Hochschild to spin off Chilean gold project via reverse takeover

LONDON - Hochschild Mining PLC (LSE:HOC) announced Wednesday it has signed a Letter of Intent to spin off its Volcan gold project in Chile through a reverse takeover transaction with Canada’s Railtown Capital Corp. (TSXV:RLT.P).

The deal would see Hochschild’s wholly-owned subsidiary Tiernan Gold Corp. merge with Railtown, resulting in a new TSX Venture Exchange listing. Under the proposed structure, Hochschild would retain approximately 87% ownership of the combined entity, with Railtown shareholders holding the remaining 13%.

The transaction, expected to close in November 2025 pending shareholder and regulatory approvals, aims to create an independent vehicle to secure external financing for Volcan’s development.

According to a recently updated Preliminary Economic Assessment completed in August, the Volcan project is projected to produce 332,000 ounces of gold annually during its first ten years, with a 14-year total mine life. The assessment estimates an average All-in-Sustaining Cost of $1,094 per ounce, with a post-tax net present value of $1.51 billion at a 5% discount rate and an internal rate of return of 29%, based on a gold price of $2,400 per ounce.

Fausto Di Trapani, currently Chief Financial Officer at MAG Silver Corp., is slated to become CEO of the combined entity.

Hochschild CEO Eduardo Landin said in the press release statement that the transaction "marks an important step forward" and would allow the company to "focus its resources on our high-quality portfolio in Peru, Brazil, and Argentina."

The completion of the transaction remains subject to several conditions, including successful equity financing, due diligence, and execution of definitive agreements.

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