November 08, 2006
Hochschild Gives A South American Boost To Londons Mining Sector


Quite a feather in Londons cap to have Hochschild Mining taking a full listing. At first glance Toronto or New York might have seemed a more logical destination, but the Sabanes-Oxley Act has meant that compliance requirements in North America have reached stratospheric levels and London looked more attractive, though a full listing on the LSE is certainly no walkover. Geographically, also, it has advantages as both JP Morgan Cazenove and Goldman Sachs International, the joint sponsors, joint global co-ordinators and joint bookrunners for the IPO are both based in London, as are Canaccord Adams the co-lead manager and Nomura International, the co-manager. The shares were placed at 350 p each to raise around 270 million from institutional investors in the UK, Europe, the US and Canada. On this basis its market capitalisation is just over 1 billion which takes it straight to 99th position in the FTSE 250 Index and makes it worthy of consideration by all types of investors.

The history of this Peruvian mining company is fascinating as it comprises the mining operations of the Hochschild Group which was founded in Chile in 1911 by Mauricio Hochschild. After World War 1 it expanded into Bolivia where the target was tin and it did not start its Peruvian operations until 1925. Even then it stuck to metal trading and beneficiation until the 1940s and during the 2nd World War the Group was a key supplier of tin and other metals to the allied forces. The next major advance came in the 1960s when the Arcata mine was developed in Peru and it is still in production today. Over the next ten years or so more mines were opened in Brazil, Peru and Chile such as the well known Mantos Blancos copper mine in Chile.

It is here that the history gets a bit complicated as in November 1984 Anglo American bought the South African mining operations of Hochschild Group and immediately sold the Peruvian operations to Luis Hochschild who is clearly a descendant of the founder, though the exact relationship is not clear. Anyway it is his son Eduardo who is now executive chairman of the company, having started as a safety assistant at Arcata in 1987 and working his way up to be boss of the company 12 years later. At the executive level he is supported by Roberto Danino as deputy chairman and Alberto Beeck which is director of strategy and corporate development.

The operations sold back to Luis became the basis of Hochschild Mining which then launched an aggressive expansion campaign in Peru as well as in Mexico, Argentina and Chile. In order to spread the financial risk joint ventures were agreed with other local and overseas mining partners to develop the San Jose, Pallacanta, Mina Moris and San Felipe projects. Hochschild Mining is now the fourth largest silver producer in the world with an output of around 10.5 million ounces plus just under 250,000 ounces of gold in 2005. In that year its cash costs of production amounted to US$2.65/oz for silver and US$169/oz for gold which puts it in the first quartile of the 2005 global cost curve for both metals.

Its specialisation is in epithermal vein deposits and it currently has three underground mines Arcata, Ares and Salene - in production in southern Peru. Next up are two advanced and two early stage development projects in Argentina, Mexico and Peru and then a swathe of prospects at various stages. The overall strategy is to bring a sequence of these projects into production and the aim is to push towards annual production of 50 million silver equivalent ounces, or 830,000 gold equivalent ounces if preferred, by 2011. This is quite an uplift from the 2005 figures, but Hochschild is not the sort of company which would risk undershooting a declared target, so it may err on the conservative side.





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It will, 535p target is hardly sticking your neck out, the way this moves around. I've read about some dramatic profit increases in the next couple of years. It would be nice to pick up a good 5 year stock to hold, with the characteristics of RIO, POG...I'm overdue one!! And I don't mean something like Sola that's up 400% and gives us a rocky ride.

don't knock SOLA .... i think it must be the only stock where i have consistently made money either on long or short tack ...... and you think POG isn't a roller coaster? ..... look at their chart!

That's so true, likewise!

New closing highs today. With gold and silver up over 2.3% right now and a nice inverted head and shoulders pattern, we could look to see a break over 500p next week.

closing all-time high looks to have been 504 on 7/11/07

Take it back you're quite right.

Strong gold today so looks good for a break here today. Not yet got much of a following but I think that will change gradually.

surely this is primarily a silver play, even though HOC have some gold interests ..... from a chart point of view, sp has challenged all-time high of 504 but fallen off each time .... you could argue either that next time it will push straight through, or that it is relatively too high and needs to consolidate further

You are right of course from a charting perspective, although a nice inverted head and shoulders now could well indicate a break. The reasons I see this going substanially higher is that Moris, Pallancata and San Jose mines should ramp up in Q407. They are also sitting on substantial cash which will be used for further acquisitions before too long. The market of course may see things differently.

