Hochschild Mining PLC Report on Payments to Govts (4491J)

TIDMHOC

RNS Number : 4491J

Hochschild Mining PLC

28 June 2017

Hochschild Mining plc

Report on Payments to Governments 2016

Hochschild Mining plc has prepared the following report in respect of payments made to governments during the year ended 31 December 2016. The information provided in this report is in accordance with the Reports on Payments to Governments Regulations 2014 (as amended) and DTR 4.3A of the Financial Conduct Authority's Disclosure Guidance and Transparency Rules.

This report is available to download from our website at:

http://www.hochschildmining.com/en/investors/results

____________________________________________________________________________

Enquiries:

Hochschild Mining plc

Raj Bhasin [phone]

Company Secretary

Hudson Sandler

Charlie Jack [phone]

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 over 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.

Introduction

This Report provides an overview of the payments to governments made by Hochschild Mining plc and its subsidiaries (hereinafter referred to as "Hochschild") in 2016 as required under the UK's Reports on Payments to Governments Regulations 2014 (as amended) (the "UK Regulations"). The UK Regulations apply to large UK incorporated companies like Hochschild that are involved in the exploration, prospection, discovery, development and extraction of minerals. This Report is also intended to satisfy the requirements of the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority in the United Kingdom.

Basis for preparation

Legislation: This Report is prepared in accordance with the UK Regulations.

Reporting entities: This Report includes payments to governments made by Hochschild Mining plc and its subsidiary undertakings ("Hochschild").

Activities: Payments made by Hochschild to governments arising from activities involving the exploration, prospection, discovery, development and extraction of minerals ("extractive activities") are disclosed in this Report. For a fully integrated project, which does not have an interim contractual cut off point where a value can be attached or ascribed separately to the extractive activities and to other processing activities, payments to governments will not be artificially split but disclosed in full.

Government: Government includes any national, regional or local authority of a country, and includes a department, agency or entity that is a subsidiary of a government.

Project: Payments are reported at project level except that payments that are not attributable to a specific project or are in respect of obligations imposed at entity level are reported by entity. Project is defined as operational activities which are governed by a single contract, licence, lease, concession or similar legal agreement, and form the basis for payment liabilities with a government. If such agreements are substantially interconnected, those agreements are to be treated as a single project. "Substantially interconnected" means forming a set of operationally and geographically integrated contracts, licences, leases or concessions or related agreements with substantially similar terms that are signed with a government giving rise to payment liabilities. Such agreements can be governed by a single contract, joint venture or other overarching legal agreement. Indicators of integration include, but are not limited to, geographic proximity, the use of shared infrastructure and common operational management.

Payment: Of the types of payments required to be reported on under the UK Regulations, the payments made by Hochschild in 2016 fall within the following categories:

-- Taxes: These are taxes paid by Hochschild on its income, profits or production (which include resource severance tax), including those settled by a government on behalf of Hochschild under a tax-paid concession. Payments are reported net of refunds. Consumption taxes, personal income taxes, sales taxes, property and environmental taxes are excluded.

-- Royalties: These are payments for the rights to extract mineral resources, typically at set percentage of revenue less any deductions that may be taken.

-- Licence fees, rental fees, entry fees and other considerations for licences and/or concessions ("Fees"): These are fees and other sums paid as consideration for acquiring a licence for gaining access to an area where extractive activities are performed. Administrative government fees that are not specifically related to the extractive sector, or to access to extractive resources, are excluded. Also excluded are payments made in return for services provided by a government.

OTHER

Operatorship: When Hochschild makes a payment directly to a government arising from a project, regardless of whether Hochschild is the operator, the full amount paid is disclosed even where Hochschild as the operator is proportionally reimbursed by its non-operating venture partners through a partner billing process (cash-call).

Cash and in-kind payments: Payments are reported on a cash basis. There were no in-kind payments made in respect of the reporting year.

Materiality Level: For each payment type, total payments below GBP86,000 to a government are excluded from this Report.

Exchange Rate: Payments made in currencies other than US Dollars are translated for the purposes of this Report using the exchange rate on the date of payment.

