Ignacio Bustamante, President & CEO,

HOCHSCHILD MINING

"The current political situation in Peru is a reminder that we cannot put all our eggs in one basket, and advancing agreements with juniors is a strategy to diversify the company and diversify risk."

Which technological improvements have been made at Inmaculada to make the mine more productive?

The most important improvement project that we have for Inmaculada is the ore sorting facility, which will allow us to screen the material from our mines using a combination of different technologies such as laser, color and x-rays. The sensors identify which material has high quality and sends it straight into the plant, while the low quality material is screened out and sent to the waste pile. We are currently in the process of finishing the engineering and starting the procurement for this plant, with the aim to be fully operational by Q1 2022. The plant will have a total capacity of 1,800 mt/d. This technology will have a material impact at Inmaculada as it will allow us to increase the grade fed to the plant, and improve the mechanization of our mining methods. It will also allow us to put value to other areas of the mine that were not profitable before.

Where has Hochschild’s recent brownfield exploration work been focused?

In 2020, we managed to attain additional resources at both Inmaculada and San José, and we are very excited about the discoveries that we have seen at both deposits in 2021 as well. Our aim is to have additional inferred resources to present to the market by the time we publish our mid-year report. For the second half of 2021, we have identified two promising targets – Minascucho and San Francisco – which we intend to drill to add more ounces before year end.

Can you tell us about Hochschild’s option agreement with NV Gold for the SW Pipe project in Nevada, and whether political uncertainty in South America is increasing the likelihood of Hochschild diversifying its geographical footprint into North America?

One of our focuses has been on exploration projects in North America, and specifically to look for areas that have the geological footprint to be able to deliver large discoveries. Our partnership with NV Gold is located very close to Barrick’s Cortez mine, where millions of ounces of gold have been discovered and put into production. The SW Pipe project has shown interesting superficial anomalies, but has not been drilled below 100 m. As per Hochschild’s agreement with NV Gold, we will continue to conduct drilling activities and, depending on what we discover, we have the option to acquire up to 100% of the asset.

The current political situation in Peru is a reminder that we cannot put all our eggs in one basket, and advancing agreements with juniors is a strategy to diversify the company and diversify risk. Indeed, I would say that potential investments outside of Peru have taken on more importance due to the political context.

Why do you think anti-mining sentiment in Peru exists, and how can the private sector change this?

News and communication regarding the mining sector is often negative, since it is associated with illegal mining activities, and people tend to link the image of mining to all this terrible news. As a sector, we need to communicate better and educate the population about the positive impact the industry has for the country and its communities. I believe that the pandemic has highlighted many things the mining sector has done to support the economy, but there is still room for improvement.

The private sector also has the responsibility to do more than simply what is expected. When the pandemic hit, Hochschild launched a program to deliver free high-speed internet access to the 13 communities surrounding our operations. This had a great impact as we were in a time where people could not travel or go to school and they now had the means to work remotely or access education. For 2021, we are focusing on a water purification project. We want to make sure that all of our communities have access to purified water, both for personal and industrial purposes.