Hochschild Buys Controlling Interest In Inmaculada Project

Hochschild Mining PLC (HOC.LN), said Wednesday that it has reached an agreement with its joint partner International Minerals Corporation to increase its stake in Inmaculada, a 20,000 hectare gold-silver project located within its existing cluster in southern Peru.

MAIN FACTS:

-Value accretive acquisition to increase holding in Inmaculada to a controlling 60% interest

-Initial cash consideration of $15 million and agreement to fund 100% of the project's first $100 million of capital expenditure

-$20 million private placement in joint venture partner, International Minerals Corporation

-Commitment by the joint venture to complete 20,000 meters of drilling annually for the first three years in areas outside of the main Angela vein

-Potential to generate pre-tax cashflow of $1,026 million non-discounted, $699 million at a 5% discount rate and $483 million at a 10% discount rate

-Estimated average annual total silver equivalent production of 11 million ounces

-Estimated average annual attributable silver equivalent production of 6.6 million ounces, representing 25% of Hochschild's anticipated 2010 production

-Feasibility study to be completed by the end of 2011 with production to commence in 2014

-Main Angela vein remains open with significant additional upside potential in several other structures within the property

-Shares closed Tuesday at 437 pence, valuing the company at GBP1.6 billion.

-By Razak Musah Baba, Dow Jones Newswires; 44-20-7842-9275; razak.baba@dowjones.com

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