TIDMHOC
RNS Number : 9022F
Hochschild Mining PLC
18 July 2019
_____________________________________________________________________________________
18 July 2019
Production Report for the 6 months ended 30 June 2019
Ignacio Bustamante, Chief Executive Officer said:
"Hochschild has continued its strong operational performance in
the second quarter of 2019, with year-on-year increases at all
three of our mines, resulting in our second strongest half of
production on record. Consequently we remain firmly on track to
meet our annual production and cost targets.
Our 2019 brownfield exploration season has continued this
quarter with campaigns ongoing at our existing mines as well as a
new programme starting at the Palca zone to the south of Pallancata
where early results have already found mineralisation. At
Inmaculada, we have discovered several new veins from a new zone to
the west of the Angela vein and infill drilling is also ongoing
with the aim of complementing the results from 2018. In Q3, we can
look forward to drilling at the nearby Cochaloma and Pablo Sur
zones along with a new campaign at the recently permitted Corina
area to the north of Selene."
Operational highlights
-- Another solid quarter of attributable production([1])
o 70,659 ounces of gold
o 4.3 million ounces of silver
o 123,959 gold equivalent ounces
o 10.0 million silver equivalent ounces
-- 2(nd) highest half of attributable production in Hochschild's
history
o 138,078 ounces of gold
o 8.7 million ounces of silver
o 245,325 gold equivalent ounces
o 19.9 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
-- Several new veins discovered to the west of Angela at
Inmaculada
-- Infill drilling ongoing at Inmaculada
-- Drilling started at Palca zone
-- New programmes set to begin in H2 at Cochaloma, Pablo Sur and
Corina
Strong financial position
-- Total cash of approximately $95 million as at 30 June 2019
($80 million as at 31 December 2018)
-- Net debt of approximately $61 million as at 30 June 2019 ($77
million as at 31 December 2018)
-- Net Debt/LTM EBITDA of approximately 0.23x as at 30 June
2019
________________________________________________________________________________________
A conference call will be held at 2.30pm (London time) on
Thursday 18 July 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: 11841575#
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: 301291996#
________________________________________________________________________________________
Overview
Hochschild's strong start to 2019 continued with second quarter
attributable production of 123,959 gold equivalent ounces or 10.0
million silver equivalent ounces. This was due to solid delivery
from all of the Company's mines especially Inmaculada. For the half
as a whole, Hochschild produced 245,325 gold equivalent ounces or
19.9 million silver equivalent ounces, the second highest in the
Company's history.
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
Q2 2019 Q1 2019 Q2 2018 H1 2019 H1 2018
-------- -------- -------- --------
Silver production
(koz) 5,166 5,071 5,781 10,237 11,135
Gold production
(koz) 84.18 77.98 80.62 162.16 160.47
Total silver equivalent
(koz) 11,984 11,387 12,311 23,371 24,133
Total gold equivalent
(koz) 147.95 140.58 151.98 288.53 297.94
Silver sold (koz) 5,189 5,032 5,785 10,221 11,067
Gold sold (koz) 84.05 76.19 81.10 160.25 158.01
------------------------- -------- -------- -------- -------- --------
Total production includes 100% of all production, including
production attributable to Hochschild's joint venture partner at
San Jose.
ATTRIBUTABLE GROUP PRODUCTION
Q2 2019 Q1 2019 Q2 2018 H1 2019 H1 2018
-------- -------- -------- --------
Silver production
(koz) 4,317 4,370 5,012 8,687 9,674
Gold production
(koz) 70.66 67.42 68.48 138.08 137.51
Silver equivalent
(koz) 10,041 9,831 10,558 19,871 20,812
Gold equivalent
(koz) 123.96 121.37 130.35 245.33 256.94
------------------- -------- -------- -------- -------- --------
Attributable production includes 100% of all production from
Arcata, Inmaculada, Pallancata and 51% from San Jose.
