TIDMHOC
RNS Number : 4692X
Hochschild Mining PLC
30 April 2019
_____________________________________________________________________________________
30 April 2019
Production Report for the 3 months ended 31 March 2019
Ignacio Bustamante, Chief Executive Officer said:
"Hochschild has delivered a solid start to the year with a
strong contribution from Inmaculada and increased first quarter
output from Pallancata leaving us firmly on track to meet our
stated production and cost targets for 2019.
We have also begun our ambitious 2019 brownfield exploration
plan with campaigns already commenced at Inmaculada, San Jose and
Pallancata. In addition, we have also secured the drilling permit
for the exciting programme scheduled at Palca as well as achieving
environmental approvals for campaigns at nearby Cochaloma and Pablo
Sur."
Operational highlights
-- Strong 1st quarter attributable production([1])
o 67,419 ounces of gold
o 4.4 million ounces of silver
o 121,367 gold equivalent ounces
o 9.8 million silver equivalent ounces
-- On track to deliver overall 2019 production target of 457,000
gold equivalent ounces (37.0 million silver equivalent ounces)
-- 2019 all-in sustaining costs on track to meet $960-$1,000 per
gold equivalent ounce guidance ($11.8-12.3 per silver equivalent
ounce)
Exploration highlights
-- Brownfield exploration programmes underway at all
operations
-- Drilling permit recently obtained for exploration programme
at Palca - now set to commence in Q2
-- Environmental permits obtained for programmes at Cochaloma
and Pablo Sur with drilling set to commence in Q3
-- Greenfield programme: initial exploration work set to begin
at three projects in Chile and the US
Strong financial position
-- Total cash of approximately $88 million as at 31 March 2019
($80 million as at 31 December 2018)
-- Net debt of approximately $68 million as at 31 March 2019
($77 million as at 31 December 2018)
-- Current Net Debt/LTM EBITDA of approximately 0.26x as at 31
March 2019
________________________________________________________________________________________
A conference call will be held at 2.00pm (London time) on
Tuesday 30 April 2019 for analysts and investors.
Dial in details as follows:
International Dial in: +44 333 300 0804
UK Toll-Free Number: 0800 358 9473
Pin: 16524791#
A recording of the conference call will be available for one
week following its conclusion, accessible from the following
telephone number:
International: +44 333 300 0819
UK Toll Free: 0800 358 2049
Pin: 301283164#
________________________________________________________________________________________
Overview
Hochschild delivered a strong start to 2019 with attributable
production of 121,367 gold equivalent ounces or 9.8 million silver
equivalent ounces. This was mostly due to another solid quarter
from Inmaculada and a consistent period at San Jose and was
achieved despite the absence of a meaningful contribution from the
Arcata mine following the announcement in February 2019 that it was
being placed on care and maintenance.
The Company reiterates that its all-in sustaining cost for 2019
is on track to be in line with the guidance of $960-$1,000 per gold
equivalent ounce ($11.8-12.3 per silver equivalent ounce).
TOTAL GROUP PRODUCTION
Q1 2019 Q4 2018 Q1 2018 12 mths
2018
-------- -------- --------
Silver production
(koz) 5,071 5,791 5,355 22,720
Gold production
(koz) 77.98 73.10 79.85 307.77
Total silver equivalent
(koz) 11,387 11,712 11,822 47,650
Total gold equivalent
(koz) 140.58 144.60 145.96 588.27
Silver sold (koz) 5,032 5,775 5,282 22,687
Gold sold (koz) 76.19 72.22 76.91 304.51
------------------------- -------- -------- -------- --------
Total production includes 100% of all production, including
production attributable to Hochschild's joint venture partner at
San Jose.
ATTRIBUTABLE GROUP PRODUCTION
Q1 2019 Q4 2018 Q1 2018 12 mths
2018
-------- -------- --------
Silver production
(koz) 4,370 4,975 4,662 19,700
Gold production
(koz) 67.42 60.50 69.03 260.44
Silver equivalent
(koz) 9,831 9,875 10,254 40,795
Gold equivalent
(koz) 121.37 121.92 126.59 503.64
------------------- -------- -------- -------- --------
Attributable production includes 100% of all production from
Arcata, Inmaculada, Pallancata and 51% from San Jose.
