mineral resources
company with 451,585 hectares of mining concessions located in the
Maule, Ñuble, Biob í o and Araucan í a regions of Chile. Aclara is
initiating the development of its resources through a project
called Penco, which covers a surface area of approximately 600
hectares and which has ionic clays that are rich in REE. Aclara is
currently focused on the development and on the future construction
and operation of Penco, which will aim to produce a rare earth
concentrate through a processing plant that will be fed by clays
from nearby deposits. In addition to Penco, Aclara intends to
conduct exploration activities in order to determine if there are
deposits within its other mining concessions that can be developed
economically and with an adequate environmental footprint.
Background to the Demerger
The Group acquired 100% of the Aclara Project in 2019. Aclara is
unique within the Group in that it focuses on rare earth mineral
resources, whereas the primary focus of the Group's business is the
exploration, mining, processing and sale of precious metals and,
since its acquisition, Aclara has continued to be run as an
independent business unit within the Group. Aclara's primary growth
opportunities going forward are expected to be in expanding its
rare earth business. The Demerger will result in two separately
listed companies, each with its own distinct investment
prospects.
The Company believes that the Demerger will provide each of the
Company and Aclara with a number of opportunities and benefits,
including the following:
-- Strategic focus on precious metals: although the Company has
applied its expertise to identifying and developing a rare earth
mineral deposit, the Company believes that its strategic focus
should remain on precious metals. In contrast, Aclara has a
different strategic approach in order to succeed in the specialty
rare earth industry and will be required to develop specific
commercial capabilities and consider further integration down the
permanent magnet value chain. Both are areas of expertise that the
Company does not currently possess and, even if it were to develop
such expertise, this would not necessarily enhance the Company's
precious metals business in the future.
-- Management focus: with the Company's management team focusing
the majority of its time on precious metals deposits, an
independent Aclara will benefit from a dedicated, standalone
management team and board.
-- Access to capital: the Company has a pipeline of precious
metals opportunities with which Aclara currently competes for
capital. At the same time, Aclara has an ambitious growth plan
based on the development of several production modules and may
eventually invest in building its own separation capabilities.
Given the Company's likely future prioritisation of precious metal
projects, a separately-listed Aclara will be in a significantly
improved position to raise capital from investors who are keen to
support a high-growth rare earth opportunity and may have a
different approach than precious metals investors.
-- Independent valuation: separating the Company's precious
metals and rare earth portfolio will allow the market to value each
business independently, potentially leading to a re-rating of
either or both businesses.
After careful consideration by the Company, the TSX was selected
as the most appropriate venue for listing Aclara due to the depth
of the investor base for a business such as Aclara and the relative
Canadian familiarity with assets in the Americas. The Company
recognises that the mineral resources industry is a much larger
proportion of the overall market in Canada and that Canadian
investors have a history of taking a longer-term approach to
mineral resources companies in the development phase where an asset
may still be a few years from the commencement of production.
As at 30 June 2021, the gross asset value of Aclara was $38.2
million (book value). Aclara is still in a developmental phase and
has not generated any revenue to date. Accordingly, Aclara has not
contributed any amount towards the Group's profits.
Effects of the Demerger on the Company
The Demerger is expected to have minimal effect on the Company's
operations. Aclara focuses on rare earth mineral resources, whereas
the primary focus of the Group's business is the exploration,
mining, processing and sale of precious metals and, since its
acquisition, Aclara has continued to be run as an independent
business unit within the Group. The Demerger is also expected to
have a minimal impact on the Company's financial position, as
Aclara is still in a developmental phase and has not generated any
revenue to date.
Board and Senior Management Changes Relating to the Demerger
The Company announces that, conditional upon the Demerger coming
into effect, Sanjay Sarma will be stepping down as an independent
non-executive director of the Company and will be appointed as an
independent non-executive director of Aclara. At this stage, the
effective date of Sanjay's resignation is not yet known. Once
Sanjay's resignation comes into effect, the Company will make an
announcement through a Regulatory Information Service.
Following the above change, the Board of the Company will
comprise eight directors, five of whom will be independent
non-executive directors. The Company is undertaking a search to
appoint one or more additional independent non-executive directors
to the Board of the Company.
In addition, and also subject to completion of the Demerger:
-- Ramon Barua will be stepping down as the Chief Financial
Officer of the Company to assume the role of Director and the Chief
Executive Officer of Aclara;
-- Eduardo Hochschild and Ignacio Bustamante will be appointed
to the Board of Aclara as Chairman and Director, respectively;
and
-- Eduardo Noriega, currently Head of Group Finance, will
succeed Ramon Barua as Hochschild Mining PLC Chief Financial
Officer. Eduardo joined the Company in March 2007. As Head of Group
Finance, Eduardo was responsible for financial planning and
controls, treasury, corporate finance, and tax and accounting.
Before joining the Company, Eduardo worked for Dell Inc., Union de
Cervecerías Peruana Backus & Johnston and Del Mar Fishing
Company, in different finance roles. Eduardo is a graduate in
Business Administration from Universidad del Pacifico and holds an
MBA from the University of Texas.
