Report on Payments to Governments 2021

RNS Number : 5171Q

Hochschild Mining PLC

28 June 2022

 

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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
Compaña 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

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Enquiries:

Hochschild Mining PLC

Raj Bhasin      [phone]

Company Secretary

Hudson Sandler

Charlie Jack                                                      [phone]

Public Relations

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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.

LEI: 549300JK10TVQ3CCJQ89

 

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