Hochschild Mining Plc · LSE:HOC
Hochschild Mining — Merger or Acquisition (October 2010)
10 slides from Hochschild Mining's merger presentation, Oct 13, 2010
Slide 1: Inmaculada acquisition
Hochschild Mining plc Inmaculada acquisition 13 October 2010 0
Slide 2: Disclaimer
Disclaimer Some statements contained in this presentation or in documents referred to in it are or may be forward‐ looking statements. Actual results may differ from those expressed in such statements, depending on a variety of factors. Past performance of the Company or its shares cannot be relied
Slide 3: Inmaculada – The project
Inmaculada – The project • 20,000 hectare gold‐silver project located in Hochschild’s existing southern Peru cluster • JV with International Minerals Corporation (IMZ) ‐ Hochschild’s partner at Pallancata • Original agreement: IMZ right to earn in 70% interest by completing and funding a feasibility
Slide 4: Inmaculada – The transaction
Inmaculada – The transaction • Hochschild to increase holding to a controlling interest of 60% • $15 million in cash • Hochschild to fund IMZ’s share of the first $100 million of capital expenditure (i.e. $40 million) • $20 million private placement in IMZ • JV to complete 20,000 metres of drilling
Slide 5: Inmaculada – Value accretive transaction
Inmaculada – Value accretive transaction Au: $1,000/oz Au: $1,300/oz Base case scenario as per IMZ’s scoping study results Ag: $17/oz Ag: $22.1/oz Pre Tax NPV Non‐discounted $m 660 1,026 • Mine loss: 5% Dilution: 20% At 5% $m 434 699 At 10% $m 287 483 • Plant capacity: 3,000tpd IRR % 41% 58% • Initi
Slide 6: Acquisition cost of $89/gold ounce
Acquisition cost of $89/gold ounce Acquisition cost Au eq oz ($ million) ($/Au Eq oz) Inmaculada (30%) 51.4* $89 Andean (100%) 3,400 $969.3 HIGHLY ACCRETIVE ACQUISITION * Purchase price of $15 million plus IMZ’s share of first 100 million in capex discounted over period of investment 5
Slide 7: Significant geological potential
Significant geological potential • Vein structure (Angela) remains open at both sides • Significant geological potential in different geological structures within the property POTENTIAL TO BE THE NEXT PALLANCATA 6
Slide 8: Pallancata: world's #7 primary silver producer
Pallancata: world’s #7 primary silver producer Pallancata Inmaculada Pallancata's resources 2009 120 109 AVG. GRADE Ag (g/t) 327 137 100 91 totaL moz Ag eq. 83 80 Au (g/t) 1.43 3.8 60 49 UNIT COST PER TONNE $50 $52* 40 20 CAPEX PER TONNE 26.1 33.6* 0 ANNUAL PRODUCTION (Ag Eq oz) 10.3 11.0 2006 2007
Slide 9: Summary: Delivering on our exploration strategy
Summary: Delivering on our exploration strategy • Great addition to our Southern Peruvian cluster • Transaction provides control from the outset • Peruvian team can assume management of the Inmaculada project with little additional resources • Further solidifies our excellent relationship with IMZ,
Slide 10: Exploration: More to come!
Exploration: More to come! Peru CURRENT OPERATIONS Mexico Argentina Canada Chile Arcata Ares Pallancata Moris San José GRC ‐ El Aguila Mines Lake Shore Gold COMPANY MAKERS COMPANY MAINTAINERS Resource Azuca Development Inmaculada Crespo Victoria Mosquito Astana Farallon Mercurio Drill Targets La Flo
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