Hochschild Mining has agreed to acquire the 40% interest in the Pallancata mine and Inmaculada Advanced project in Peru from International Mineral Corporation for around $280m.

The acquisition is anticipated to be completed by the end of the fourth quarter of 2013.

Pallancata facility, which has been producing silver since 2007, has an estimated resource mine life of 7.4 years based on existing measured and indicated resources.

The mine currently has an annual production of 7.4 million ounces of silver and 26,230 ounces of gold.

Inmaculada is an underground gold and silver deposit, which is expected to start production in the fourth quarter of 2014.

The project has an expected total production of 12 million silver equivalent ounces per year and an estimated mine life of nearly 6.3 years based on existing resources.

The Peruvian Government recently approved the mill construction permit for Inmaculada project.

Hochschild, which operates both facilities, owns the remaining 60% in each asset and the latest acquisition will increase the company’s geographic production exposure to Peru to about 85%.

Hochschild chief executive officer Ignacio Bustamante said the transaction represents an opportunity to increase the company’s exposure to its southern Peru cluster, reduce overall operating cost position and improve its cash flow generating potential at no additional ongoing administrative cost.

"We are excited to be announcing today a strategic milestone for Hochschild by consolidating ownership in Pallancata, currently our biggest cash flow generator and Inmaculada, our most exciting growth project," Bustamante said.

Hochschild said it planned to raise between $48m and $96m in an equity placing to partially fund the acquisition and noted that it is still on track to produce 20 million attributable silver equivalent ounces in 2013.