Production
Inmaculada
Product Q2 2019 Q1 2019 Q2 2018 H1 2019 H1 2018
------------ -------- ------------ ------------------
Ore production
(tonnes treated) 339,098 331,390 333,207 670,487 670,713
Average grade silver
(g/t) 170 144 148 157 153
Average grade gold
(g/t) 4.85 4.38 4.57 4.62 4.58
Silver produced
(koz) 1,503 1,447 1,445 2,950 3,115
Gold produced (koz) 49.75 48.86 46.55 98.61 96.33
Silver equivalent
(koz) 5,533 5,405 5,215 10,938 10,918
Gold equivalent
(koz) 74.77 66.72 70.48 135.03 134.79
Silver sold (koz) 1,500 1,441 1,517 2,942 3,108
Gold sold (koz) 49.41 48.08 48.41 97.48 95.35
---------------------- ------------ -------- ------------ ------------------ ------------------
Inmaculada's second quarter production was 49,751 ounces of gold
and 1.5 million ounces of silver which amounts to a gold equivalent
output of 74,770 ounces and was principally driven by higher than
expected gold and silver grades offset by lower silver recoveries.
Overall in the first half of 2019, Inmaculada produced 135,033 gold
equivalent ounces, in line with the same period of 2018 (134,789
gold equivalent ounces), with the solid result reflecting steady
tonnage, strong grades and a contribution from products in process
from Q4 2018.
Pallancata
Product Q2 2019 Q1 2019 Q2 2018 H1 2019 H1 2018
------------- -------- ------------- --------
Ore production
(tonnes treated) 240,705 231,589 157,434 472,294 285,568
Average grade silver
(g/t) 282 285 411 284 399
Average grade gold
(g/t) 1.01 1.01 1.47 1.01 1.47
Silver produced
(koz) 1,931 1,881 1,866 3,812 3,278
Gold produced (koz) 6.84 6.61 6.57 13.44 11.86
Silver equivalent
(koz) 2,485 2,416 2,398 4,901 4,238
Gold equivalent
(koz) 30.68 29.83 29.60 60.51 52.33
Silver sold (koz) 1,891 1,877 1,855 3,768 3,256
Gold sold (koz) 6.62 6.58 6.48 13.20 11.58
---------------------- ------------- -------- ------------- -------- --------
Pallancata produced 1.9 million ounces of silver and 6,838
ounces of gold bringing the silver equivalent total to 2.5 million
ounces in Q2. Tonnage was slightly higher in the period versus Q1
2019 although grades were in line. Overall in H1 2019, Pallancata's
output was 4.9 million silver equivalent ounces, a 16% improvement
on the corresponding period of 2018 (H1 2018: 4.2 million ounces),
reflecting production from the wider but lower grade Pablo
vein.
San Jose (the Company has a 51% interest in San Jose)
Product Q2 2019 Q1 2019 Q2 2018 H1 2019 H1 2018
------------ -------- -------- --------
Ore production
(tonnes treated) 141,621 110,132 142,452 251,753 264,341
Average grade silver
(g/t) 436 460 400 446 407
Average grade gold
(g/t) 6.89 6.90 6.26 6.89 6.34
Silver produced
(koz) 1,731 1,431 1,570 3,162 2,982
Gold produced (koz) 27.59 21.55 24.77 49.14 46.86
Silver equivalent
(koz) 3,966 3,177 3,577 7,143 6,778
Gold equivalent
(koz) 48.96 39.22 44.15 88.18 83.68
Silver sold (koz) 1,785 1,405 1,521 3,189 2,955
Gold sold (koz) 28.18 20.71 23.66 48.89 46.00
---------------------- ------------ -------- -------- -------- --------
The San Jose mine again delivered a steady quarter with tonnage
as expected and slightly higher than expected gold and silver
grades resulting in production of 1.7 million ounces of silver and
27,588 ounces of gold which makes 4.0 million silver equivalent
ounces. This therefore amounts to a first half total of 7.1 million
silver equivalent ounces, ahead of the same period of 2018 (H1
2018: 6.8 million ounces) due to better than expected grades.
Arcata
Product Q2 2019 Q1 2019 Q2 2018 H1 2019 H1 2018
--------- -------- ------------- --------
Ore production
(tonnes treated) - 37,049 97,347 37,049 188,522
Average grade silver
(g/t) - 298 322 298 326
Average grade gold
(g/t) - 0.94 0.98 0.94 1.01
Silver produced
(koz) - 311 900 311 1,760
Gold produced (koz) - 0.97 2.73 0.97 5.42
Silver equivalent
(koz) - 390 1,121 390 2,199
Gold equivalent
(koz) - 4.81 13.84 4.81 27.15
Silver sold (koz) - 309 893 309 1,748
Gold sold (koz) - 0.82 2.56 0.82 5.08
---------------------- --------- -------- ------------- -------- --------
On 13 February 2019, Hochschild announced its intention to
suspend operations at Arcata and place it on care and maintenance.