1. SUMMARY OF PAYMENTS TO GOVERNMENT (Unaudited) (in USD)

 
 Countries               Taxes     Royalties         Fees                      Total 
--------------  --------------  ------------  -----------  ------------------------- 
 Peru                4,291,207     9,963,957    3,455,952                 17,711,116 
 Argentina           3,047,544     5,754,601    1,228,229                 10,030,374 
 Chile                       -             -      203,940                    203,940 
--------------  --------------  ------------  -----------  ------------------------- 
 Totals             $7,338,751   $15,718,558   $4,888,121                $27,945,430 
 
 
     2. PAYMENTS BY COUNTRY (Unaudited) 
 
 
     (a) Peru 
 
    *    By Government Department (in USD) 
                                       Taxes    Royalties         Fees         Total 
------------------------------  ------------  -----------  -----------  ------------ 
 Superintendencia Nacional 
  de Administración 
  Tributaria                       4,291,207    9,963,957            -    14,255,164 
 Instituto Geológico 
  Minero y Metalúrgico                -            -    3,455,952     3,455,952 
------------------------------  ------------  -----------  -----------  ------------ 
 Totals                           $4,291,207   $9,963,957   $3,455,952   $17,711,116 
 
 
    *    By Entity/Project (in USD) 
                                       Taxes    Royalties         Fees         Total 
------------------------------  ------------  -----------  -----------  ------------ 
 Entity 
------------------------------------------------------------------------------------ 
 Compañía 
  Minera Ares S.A.C.               4,291,207    9,963,957      445,362    14,700,526 
------------------------------  ------------  -----------  -----------  ------------ 
 Project 
------------------------------------------------------------------------------------ 
 Arcata                                    -            -      146,611       146,611 
 Ares                                      -            -      453,718       453,718 
 Inmaculada                                -            -      181,015       181,015 
 Selene                                    -            -      689,167       689,167 
 Pallancata                                -            -      187,482       187,482 
 Azuca                                     -            -    1,062,204     1,062,204 
 Crespo                                    -            -      290,393       290,393 
------------------------------  ------------  -----------  -----------  ------------ 
 Totals                           $4,291,207   $9,963,957   $3,455,952   $17,711,116 
 
 
 
 
        (b) Argentina (in relation 
        to the San Jose mine) 
 
    *    By Government Department (in USD) 
                                       Taxes    Royalties         Fees         Total 
------------------------------  ------------  -----------  -----------  ------------ 
 Tesorería General 
  de la Provincia de 
  Santa Cruz                               -            -      134,564       134,564 
 Consejo Agrario Provincial                -            -    1,093,665     1,093,665 
 Administración 
  General de Ingresos 
  Públicos                    3,047,544            -            -     3,047,544 
 Rentas Generales de 
  la Provincia de Santa 
  Cruz                                     -    5,754,601            -     5,754,601 
------------------------------  ------------  -----------  -----------  ------------ 
 Totals                           $3,047,544   $5,754,601   $1,228,229   $10,030,374 
 
 
    *    By Entity (in USD) 
                                       Taxes    Royalties         Fees         Total 
------------------------------  ------------  -----------  -----------  ------------ 
 Minera Santa Cruz 

  S.A.                             3,047,544    5,754,601    1,228,229    10,030,374 
------------------------------  ------------  -----------  -----------  ------------ 
 Totals                           $3,047,544   $5,754,601   $1,228,229   $10,030,374 
 
 (c) Chile (in relation to the 
  Volcan Project) 
 
   *    By Government Department (in USD) 
                                       Taxes    Royalties         Fees         Total 
------------------------------  ------------  -----------  -----------  ------------ 
 Tesorería General 
  de la República                     -            -      203,940       203,940 
------------------------------  ------------  -----------  -----------  ------------ 
 Totals                                    -            -     $203,940      $203,940 
 
 
   *    By Entity (in USD) 
                                       Taxes    Royalties         Fees         Total 
------------------------------  ------------  -----------  -----------  ------------ 
 Andina Minerals Chile 
  Ltd                                      -            -      203,940       203,940 
------------------------------  ------------  -----------  -----------  ------------ 
 Totals                                    -            -     $203,940      $203,940 
 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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June 28, 2017 07:39 ET (11:39 GMT)