Hochschild To Invest $171 Million In New Peru Mine Project

Gold and silver mining company Hochschild Mining PLC (HOC.LN), plans to invest $171 million developing the Azuca gold mine project in Peru.

The mine, which is expected to produce 3.5 million of silver equivalent ounces a year, should have a life of about eight and a half years, Hochschild Chief Executive Ignacio Bustamante said in an email late Monday.

Silver equivalent is the combined gold and silver production expressed in silver terms. The silver-equivalent volume and value is calculated at 60 gold units to one silver unit.

Bustamante said pre-feasibility studies at Azuca should be completed in the second half of 2011.

The company's 2009 annual report says the Azuca mine has significant mineral potential and analysts expect it--along with another Peruvian mine project, Crespo--to be one of the next big share price drivers.

Hochschild's total production for 2010 is expected to reach about 29 million ounces of silver-equivalent.

Hochschild, which has its headquarters in Lima, has five directly controlled mines--three in Peru, one in Argentina and one in Mexico. The company also has holdings in two other mining companies, 38% in Canada's Lake Shore Gold Corp. (LSGGF, LSG.T) and 29% in Mexico's Gold Resource Corp. (GORO).

Peru is the world's top silver producer and a leading gold producer.

-By Sophie Kevany, Dow Jones Newswires; 51(1)-989-038-043; sophie.kevany@dowjones.com

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