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Hochschild Buys Chile's BioLantanidos Ionic Clay Rare Earth Deposit For $56.3mln

Hochschild Mining plc (HOC.L) announced Wednesday that it has acquired the BioLantanidos ionic clay rare earth deposit in Chile. Hochschild is acquiring 93.8% of the BioLantanidos deposit that it does not already own for a consideration of $56.3 million.

Private Chilean company BioLantanidos is controlled by the private fund FIP Lantanidos, managed by private equity firm Mineria Activa SpA

Hochschild has previously invested $2.5 million in the project during 2018 and early 2019 in exchange for a 6.2% equity stake with an option to increase ownership.

According to the company, the investment represents a small percentage of Hochschild's current precious metal revenue and market capitalisation, but it provides significant optionality in a market expected to grow exponentially.

Rare earths are essential in several technological components and demand is increasing. In addition, some are critical in the manufacturing of permanent magnets used in electric vehicles, wind turbines and drone motors amongst other things.

The company noted that Ion Adsorption Clay deposits are currently the lowest cost sources of rare earths in the world. The acquisition includes special concentration of high demand rare earths, such as Terbium, Dysprosium, Praseodymium and Neodymium.

Ignacio Bustamante, Chief Executive Officer said, "The Company remains focused on precious metals and on our successful exploration-based strategy but this diversification gives us the potential to acquire a unique deposit in a key industry with expected exponential growth and in a low risk jurisdiction."

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