Production
Inmaculada
Product Q1 2019 Q4 2018 Q1 2018 12 mths
2018
-------- ------------ --------
Ore production (tonnes
treated) 331,390 320,400 337,507 1,323,525
Average grade silver
(g/t) 144 157 158 150
Average grade gold
(g/t) 4.38 4.32 4.60 4.36
Silver produced
(koz) 1,447 1,255 1,670 5,690
Gold produced (koz) 48.86 37.74 49.78 174.20
Silver equivalent
(koz) 5,405 4,312 5,702 19,800
Gold equivalent
(koz) 66.72 53.24 70.40 244.45
Silver sold (koz) 1,441 1,251 1,591 5,676
Gold sold (koz) 48.08 37.27 46.95 172.40
------------------------ -------- ------------ -------- -----------------
Inmaculada's first quarter production was 48,858 ounces of gold
and 1.4 million ounces of silver which amounts to a gold equivalent
output of 66,720 ounces and was principally driven by higher than
expected gold grades and a contribution from products in process
from the previous period.
Pallancata
Product Q1 2019 Q4 2018 Q1 2018 12 mths
2018
-------- ------------ -------------
Ore production (tonnes
treated) 231,589 231,075 128,134 717,652
Average grade silver
(g/t) 285 317 384 362
Average grade gold
(g/t) 1.01 1.10 1.47 1.30
Silver produced
(koz) 1,881 2,086 1,412 7,449
Gold produced (koz) 6.61 7.20 5.29 26.40
Silver equivalent
(koz) 2,416 2,669 1,840 9,588
Gold equivalent
(koz) 29.83 32.95 22.72 118.37
Silver sold (koz) 1,877 2.093 1,401 7,439
Gold sold (koz) 6.58 7.35 5.11 26.23
------------------------ -------- ------------ ------------- --------
Pallancata produced 1.9 million ounces of silver and 6,606
ounces of gold bringing the silver equivalent total to 2.4 million
ounces in Q1. Tonnage rose in the period versus Q1 2018 following
the achievement of full production at the Pablo vein in Q4 2018
with grades adjusted down as expected.
San Jose (the Company has a 51% interest in San Jose)
Product Q1 2019 Q4 2018 Q1 2018 12 mths
2018
-------- ------------ ------------
Ore production (tonnes
treated) 110,132 146,992 121,889 556,185
Average grade silver
(g/t) 460 401 415 397
Average grade gold
(g/t) 6.90 6.19 6.44 6.20
Silver produced
(koz) 1,431 1,666 1,412 6,165
Gold produced (koz) 21.55 25.72 22.08 96.59
Silver equivalent
(koz) 3,177 3,749 3,201 13,989
Gold equivalent
(koz) 39.22 46.29 39.52 172.70
Silver sold (koz) 1,405 1,647 1,434 6,175
Gold sold (koz) 20.71 25.29 22.34 95.95
------------------------ -------- ------------ ------------ --------
San Jose delivered a steady start to 2019 despite the
traditionally shorter operational period due to the scheduled
hourly workers holiday in February. Tonnage was slightly lower than
the corresponding period of 2018 but this was offset by higher gold
and silver grades resulting in production of 1.4 million ounces of
silver and 21,549 ounces of gold which makes 3.2 million silver
equivalent ounces.
Arcata
Product Q1 2019 Q4 2018 Q1 2018 12 mths
2018
-------- ------------- -------------
Ore production (tonnes
treated) 37,049 91,203 91,175 373,106
Average grade silver
(g/t) 298 304 330 321
Average grade gold
(g/t) 0.94 0.95 1.04 0.99
Silver produced
(koz) 311 784 860 3,416
Gold produced (koz) 0.97 2.44 2.69 10.57
Silver equivalent
(koz) 390 982 1,078 4,273
Gold equivalent
(koz) 4.81 12.12 13.31 52.75
Silver sold (koz) 309 783 855 3,397
Gold sold (koz) 0.82 2.30 2.52 9.93
------------------------ -------- ------------- ------------- --------
On 13 February 2019, Hochschild announced its intention to
suspend operations at Arcata and place it on care and maintenance.
Mining operations continued in the period until that date with
output of 0.4 million silver equivalent ounces.
Average realisable prices and sales
Average realisable precious metal prices in Q1 2019 (which are
reported before the deduction of commercial discounts) were
$1,310/ounce for gold and $15.3/ounce for silver (Q1 2018:
$1,350/ounce for gold and $16.1/ounce for silver).
Brownfield exploration
Inmaculada
In Q1 2019, 1,796m of potential drilling was carried out at the
Anomalia 1 and Anomalia 3 structures. Also, 1,204m of resource
drilling was executed at the Angela and Ramal 4 veins.
Vein Results (resource drilling)
Ramal 4 ANE-18-003: 2.3m @ 4.7g/t Au & 96g/t Ag
ANE-18-005: 1.0m @ 5.4g/t Au & 340g/t Ag
------------------------------------------
Lady MIL-18-046: 0.9m @ 5.3g/t Au & 699g/t Ag
------------------------------------------
EW ANE-18-003: 2.2m @ 1.6g/t Au & 98g/t Ag
------------------------------------------
In Q2, resource drilling will continue to be focused at the
Angela and Ramal 4 veins with 15,000m of drilling planned.
