HOC Hochschild Mining Plc

RNS Number:9957Y
Hochschild Mining PLC
26 June 2007



26 June 2007

           Hochschild Mining plc commences production at the San Jose
                           mine in southern Argentina

* Commencement of production at San Jose on time marks another important
  milestone in Hochschild's growth strategy and geographic diversification

* In the course of 2007, Hochschild is expanding from three operations in
  one country to six operations in three countries

* Hochschild plans to double plant capacity at San Jose in Q3 2008

* Hochschild is on track to reach its production target of 26 million
  silver equivalent attributable ounces in 2007 (14 million silver attributable
  ounces and 200 thousand gold attributable ounces)


Eduardo Hochschild, Chairman of Hochschild Mining plc, said,

"I am delighted to announce the commencement of production at this significant
project. San Jose marks an important milestone for us as our first producing
operation in Argentina, adding to our status as a leading Latin American
underground precious metals producer. As the first Latin American company to
achieve a main board listing on the London Stock Exchange in over a hundred
years, we are committed to delivering value for our shareholders and for all our
stakeholders."

"We intend to keep building on our proven track record of production growth and
project delivery. This year is crucial to Hochschild's development as we are
expanding from three mines in one country to six mines in three countries. With
the expansions at Ares and Arcata behind us and the commencement of production
at San Jose, we remain on course to reach our stated target of producing 50
million silver equivalent ounces by 2011."

Hochschild Mining plc ("Hochschild") is pleased to announce that it has
commenced production at the San Jose mine today. San Jose, a silver and gold
mine located in southern Argentina, is owned by Minera Santa Cruz, which is
jointly owned by Hochschild (51%) and Minera Andes, S.A. (49%) and is operated
by Hochschild. This project represents a significant step in the delivery of
Hochschild's growth strategy, which is based on high margin, cash generative
precious metals production in the Americas. San Jose is Hochschild's first
operation in Argentina and the first underground mine in the province of Santa
Cruz. Commencement of production at San Jose demonstrates Hochschild's ability
to use its regional knowledge and expertise in underground mining to
successfully achieve production growth and geographic diversification. This year
Hochschild is expanding from three operations in one country to six operations
in three countries, Peru, Argentina and Mexico.

In addition, Hochschild plans to expand the processing plant capacity at the San 
Jose mine from 750 ktpd to 1500 ktpd beginning in Q3 2008. This expansion will 
effectively double the throughput capacity of San Jose at a cost of 
approximately $38m.

Currently the San Jose operation is being powered by diesel generators. However,
Minera Santa Cruz has been evaluating alternative sources of energy in order to
reduce the future cost base. As a result of this evaluation, the company is 
planning to change the energy source at San Jose from diesel generators to 
electrical connection via the southern national grid, starting in Q4 2008.

The San Jose mine will use an intensive leaching reactor (ILR) in lieu of the
Merry-Crowe plant to produce dore. ILR was chosen by Minera Santa Cruz (instead
of the Merry-Crowe plant contemplated in the feasibility study) because of its
higher recoveries of gold and silver, better control of cyanide and lower
investment and operating costs, all of which were determined by comprehensive
metallurgical tests undertaken in 2006. Hochschild presently uses ILR
successfully at Ares, one of its Peruvian operations.

Consistent with Hochschild's CSR philosophy, Minera Santa Cruz has devoted
considerable time and resources to engage with the local communities around San
Jose. Sixty per cent of the workforce is from the surrounding Patagonian region
and have been trained by Hochschild. In addition, over the past year, Minera
Santa Cruz has hosted monthly visits to the mine site for the local community to
learn about mining, the project and environmental management. Minera Santa Cruz
has established a tripartite Project Development Agency comprising
representatives from the community, local authorities and Hochschild, to promote
and, where feasible, fund projects and ventures that will provide a direct and
sustainable economic benefit to the community, the surrounding region and its
people.


Enquiries:
Hochschild Mining plc
Wray Barber                             +44 (0)20 7152 6014
Head of Investor Relations

Finsbury
Robin Walker                            +44 (0)20 7251 3801
Public Relations


About San Jose

The San Jose silver and gold mine, located in southern Argentina, is owned by
Minera Santa Cruz, which is jointly owned with Minera Andes, S.A. and
Hochschild, which has a 51% ownership interest and is the operator. In 2006, a
21,241 metre drill program was completed which increased attributable resources
and reserves by 37% and 54%, respectively. Thus far in 2007, 4,800 metres of
drilling have been completed and plans to drill an additional 33,000 metres will
be completed during the remainder of the year. This year Minera Santa Cruz plans
to mine the Huevos Verdes vein and the nearby Frea vein where more than 11
kilometres of underground workings have been developed.


About Hochschild Mining plc

Hochschild Mining plc (HOC.L for Reuters / HOC LN for Bloomberg) is a publicly
held company listed on the London Stock Exchange. Hochschild is a leading
precious metals company with a primary focus on the exploration, mining,
processing and sale of silver and gold. Hochschild currently operates four
underground epithermal vein mines, three located in southern Peru and one in
southern Argentina. Hochschild also has two advanced stage development projects,
one in each of Mexico and Peru and one early stage development project in
Mexico. In addition, Hochschild has over twenty long-term prospects throughout
Latin America and has over forty years experience in the mining of precious
metal epithermal vein deposits. For further information please visit
www.hochschildmining.com.



                      This information is provided by RNS
            The company news service from the London Stock Exchange

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