HOC Hochschild Mining Plc

    RNS Number : 5480I
  Hochschild Mining PLC
  20 November 2008
   





    
    

    Hochschild takes steps to address current market conditions 

    *     Reduction of workforce by 150 corporate jobs 
    *     Optimisation of capex allocation to preserve strong cash position 
    *     Delay of San Felipe project 
    *     On track to meet 2008 production target of 26 million silver equivalent ounces 

In response to current adverse market conditions and lower prices of base and precious metals, Hochschild Mining plc (*Hochschild*) has
initiated a plan to reduce costs and conserve cash holdings. The company is initially cutting 150 jobs and reducing administrative expenses
and capital expenditure. As a result of this, and the continued decline in zinc prices, Hochschild has also decided to delay the development
of its San Felipe zinc project in northern Mexico until market conditions improve.

Hochschild is implementing an initial Group-wide reduction in workforce of 150 positions, predominantly in corporate and administrative
functions. The Company has also implemented a number of initiatives to reduce administrative costs further, including a freeze on
recruitment. Additionally, Hochschild has deferred almost all of its 2009 capital expenditure, which will be largely limited to sustaining
capex at existing operations and already committed investments.
    
In light of the decision to reduce capex and given the current price environment for zinc, the Company has concluded that it is prudent to
delay development of the San Felipe project. Over the previous 6 months, zinc prices have fallen by 46% from a high of $2,267/mt to the
current price of $1,218/mt. However, Hochschild remains confident about the long term value of San Felipe and will continue to review the
timing of the project.  

    Hochschild's focus for 2009 is to deliver profitable production and the Company is undertaking a review of its cut-off prices to ensure
economic grades are mined throughout all of its operations. 2009 production targets will be reported in the Company's Production Statement
in January.

Hochschild continues to maintain a solid cash position with a balance of US$130 million.  This, together with the reductions in capex,
administrative expenses and operating costs in 2009, positions the Company to successfully meet the market challenges ahead. The Company
remains on track to achieve its 2008 production target of 26 million silver equivalent ounces.


    Miguel Arambur?ief Executive Officer, commented: 
    
"We are taking a proactive response to challenging market conditions. By controlling costs we are ensuring that the Company is well placed
to face this volatile price environment. 

Hochschild is in solid financial health, with over US$130 million of cash on the balance sheet. We have a strong management team and over 40
years' experience in underground mining and a high quality portfolio of assets in the Americas. We are well positioned to deal with the
challenges ahead.   
    
At the same time, we remain positive about the future of silver and gold prices as historically, these have remained solid through periods
of financial instability." 


    ------------------------------------------------------------------------- ------------------------------------------------

    A conference call will be held at 8.30am (London time) on 20 November 2008 for analysts and investors.  

    Dial in details as follows:

    UK                                                     +44 (0)20 7162 0025

    A recording of the conference call will be available for one week following its conclusion, accessible from the following telephone
numbers:
    
Dial                                                    +44 (0)20 7031 4064     

Access Code                                     817989
    _____________________________________________________________________
    Enquiries:

    Hochschild Mining plc
    Isabel L?orf                             +44 (0)20 7907 2934
    Head of Investor Relations

    Ignacio Rosado                               +511 437 6007
    Chief Financial Officer

    Finsbury
    Robin Walker                                  +44 (0)20 7251 3801
    Public Relations
    __________________________________________________________________
    About Hochschild Mining plc:

    Hochschild Mining plc is a leading precious metals company listed on the London Stock Exchange (HOCM.L for Reuters / HOC LN for
Bloomberg) with a primary focus on the exploration, mining, processing and sale of silver and gold. Hochschild currently operates five
underground epithermal vein mines, four located in southern Peru and one in southern Argentina and one open pit mine in northern Mexico.
Hochschild also has over sixteen long-term prospects throughout the Americas. Hochschild has over forty years experience in the mining of
precious metal epithermal vein deposits. For further information please visit www.hochschildmining.com


This information is provided by RNS
The company news service from the London Stock Exchange
 
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