TIDMHOC
RNS Number : 0080T
Hochschild Mining PLC
15 July 2020
_____________________________________________________________________________________
15 July 2020
Production Report for the 6 months ended 30 June 2020
Ignacio Bustamante, Chief Executive Officer said:
"At such a difficult time for everyone globally, the Company is
focused on supporting our people and communities as well as
protecting our finances. I am very proud of the work that our
employees are doing, particularly our colleagues at the mines who
are operating in the most challenging of circumstances.
The second quarter results inevitably reflect the impact of
Covid-19 on the countries we operate in. However, we remain in a
strong financial position and currently expect that the extensive
protective measures we have implemented across the organisation
will allow our full team to start returning to Inmaculada next
week. We look forward to an ambitious second half schedule,
particularly in our brownfield drilling programme, and we expect to
issue our updated 2020 guidance when we have assessed the full
impact of the current suspension."
Operational highlights
-- Q2 2020 attributable production: ([1])
o 19,647 ounces of gold
o 1.1 million ounces of silver
o 32,712 gold equivalent ounces
o 2.8 million silver equivalent ounces
-- H1 2020 attributable production
o 79,073 ounces of gold
o 4.1 million ounces of silver
o 126,835 gold equivalent ounces
o 10.9 million silver equivalent ounces
-- Inmaculada expected to ramp up back to full production by end
of July
-- Pallancata operating normally
-- San Jose in phased ramp-up process
-- Full Covid-19 protocols in place at all operations
-- Full brownfield exploration programme expected to be
completed by year-end
Strong financial position despite Covid-19 impact
-- Total cash of approximately $162 million as at 30 June 2020
($166 million as at 31 December 2019)
-- Net debt of approximately $58 million as at 30 June 2020 ($33
million as at 31 December 2019)
-- Net Debt/LTM EBITDA of approximately 0.21x as at 30 June
2020
________________________________________________________________________________________
A conference call will be held at 2.30pm (London time) on
Wednesday 15 July 2020 for analysts and investors.
Dial in details as follows:
UK Toll Free: 0800 279 7204
International Dial in: +44 (0)330 336 9411
US Dial in: +1 646-828-8193
Pin: 7765875#
Please dial into the call approximately ten minutes before the
2.30pm start time.
A recording of the conference call will be available on demand
on the Company's website: www.hochschildmining.com
________________________________________________________________________________________
Revised guidance
Due to the temporary suspension of Hochschild's Inmaculada mine
in Peru, Hochschild is not providing revised 2020 guidance. The
Company will reissue guidance once all operations are in production
and the full impact of the current suspension of Inmaculada is
clearer.
Overview
In Q2 2020, Hochschild delivered attributable production of
32,712 gold equivalent ounces or 2.8 million silver equivalent
ounces with the period impacted by effects of the Covid-19 crisis
and the consequent operational stoppage at all three of the
Company's mines. The Inmaculada and Pallancata mines were stopped
for 11 weeks with operations at each mine resuming on 31 May and 1
June respectively whilst the San Jose operation in Argentina
stopped for six weeks and resumed on 27 April with a phased ramp-up
process. In H1 2020, Hochschild produced 126,835 gold equivalent
ounces or 10.9 million silver equivalent ounces (on an attributable
basis).
TOTAL GROUP PRODUCTION [2]
Q2 2020 Q1 2020 Q2 2019 H1 2020 H1 2019
-------- -------- -------- --------
Silver production
(koz) 1,482 3,536 5,166 5,018 10,237
Gold production
(koz) 25.17 68.42 84.18 93.59 162.16
Total silver equivalent
(koz) 3,647 9,420 12,405 13,067 24,182
Total gold equivalent
(koz) 42.40 109.53 144.24 151.94 281.19
Silver sold (koz) 1,794 3,103 5,189 4,897 10,221
Gold sold (koz) 35.90 57.69 84.05 93.58 160.25
------------------------- -------- -------- -------- -------- --------
Total production includes 100% of all production, including
production attributable to Hochschild's joint venture partner at
San Jose.
