2nd Oct 2019 09:18
(Alliance News) - Hochschild Mining PLC on Wednesday said it has acquired the BIoLantanidos ionic clay rare earth deposit in Chile.
The precious metals producer said the acquisition represents an opportunity for Hochschild to enter into a "unique" rare earth deposit. Rare earths are essential in several technological components with increasing global demand and some are critical in the manufacturing of permanent magnets used in electric vehicles, Hochschild highlighted.
Hochschild is acquiring 93.8% of the BioLantanidos deposit that it does not already own for USD56.3 million.
The company said it has previously invested USD2.5 million in the project during 2018 and early 2019 in exchange for a 6.2% equity stake with an option to increase ownership.
Hochschild said mineralisation occurs from the surface to between 20 and 30 metres deep, and mining will not require explosives. The clay undergoes a simple washing process in which rare earths will be desorbed into a solution, concentrated and calcined to obtain a rare earth oxide.
Although BioLantanidos owns 72,000 hectares of concessions, an initial modular project has been developed in the Penco area in an area of 300 hectares. Other modules are expected to be evaluated in the future, providing significant low capital expenditure growth potential, the company said.
"We believe that consolidating 100% of this early-stage rare earth deposit in Chile represents a unique opportunity for our shareholders and is the direct result of Hochschild's deep understanding of the region," said Chief Executive Ignacio Bustamante.
"The company remains focused on precious metals and on our successful exploration-based strategy but this diversification gives us the potential to acquire a unique deposit in a key industry with expected exponential growth and in a low risk jurisdiction," added Bustamante.
Hochschild shares were trading 2.0% lower on Wednesday in London at 199.55 pence each.
By Evelina Grecenko; [email protected]
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