Hochschild Regulatory News (HOC)

18 Sep 2007 07:02

Hochschild Mining PLC18 September 2007 18 September 2007 Hochschild Mining plc commences production at the Pallancata mine and completes capacity expansion at the Selene plant • Commencement of production at Pallancata marks another important milestone in Hochschild's growth strategy • Doubling plant capacity at Selene exemplifies Hochschild's ability to leverage its existing operations and regional knowledge to efficiently expand production • During the course of 2007, Hochschild has expanded from three operations in one country to six operations in three countries, Peru, Argentina and Mexico • Hochschild is on track to reach its production target of 26 million silver equivalent attributable ounces in 2007 (14 million silver attributable ounces and 200 thousand gold attributable ounces) Eduardo Hochschild, Chairman of Hochschild Mining plc, said, "Thus far, 2007 has been an exciting year for the Hochschild Mining Group as wecontinue to deliver on our project pipeline. We have successfully expanded plantcapacity at Ares, Arcata and Selene and have commenced production at San Jose inArgentina, Moris mine in Mexico and now Pallancata in Peru." Hochschild Mining plc ("Hochschild" or the "Group") is pleased to announce thatit has commenced production at the Pallancata mine on time and within budget atan initial rate of 180 ktpa. Pallancata is a silver and gold mine located insouthern Peru approximately 22 kilometers from the existing Selene operation andis a joint venture between Hochschild (60%) and International MineralsCorporation ("International Minerals") (40%) and is operated by Hochschild.Commencement of production at Pallancata further solidifies Hochschild's abilityto bring new projects into production on time. This year Hochschild has expandedfrom three operations in one country to six operations in three countries, Peru,Argentina and Mexico. Processing throughput capacity at the Selene plant has increased from 350 ktpato 700 ktpa to accommodate the Pallancata ore. Initially, while Pallancata isbeing ramped up to approximately 270 ktpa over the next 12 months, approximatelyseventy-five percent of the throughput capacity at the Selene plant will be usedfor the Selene ore with the remaining twenty-five percent for the Pallancataore. The Pallancata ore is transported to the Selene site via a 22 kilometer gravelroad. As was contemplated originally, the Pallancata ore will be sold in theform of a silver-gold concentrate while the possibility of converting it to doreis evaluated. In the last six months of 2006, the reserves and resources in Pallancataincreased substantially as a result of an aggressive drilling campaign where12,860 meters were drilled. During this period, resources and reserves increased36% and 111% respectively. In 2007, 2,939 meters have already been drilled, witha plan to drill another 16,441 meters during the remainder of the year. With thedrilling success over the last twelve months, the Group intends to shift focusback to Selene in order to prove up additional reserves. The Group continues tobe pleased with the caliber of mineralization being encountered within thePallancata land package which consists of 7,330 hectares. Corporate social responsibility remains a key pillar of the Hochschild missionand for this reason the Company has employed a CSR manager at the Pallancataoperation solely responsible for maintaining and improving communications withthe local communities. We have been active on all fronts of corporate socialresponsibility most notably in active involvement with the local school as wellas through the establishment of an infirmary. Enquiries Hochschild Mining plcWray Barber +44 (0)20 7152 6014Head of Investor Relations FinsburyRobin Walker +44 (0)20 7251 3801Public Relations About Hochschild Mining plc Hochschild Mining plc (HOC.L for Reuters / HOC LN for Bloomberg) is a publiclyheld company listed on the London Stock Exchange. Hochschild is a leadingprecious metals company with a primary focus on the exploration, mining,processing and sale of silver and gold. Hochschild currently operates fiveunderground epithermal vein mines, four located in southern Peru and one insouthern Argentina and one open pit mine in northern Mexico. Hochschild also hasone early stage development project in Mexico and fifteen long-term prospectsthroughout Latin America. Hochschild has over forty years experience in themining of precious metal epithermal vein deposits. For further information please visit www.hochschildmining.com About Pallancata The Pallancata silver and gold mine, located in southern Peru, is owned byHochschild (60%) and International Minerals (40%) and is operated by Hochschild.In 2006, a 12,860 metre drill program was completed which increased attributableresources and reserves by 36% and 111%, respectively. Thus far in 2007, 2,939metres of drilling have been completed and plans to drill an additional 16,411metres will be completed during the remainder of the year. To date more than 1.6kilometres of underground workings have been developed in the Pallancata vein. This information is provided by RNS The company news service from the London Stock Exchange