Business
Hochschild increases stake in
Hochschild increases stake in.
About this update from Hochschild Mining Plc
[{"type":"text","content":"\n RNS Number : 3405E Hochschild Mining PLC 18 December 2009 \n \n________________________________________________________________________\n\n18 December 2009 \n\n\nHochschild increases stake in Gold Resource Corporation\n\n\n\nHochschild enters into $16 million private placement with GRC\n\n\nPurchase of 1.95 million GRC shares at $8.2 per share\n\n\nHochschild's ownership to increase from 23.9% to 27%\n\n\nTransaction demonstrates continued delivery of M&A strategy following Hochschild's successful capital raising in early October 2009 \n\n\n\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 $16 million. On completion of the purchase, which will be funded from existing cash, Hochschild will have a 27% interest in GRC. \n\nSince December 2008, Hochschild has invested a total of $54 million in GRC, a US OTC traded underground precious metals mining company with a number of prime development projects in southern Mexico. GRC has a current market capitalisation of approximately $470 million. \n\nToday's announcement demonstrates Hochschild's commitment and ability to deliver on its strategy following the $260 million capital raising undertaken in October 2009, which strengthened the Company's balance sheet and provided funds for further acquisition opportunities. \n\nThis additional 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 previous investments in GRC. \n\nGRC will use $8 million of the proceeds to fund development of the El Aguila project including working capital for GRC's recently commissioned Aguila mill which is expected to produce 70 thousand ounces of gold in 2010 (4.2 million silver equivalent ounces). The deposit comprises 75% gold and silver and 25% zinc, copper and lead at current prices....