Hochschild says key mines to continue operations as Peru eases stance
Nov 25 (Reuters) - Hochschild Mining (HOCM.L) said on Thursday its flagship Inmaculada mine and another one in the Ayacucho region of Peru would continue to operate under current frameworks, a day after the South American country allowed miners to seek extensions.
Last week, Peru planned to rule out timeline extensions for mines in Ayacucho on environmental concerns and said they would instead close down in the near future, setting up a clash with mining executives and sending Hochschild's shares crashing. read more
Mining is key to the economy of Peru, which is the world's No. 2 producer of copper and silver.
The uncertainty of Inmaculada's future triggered a sell-off in shares of London-listed Hochschild, which slumped nearly 60% on Monday. Any ruling in Peru would have also hurt the precious metals miner's Pallancata mine.
"We are pleased that our Inmaculada and Pallancata mines can continue to operate without further uncertainty and, furthermore, we reaffirm our goal to increasing our resources and extending our mine lives, in accordance with current legislation," Hochschild Chief Executive Officer Ignacio Bustamante said in a statement on Thursday. [nRSY5263Ta]
The Inmaculada mine is Hochschild biggest, representing over 60% of its cash flow, according to its 2020 annual report. Both mines account for the bulk of the company's production.
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