I took the opportunity earlier to top up while we were off 20p. I don't see this generally going much lower and whilst we're currently seeing a stronger dollar/weaker gold/silver, I still think it's only a correction. Pretty soon we'll be back to selling the dollar and in volatile December markets I expect to see EUR/USD 1.50, cable 1.10+ and gold $850 etc...

http://biz.yahoo.com/iw/071129/0333716.html

Inmaculada joint venture project commences drilling in Peru


Ventura Gold Commences Drilling at Inmaculada Gold Project in Peru
Thursday November 29, 8:00 am ET


SCOTTSDALE, AZ--(MARKET WIRE)--Nov 29, 2007 -- Ventura Gold Corp. (CDNX:VGO.V - News) (the "Company") has commenced a core drilling program at the Inmaculada gold-silver project in Southern Peru. The Inmaculada Project is a joint venture with Compaa Minera Ares S.A.C., a wholly owned subsidiary of Hochschild Mining PLC ("Hochschild"). The terms of the joint venture agreement, under which the Company can acquire up to a 70% interest, were outlined in a news release dated February 22, 2007.
Source: Ventura Gold Corp


(click to enlarge)
Appendix: Inmaculada Project -- Quellopata Area Drill Location Map



The Company plans to complete a total program of 3,000 meters drilled by early January 2008.The Inmaculada property contains three principal target areas, which were identified by Hochschild during previous exploration campaigns (see attached map).

Quellopata -- hosting over 25km of gold/silver-bearing quartz veins of the low-sulfidation type. Hochschild reported positive drill results from their drilling campaign, which comprised 31 drill holes totaling 7,188m. Drill assay results from five different veins included intercepts of 3.6m at 6.7 g/t gold and 63 g/t silver, 2.1m at 8.1 g/t gold and 151 g/t silver, and 1.5m at 5.9 g/t gold and 272 g/t silver.

Minascucho-San Salvador -- hosting mineralized breccias of the high-sulfidation type. Hochschild's drilling results were positive for this zone, with one of two drill holes (total 440m of drilling) which tested the area reporting a 40m intercept at an average grade of 1.9 g/t gold and 20 g/t silver.

Tararunqui -- hosting disseminated mineralization of the high sulfidation type. Hochschild drilled 11 holes totaling 1,479m in two widely separated portions of the mineralized zone. In one of these areas, three holes were drilled which returned anomalous but sub-economic gold values (in the 100-600 ppb gold range). Much of the mineralized system remains to be tested.

The current drill campaign will focus on the Quellopata target area. Eleven drill holes totaling 3,000 meters will be drilled to test the Martha, Roxana/Angela and Shakira veins at depths of up to 350 meters below surface (see attached map).

Sample preparation and analytical work for Ventura's drilling program will be carried out by SGS in Lima, Peru using industry-standard sampling practices and analytical methods for silver and gold. Ventura's drilling program will be supervised by Qualified Person, Ventura Exploration Manager, Mark Cannuli.

Ventura Gold Corp. is a United States-based precious metals exploration and development company with a business plan to a) acquire, evaluate and develop high-grade, low-cost gold-silver and base-metal deposits with a view to establishing strategic alliances and/or joint ventures with larger companies, and b) acquire strategic investments and/or alliances with pre-IPO exploration companies and listed junior companies where Ventura believes those companies and management have the resources and expertise to optimize the potential value of their asset bases. In addition to exploration projects in Peru, Arizona and Nevada, Ventura has over $1 million in strategic investments in emerging exploration companies with exposure to projects in Mexico, China, Africa and Ecuador.

Neither Hochschild Mining plc nor any of its subsidiaries accept any responsibility for the adequacy or inadequacy of the disclosure made in this news release and any such responsibility is hereby disclaimed in all respects.

The TSX Venture Exchange neither approves nor disapproves the information contained in this News Release.

Image Available: http://www2.marketwire.com/mw/frame_mw?attachid=636954

http://www.newswire.ca/en/releases/archive/November2007/26/c4494.html


Minera Andes announces the San Jose mine increases silver and gold mineral reserves by 100 percent
< <
TSX: MAI NASD-OTCBB: MNEAF
>>

SPOKANE, WA, Nov. 26 /CNW/ - Minera Andes Inc. (TSX: MAI and US OTC:
MNEAF) is pleased to announce results of a NI 43-101 Technical Report to be
filed that includes new mineral resources identified from 2007 exploration
drilling, underground development and conversion of 2006 mineral resources
into mineral reserves at the San Josproject in Santa Cruz province, southern
Argentina. In addition the report also quantifies areas of mineral potential
based on drilling. The San Josmining operation is expected to reach full
production of 750 tonnes per day (t/d) by year-end and the process plant in
commissioning is forecast by Minera Andes to reach full capacity in first half
of 2008. The San Josproject is operated by Minera Santa Cruz S.A. ("MSC")
(owned 51% by Hochschild Mining plc ("Hochschild") (HOC.L Reuters, HOC.LN
Bloomberg, London Stock Exchange) and 49% by Minera Andes).
Some highlights of the new Technical Report by AMEC Americas Limited
(AMEC) are as follows (all amounts are expressed in U.S. dollars, unless
otherwise indicated):

