UPDATE 1-Hochschild mine to switch to processed product
* To spend $25-$30 million on Arcata mine initiative
* Mine to produce "dore", a more processed product
* To boost revenue, cut working capital needs
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LONDON, June 26 (Reuters) - Latin American silver and gold producer Hochschild Mining Plc (HOCM.L) plans to spend $25-$30 million to enable its Arcata mine in Peru to sell a more processed end product and boost revenue, it said on Friday.
Arcata produced about 10.4 million silver equivalent ounces in 2008 in the form of concentrate, but the London-listed group plans to process that further into dore -- bullion bars usually consisting of about 90 percent precious metal that are further refined to almost pure metal.
"This initiative will improve operational efficiency, maximise revenue, lower working capital requirements and allow the company to benefit from more stable commercial terms," a statement said.
"The sales cycle for dore is shorter (10 days on a weighted average basis compared to 60 days for concentrate) and pricing is less volatile."
The conversion at Arcata is expected to be completed in the second half of next year.
The company, which has six operating mines in Peru, Mexico and Argentina, on May 26 repeated its target of producing 28 million silver equivalent ounces this year.
In April, Hochschild posted a 16 percent rise in first-quarter attributable output to 6.7 million silver equivalent ounces. [ID:nLS594389]
It swung to an annual loss in 2008 after exceptionals of $19.0 million from an attributable profit after exceptional items of $85.1 million in 2007. (Reporting by Eric Onstad; Editing by David Holmes)