The person responsible for making this announcement on behalf of
the Company is Raj Bhasin, Company Secretary.
_____________________________________________________________________________________
Enquiries:
Hochschild Mining PLC
Charles Gordon
+44 (0)20 3709 3264
Head of Investor Relations
Hudson Sandler
Charlie Jack
+44 (0)207 796 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) and
crosstrades on the OTCQX Best Market in the U.S. (HCHDF), 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.
_____________________________________________________________________________________
Important Information
The distribution of this announcement in certain jurisdictions
may be restricted by law and, therefore, persons into whose
possession this announcement comes should inform themselves and
observe any such restrictions in relation to the Company's shares,
the Aclara Shares and this announcement, including those in the
paragraphs that follow. Any failure to comply with these
restrictions may constitute a violation of the securities laws of
any such jurisdiction. No action has been taken or will be taken in
any jurisdiction that would permit possession or distribution of
this announcement in any country or jurisdiction where action for
that purpose is required. Accordingly, this announcement may not be
distributed or published in any jurisdiction where to do so would
breach any securities laws or regulations of any such jurisdiction
or give rise to an obligation to obtain any consent, approval or
permission, or to make any application, filing or registration.
Failure to comply with these restrictions may constitute a
violation of the securities laws or regulations of such
jurisdictions.
This announcement does not constitute an offer to sell,
subscribe or purchaser or the solicitation of an offer to sell,
subscribe for or purchase any shares of the Company, any Aclara
Shares or any other securities in any jurisdiction. The Aclara
Shares have not been and will not be registered under the
applicable securities law of Japan, Australia or the Republic of
South Africa and, subject certain limited exceptions, may not be
offered for sale or sold, directly or indirectly, in or into Japan,
Australia or the Republic of South Africa. Prior to completion of
the Demerger, Aclara intends to file a long form prospectus with
the securities regulatory authorities in each of the provinces and
territories of Canada (excluding Quebec) in order to qualify the
distribution of the Aclara Shares issuable pursuant to the Demerger
such that, following completion of the Demerger, all of the Aclara
Shares issuable pursuant to the Demerger shall be freely tradeable
in Canada and over the facilities of the Toronto Stock Exchange
under applicable Canadian securities laws. The Aclara Shares have
not been and will not be registered under the US Securities Act of
1933, as amended (the "US Securities Act"), or under the securities
laws of any state or other jurisdiction of the United States and
may not be offered or sold within the United States, except
pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the US Securities Act. None of the
US Securities and Exchange Commission, any other US federal or
state securities commission or any US regulatory authority has
approved or disapproved of the Aclara Shares nor have such
authorities passed upon or endorsed the merits of the Aclara Shares
or the accuracy or adequacy of this announcement. Any
representation to the contrary is a criminal offence in the United
States.
This announcement is not an offer or solicitation to purchase or
invest in any securities of the Company or Aclara. It is not a
prospectus within the meaning of the Swiss Financial Services Act
or within the meaning of any securities laws or regulations of
Switzerland. Neither this announcement nor any other offering or
marketing material relating to the Company's shares or the Aclara
Shares has been or will be filed with or approved by any Swiss
regulatory authority.
Certain statements contained in this announcement that are not
historical fact are "forward-looking" statements. These
forward-looking statements are subject to a number of risks and
uncertainties, many of which are beyond the Company's control and
all of which are based on the Company's current beliefs and
expectations about future events. Forward-looking statements are
typically identified by the use of forward-looking terminology such
as "believes", "expects", "may", "will", "could", "should",
"intends", "estimates", "plans", "assumes" or "anticipates" or the
negative thereof or other variations thereon or comparable
terminology, or by discussions of strategy that involve risks and
uncertainties. In addition, from time to time, the Company or its
representatives have made or may make forward-looking statements
orally or in writing. Furthermore, such forward-looking statements
may be included in, but are not limited to, press releases or oral
statements made by or with the approval of an authorised executive
officer of the Company. These forward-looking statements, and other
statements contained in this announcement regarding matters that
are not historical facts, involve predictions. No assurance can be
given that such future results will be achieved; actual events or
results may differ materially as a result of risks and
uncertainties facing the Company and its subsidiaries. Such risks
and uncertainties could cause actual results to vary materially
from the future results indicated, expressed or implied in such
forward-looking statements. The forward-looking statements
contained in this announcement speak only as of the date of this
announcement. The Company does not undertake any obligation
publicly to update or revise any forward-looking statement as a
result of new information, future events or other information,
although such forward-looking statements will be publicly updated
if required by law or regulation.
Nothing in this announcement should be construed as a profit
forecast.
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (Regulation (EU) No.596/2014), as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018. Upon the publication of this announcement
via a Regulatory Information Service, this inside information is
now considered to be in the public domain.
LEI: 549300JK10TVQ3CCJQ89
- ends -
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