Increases stake in Gold Resource Corporation
July 01 2009 - 2:00AM
UK Regulatory
TIDMHOC
RNS Number : 8695U
Hochschild Mining PLC
01 July 2009
July 1, 2009
Hochschild increases stake in Gold Resource Corporation
* Hochschild exercises option to invest a further $20 million in GRC
* Purchase of 5 million GRC shares at $4 per share, representing a 20% discount to
the previous 30 day average closing price
* Hochschild's ownership to increase from 14.6% to 23.9%
* Investment provides additional exposure to GRC's high grade, low cost ounces in
a mining friendly country with significant mineral potential
* Transaction represents continued delivery of cluster consolidation strategy
Hochschild Mining plc ("Hochschild") is pleased to announce that it has
exercised its option to purchase a further five million shares of Gold Resource
Corporation ("GRC") for a total cash consideration of $20 million, representing
a 20% discount to the previous 30 day average closing price as at 24 June 2009.
The purchase will be completed in two tranches: a $5 million dollars investment
which closed on June 30, 2009 and a second tranche of $15 million dollars, which
will close by 20 July 2009.On completion of the purchase, which will be funded
from existing cash, Hochschild will have a 23.9% interest in GRC, a US OTC
traded underground precious metals mining company with a number of prime
development projects in southern Mexico.
The investment increases Hochschild's exposure to GRC's high grade, low cost
ounces in a mining friendly country with significant mineral potential, and
expands the Group's Southern Mexico operational cluster following Hochschild's
initial investment in GRC in December 2008.
GRC will use $16 million of the proceeds to complete the El Aguila project. El
Aguila is currently expected to commence production in the second half of 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.
The remaining investment will be used to advance GRC's exploration efforts
around the La Arista, Margaritas, El Rey and El Aguila properties.
Miguel Aramburú, Chief Executive Officer of Hochschild Mining plc, commented:
"We are delighted to announce this transaction which provides Hochschild further
exposure to low cost, high grade ounces in the Southern Mexico, 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. This investment will enable GRC to complete the construction of the
mine and plant as well as to further their exploration efforts."
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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 for Reuters / HOC LN for Bloomberg) 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, one in southern Argentina and one open pit mine in northern
Mexico and numerous 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 42,345,489 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.
Forward looking statements:
The statement in this press release relating to the advancement and development
of Gold Resource Corporation's El Aguila project is a forward looking statement
within the meaning of securities legislation. The statement is based on the
public disclosures of Gold Resource Corporation, and is subject to the
statements by Gold Resource Corporation about such forward looking statements
and the assumptions and risks associated with it.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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