Hochschild MiningPLC HOC Recommended All-Cash Offer for Andina Minerals

  Hochschild MiningPLC (HOC) - Recommended All-Cash Offer for Andina Minerals

RNS Number : 6275Q
Hochschild Mining PLC
08 November 2012


8 November 2012


Hochschild Boosts Project Pipeline With Recommended All-Cash Offer For Andina


§ Hochschild makes C$0.80 per share all-cash  offer for all of the issued  and 
outstanding common shares of Andina Minerals Inc.

§ Andina's  Board has  unanimously recommended  that shareholders  accept  the 
Hochschild offer

§ Andina's Directors,  senior management  and a  significant shareholder  have 
entered into  lock-up  agreements  with Hochschild  agreeing  to  support  the 
transaction,  representing  approximately  14%   of  Andina's  common   shares 

§ Acquisition adds  to Hochschild's  extensive project  pipeline, with  assets 
located in Chile, one of the Company's key targeted mining jurisdictions

§ Acquisition is in line with Hochschild's stated strategy of pursuing  highly 
value accretive, early stage  opportunities with strong geological  conditions 
and full control

Hochschild Mining plc ("Hochschild" or "the Company") is pleased to announce a
recommended cash  offer  of  C$0.80  per  share for  all  of  the  issued  and 
outstanding common shares of Andina Minerals Inc. ("Andina").The equity value
of the  Hochschild offer  is approximately  C$103 million  on a  fully-diluted 
basis and represents a  premium of approximately 106%  to the 20-day VWAP  for 
Andina common shares for the period ending 7 November 2012 on the TSX  Venture 
Exchange ("TSXV").

Andina owns the  Dorado Gold Deposit  ("Dorado"), located at  the Volcan  Gold 
Project in the prolific Maricunga gold belt in Chile as well as a 49% interest
in Hochschild's Encrucijada project close to  Dorado and a 50% share in  Pampa 
Buenos Aires, a gold and silver property in Northern Chile.

In February 2011, Andina published details of a Pre-Feasibility Study  carried 
out on  the Dorado  deposit  disclosing initial  Proven and  Probable  mineral 
reserves of  6.6 million  ounces  of gold.  Hochschild  intends to  carry  out 
extensive  technical  and  geological  evaluation   of  the  deposit  over   a 
significant  period  of  time  and  consequently  during  this  process   will 
re-classify the  reported  reserves  as resources.  As  reported  in  Andina's 
February 2011 Pre-Feasibility  Study, the  project has  the following  mineral 

Classification                       Total In-Pit Resource
                          Tonnes Gold grade (g/t Au) Contained Gold Ounces
Measured             105,918,000               0.738             2,511,000
Indicated            283,763,000               0.698             6,367,000
Measured & Indicated 389,681,000               0.709             8,878,000
Inferred              41,553,000               0.502               671,000

^1. All  quantities are  rounded  to the  appropriate number  of  significant 
figures, consequently sums may not add due to rounding.

^2.  The  estimate  of  mineral  resources  may  be  materially  affected  by 
environmental, permitting, legal, title, taxation, socio-political,  marketing 
or other relevant issues.

^3. The quantity and grade of reported Inferred Resources in this  estimation 
are conceptual in nature and there has been insufficient exploration to define
these Inferred Resources as an Indicated  or Measured Mineral Resource. It  is 
uncertain if further exploration will result in the upgrading of the  Inferred 
Resources into an Indicated or Measured Mineral Resource category.

^4. The Dorado  mineral resource  estimate is  effective as  of 16  September 

In addition, the  Ojo de  Agua area,  close to  the Dorado  deposit, hosts  an 
inferred resource  of  18.6 million  tonnes  grading  0.85 g/t  Au  for  total 
contained gold  content  of 510,000  ounces  at a  cut-off  grade of  0.5  g/t 
(October 2008) at the Andrea and Florencia zones.

In July 2012, Andina announced that  it had submitted an Environmental  Impact 
Assessment ("EIA") for the  Dorado Gold Project  to the Chilean  environmental 
authority,  SEA  ('Servicio  de  Evaluacion  Ambiental'),  who  are  currently 
evaluating  the  submission  via  SEIA  ('Sistema  de  Evaluacion  de  Impacto 
Ambiental').The next stage in the permitting  process will be the receipt  of 
an "ICSARA",  being  the  formal  document  that  contains  the  observations, 
comments,  requests  for  clarification  and/or  modifications  made  by   the 
regulatory authorities. Furthermore,  the public  consultation coordinated  by 
SEA will, under Chilean Law, continue as part of the ongoing process.