< <
- Proven and Probable Mineral Reserves: at June 30, 2007 are:
2.4 million tonnes grading 6.79 g/t gold and 430 g/t silver. The
economic cutoff used to calculate the reserves is $94/t (using a price
of $500 for gold and $9.00 for silver and taking into account
metallurgical recoveries).
- Gold contained: 521,000 ounces of Proven and Probable Mineral Reserves
- Silver contained: 38 million ounces of Proven and Probable Mineral
Reserves
- Production: 750 t/day at full production mining rate
- Forecast average operating costs of: $3.92 per ounce silver equivalent
- Mine life increased from 5.2 yrs to 9 yrs
- Forecast average gold production: 64,000 ounces per year at full
production
- Forecast average silver production: 3.9 million ounces per year at
full production
- Mineral potential was estimated for three targets to total:
1.6-3.4 million tonnes, with 6-10 g/t gold and 200-600 g/t silver
>>

The new Technical Report by AMEC entitled "San JosProperty San Cruz
Province, Argentina NI 43-101 Technical Report", was authored by Pierre Rocque
(P. Eng.), William Colquhoun (FSAIMM), Emmanuel Henry MAusIMM (C.P.), and
Armando Simon, R.P. Geol., AIG, appropriately qualified persons according to
NI 43-101. The results from the new report indicate that the 2006 core
drilling program (128 holes totaling 22,047 meters) and 2007 development and
drilling on the Kospi and Frea veins at San Josincreased silver and gold
reserves by 100% (on a tonnage basis) from the level announced in the our
September 2007 Technical Report. Work at San Josin 2007 has increased the
mineral resources and mineral reserves from a 38,000-meter exploration
drilling campaign currently underway, and development of the underground
workings. We expect further increases in the mineral reserves and mineral
resources from these programs. At the current mining production rate of
750 t/d the new mineral reserves that include the Kospi vein indicate a mine
life of 9 years at San Jos an increase of 73 percent over the existing mine
life of 5.2 years.
Allen Ambrose, president of Minera Andes, said "Even with the new
drilling, less than 15% of the known 40 kilometers of the vein trends at San
Joshave been drilled. The drilling in 2006-2007 has increased the mine's
mineral reserves by 100% (on a tonnage basis). The joint venture is drilling
38,000 meters in the current exploration program to define new mineral
reserves and continue evaluating new targets. With commissioning of the mine
and the ramping up of production it is an exciting time for Minera Andes. Now
we are developing the mineral reserves to support the plans of MSC to double
production to 1,500 t/d. The mineral potential estimates on drilled targets
further highlights the potential to increase the mineral reserves."

Mineral Potential

The new Technical Report also estimates the mineral potential at San Josbased on drilling outside the existing mineral reserves/resources. Mineral
potential was estimated using long section based blocks with 2 to 8 drill
holes per target for the Odin, Aylen, and Frea extension targets. The mineral
potential for these targets based on the current drilling is estimated to
total 1.6 to 3.4 million tonnes ranging from 6 to 10 g/t gold and 200 to
600 g/t silver.
The estimation used a conventional method, based on the interpretation of
mineralized blocks on vertical longitudinal sections, the calculation of block
areas, average horizontal widths and weighted average grades of the
mineralized intersections, and the subsequent calculation of block tonnages
and weighted average grades.
AMEC's estimation has also considered the following procedures and
assumptions:
< <
- For Ayel and Odin, AMEC used the composite vein true thicknesses and
grades provided by Minera Andes. Composite grades were capped at
10 g/t Au and 500 g/t Ag.
- For Frea, AMEC used the individual sample lengths and assays.
Individual assays were capped at 25 g/t Au and 1,000 g/t Ag. In such
cases where splits were present in the proximity of the main vein
(less than 10 m along the hole), the estimation considered the
combined thickness and weighted average grade of the split and the
vein. Splits located at greater distances were not included in the
estimation.
- For the estimation of horizontal thicknesses, AMEC assumed that all
veins dip 70 degrees, and that all holes were drilled with 50 degrees
dip.
- Whenever necessary, horizontal thicknesses were diluted to 1 m minimum
mining width.
- AMEC considered a 2.65 t/m(3) bulk density.
>>

It should be emphasized that this estimation is conceptual in nature,
that there has been insufficient exploration to define a mineral resource, and
that it is uncertain if further exploration will result in the target being
delineated as a mineral resource.

Looking better again here again, some late gains coming in.

Silver putting in quite a strong performance today, up 1.6% breaking above $14.50. Uptrend looks firmly intact and I see HOC benefitting.

HOC takes an additional stake in Exmin, increasing stake to just short of 20%.

HOC sp has tumbled recently, but if you scroll up to the chart in the header you will note the encouraging support of 25 dma

Yes had seen that thanks. It does move sharply up and down but think they'll be adding some nice niche acquisitions in due course. Both silver and gold had a further turnaround yesterday. Greater volatility to come in the next 3 weeks too.

charts are a bit iffy for HOC anyway because it is so illiquid and thus volatile ..... good to see POG doing its bit at last, albeit without much impetus

Yes very illiquid. HOC's investment in Exmin is more a gold play in Mexico so indirectly starts to be bit more of a gold play (though still silver is the main business).

Silver showing bullish gains this afternoon and the graph looks positive to retest highs. Not yet influencing the share price!