Hochschild Regulatory News (HOC)

19 January 2011  

Positive scoping study at 100% owned Crespo project in Peru

Hochschild Mining plc ("Hochschild" or the "Company") is pleased to announce positive results from a scoping study completed by an independent company, Ausenco, at its 100% owned Crespo project, located in the Company's existing operating cluster in southern Peru.  

Highlights

·; Open pit, heap leach operation within Hochschild's Southern Peruvian cluster

·; Total resources of 49.41 million silver equivalent ounces

·; Estimated average initial silver equivalent production of 2.3 million ounces per year with a resource life of 7.5 years

·; Potential to generate pre-tax non-discounted cashflow2 of $173.7 million and IRR of over 48% at current prices

·; Estimated total cash operating cost of $8.8 per silver equivalent ounce

·; Project now at pre-feasibility stage, with targeted completion in Q4 2011

The scoping study is based on measured and indicated resources of 31.3 million silver equivalent ounces and estimates annual silver equivalent production of 2.3 million ounces starting from 2014. Crespo, which is expected to be an open pit deposit, is one of a number of properties acquired by the Company in 2008 as part of the Liam JV/Southwestern Resources land package and is the first of these to progress to pre-feasibility.

Ignacio Bustamante, CEO of Hochschild Mining plc commented:

"We are delighted to announce positive scoping results at our 100% owned Crespo project, demonstrating our ongoing focus on value creation through organic growth. The results confirm that Crespo has the potential to become a profitable operation and enables us to leverage the existing skill base and infrastructure that we have established in southern Peru. We have extensive experience in bringing early stage projects into development and we will now progress Crespo through pre-feasibility which we will aim to complete in Q4 2011.

In addition to the resources incorporated in the scoping study, the Company believes that there is a high probability of significantly increasing resources at Crespo. This is demonstrated by the recent addition of 5.6 million silver equivalent ounces in the measured and indicated category (not considered in the scoping study), the possibility to convert more than 15 million silver equivalent ounces from the inferred category and the additional potential to further explore adjacent areas."

Summary of scoping study3

(base case using $1,000/oz gold and $17/oz silver with a 60:1 silver-to-gold equivalent ratio):

·; For pit optimisation purposes, the scoping assumed long-term gold and silver prices of $900/oz and $15/oz respectively

·; Mine production of 14.3 million tonnes at an average grade of 36.1 g/t silver and 0.5 g/t gold

·; Recovered ounces: 178,570 ounces of gold and 6.5 million ounces silver or approximately 17.2 million ounces of silver equivalent (based on metallurgical recoveries of 80% for gold and 39% for silver)

·; Total cash operating cost: $8.8 per silver equivalent ounce

·; Initial capital expenditure of $65.3 million plus life of mine capex estimate of $7.5 million

·; 5,500 ore tonnes per day ("tpd") open-pit mine

1 Includes measured, indicated and inferred resources

2 Using prices of $1,400/oz for gold and $25/oz for silver

3 Results of a scoping study can vary by +/- 40%. The Ag equivalent resource calculation does not consider metallurgical recovery

 Table 1: Crespo resources4:  

Table 2: Crespo project scoping study4 - initial results:

Table 3: Crespo project sensitivity analysis (base case in bold and highlighted):

4 Scoping study assumes only measured and indicated resources

4 Results of scoping study can vary by +/- 40%

5 Calculation considers inferred resources as waste

Please click on the link below to view the location of the Crespo project within Hochschild's southern Peru cluster:

 http://www.rns-pdf.londonstockexchange.com/rns/6998Z_-2011-1-18.pdf

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Enquiries:

Hochschild Mining plc

Charles Gordon +44 (0)20 7907 2934

Head of Investor Relations

Finsbury

Faeth Birch +44 (0)20 7251 3801

Public Relations

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About Hochschild Mining plc:

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

Forward looking statements:  

This announcement may contain forward looking statements. By their nature, forward looking statements involve risks and uncertainties because they relate to events and depend on circumstances that will or may occur in the future. Actual results, performance or achievements of Hochschild Mining plc may, for various reasons, be materially different from any future results, performance or achievements expressed or implied by such forward looking statements.

The forward looking statements reflect knowledge and information available at the date of preparation of this announcement. Except as required by the Listing Rules and applicable law, the Board of Hochschild Mining plc does not undertake any obligation to update or change any forward looking statements to reflect events occurring after the date of this announcement.