Hochschild Regulatory News (HOC)

26 May 2009 10:00



26 May 2009

AGM Statement

At the Company's Annual General Meeting to be held in London today, Eduardo Hochschild, Executive Chairman of Hochschild Mining plc ("Hochschild") will comment:

"I am pleased that, despite difficult conditions in 2008, we once again achieved all our operational targets, completing expansions at three of our six mines and increasing capacity by 29%. The Board remains committed to maximising long term shareholder returns whilst ensuring that the business is adequately funded to further its growth strategy. Therefore, it has proposed a dividend of $0.02 per share for the six months to December 2008, representing a full year dividend of $0.04 per share.

We are pleased with our operational performance in 2009 so far, with production in the first quarter up 16% year-on-year to 6.7 million attributable silver equivalent ounces and remain confident that we will achieve our full year production target of 28 million attributable silver equivalent ounces. We are focused on producing profitable ounces and diligently controlling costs. We have already made good progress in this area and expect 2009 unit cost per tonne to be at least 5% lower than 2008.

We remain focused on exploration and continue to develop our existing operations as well as our project pipeline, which currently contains numerous medium and long term prospects with significant growth potential. In the first quarter of 2009, significant progress has been made at San José, our operation in Argentina, with the discovery of a promising new mineralised structure. We are also continuing to see positive drill results at a number of our other early stage properties such as Azuca in Peru and Encrucijada in Chile.

I am delighted that our acquisition of Southwestern Resources Corp was successfully completed on 21 May 2009, for a total cash consideration of C$22.5 million (US$17.5 million). The acquisition consolidates our position in Liam, a 282,000 hectare land package in very close proximity to the Group's four existing Peruvian mines and enables us to leverage existing infrastructure and knowledge of the regional geology.

Hochschild's long term debt of $200 million is a low cost facility fixed at 2.75%. Debt repayments of approximately $57 million are due yearly from 2010. To ensure an ongoing level of cash flow stability, particularly related to the funding of our debt repayments, we have secured a 'zero cost collar' for 2.2 million ounces of our 2010 silver production with an average 'floor' at $11/oz and an average 'cap' at $18/oz. We will continue to monitor market trends and will consider further collars as appropriate.

We are in a sound financial position and continue to be focused on cost control and producing profitable ounces. With solid assets, an excellent project pipeline and an enthusiastic and dedicated management team, I am optimistic about the prospects for the coming year."

About Hochschild Mining plc:

Hochschild Mining plc is a leading precious metals company listed on the London Stock Exchange (HOCM.L for Reuters / HOC LN for Bloomberg) with a primary focus on the exploration, mining, processing and sale of silver and gold. Hochschild currently operates five underground epithermal vein mines, four located in southern Peru, one in southern Argentina, one open pit mine in northern Mexico and numerous long-term prospects throughout the Americas. Hochschild has over forty years experience in the mining of precious metal epithermal vein deposits. For further information please visit www.hochschildmining.com