Business
Acquires Further Stake in GRC
Acquires Further Stake in GRC.
About this update from Hochschild Mining Plc
[{"type":"text","content":"\n RNS Number : 6096M Hochschild Mining PLC 26 May 2010 \n \n\n \n \n \n \n________________________________________________________________________\n \n26 May 2010 \n \nHochschild acquires further stake in Gold Resource Corporation\n \n • Hochschild enters into $6.0 million private placement with GRC, increasing ownership to 30%*\n • Purchase of 631,579 GRC shares at $9.5 per share\n • Transaction demonstrates continued delivery of consolidation strategy\nHochschild Mining plc (\"Hochschild\") is pleased to announce that it has entered into a private placement with Gold Resource Corporation (\"GRC\") for a total cash consideration of $6.0 million or $9.5 per share. Following completion of the purchase, Hochschild's ownership in GRC will increase from 29% to 30%*.\n\nTo date, Hochschild has invested a total of $69.5 million in GRC, a US OTC traded underground precious metals mining company with a number of high grade, low cost development projects in southern Mexico. GRC has a current market capitalisation of over $500 million, valuing Hochschild's investment at approximately $150 million. The company's key project, El Aguila, is due to commence commercial production in the first half of 2010 with a target of 70 thousand ounces of gold (4.2 million silver equivalent ounces) in the first twelve months of operation.\n\nGRC will use the proceeds of the private placement for working capital and continued construction of the phase two tailings impoundment as it moves towards commercial production at El Aguila. The company sold its initial gold and silver concentrates in April 2010 and subsequent concentrate sales have been made from low-grade ore processed during the El Aguila mill startup and commissioning. Following good progress at the mill, management has now switched to processing its targeted average grade ore as it moves towards declaring commercial production. \n\nIgnacio Bustamante, Chief Executive Officer of Hochschild Mining plc, commented:\n\n\"We are extremely impressed with the quality of GRC's project portfolio and the fact that the company is progressing towards commercial production at its El Aguila operation, which is expected in the first half of this year. We continue to execute our three-part str...