ATTRIBUTABLE GROUP PRODUCTION
Q2 2020 Q1 2020 Q2 2019 H1 2020 H1 2019
-------- -------- -------- --------
Silver production
(koz) 1,124 2,984 4,317 4,108 8,687
Gold production
(koz) 19.65 59.43 70.66 79.07 138.08
Silver equivalent
(koz) 2,813 8,095 10,394 10,908 20,562
Gold equivalent
(koz) 32.71 94.12 120.86 126.84 239.09
------------------- -------- -------- -------- -------- --------
Attributable production includes 100% of all production from
Inmaculada, Pallancata and 51% from San Jose.
Production
Inmaculada
Product Q2 2020 Q1 2020 Q2 2019 H1 2020 H1 2019
------------- -------- ------------ --------
Ore production
(tonnes treated) 93,475 308,896 339,098 402,371 670,487
Average grade silver
(g/t) 166 151 170 154 157
Average grade gold
(g/t) 4.62 4.37 4.85 4.42 4.62
Silver produced
(koz) 377 1,391 1,503 1,768 2,950
Gold produced (koz) 12.60 46.45 49.75 59.05 98.61
Silver equivalent
(koz) 1,461 5,385 5,782 6,846 11,431
Gold equivalent
(koz) 16.98 62.62 67.23 79.60 132.92
Silver sold (koz) 579 1,179 1,500 1,758 2,942
Gold sold (koz) 19.76 39.72 49.41 59.48 97.48
---------------------- ------------- -------- ------------ -------- ------------------
Inmaculada's second quarter production was 12,596 ounces of gold
and 0.4 million ounces of silver which amounts to a gold equivalent
output of 16,984 ounces and represents approximately 25 days of
production. As expected, grades rose versus the first quarter.
Overall in the first half of 2020, Inmaculada produced 79,604 gold
equivalent ounces (H1 2019: 132,915 ounces).
As announced on 6 July 2020, operations are currently halted due
to a number of cases of Covid-19 with a reduced workforce
performing care and maintenance activities. The Inmaculada team is
currently expected to remobilise during the week beginning 20 July
2020 and is scheduled to reach full production by the end of the
month.
Pallancata
Product Q2 2020 Q1 2020 Q2 2019 H1 2020 H1 2019
-------- ----------------- ------------- --------
Ore production
(tonnes treated) 46,234 142,506 240,705 188,740 472,294
Average grade silver
(g/t) 276 250 282 257 284
Average grade gold
(g/t) 0.98 0.90 1.01 0.92 1.01
Silver produced
(koz) 373 1,019 1,931 1,392 3,812
Gold produced (koz) 1.30 3.61 6.84 4.92 13.44
Silver equivalent
(koz) 485 1,330 2,519 1,815 4,969
Gold equivalent
(koz) 5.64 15.46 29.29 21.10 57.78
Silver sold (koz) 310 961 1,891 1,271 3,768
Gold sold (koz) 1.08 3.33 6.62 4.41 13.20
---------------------- -------- ----------------- ------------- -------- --------
In the second quarter, Pallancata produced 372,807 ounces of
silver and 1,305 ounces of gold bringing the silver equivalent
total to 485,034 ounces. Tonnage resulted from 24 days of
production in June with grades higher, as expected, versus the
first quarter. Overall in H1 2020, Pallancata's output was 1.8
million silver equivalent ounces (H1 2019: 5.0 million ounces).
