HOC Hochschild Mining Plc

    RNS Number : 8529J
  Hochschild Mining PLC
  10 December 2008
   



    10 December 2008

    Hochschild Mining enters into strategic investment with Gold Resource Corporation

    *     Provides exposure to high grade, low cost ounces in a mining friendly country with significant mineral potential
    *     $5 million private placement for 5% of GRC at $3 per share
    *     19% premium over the closing price on Friday 4 December and a 20% discount on the 6 month average price 
    *     80 day option to purchase a further 15% at $3 per share 

    Hochschild Mining plc ("Hochschild") is pleased to announce a $5 million strategic investment in Gold Resource Corporation ("GRC"), a US
OTC BB traded underground precious metals mining company with a number of prime development projects in southern Mexico. The investment
creates an additional operational cluster for Hochschild, providing exposure to high grade, low cost ounces in a mining friendly country
with significant mineral potential.

    GRC will use the proceeds from the transaction to fund development of its flagship property, El Aguila, in the southern state of Oaxaca,
and is currently expected to commence production by mid 2009 at 70 thousand ounces of gold (4.2 million silver equivalent ounces) per year.
El Aguila is located in an emergent and promising district that has not been extensively explored. The deposit comprises 75% gold and silver
and 25% zinc, copper and lead at current prices. 

    Eduardo Hochschild, Executive Chairman of Hochschild Mining plc, commented;

    "We are delighted to announce this transaction which provides Hochschild access to low cost, high grade ounces with a near term
production profile. We have well established operations in Mexico and are keen to strengthen our position in this mineral rich and mining
friendly region of the Americas. Gold Resource Corporation has a highly experienced management team and we look forward to working with them
to develop the significant potential of the El Aguila property as well as the other properties in their impressive project pipeline. We
continue to use our financial strength to access key strategic opportunities in line with our established strategy."

    Hochschild and GRC also plan to evaluate the benefit of accelerating the development of La Arista, GRC's Au-Ag polymetalic deposit which
is adjacent to El Aguila. In addition, GRC has three other early stage projects in its pipeline, all of which show indications of
potentially significant mineralisation; Las Margaritas and Solaga, which are high grade silver deposits and El Rey a high grade gold
deposit, all in the same region. 

    Hochschild has initially purchased 1.67 million restricted common shares by way of a private placement, representing approximately 5% of
GRC. The total cash consideration of $5 million or $3 per share, represents a 19% premium over the closing price on Friday 4 December and a
20% discount on the 6 month average price. Hochschild will finance the investment from existing cash.  

    Under the terms of the agreement, Hochschild has the right to increase its ownership to 15% of GRC at $3 per share within 80 days and,
following which, Hochschild will be entitled to appoint one member to the GRC board. Over the next two years, Hochschild has the right to
increase its stake to 40% in the open market, with the full support of the GRC board. After this time, Hochschild will have the ability to
purchase additional shares in GRC without restriction. 

    For more information on GRC's projects, visit www.goldresourcecorp.com



    Enquiries:

    Hochschild Mining plc
    Isabel Lutgendorf                            +44 (0)20 7907 2934
    Head of Investor Relations

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

    About Hochschild Mining plc:

    Hochschild Mining plc is a leading precious metals company listed on the London Stock Exchange (HOCM.L for Reuters / HOC LN for
Bloomberg) with a primary focus on the exploration, mining, processing and sale of silver and gold. Hochschild currently operates five
underground epithermal vein mines, four located in southern Peru and one in southern Argentina and one open pit mine in northern Mexico.
Hochschild also has over sixteen long-term prospects throughout the Americas. Hochschild has over forty years experience in the mining of
precious metal epithermal vein deposits.

    For further information please visit www.hochschildmining.com 

    ______________________________________________________________________
    About GRC
    Gold Resource Corporation is a mining company focused on production and pursuing development of gold and silver projects that feature
low operating costs and produce high returns on capital. The Company has 100% interest in four potential high-grade gold and silver
properties in Mexico's southern state of Oaxaca. The company has 36,087,556 shares outstanding and no warrants. For more information, please
visit GRC's website, located at www.Goldresourcecorp.com and read the Company's 10-K for an understanding of the risk factors involved.

    Certain statements in this production report are or may be forward looking statements regarding Hochschild Mining plc's financial
position and results, business strategy, production, plans and objectives. By their nature, all forward-looking statements involve risk and
uncertainty because they relate to future events and circumstances which are beyond the Group's control. As a result, the Group's actual
future financial condition, performance and results may differ materially from the plans, goals and expectations set forth in such
forward-looking statements. Except as required by applicable law or regulation, the Group does not undertake any obligation to update or
change any forward-looking statements contained in this production report or any other forward-looking statement it may make. Nothing in
this production report should be construed as a profit or production forecast. 

    This production report does not constitute or form part of any offer, invitation to underwrite, subscribe for or otherwise acquire or
dispose of any Hochschild Mining plc shares.

    Past performance of the Company or its shares cannot be relied upon as a guide to future performance and persons needing advice should
consult an independent financial adviser.

    - ends -


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