Ignacio Bustamante, Chief Executive, commented:

"The acquisition of Andina Minerals provides Hochschild with further long-term
optionality as  well  as geographical  balance  within our  extensive  project 
pipeline with  its  principal asset,  Dorado,  being  located in  one  of  our 
preferred mining-friendly jurisdictions in the Americas. Although we recognise
the challenges  associated with  the  project, we  expect to  conduct  further 
substantial geological and technical  evaluation work on  the deposit and  are 
confident that our experienced geological  and operational teams will  develop 
its strong potential. Despite  this transaction representing approximately  4% 
of Hochschild's market capitalisation, it could ultimately deliver significant

Terms of the Transaction

§ Andina shareholders to receive C$0.80 per common share in cash

§ Transaction equity value of approximately C$103 million

§ Represents a 106% premium based on  the 20-day VWAP of Andina common  shares 
on the TSXV for the period ending 7 November 2012

§ Completion of the transaction  is subject to customary conditions  including 
acceptances from 66.67% of Andina's shareholders and the absence of a material
adverse change with respect to Andina

§  A  Support  Agreement  provides  for  customary  provisions,  including   a 
non-solicitation clause, right to match covenants in favour of Hochschild  and 
provides for the  payment of  a C$4.1  million termination  fee to  Hochschild 
under certain circumstances

§ The  transaction will  be carried  out as  a take-over  bid and,  as such  a 
take-over bid  circular  and  related  documents  will  be  mailed  to  Andina 
shareholders on or before 21 November 2012

§ Andina's Directors,  senior management  and a  significant shareholder  have 
entered into  lock-up  agreements  with Hochschild  agreeing  to  support  the 
transaction,  representing  approximately  14%   of  Andina's  common   shares 

§ Hochschild has also agreed to provide  Andina with a loan of C$1.75  million 
for general purposes until  the transaction closes, which  is to be repaid  by 
Andina if the acquisition is not completed

Andina Board Recommendation

The Board of Directors of Andina  has unanimously recommended that holders  of 
Andina common shares vote in favour of the transaction.



Hochschild Mining plc

Charles      Gordon               
 +44 (0)20 7907 2934

Head of Investor Relations

RLM Finsbury

Charles                                                             Chichester 

+44 (0)20 7251 3801

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 
almost fifty years' experience in the mining of precious metal epithermal vein
deposits and currently operates four underground epithermal vein mines,  three 
located in southern Peru  and one in southern  Argentina. Hochschild also  has 
numerous long-term projects throughout the Americas.

About Andina Minerals Inc.

Andina Minerals' 100%-owned Dorado Gold Project is located in Chile's  Atacama 
Region, approximately 120km  east of  Copiapo. The  property is  strategically 
located in the prolific Maricunga gold belt, which hosts a number of important
gold deposits, including the Maricunga gold mine (Kinross), the La Coipa  mine 
(Kinross), the  Cerro Casale  deposit  (Kinross/Barrick), and  the  Lobo-Marte 
deposit (Kinross).

Forward looking Statements

This announcement contains certain forward looking statements which may relate
to matters  such as  the business,  strategy, investments,  production,  major 
projects and  their contribution  to expected  production and  other plans  of 
Hochschild Mining  plc and  its current  goals, assumptions  and  expectations 
relating to its future financial condition, performance and results.

Forward-looking statements include,  without limitation, statements  typically 
containing words  such  as  "intends",  "expects",  "anticipates",  "targets", 
"plans", "estimates" and  words of  similar import. By  their nature,  forward 
looking statements  involve risks  and uncertainties  because they  relate  to 
events and  depend on  circumstances that  will or  may occur  in the  future. 
Actual results, performance or  achievements of Hochschild  Mining plc may  be 
materially different  from any  future  results, performance  or  achievements 
expressed or implied by  such forward looking  statements. Factors that  could 
cause or contribute to differences between the actual results, performance  or 
achievements of Hochschild  Mining plc and  current expectations include,  but 
are  not  limited  to,   legislative,  fiscal  and  regulatory   developments, 
competitive conditions, technological developments, exchange rate fluctuations
and general  economic  conditions. Past  performance  is no  guide  to  future 
performance and persons needing advice should consult an independent financial

The forward looking statements reflect knowledge and information available  at 
the date  of preparation  of  this announcement.  Except  as required  by  the 
Listing Rules and applicable law, Hochschild Mining plc does not undertake any
obligation to  update or  change  any forward  looking statements  to  reflect 
events occurring  after  the  date  of  this  announcement.  Nothing  in  this 
announcement should be construed as a profit forecast.

                     This information is provided by RNS
           The company news service from the London Stock Exchange


OUPGLBDBRDGBGDI -0- Nov/08/2012 07:01 GMT
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