Hochschild Mining ups its stake in Gold Resource

HOCHSCHILD Mining, the gold and silver producer, said yesterday it had exercised an option to up its stake in Gold Resource, spending $20m on a further 5m shares. <br /><br />It said the price was a discount of 20 per cent to the previous 30 day closing price average. The purchase will be funded from its existing cash pool, and Hochschild will up its ownership from 14.6 per cent to 23.9 per cent.<br /><br />Gold Resource will use $16m of the cash to complete its El Aguila project in Mexico.<br /><br />El Aguila is expected to start production in the second half at 70,000 ounces of gold per year, or 4.2m silver equivalent ounces, subject to obtaining remaining permits and regulatory approval.<br /><br />Last month, it announced a project to convert its Arcata plant production to dor&eacute;, an alloy of gold and silver, to improve operational efficiency, maximise revenue, and lower working capital requirements.