Pallancata
The focus at Pallancata is on the drilling programme at Pablo
Sur, Palca and Cochaloma. Good progress has been made on permitting
for all three zones with the drilling permit achieved for the Palca
zone and environmental permits secured for Pablo Sur and Cochaloma.
The campaign is expected to start at Palca towards the end of the
second quarter and at the other two areas in the third quarter. In
addition, underground drilling will be executed towards the south
zone of the Pallancata West vein with the aim of intercepting
structures parallel to the main Pallancata vein.
San Jose
At San Jose, 7,973m of potential drilling was executed in the
first quarter at the Aguas Vivas system as well as the Pluma 19
structure. The intercepted structures at Aguas Vivas correspond to
an intermediate sulphidation system with associated grades of zinc
and lead.
Vein Results
Aguas Vivas SJD-1627: 3.0m @ 0.1g/t Au, 443/t Ag, 0.2%
Cu, 8.2% Pb & 5.5% Zn
SJD-1686: 1.1m @ 3.6g/t Au, 85g/t Ag, 0.1%
Cu, 19.0% Pb & 10.3% Zn
SJD-1703: 1.4m @ 0.2g/t Au, 55g/t Ag, 0.6%
Pb & 1.9% Zn
SJD-1720: 0.8m @ 2.4g/t Au, 9g/t Ag
SJD-1851: 3.4m @ 0.3g/t Au, 44g/t Ag, 1.2%
Cu, 4.6% Pb & 6.4% Zn
SJD-1853: 1.1m @ 0.4g/t Au, 98g/t Ag, 1.6%
Cu, 5.3% Pb & 4.2% Zn
SJD-1855: 2.8m @ 0.9g/t Au, 9g/t Ag, 0.2%
Cu, 0.7% Pb & 1.4% Zn
SJD-1857: 0.9m @ 1.6g/t Au, 18g/t Ag, 0.1%
Cu, 2.7% Pb & 2.2% Zn
SJD-1865: 1.3m @ 0.4g/t Au, 12g/t Ag, 0.2%
Cu, 2.1% Pb & 3.9% Zn
SJD-1870: 1.1m @ 5.0g/t Au, 64g/t Ag, 0.4%
Cu, 2.3% Pb & 3.9% Zn
--------------------------------------------
In Q2, drilling will be focused towards the south of the San
Jose mine.
Arcata
In Q1, 1,232m of potential drilling was executed in the 4th
quadrant targeting the Pamela New vein. During Q2, drilling will
continue to be focused at the 4th quadrant targeting structures
resulting from a new geophysics programme.
Financial position
Total cash was approximately $88 million as at 31 March 2019
resulting in net debt of approximately $68 million. This cash
balance reflects: the majority of redundancy payments at Arcata;
expenditure on the ongoing brownfield exploration programme; and a
temporary increase in working capital of approximately $7
million.
In March 2019, the Company refinanced its $50 million
medium-term loan with Scotiabank and Citi and replaced it with a
$50 million loan from Scotiabank with a duration of one year and a
fixed interest rate of 2.95%.
_____________________________________________________________________________________
Enquiries:
Hochschild Mining plc
Charles Gordon +44 (0)20 3709 3264
Head of Investor Relations
Hudson Sandler
Charlie Jack +44 (0)207 796 4133
Public Relations
_____________________________________________________________________________________
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 fifty years' experience in the
mining of precious metal epithermal vein deposits and currently
operates three underground epithermal vein mines, two located in
southern Peru and one in southern Argentina. Hochschild also has
numerous long-term projects throughout the Americas.
_____________________________________________________________________________________
Forward looking statements
This announcement may contain forward looking statements. By
their nature, forward looking statements involve risks and
uncertainties because they relate to events and depend on
circumstances that will or may occur in the future. Actual results,
performance or achievements of Hochschild Mining plc may, for
various reasons, be materially different from any future results,
performance or achievements expressed or implied by such forward
looking statements.
The forward looking statements reflect knowledge and information
available at the date of preparation of this announcement. Except
as required by the Listing Rules and applicable law, the Board of
Hochschild Mining plc does not undertake any obligation to update
or change any forward looking statements to reflect events
occurring after the date of this announcement. Nothing in this
announcement should be construed as a profit forecast.
This announcement contains information which prior to its
release could be considered inside information.
Note
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (Regulation (EU) No.596/2014). Upon the
publication of this announcement via a Regulatory Information
Service, this inside information is now considered to be in the
public domain.
LEI: 549300JK10TVQ3CCJQ89
- ends -
[1] All equivalent figures assume a gold/silver ratio of 81x
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END
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