(Bloomberg) -- Hochschild Mining Plc said it has agreed to buy Amarillo Gold Corp. and its Posse gold project in Brazil for about C$135 million ($106 million), in a move that would diversify its Peru-focused operations.
“The acquisition of Amarillo enhances the company's project pipeline,” Hochschild Chief Executive Officer Ignacio Bustamante said Tuesday in a statement. “Posse is an attractive low-cost project with relatively near-term production and strong exploration upside potential.”
The deal comes after Peru's government backed away from a plan to withhold further permitting extensions at Hochschild's two most important mines in the country. The company's London-listed shares slumped after Prime Minister Mirtha Vasquez on Nov. 19 announced that four mines in the Andean region of Ayacucho wouldn't be allowed extensions. That sent shock waves through the local mining industry.
Investors have been nervous about Peru's mining sector since the April elections were won by Pedro Castillo, a former rural union activist from a Marxist party who had vowed to nationalize assets, block projects and take a bigger share of the mineral windfall to fight poverty.
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