There was consequently no output in Q2, so production in the first
half was the same as Q1 at 0.5 million silver equivalent
ounces.
Average realisable prices and sales
Average realisable precious metal prices in Q2 2019 (which are
reported before the deduction of commercial discounts) were
$1,346/ounce for gold and $14.8/ounce for silver (Q2 2018:
$1,270/ounce for gold and $16.3/ounce for silver). For H1 2019,
average realisable precious metal prices were $1,329/ounce for gold
and $15.0/ounce for silver (H1 2018: $1,309/ounce for gold and
$16.2/ounce for silver).
Brownfield exploration
Inmaculada
In Q2 2019, 6,684m of potential drilling and 7,968m of resource
drilling was carried out focusing on the newly-discovered Susana
Beatriz, Facundo and Salvador structures to the west of the Angela
vein.
Vein Results (potential drilling)
Salvador ANG-19-012: 2.1m @ 41.0g/t Au & 480g/t
Ag
------------------------------------------
Susana Beatriz ANE-19-010: 4.2m @ 2.9g/t Au & 280g/t Ag
IMM-19-001: 1.5m @ 8.1g/t Au & 114g/t Ag
IMM-19-002: 2.5m @ 2.5g/t Au & 105g/t Ag
------------------------------------------
Lady IMS-19-003: 1.1m @ 6.3g/t Au & 58g/t Ag
------------------------------------------
Facundo HUA-19-001: 3.1m @ 6.0g/t Au & 136g/t Ag
------------------------------------------
M.Mamani MM-19-001: 1.0m @ 2.2g/t Au & 155g/t Ag
------------------------------------------
Vein Results (resource drilling)
Salvador ANE-19-010: 0.8m @ 16.7g/t Au & 349g/t
Ag
ANE-19-011: 0.8m @ 20.7g/t Au & 667g/t
Ag
ANE-19-013: 0.8m @ 5.9g/t Au & 399g/t Ag
IMM-19-001: 1.1m @ 31.9g/t Au & 5,053g/t
Ag
IMM-19-007: 0.6m @ 3.6g/t Au & 98g/t Ag
------------------------------------------
Results to date from the ongoing infill drilling programme at
Millet are below:
Vein Results (infill drilling)
Millet MIL-19-001: 0.9m @ 1.7g/t Au & 80g/t Ag
MIL-19-002: 4.5m @ 2.6g/t Au & 204g/t Ag
MIL-19-003: 2.8m @ 3.6g/t Au & 153g/t Ag
MIL-19-004: 1.3m @ 0.9g/t Au & 42g/t Ag
MIL-19-005: 0.9m @ 3.2g/t Au & 25g/t Ag
MIL-19-006: 4.2m @ 0.8g/t Au & 67g/t Ag
MIL-19-007: 2.7m @ 7.0g/t Au & 129g/t Ag
MIL-19-008: 1.5m @ 2.5g/t Au & 139g/t Ag
MIL-19-009: 2.0m @ 4.8g/t Au & 557g/t Ag
MIL-19-010: 5.0m @ 3.3g/t Au & 104g/t Ag
MIL-19-011: 0.9m @ 2.0g/t Au & 37g/t Ag
MIL-19-012: 6.8m @ 2.4g/t Au & 81g/t Ag
MIL-19-013: 1.2m @ 1.3g/t Au & 8g/t Ag
MIL-19-014: 2.0m @ 3.8g/t Au & 342g/t Ag
MIL-19-015: 1.2m @ 0.9g/t Au & 97g/t Ag
MIL-19-016: 5.9m @ 1.9g/t Au & 88g/t Ag
MIL-19-017: 1.4m @ 2.0g/t Au & 344g/t Ag
MIL-19-018: 1.2m @ 1.4g/t Au & 30g/t Ag
MIL-19-019: 4.6m @ 1.3g/t Au & 67g/t Ag
MIL-19-020: 1.2m @ 0.2g/t Au & 52g/t Ag
MIL-19-021: 2.6m @ 9.4g/t Au & 184g/t Ag
MIL-19-022: 4.0m @ 1.2g/t Au & 61g/t Ag
MIL-19-023: 3.5m @ 3.1g/t Au & 208g/t Ag
MIL-19-024: 1.0m @ 2.8g/t Au & 213g/t Ag
MIL-19-025: 5.8m @ 2.9g/t Au & 174g/t Ag
MIL-19-026: 6.2m @ 2.1g/t Au & 167g/t Ag
MIL-19-027: 5.1m @ 2.7g/t Au & 264g/t Ag
MIL-19-028: 3.0m @ 2.7g/t Au & 162g/t Ag
MIL-19-029: 4.0m @ 2.9g/t Au & 470g/t Ag
MIL-19-030: 0.7m @ 1.4g/t Au & 67g/t Ag
MIL-19-031: 2.3m @ 1.6g/t Au & 113g/t Ag
MIL-19-032: 2.5m @ 1.7g/t Au & 133g/t Ag
