Inmaculada and Crespo Feasibility Studies (3593V)
January 11 2012 - 2:00AM
UK Regulatory
TIDMHOC
RNS Number : 3593V
Hochschild Mining PLC
11 January 2012
11 January 2012
Hochschild Successfully Completes Inmaculada and Crespo
Feasibility Studies
Highlights
-- Inmaculada and Crespo Feasibility Studies successfully completed by independent consultant
-- Profitable projects at conservative prices with significant price and geological upside
-- Combined average attributable production of approximately 10
million silver eq. oz per annum providing strong growth profile
-- Inmaculada and Crespo on track to start production in Q4 2013
-- Azuca Feasibility Study postponed to allow resource
optimisation through further exploration of new higher grade
areas
-- Significant exploration programme continuing during 2012 at all three Advanced Projects
Summary
Hochschild Mining plc ("Hochschild" or "the Company") is pleased
to report the completion of Feasibility Studies by an independent
company, Ausenco, for the Inmaculada and Crespo projects.
Both studies confirm a positive return for the Company at
conservative price and resource assumptions. The exciting 60% owned
Inmaculada project is now set to start construction with total
initial capital expenditure of $315 million for a 3,500 tonne per
day underground operation with average annual production of 12
million silver equivalent ounces and a commissioning date in the
fourth quarter of 2013. Unit cost per tonne is projected to be in
line with the similar highly profitable joint venture operation at
Pallancata and, most importantly, total resources have now
increased to almost 150 million silver equivalent ounces from the
previous figure of 137m ounces. Hochschild remains confident that
these resources will grow significantly from this excellent
starting point in the same manner as its other mines at Arcata,
Pallancata in Peru and San Jose in Argentina and see Inmaculada
develop into a main contributor for the Company.
In addition, Hochschild is pleased to see a positive result from
its 100% owned Crespo project which is set to add another 2.7
million silver equivalent ounces from 2014 at an initial capital
cost of $111 million for a 6,850 tonne per day operation. This
relatively simple open pit project is expected to have a unit cost
per tonne of $13.5, high gold recovery rates and, with its
proximity to Hochschild's other operations in Southern Peru, will
benefit from operational synergies. Current inferred resources at
Crespo are set to deliver more mineable material for the project
and the exploration team remains positive about the geological
potential of the surrounding areas.
Finally, the Company remains excited by the potential of the
Azuca deposit especially in the ongoing exploration of the newly
discovered higher grade Colombiana and Cimoide Vivian veins.
However, the Company believes it is prudent to delay the
Feasibility Study and continue exploration work at the project
throughout 2012 in order to consolidate resources and provide a
more comprehensive picture of the dispersed vein structures present
in the area. To this end, the Board has approved an additional $10m
exploration programme for 2012.
Ignacio Bustamante, CEO, commented:
"I am delighted that Hochschild has taken the next key steps in
the development of our project pipeline and is now set to increase
production from 2014 by almost 50%. Following on from scoping
studies released in late 2010 and early 2011, the Company has been
able to deliver both the Inmaculada and Crespo projects to
feasibility on time and we are now able to present two
independently audited studies which demonstrate solid profitability
at conservative price assumptions and with strong price and
geological upside potential.
With the Feasibility Study work behind us we look forward to the
year ahead, where we will focus our efforts on the engineering,
permitting and construction activities at both projects. Execution
risk is expected to be considerably reduced as a result of both
projects' proximity to our current operations and our longstanding
knowledge and experience of working closely with the surrounding
communities. In addition, exploration work will continue at both
sites to add more resources not included in the Feasibility Studies
but which we are confident will positively impact the projects
going forward."
To see the full version of the release, please click or copy and
paste the link below;
http://www.rns-pdf.londonstockexchange.com/rns/3593V_1-2012-1-11.pdf
__________________________________________________________________
A conference call will be held at 12pm (London time) on
Wednesday 11th January 2012 for analysts and investors.
Dial in details as follows:
UK +44 (0) 20 3003 2666
A recording of the conference call will be available for one
week following its conclusion, accessible from the following
telephone number:
UK +44 (0) 20 8196 1998
Access code: 5485169#
__________________________________________________________________
Enquiries:
Hochschild Mining plc
Charles Gordon +44 (0)20 7907 2934
Head of Investor Relations
RLM Finsbury
Charles Chichester +44 (0)20 7251 3801
Public Relations
______________________________________________________________
This information is provided by RNS
The company news service from the London Stock Exchange
END
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