Business
Increases Stake in LSG
Increases Stake in LSG.
About this update from Hochschild Mining Plc
[{"type":"text","content":"\n RNS Number : 7931C Hochschild Mining PLC 19 November 2009 \n \n\n\n\n________________________________________________________________________\n\n19 November 2009 \nHochschild increases stake in Lake Shore Gold to 36% via a private placement \n\n\n\nHochschild acquires 19.2 million shares in Lake Shore Gold via a private placement \n\n\nIncreases Hochschild's stake in Lake Shore Gold from 32% to 36%\n\n\nPurchase demonstrates continued delivery of M&A strategy following Hochschild's successful capital raising in early October 2009 \n\n\nHochschild Mining plc (\"Hochschild\") is pleased to announce that it has entered into an agreement with Lake Shore Gold Corp. (\"Lake Shore Gold\") (TSX:LSG) to increase its investment from 32% to 36% (on a fully diluted basis) by way of a private placement. The Company will acquire 19.2 million common shares using existing cash for a total consideration of C$85 million or an average price of C$4.43 per share, representing a 10% premium over the reference closing price on 17 November 2009 of C$4.02. \n\nToday's announcement demonstrates Hochschild's ability to deliver on its strategy following the US$260 million capital raising undertaken in October 2009, which strengthened the Company's balance sheet and provided the funds for further acquisition opportunities. \n\nSince 2008, Hochschild has invested a total of C$343 million in its 36% stake in Lake Shore Gold at an average price of C$2.68 per share. Hochschild's investment to date reflects its confidence in the significant production potential and long-term growth of Lake Shore Gold, which has a current market capitalisation of approximately C$1.3 billion. \n\nOn 6 November 2009, Lake Shore Gold completed its business combination with WTM creating the new large-scale, wholly-owned Timmins West Gold Mine Complex. Lake Shore Gold has announced a production target of 100,000 ounces of gold in 2010, building production over the following three years to upwards of 350,000 o...