Hochschild Mining plc

Hochschild Mining plc

December 07, 2009 13:53 ET

Completion of Private Placement in Lake Shore Gold

LONDON, UNITED KINGDOM--(Marketwire - Dec. 7, 2009) - This press release is issued by Hochschild Mining plc (LSE:HOC)("Hochschild"), with registered office located at 46 Albemarle Street, London, England, W1S 4JL, as required under applicable Canadian securities laws.

As at November 30, 2009, Hochschild owned 108,714,027 common shares of Lake Shore Gold Corp. ("Lake Shore"), representing approximately 33.9% of the outstanding common shares of Lake Shore (the "Common Shares").

Hochschild announces today that it has purchased a further 19,187,359 common shares in Lake Shore (the "Transaction") for a total cash consideration of C$85 million (or C$4.43 per Common Share) giving it ownership and control of 127,901,386 outstanding Common Shares (approximately 37.65%) of Lake Shore.

The consideration for the purchase announced today was paid by Hochschild Mining Holdings Ltd. ("Hochschild Mining"), a wholly owned subsidiary of Hochschild Mining plc which is a publicly listed company whose shares are listed for trading on the London Stock Exchange. The Transaction was completed in accordance with the terms and conditions of a subscription agreement entered into between Hochschild Mining and Lake Shore dated December 4, 2009.

Hochschild has acquired ownership and control over the Common Shares for strategic investment purposes to increase Hochschild's holdings in Lake Shore to 40% on a fully diluted basis as permitted under the terms of the strategic alliance agreement made as of February 22, 2008 between Hochschild and Lake Shore, as amended (the "Strategic Alliance Agreement"). The Strategic Alliance Agreement restricts Hochschild and its affiliates and any person acting jointly and in concert with any of them from holding greater than 40% of the Common Shares on a fully diluted basis prior to November 22, 2010.

Hochschild may acquire additional ownership and control of Lake Shore Common Shares.

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.

Contact Information

  • Hochschild Mining plc
    Isabel Lutgendorf
    Head of Investor Relations
    +44 (0)20 7907 2934
    Robin Walker
    Public Relations
    +44 (0)20 7251 3801