El Salvador president proposes bill to overturn metals mining ban
In 2017, El Salvador became the first country in the world to ban forms of metals mining.
Hochschild Mining (LON: HOC) shares jumped 17% in London on Wednesday after the company announced the approval of a modified Environmental Impact Assessment for its flagship Inmaculada gold-silver mine in southern Peru.
The fresh permit, valid for 20 years, allows Hochschild to resume brownfield exploration and develop high-grade reserves and resources at the property.
The official green light is expected to enhance the mine’s productivity, supporting the company’s growth prospects.
Investors had cautiously been awaiting the permit, a delay that kept Hochschild’s shares down on worries about the outcome and the volatile political, economic and social situation in Peru in the first half of this year.
The company’s stock was at 89p at the close of Wednesday’s trading, leaving the miner with a market capitalization of nearly £460 million ($585m).
“This approval represents a significant achievement for Hochschild and the Peruvian mining industry and demonstrates the Government’s commitment to confirming Peru’s position as an attractive, mining friendly jurisdiction,” chief executive Ignacio Bustamante said.
Commissioned in 2015, Inmaculada consists of 40 mining concessions and is responsible for the lion’s share of Hochschild’s overall production.
The mine churned out 43,622 ounces of gold, 2.4 million ounces of silver of attributable output in the second quarter of this year. The figures equal 72,364 gold equivalent ounces and 6 million silver equivalent ounces.
Besides delays in securing Inmaculada’s permit, the company has recently had to deal with protests and civil unrest in Peru affecting the operation, as well as the imminent departure of Bustamante.
Bustamante, 52, will be replaced by current chief operating officer Eduardo Landin at the end of August.
Landin, who has been with Hochschild for 15 years, said that having secured Inmaculada’s future, allows the company to focus on first production from the Mara Rosa project in Brazil, expected in the first half of 2024.
He also said Hochschild was progressing the new Royropata deposit at the Pallancata operation in Peru, and continuing to assess other development opportunities.
