Hochschild Raises Exmin Stake -BLOOMBERGHochschild Raises Exmin Stake to Develop Mexico Mine (Update3)
By Claudia Carpenter
July 9 (Bloomberg) -- Hochschild Mining Ltd., Peru's second- largest silver producer, more than tripled its stake in Vancouver-based Exmin Resources Inc. for $3 million to help develop the Mina Moris mine in Mexico. Its shares climbed.
The Lima-based company increased its interest to 17 percent from 4.5 percent, according to a statement released today. Hochschild paid 40 Canadian cents (38 U.S. cents) a share and agreed to convert $1.5 million owed by Exmin into stock at the same price. That's about 18 percent less than Exmin's closing share price of 48.5 Canadian cents last week in Toronto.
The $3 million will be used to fund Exmin's portion of the Moris mine in Chihuahua, Mexico, that is expected to start production in the current quarter. Hochschild owns 70 percent of Moris and Exmin has 30 percent. Hochschild has a ``right of first offer'' over Exmin's future projects in Mexico and some existing ones for at least 18 months in Mexico's Sierra Madre gold belt.
``We bring underground mining expertise and they bring some very good knowledge of the geological structure in the Sierra Madre,'' Deputy Chairman Roberto Danino said in a phone interview from London. The venture with Exmin started about a year ago was going so well, ``we decided it would be in our mutual interest to expand the relationship,'' he said.
Shares of Hochschild rose 18.25 pence, or 5.1 percent, to 378.25 pence as of 1:01 p.m. in London. A close at that price would be the highest since Feb. 26.
``It seems like a good move for Hochschild with respect to increasing its `optionality' over a larger number of exploration projects,'' Paul Mylchreest, an analyst at Redburn Partners in London, wrote in a note today provided by Hochschild.
Lima-based Cia. de MinasBuenaventura SA was Peru's biggest silver producer last year.
To contact the reporter on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net .
Last Updated: July 9, 2007 08:09 EDT