Hochschild Mining has entered into a binding agreement to acquire the 40% interests held by International Minerals Corp. in the Pallancata mine and the Inmaculada advanced project in Peru. Prior to the acquisition, Hochschild holds a 60% interest in the two properties. The transaction is valued at about $280 million.
International Minerals’ non-Peruvian assets and liabilities will be spun off into a new company at closing. These will include International Minerals’ remaining cash and receivables, estimated at approximately $58 million, and the company’s non-Peruvian subsidiaries and related liabilities, primarily its properties in Nevada, including its advanced Gemfield gold project.
Hochschild CEO Ignacio Bustamante said, “We are excited to be consolidating ownership in Pallancata, currently our largest cash flow generator, and Inmaculada, our most exciting growth project. This step is consistent with our strategy of value accretive acquisitions, with significant geological potential in a jurisdiction in which Hochschild has almost 50 years of experience.”
In 2012, the Pallancata mine produced 9 million silver equivalent oz, comprised of 7.44 million oz of silver and 26,230 oz of gold. Current scheduling at Inmaculada calls for completion of construction and start of commissioning during the fourth quarter of 2014, targeting production of 12 million silver equivalent oz/y.
Hochschild will defer its Crespo project in Peru to focus capital spending on the Inmaculada project.