Hochschild Mining to sell Volcan gold project to Railtown Capital

Hochschild Mining to sell its Volcan gold project in Chile to Railtown Capital. The reverse takeover strengthens the British miner’s strategy and positions Railtown in the Chilean gold market.

Britain-based precious metals miner Hochschild Mining announced Wednesday that it has signed a letter of intent to sell its Chilean gold project operator, Tiernan Gold Corp, to Canadian company Railtown Capital.

Hochschild has faced significant production challenges at its Mara Rosa mine in Brazil, which have heavily impacted output and led the company to cut its annual production forecast.

The deal will be structured as a reverse takeover, with Hochschild set to own approximately 87% of the combined company, which will be listed on the Toronto Venture Exchange.

Following the announcement, Hochschild shares rose 9.3% to 335.8 pence, marking their highest level since February 2013.

In August 2023, the company had already stated it was exploring strategic options for the Volcan project, aiming to optimize operations and focus on more profitable assets.

This transaction allows Hochschild to strengthen its financial structure and focus on high-potential projects, while Railtown Capital gains a foothold in the Chilean gold market.