Hochschild Mining PLC (HOC.LN), a precious metals producer, said Thursday that it has entered into an agreement to reduce its stake in Lake Shore Gold Corp (LSGGF) to 6% from 35% at a price of C$3.60 per common share, representing a 33% gain on the average purchase price of C$2.70 per share.

MAIN FACTS:

-Total gross proceeds of C$392.4 million will mostly be used to support the company's organic growth strategy through investment in its extensive and rapidly expanding exploration pipeline, including funding Azuca and Inmaculada to production.

-Under the agreement, RBC Dominion Securities Inc., BMO Nesbitt Burns Inc. and CIBC World Markets Inc. will purchase 109 million of the common shares of Lake Shore Gold held by Hochschild, on a bought deal basis for onward sale.

-Immediately following the closing of the offering, Hochschild will continue to hold 21.5 million common shares of Lake Shore Gold, representing 6% of issued and outstanding common shares.

-The transaction is expected to close on Nov. 3.

-Shares of Hochschild Mining at 1127 GMT up 11.70 pence or 2.40% at 499.50 pence.

-By Tapan Panchal, Dow Jones Newswires. Tel +44(0)207-842 9448, tapan.panchal@dowjones.com
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