Name and Location
Inmaculada gold/silver project, Ayacucho department, Peru.

Client
Minera Suyamarca, in which Hochschild Mining holds 60% and International Minerals Corporation 40%.

Project Description
Inmaculada is a 20 000 ha gold/silver project, in Hochschild’s southern Peru cluster.

The property consists of 40 mining concessions. Envisaged is a 3 500 t/d underground operation, with average silver equivalent production of 11.6-million ounces a year from Inmaculada’s main Angela vein.

The Angela vein will be accessed through a ramp, starting from a portal about 4 400 m above sea level and that declines to about 4 300 m above sea level towards the middle and lower end of the vein.

A primary crusher plant will be sited close to the portal, with a 1.5 km conveyor belt transporting ore to the plant and a waste dump located 1 km to the south. There will be an additional horizontal access tunnel at the Quellopata gorge at 4 500 m and a drainage tunnel at the Patari Gorge at 4 300 m.

Key mining infrastructure will comprise three main levels to exploit all sections of the vein at the 4 300 m, 4 400 m and 4 500 m levels. These will be connected by four spiral ramps and six ore passes, with other shafts for ventilation, water and additional support services.

Net Present Value/Internal Rate of Return
Not stated.

Value
$370-million.

Duration
Production started in June 2015.

Latest Developments
During the first half of this year, plant construction continued, with first doré production achieved on in June 2015. By the end of June, as part of the ramp-up phase to achieve full commercial design capacity, 52 325 t of low-grade development material had been treated at the plant producing an esyimated 3 420 oz of gold and 95 450 oz of silver.

Ramp-up in mill throughput continued throughout July and August, with tonnes produced averaging 3 000 t/d and expected to reach the forecast capacity of 3 500 t/d at the end of August. Gold and silver recoveries slightly exceeded expectations with the target of reaching 95% in gold and 90% in silver expected by the end of the year.

Underground mine development is continuing, with a stockpile of about 270 000 t currently available for processing while stope mining activities have started using long-hole and breasting methods.

Hochschild has reiterated that the overall production forecast of six- to seven-million silver equivalent ounces for 2015 remains in place and that it is on course to receive its plant operating permit, which will enable the company to start commercial sales.

Construction of the paste backfill plant is 65% complete, with work on the laboratories, warehouses and workshops now complete.
Hochschild continues to assess the change orders and discussions with the contractor are ongoing relating to the completion of the engineering, procurement and construction (EPC) contract for Inmaculada.

Based on Hochschild's own evaluation work and advice received from external advisers, it believes that the majority of the change orders are without any merit or will be subject to significant downward adjustment. In addition, the company believes that GyM has breached several terms of the EPC contract, including failing to meet the completion date.

The exploration focus near the Inmaculada mine remains on the Palca area to the north-east. Following a mapping programme in 2014 at the Palca 1 zone, six promising vein structures have been selected in a corridor of almost 5 km, with work at Palca 2 zone starting later on in the year.

Key Contracts and Suppliers
Ausenco (feasibility studies).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Hochschild Mining, tel +511 317 2000, fax +511 437 5009 or email info@hocplc.com.