Name: Pallancata mine.

Location: The mine is located in the Ayacucho region in the south of Peru.

Holding and Controlling Company: Hochschild Mining.

Brief Description: The Pallancata orebody is an epithermal silver deposit that was

formed by hydrothermal fluids that were channelled in distinct veins which are mined today with highly selective methods to keep ore dilution by waste rock to a minimum.

The mine is one of the richest silver deposits in the world and is a low-to-intermediate sulphidation precious metal epithermal vein deposit.

Brief History: The Pallancata and Mariana veins were discovered at the property in 1980.

International Minerals Corporation (IMZ) acquired the Pallancata mine in 2002 and conducted an exploration programme from 2002 to 2005.

Hochschild Mining signed a formal joint venture (JV) agreement with IMZ in 2006, to fast track development, permitting and the start of commercial production from the Pallancata deposit.

Production stated at Pallancata in the third quarter of 2007 at an initial rate of 180 000 t/y.

Hochschild held a controlling interest of 60% in a JV with IMZ up until December 2013.

Hochschild now owns 100% of the operation, following the purchase of IMZ.

Products: Silver and gold.

Geology/Mineralisation: Low sulphidation epithermal vein mineralisation extends from the San Javier/Virgen del Carmen areas in the north for more than 3 km to the Pallancata vein, and up to 2 km in an east-west direction, with a vertical extent of up to 500 m. The Pallancata vein is the principal target area. 

The known mineralised zone at the Pallancata vein is more than 2 km long and is up to 40 m wide. The San Javier and Mariana zones display similar veining with high-grade silver and gold mineralisation.

Resources: Total measured and indicated mineral resources as at December 31, 2016, were estimated at 1.75-million tonnes grading 405 g/t silver and 1.74 g/t gold.

Reserves: Total proven and probable reserves for stockpile as at December 31, 2016, were estimated at one-million tonnes grading 423 g/t silver and 1.8 g/t gold.

Inferred resources were estimated at 3.64-million tonnes grading 357 g/t silver and 1.37 g/t gold.

Mining Method: Underground operation using conventional/mechanized trackless cut and fill.

Major Infrastructure and Equipment: The Pallancata ore is transported about 22 km to Hochschild’s Selene plant for processing and is sold in the form of silver/gold concentrate. 

The processing plant has a current capacity of 1 000 t/d but this reflects a transitional year before the introduction of commercial production from the new Pablo vein in 2017.

Prospects: In 2007, Hoschild developed the Pablo vein at Pallancata in preparation for mining in 2018. Meanwhile the discovery of the Marco vein nearby has added further resources and prompted a new regional geological hypothesis that the company will be testing in 2018.

Contact: Hochschild head of investor relations Charlie Gordon

Contact Details:

Hochschild Mining

Tel +44 203 709 3260

Email charles.gordon@hocplc.com

Website http://www.hochschildmining.com/