3rd Qtr Production Results
October 17 2007 - 3:01AM
UK Regulatory
RNS Number:8442F
Hochschild Mining PLC
17 October 2007
Hochschild Mining plc Quarterly Production Report for the
three months to 30 September 2007 ("Q3")
Highlights:
* 27% increase in total attributable silver production year-on-year and 11%
increase quarter-on-quarter
* 26% increase in total attributable gold production year-on-year and 1%
increase quarter-on-quarter
* Commenced production at the Moris mine in Mexico and Pallancata in Peru,
thus expanding from operating three mines in one country to six mines in
three countries, during the course of 2007
* Completed expansion at the Selene plant, doubling throughput capacity
* Capacity ramp-up at the San Jose plant taking longer than initially
planned although we expect to reach full capacity during the fourth quarter
of 2007
* We are confident of coming very close to our 2007 production target of 26
million silver equivalent attributable ounces
Eduardo Hochschild, Chairman of Hochschild Mining plc, commented
"We are pleased with a strong set of production results for the period with an
increase of 27% in silver production and 26% in gold. These results reflect the
benefit of the capacity expansions at our three original operations in Peru,
Ares, Arcata and Selene, as well as the initial incremental production from the
new operations, San Jose and Pallancata. Although ramp up of San Jose did not
take place as quickly as originally planned, we believe we will achieve full
capacity during the fourth quarter of 2007. We remain confident of coming close
to our 2007 production target of 26 million silver equivalent ounces".
Overview:
Production volumes for the three months to 30 September 2007 ("Q3") were
significantly higher compared with the same period of 2006. The increase in
production was primarily a result of capacity expansions at Arcata, Ares and
Selene, higher grades at Arcata and Ares and incremental production from San
Jose and Pallancata. During the fourth quarter of this year, we will benefit
from additional production from all our mines in Peru, as well as production
from San Jose and Moris as they reach full capacity.
Capacity Expansions:
We successfully completed the expansion at the Selene plant taking the plant
from 350 ktpa to 700 ktpa. We have now completed plant expansions at all three
of our original operations in Peru. We continue to make progress on the
engineering work required to double capacity at San Jose in Q3 2008. In
addition, our Board approved a further expansion of the Arcata plant to 618 ktpa
in Q4 2008.
New Projects:
At the San Jose operation in Southern Argentina, the mine is operating at full
capacity and we have built a stockpile of over 60,000 tonnes. The ramp-up of the
San Jose plant is taking longer than expected due to some fine tuning of the
Gekko process, but we remain confident in reaching full capacity during the
fourth quarter of this year.
During Q3 both the Moris mine in Mexico and Pallancata in Peru entered
production. At the Moris mine we have been processing ore through the crushing
plant and feeding it to the ADR plant since late September. We began processing
the Pallancata ore through the Selene plant during Q3 and will continue to
ramp-up production over the next months. The mineral currently being processed
from Pallancata includes a high degree of ore from mine developments, which
contain lower grades than the average reserve grade for Pallancata.
During the early part of Q3 we generated sufficient resources at San Felipe to
justify taking the project to feasibility stage, which was subsequently approved
by the Board.
We are also currently drilling in Azuca in Peru, Gonzalito and Claudia in
Argentina and El Gachi in Mexico. We expect to release positive results by end
2007.
Joint Ventures:
We remain active in our joint venture and acquisition strategy and continue to
work diligently in evaluating joint venture and acquisition targets. During
2007, we have increased our project portfolio through joint ventures with
Cardero Resources, Hidefield, Silver Standard and Mirasol Resources for
properties in Argentina. In addition, we entered into an option agreement to
acquire 100% of the Tres Chepas copper-gold skarn project in Chile, a strategic
alliance with Exmin Resources in Mexico and an option agreement to acquire 100%
of the Gavilanes silver-gold epithermal vein project in Mexico.
Our plan is to continue to grow through mid-sized, bolt-on acquisitions that fit
our niche strategy of being an underground, precious metals mining company
focused in the Americas. Our objective is to strengthen our interest in specific
geological regions in the Americas by making anchor investments in strategic
mining districts and executing a cluster consolidation strategy. The new
operations and the joint ventures that we have entered into to date fit squarely
within this strategy.