MIL-19-033: 3.3m @ 3.0g/t Au & 14g/t Ag
MIL-19-034: 1.4m @ 0.7g/t Au & 41g/t Ag
MIL-19-035: 3.0m @ 2.7g/t Au & 77g/t Ag
MIL-19-036: 2.3m @ 2.1g/t Au & 71g/t Ag
MIL-19-037: 2.8m @ 4.5g/t Au & 509g/t Ag
MIL-19-038: 1.0m @ 1.0g/t Au & 93g/t Ag
MIL-19-039: 0.8m @ 0.9g/t Au & 68g/t Ag
MIL-19-040: 3.5m @ 3.0g/t Au & 111g/t Ag
MIL-19-041: 0.6m @ 0.2g/t Au & 347g/t Ag
------------------------------------------
The drilling programme in Q3 will focus mainly on 7,000m of
resource drilling with the main targets of the Susana Beatriz,
Salvador, Facundo, Laidy and Rosy veins. It will also include
1,200m of potential drilling in the Rosy and Lady structures. In
addition, infill drilling will continue at the Millet, Divina and
other veins discovered in 2018.
Pallancata
In Pallancata, 817m of potential resources were drilled from the
Mariel and Pablo veins with results pending from the Mariel
target.
Vein Results (potential drilling)
Pablo DLEP-A49: 3.4m @ 1.4g/t Au & 553g/t Ag
---------------------------------------
Drilling in the Pablo Sur area is scheduled for Q3 along with
the programme at Cochaloma to the south.
Palca
The Palca drilling programme started in late Q2 with potential
resource drilling in the Roxana, Santa Beatriz and Prometida
structures. Early results confirm mineralisation with 200m of
depth. The key result was obtained from the Prometida vein.
Vein Results (potential drilling)
Roxana PLC-195-001: 1.8m @ 1.0g/t Au & 27g/t Ag
PLC-195-004: 0.8m @ 1.0g/t Au & 33g/t Ag
------------------------------------------
Santa Beatriz PLC-195-001: 1.2m @ 0.7g/t Au & 13g/t Ag
------------------------------------------
Prometida PLC-195-006: 2.9m @ 5.0g/t Au & 32g/t Ag
------------------------------------------
For Q3, 3,810m of drilling is scheduled for the Blanca,
Alejandra, Rafaela, Escondida, Escandalosa and Kimberly
targets.
San Jose
During Q2, potential drilling was carried out at Aguas Vivas,
the south-east Kospi projection and East and West Antonella.
Vein Results (potential drilling)
Antonella SJM-429: 3.9m @ 8.1g/t Au & 239/t Ag
-------------------------------------
During Q3, the programme will focus on the Antonella structure
and on the south-east Kospi projection. Also, a magnetometry study
will be performed on the extension of Cerro Negro structures
covering a total area of 14.3km(2) .
Arcata
At Arcata, a Titan geophysical programme and geological mapping
for new targets has concluded and a drilling plan is scheduled for
August 2019.
Corina
During the quarter, final permits were obtained for the drilling
programme planned for the Corina zone, approximately 15km to the
north east of the Selene plant. A 3,500m drilling campaign has
recently commenced with results expected later in the quarter.
Financial position
Total cash was approximately $95 million as at 30 June 2019
resulting in net debt of approximately $61 million.
____________________________________________________________________________________
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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