San Jose (the Company has a 51% interest in San Jose)
Product Q2 2020 Q1 2020 Q2 2019 H1 2020 H1 2019
------------ ----------------- ------------ --------
Ore production
(tonnes treated) 77,491 84,903 141,621 162,394 251,753
Average grade silver
(g/t) 329 466 436 401 446
Average grade gold
(g/t) 5.04 7.57 6.89 6.36 6.89
Silver produced
(koz) 732 1,126 1,731 1,858 3,162
Gold produced (koz) 11.27 18.35 27.59 29.62 49.14
Silver equivalent
(koz) 1,701 2,705 4,104 4,406 7,388
Gold equivalent
(koz) 19.78 31.45 47.72 51.23 85.91
Silver sold (koz) 904 963 1,785 1,868 3,189
Gold sold (koz) 15.05 14.64 28.18 29.69 48.89
---------------------- ------------ ----------------- ------------ -------- --------
The San Jose operation in Argentina restarted concentrate
production on 27 April, although the ongoing countrywide
restrictions on the movement of people resulted in the ramp-up
being phased over a significant period of time with full production
expected towards the end of the third quarter. Q2 production was
732,048 ounces of silver and 11,268 ounces of gold which is 1.7
million silver equivalent ounces and brings the total for the first
half of the year to 4.4 million silver equivalent ounces (H1 2019:
7.4 million ounces).
Average realisable prices and sales
Average realisable precious metal prices in Q2 2020 (which are
reported before the deduction of commercial discounts) were
$1,826/ounce for gold and $19.8/ounce for silver (Q2 2019:
$1,346/ounce for gold and $14.8/ounce for silver). For H1 2020,
average realisable precious metal prices were $1,701/ounce for gold
and $16.2/ounce for silver (H1 2019: $1,329/ounce for gold and
$15.0/ounce for silver).
Brownfield exploration
In the second quarter, the brownfield exploration programme was
subject to the same restrictions which were implemented to control
the spread of Covid-19 and therefore in Peru only a limited amount
of work was performed.
Inmaculada
In Q2 2020, 1,677m of potential drilling was carried out with
selected results below:
Vein Results (potential drilling)
Shakira HUA-20-008A: 1.3m @ 2.5g/t Au & 259g/t
Ag
---------------------------------------
Noe HUA-20-008A: 1.1m @ 5.0g/t Au & 179g/t
Ag
---------------------------------------
During Q3, the plan is to drill 25,000m to incorporate new
resources from the Juliana and Shakira veins.
Pallancata
At Pallancata, 2,734m of potential drilling was executed
targeting the Erika and Luciano veins and the continuation of the
Pallancata vein.
Vein Results (potential drilling)
Pallancata c DLPL-A932: 4.6m @ 3.0g/t Au & 790g/t Ag
----------------------------------------
Puka DLHU-A49: 1.9m @ 1.1g/t Au & 351g/t Ag
----------------------------------------
In Q3, the plan is to carry out 6,300m of resource drilling in
the Pallancata vein extension and 2,500m of potential drilling
towards the Marco vein and the Pablo West zone.
San Jose
At San Jose, 6,020m of potential were drilled towards the
Ayelen, Erika, Mara, Sigmoide Julia, Emilia, Salvador and Micaela
Oeste targets. Additionally, during Q2 the Titan geophysics survey
was completed.
Vein Results (potential)
Odin SJD-2103: 2.8m @ 17.1g/t Au & 591g/t Ag
SJD-2109: 0.9m @ 6.9g/t Au & 126g/t Ag
----------------------------------------
Julia SJD-2108: 1.0m @ 7.0g/t Au & 812g/t Ag
SJD-2110: 1.2m @ 5.8g/t Au & 197g/t Ag
----------------------------------------
Erika SJD-2114: 0.8m @ 1.5g/t Au & 332g/t Ag
----------------------------------------
New vein 1 SJD-2110: 0.9m @ 8.0g/t Au & 398g/t Ag
----------------------------------------
New vein 2 SJD-2118: 0.8m @ 1.2g/t Au & 226g/t Ag
----------------------------------------
During Q3, subject to a successful potential drilling programme,
5,000m will be drilled in the Erika vein to add resources.
Financial position
Total cash was approximately $162 million as at 30 June 2020
resulting in net debt of approximately $58 million. This includes
$20 million of debt raised in Argentina for temporary working
capital increases.
_____________________________________________________________________________________
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.
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 the average gold/silver ratio
for 2019 of 86x.
[2] Group production figures for 2019 include 394,000 silver
equivalent ounces from the Arcata operation which was placed on
care and maintenance in February 2019.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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