Business
Increases Stake in GRC
Increases Stake in GRC.
About this update from Hochschild Mining Plc
[{"type":"text","content":"\n RNS Number : 2854I Hochschild Mining PLC 09 March 2010 \n \n\n \n \n \n \n________________________________________________________________________\n \n9 March 2010 \n \nHochschild further increases stake in Gold Resource Corporation\n \n • Hochschild enters into $5.2 million private placement with GRC, increasing ownership to 29%\n • Purchase of 600,000 GRC shares at $8.6 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 $5.2 million. Following completion of the purchase and purchases undertaken on the open market, Hochschild's ownership in GRC will increase from 27% to 29%.\n\nSince December 2008, Hochschild has invested a total of $59.2 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 over $470 million, valuing Hochschild's investment at approximately $136 million.\n\nThis additional investment increases Hochschild's exposure to GRC's high grade, low cost ounces and expands the Company's operational cluster in southern Mexico, a mining friendly country with significant mineral potential. It also 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\nProceeds will be used at GRC's El Aguila project for working capital during mill optimisation, training and continued construction of the phase 2 tailings facility. The El Aguila project commenced production in February 2010 and is on track to produce 70 thousand ounces of gold in the first year of operation (4.2 million silver equivalent ounces).\n\nMiguel Aramburú, Chief Executive Officer of Hochschild Mining plc, commented:\n\n\"We are delighted to announce this transaction which demonstrates the continued delivery of our selective M&A strategy following our $260 million capital r...