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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (18040)	4/18/2008 9:00:25 PM
From: LoneClone	Read Replies (1) \| Respond to of 192834

Peruvian silver miner ups ante for Lake Shore Gold mineweb.com With the recently announced total ownership of 35% of the Toronto-based junior explorer’s shares, Peruvian miner Hochschild slowly, but surely aims for full ownership of Lake Shore Gold after 2010. Author: Dorothy Kosich Posted: Friday , 18 Apr 2008 RENO, NV - Peruvian silver and gold miner Hochschild has offered Cdn$79 million to increase its position in Toronto-based junior explorer Lake Shore Gold (TSX: LSG) from 19.9% to 35%, stressing that it eventually plans to buy the entire company. This transaction follows an earlier Cdn$64.7 million private placement in February 2008, which Haywood Securities Andrew Kaip says places Lake Shore " in a strong position to execute development plans at its Timmins West mine, re-commission the Bell Creek mill, and to advance underground development at the Bell Creek mine and the Vogel and Schumacher properties." However, Kaip warned that "a 35% Hochschild interest could be viewed as a creeping take over with an inevitable outcome." In a statement, Anthony Maluck, President and CEO of Lake Shore Gold, said, "Hochschild's desire to increase its interest in Lake Shore Gold by an additional 15.1% at a 44% premium to market illustrates its strong support for, and belief in, our vision to become Canada's next intermediate gold producer. The money would give Lake Shore the capital to develop and begin production at the Timmins West mine, and to re-commission the Bell Creek mine, he added. Timmins West is Lake Shore's core property, located at the west end of the Timmins gold mining district. A pre-feasibility study was completed for the deposit in the third quarter of 2007. An advanced exploration program was started in the fourth quarter with the program expected to be completed by the end of 2009. At Bell Creek, re-commissioning of the mill is underway with expectations that it will be operational at the end of this year. Formerly owned by the Porcupine Joint Venture, the Bell Creek mine contains an indicated resource of 50,641 ounces of gold, while the Bell Creek complex also includes the Vogel and Schumacher gold properties. At the end of last year, Lake Shore earned a 60% interest in the Thunder Creek property, contiguous to Timmins West. Eduardo Hochschild, Executive Chairman of Hochschild Mining, who holds 59% the Peruvian company, said, "Our two companies have a number of complementary strengths and we have high regard for the company and its asset base. Lake Shore Gold provides attractive growth potential to Hochschild in Canada and we view it as an important strategic investment moving forward." The Financial Times Thursday quoted Miguel Aramburu, Hochschild CEO, who said, "the current plan is to acquire control" of Lake Shore after November 2010, when the Peruvian company could take full control without violating a standstill agreement. Haywood's Kaip Thursday gave Lake Shore a "Sector Outperform" rating with a 12-month target price of Cdn$3.00 with a risk of mixed speculative impact. Meanwhile, Hochschild said this week that it was on track to achieving its silver production target of 26 million attributable silver equivalent ounces comprised of 16.9 million ounces of silver and 153,000 ounces of gold. "This year we intend to consolidate our operations following a period of significant growth having brought three new mines into production last year,' Hochschild said in a statement. "The capacity expansions at San Jose, Arcata and Pallancata are on schedule and, as a result, production will increase in the second half of the year once these expansions are completed."