REG - Hochschild MiningPLC - Report on Payments to Governments 2021

Hochschild MiningAnnouncement

28/06/2022 15:15

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RNS Number : 5171Q  Hochschild Mining PLC  28 June 2022

 

 

__________________________________________________________________________

28 June 2022

2021 Report on Payments to Governments

Introduction

This Report provides an overview of the payments to governments made by
Hochschild Mining PLC and its subsidiaries (hereinafter referred to as
"Hochschild Mining") in 2021 as required under the UK's Report on Payments to
Governments Regulations 2014 (as amended) (the "UK Regulations"). The UK
Regulations apply to large UK incorporated companies like Hochschild Mining
PLC 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 arising
from the activities of Hochschild Mining.  This includes payments made by REE
UNO SpA prior to its demerger from Hochschild Mining in December 2021.

Activities:  Payments made by Hochschild Mining 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 Mining in 2021 fall within the
following categories:

 

·    Taxes:  These are taxes paid by Hochschild Mining on its income,
profits or production (which include resource severance tax), including those
settled by a government on behalf of Hochschild Mining 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 Mining makes a payment directly to a government
arising from a project, regardless of whether Hochschild Mining is the
operator, the full amount paid is disclosed even where Hochschild Mining 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 £86,000 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                 28,577,470           -                                         711,062               29,288,532
 Argentina            8,524,000            7,170,515                                 1,034,902             16,729,417
 Chile                -                    -                                         547,878               547,878
 Total                $37,101,470          $7,170,515                                $2,293,842            $46,565,827

 2. PAYMENTS BY COUNTRY (Unaudited)

 (a) Peru

 -       By Government Department (in USD)

                                                                Taxes        Royalties              Fees           Total
 Superintendencia Nacional de Administración Tributaria         28,577,470   -                      -              28,577,470
 Instituto Geológico Minero y Metalúrgico                       -            -                      711,062        711,062
 Total                                                          $28,577,470   -                     $711,062       $29,288,532

 -       By Entity/Project (in USD)

                                                                Taxes        Royalties              Fees           Total
 Entity
 Compañía Minera Ares S.A.C.                                    28,577,470   -                      496,314        29,073,784
 Project
 Inmaculada                                                      -            -                     214,748        214,748
 Total                                                          $28,577,470   -                     $711,062       $29,288,532

 (b) Argentina (in relation to the San Jose mine)

 -       By Government Department (in USD)

                                                                Taxes        Royalties       Fees                  Total
 Consejo Agrario Provincial                                      -            -              1,034,902             1,034,902
 Administración Federal de Ingresos Públicos                    8,524,000     -               -                    8,524,000
 Rentas Generales de la Provincia de Santa Cruz                 -            7,170,515       -                     7,170,515
 Total                                                          $8,524,000   $7,170,515      $1,034,902            $16,729,417

 -       By Entity (in USD)

                                                                Taxes        Royalties       Fees                  Total
 Minera Santa Cruz S.A.                                         8,524,000    7,170,515       1,034,902             16,729,417
 Total                                                          $8,524,000   $7,170,515      $1,034,902            $16,729,417

 

 

 (c) Chile

 -       By Government Department (in USD)

                                      Taxes       Royalties   Fees        Total
 Tesorería General de la República     -           -          547,878     547,878
 Total                                 -           -          $547,878    $547,878

 -       By Entity/Project (in USD)

                                      Taxes       Royalties   Fees        Total
 Entity
 Andina Minerals Chile Ltd.            -           -          293,135     293,135
 Total                                 -           -          $293,135    $293,135
 Project
 Volcan                               -           -           293,135     293,135
 Total                                 -           -          $293,135    $293,135

 

 

                Taxes  Royalties  Fees      Total
 Entity
 REE UNO SpA     -      -         254,743   254,743
 Total           -      -         $254,743  $254,743
 Project
 Biolantanidos  -      -          254,743   254,743
 Total           -      -         $254,743  $254,743

 

__________________________________________________________________________

Enquiries:

Hochschild Mining PLC

Raj Bhasin
                           +44 (0)7825 533495

Company Secretary

 

Hudson Sandler

Charlie Jack
          +44 (0)20 7796 4133

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) and crosstrades on the OTCQX
Best Market in the U.S. (HCHDF), 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 three underground epithermal vein mines, two located in
southern Peru and one in southern Argentina. Hochschild also owns the Mara
Rosa Advanced Project in Brazil as well as numerous long-term projects
throughout the Americas.

 

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