AGM Statement (7563H)
June 02 2011 - 6:52AM
UK Regulatory
TIDMHOC
RNS Number : 7563H
Hochschild Mining PLC
02 June 2011
2 June 2011
2011 Annual General Meeting
Address to Shareholders
Hochschild Mining plc ("Hochschild") held its Annual General
Meeting for shareholders in London today. Eduardo Hochschild,
Executive Chairman, made the following remarks:
"I am happy to report that Hochschild Mining plc delivered a
record performance in 2010. Although it was once again a difficult
year for the global economy, precious metals performed very
strongly with silver in particular rising just over 80%. In this
strong pricing environment, the Company met its operational
expectations, strengthened its financial position and undertook
some key strategic steps to secure our future growth path and
delivering further value for our shareholders.
To give you a quick results snapshot: production was in line
with expectations at 26.4 attributable silver equivalent ounces
with unit costs rising by 16% at the underground operations, a
creditable performance in such an inflationary industry
environment. Group Revenue, as a result, climbed by nearly 40% to a
record US$752 million with EBITDA up 59% at $397 million and
pre-exceptional earnings per share rising by 65% to 28 cents per
share.
With that in mind, the Board is recommending an increase in the
final dividend by 50% to three cents per share which reflects our
strong balance sheet position, and the anticipated healthy future
cashflows of the Group. We believe the proposed increase reflects
capital availability and our desire to provide a yield to
shareholders whilst continuing to respect the growth requirements
of the business.
During 2010, the Board appointed a new management team led by
Ignacio Bustamante as Chief Executive Officer, and Ramon Barua as
Chief Financial Officer. I believe that the realigned Company focus
on growth through exploration heralds the beginning of a new era
for Hochschild in which our excellent asset base, combined with an
immense talent pool, will unlock consistent and profitable precious
metal production growth. The 40% increase in our exploration budget
to $70 million for this year, is firm evidence of our commitment to
this strategy and our confidence in the potential of our current
project pipeline which now contains 3 advanced projects, 12 Medium
Scale projects and 8 potential Company Makers.
Our team has great confidence in the potential of the Company to
develop this aggressive exploration strategy and, allied to this,
they have promoted a disciplined approach to the assessment of
acquisitions. In this regard, the key announcements in 2010 were
the progression of our 100% owned Azuca and Crespo projects, and
the acquisition of a controlling stake in the Inmaculada project,
all of which are located at the core of our Southern Peru cluster.
We have already announced a very sizeable increase in grades and
resources at Inmaculada, which in our view highlights the
tremendous potential at this deposit which is due to start
production by the end of 2013.
Early this year we completed the sale of our stake in Lake Shore
Gold which represented a 34% gain on our original average purchase
price. This decision is in line with the disciplined M&A
approach I mentioned just now with any potential deals being
required to deliver early stage assets with strong geological
potential and high value accretion but also giving us a clear path
to control. In our view, such strict criteria will not stop us from
continuing to make value-enhancing bolt-on acquisitions going
forward.
It is also worth reminding you that our 25% investment in Gold
Resource Corporation, in which we have invested a total of $67
million, is currently valued at approximately $400 million.
I mentioned Inmaculada and during this year we can look forward
to further crucial steps in its development as well as at our other
advanced projects at Azuca and Crespo. These three have the
potential to expand our production base by a minimum of 12 million
profitable ounces per year from the end of 2013. Of course, in 2010
we also made strong progress at increasing the life-of-mine at our
core assets with the new discoveries at San Jose the highlight. It
is particularly pleasing that we have already exceeded our IPO
target of 8 years and currently stand at 8.7 years.
Hochschild Mining is currently in a very solid financial
position with a cash balance of US$540 million, roughly US$480
million of investments and very strong cash generation helped by
the silver price at the moment which, despite recent volatility,
remains well above last year's average. Overall we are in a very
robust position to carry-out out the strategic aims that the
management has so clearly delineated.
On behalf of the Board, I would like to thank our entire team
for their continued commitment in 2010 and I am confident that such
impressive execution will remain the focus as we move through
2011."
________________________________________________________________________
___
Enquiries:
Hochschild Mining plc
Charles Gordon +44 (0)20 7907 2934
Head of Investor Relations
Finsbury
Faeth Birch +44 (0)20 7251 3801
Public Relations
________________________________________________________________________
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About Hochschild Mining plc:
Hochschild Mining plc is a leading precious metals company
listed on the London Stock Exchange (HOCM.L / HOC LN) with a
primary focus on the exploration, mining, processing and sale of
silver and gold. Hochschild has over forty years' experience in the
mining of precious metal epithermal vein deposits and currently
operates four underground epithermal vein mines, three located in
southern Peru, one in southern Argentina and one open pit mine in
northern Mexico. Hochschild also has numerous long-term prospects
throughout the Americas.
This information is provided by RNS
The company news service from the London Stock Exchange
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