TOTAL PRODUCTION(1)
--------------------------------------------------------------------------------
Q3 Q2 Q3
2007 2007 2006
--------------------------------------------------------------------------------
Silver production (Koz) 3,555 3,073 2,706
Gold production (Koz) 50.58 48.04 38.59
Total silver equivalent (Koz) 6,590 5,955 5,022
Total gold equivalent (Koz) 109.83 99.25 83.70
Silver sold (Koz) 2,544 2,197 3,943
Gold sold (Koz) 46.87 42.71 53.44
--------------------------------------------------------------------------------
ARCATA
--------------------------------------------------------------------------------
Q3 Q2 Q3
Product 2007 2007 2006
--------------------------------------------------------------------------------
Ore production (tonnes) 106,656 94,421 86,972
Average head grade silver (g/t) 578.97 569.03 515.97
Average head grade gold (g/t) 1.48 1.44 1.38
Concentrate produced (tonnes) 4,457 4,099 3,335
Silver grade in concentrate (kg/t) 11.94 11.36 11.63
Gold grade in concentrate (kg/t) 0.03 0.03 0.03
Silver produced (Koz) 1,711 1,497 1,254
Gold produced (Koz) 4.23 3.74 3.20
Silver sold (Koz) 896 912 1,916
Gold sold (Koz) 2.24 2.18 4.59
--------------------------------------------------------------------------------
ARES
--------------------------------------------------------------------------------
Q3 Q2 Q3
Product 2007 2007 2006
--------------------------------------------------------------------------------
Ore produciton (tonnes) 84,996 84,138 71,921
Average head grade silver (g/t) 255.93 261.80 242.14
Average head grade gold (g/t) 13.98 14.66 13.23
Dore total (Koz) 671.21 690.15 557.41
Silver produced (Koz) 633 650 527
Gold produced (Koz) 36.57 38.11 29.37
Silver sold (Koz) 646 692 679
Gold sold (Koz) 38.56 36.87 39.85
--------------------------------------------------------------------------------
SELENE
--------------------------------------------------------------------------------
Q3 Q2 Q3
Product 2007 2007 2006
--------------------------------------------------------------------------------
Ore production (tonnes) 125,451 100,389 87,727
Average head grade silver (g/t) 275.31 328.00 364.38
Average head grade gold (g/t) 1.84 2.32 2.54
Concentrate produced (tonnes) 1,090 947 896
Silver grade in concentrate (kg/t) 26.69 30.96 32.13
Gold grade in concentrate (kg/t) 0.16 0.21 0.21
Silver produced (Koz) 923 925 925
Gold produced (Koz) 5.66 6.19 6.02
Silver sold (Koz) 1,002 594 1,348
Gold sold (Koz) 6.07 3.66 9.00
--------------------------------------------------------------------------------
PALLANCATA(2)
--------------------------------------------------------------------------------
Q3
Product 2007
--------------------------------------------------------------------------------
Ore production (tonnes) 14,723
Average head grade silver (g/t) 255.45
Average head grade gold (g/t) 1.29
Concentrate produced (tonnes) 79
Silver grade in concentrate (kg/t) 41.60
Gold grade in concentrate (kg/t) 0.17
Silver produced (Koz) 105
Gold produced (Koz) 0.43
Silver sold (Koz) 0
Gold sold (Koz) 0.00
--------------------------------------------------------------------------------
SAN JOSE(3)
--------------------------------------------------------------------------------
Q3
Product 2007
--------------------------------------------------------------------------------
Ore produciton (tonnes) 27,494
Average head grade silver (g/t) 543.8
Average head grade gold (g/t) 7.2
Silver produced (Koz) 182
Gold produced (Koz) 3.29
Silver sold (Koz) 0
Gold sold (Koz) 0.00
--------------------------------------------------------------------------------
MORIS(4)
--------------------------------------------------------------------------------
Q3
Product 2007
--------------------------------------------------------------------------------
Ore produciton (tonnes) 84,538
Average head grade silver (g/t) 4.9
Average head grade gold (g/t) 1.8
Silver produced (Koz) 1.2
Gold produced (Koz) 0.40
Silver sold (Koz) 0
Gold sold (Koz) 0.00
--------------------------------------------------------------------------------
--------------------------
(1) Q3 2007 total production includes 100% of all production, including
production attributable to joint venture partners at Moris, San Jose and
Pallancata.
(2) The Company has a 60% interest in Pallancata.
(3) The Company has a 51% interest in San Jose.
(4) The Company has a 70% interest in Moris.
Enquiries:
Hochschild Mining plc
Wray Barber +44 (0)20 7152 6014
Head of Investor Relations
Finsbury
Robin Walker +44 (0)20 7251 3801
Public Relations
- ends -
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