The agreement between Hochschild Mining and BBVA is a ‘Club Deal’ facility totaling $200 million in favor of the mining companies Ares and Amarillo Mineraçao do Brasil.
The sustainable operation is in the ‘KPI-linked’ category because it incorporates an adjustment mechanism to link the interest rate of the loan to the mining company’s performance in three sustainable KPIs related to physical security, water and waste. They will be reviewed on an annual basis by an independent agency.
As a sustainable co-agent, BBVA assisted Hochschild Mining in coordinating the adjustment mechanism of the interest rate and reviewing the necessary legal documentation to certify the sustainable quality of the loan.
“This year, through the mining companies Ares and Amarillo Mineraçao do Brasil, subsidiaries of Hochschild Mining, we received a financing request for $200 million. BBVA was selected as joint lead arranger and joint bookrunner, as well as sustainable co-agent due to our global experience in ESG operations in the region,” explained Victor Gordillo, Head of Corporate Banking at BBVA Peru.
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“This first sustainable loan marks an important milestone for Hochschild Mining and demonstrates our decision to be a responsible and innovative mining company that is committed to a better world,” said Eduardo Noriega, CFO of Hochschild Mining.
Mining companies
Hochschild Mining is a mining company with over 100 years of history, dedicated to the production of precious metals. Since its establishment, it has focused on building a responsible corporate culture that contributes to environmental, social and governance issues. It currently has three mining operations – two in Peru and one in Argentina – as well as a construction project in Brazil and other projects in the region.
The mining company Ares is Hochschild Mining’s main investment vehicle in Peru and is positioned as one of the biggest gold and silver producers in the country. Its most important mining unit is Inmaculada, which is located in the Ayacucho region.
Meanwhile, Amarillo Mineraçao do Brasil has the Mara Rosa gold project in the Goias region of Brazil. It plans to begin production in the first half of 2024.