HOC Hochschild Mining Plc

 

TIDMHOC 
 
RNS Number : 8994N 
Hochschild Mining PLC 
26 February 2009 
 
_______________________________________________________________________ 
 
 
26 February 2009 
 
 
Hochschild Mining exercises option to increase stake in Gold Resource 
Corporation 
 
 
  *  Hochschild exercises option to purchase a further 4.33 million GRC shares for 
  $12.9 million or $3 per share, representing a 41% discount to the closing price 
  on 23 February 2009 
 
  *  Hochschild to appoint a director to GRC board 
 
  *  Investment provides exposure to high grade, low cost ounces in a mining friendly 
  country with significant mineral potential 
 
 
 
Hochschild Mining plc ("Hochschild") is pleased to announce the exercise of its 
option to purchase a further 4.33 million shares of Gold Resource Corporation 
("GRC") for $12.9 million or $3 per share, representing a 41% discount to the 
closing price on 25 February 2009. On completion of the purchase, which will be 
funded from existing cash, Hochschild will have a 14.6% interest in GRC, a US 
OTC traded underground precious metals mining company with a number of prime 
development projects in southern Mexico. With its increased ownership, 
Hochschild has the right to appoint a director to the GRC board. 
 
 
This strategic 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, 
which is currently expected to commence production by mid 2009 at 70 thousand 
ounces of gold per year (4.2 million silver equivalent ounces), subject to 
obtaining remaining permits and regulatory approval. The deposit comprises 75% 
gold and silver and 25% zinc, copper and lead at current prices. 
 
 
Miguel Aramburú, Chief Executive Officer of Hochschild Mining plc, commented; 
 
 
"We are delighted to announce our increased investment in GRC which strengthens 
our position in a mineral rich and mining friendly region of the Americas, in 
line with our cluster consolidation strategy. We have been extremely impressed 
with the quality of GRC's assets and the speed at which the El Aguila property 
is being developed. We look forward to working with GRC's highly experienced 
management team to realise the significant potential of El Aguila as well as the 
other projects in their impressive pipeline." 
 
 
Hochschild and GRC are also evaluating 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. 
 
 
Today's announcement follows Hochschild's initial 5% investment in GRC which was 
completed in December 2008. Hochschild has the right to increase its stake to 
40% in the open market by December 2010, with the support of the GRC board. 
After this time, Hochschild can purchase additional shares in GRC without 
restriction. In the event that Hochschild increases its stake to 40%, it is 
entitled to a total of two out of five board nominations. 
 
 
William W. Reid, president of Gold Resource Corporation, stated; 
 
 
"We are pleased and impressed with the technical assessments, opinions and 
suggestions made by Hochschild's geologists and mining and milling personnel. 
Hochschild's professionalism and expertise confirm our belief that we have 
chosen the right strategic alliance partner. As a significant shareholder, 
Hochschild's backing, both financially and technically, strengthens Gold 
Resource Corporation's ability to build value for all shareholders. This 
alliance promotes a common goal to achieve significant production at the El 
Aguila project at the earliest possible date. We believe the increase of 
Hochschild's strategic investment in GRC further underscores the significant 
potential of our El Aguila Project." 
 
 
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 announcement 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 announcement or any other forward-looking statement it may 
make. 
 
 
- ends - 
 
 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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