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Hochschild Mining: Excellent drill results at Inmaculada

Contributed by Fox-Davies Capital

Hochschild has announced that the Peruvian Government has approved the Company's Environmental Impact Study for the Inmaculada project in southwestern Peru. At the same time, some drill results from the Lourdes and Martha veins were released.

The approval of the Environmental Impact Study for the Inmaculada project is a very important milestone for the project as it now allows for construction to proceed. The key issue here is that construction of the 3,500tpd underground mine may now commence. It is estimated to cost $315M and be ready to start commissioning in Q4 2013. Apart from the plant construction, the other main contracts are for the construction of three exploration tunnels, the construction of the main access road to the site and the construction of the electricity transmission line.

The new exploration results from the Lourdes and Martha veins were excellent. The standout hole was LOU12-009 which intercepted 31.55g/t gold and 199g/t silver over a width of 3.12m. In general the widths were in line with expectations, but the metal grades were higher than the reserve grades of 3.37g/t gold and 120g/t silver. They were also higher than the resource grades of 4.0g/t gold and 147g/t silver.

These positive exploration results are indicative of the exploration potential at Inmaculada.