TIDMHOC
RNS Number : 2330M
Hochschild Mining PLC
20 January 2021
_____________________________________________________________________________________
20 January 2021
Production Report for the 12 months ended 31 December 2020
Ignacio Bustamante, Chief Executive Officer said:
"Our mines have delivered a successful fourth quarter despite
continuing disruption from the pandemic and therefore I am pleased
to announce that we have achieved our revised production targets
for the year. Furthermore, our balance sheet is now in a net cash
position following another period of substantial free cashflow
generation driven by our strong operational performance and ongoing
favourable precious metal prices. Finally, our brownfield programme
continues to advance with Inmaculada expected to increase reserves
significantly and encouraging new drill results achieved at Arcata,
San Jose and Corina."
Operational highlights
-- Full year attributable production at higher end of revised
forecasts ([1])
o 175,241 ounces of gold
o 9.8 million ounces of silver
o 289,293 gold equivalent ounces (versus revised guidance of
280,000-290,000 gold equivalent ounces)
o 24.9 million silver equivalent ounces (versus revised guidance
of 24.0-25.0 million silver equivalent ounces)
-- Strong operational recovery despite ongoing Covid-19 related
stoppages
-- All-in sustaining costs from operations in 2020 expected to
be below revised guidance at between $1,200 and $1,250 per gold
equivalent ounce or $14.0 and $14.5 per silver equivalent ounce
Exploration highlights
-- Inmaculada close to completing successful 2020 drilling
campaign
o Infill drilling expected to increase reserves
substantially
-- Maiden resource expected to be achieved in next few months at
Corina deposit following encouraging intercepts
-- Promising results from the Saavedra area at San Jose
-- Encouraging early results from new Arcata exploration
programme
Strong financial position
-- Total cash of approximately $231 million as at 31 December
2020 ($166 million as at 31 December 2019)
-- Net cash of approximately $21 million as at 31 December 2020
(Net debt of $34 million as at 31 December 2019)
-- Current Net cash/LTM EBITDA of 0.08x as at 31 December
2020
2020 ESG highlights
-- Lost Time Injury Frequency Rate of 1.38 (2019: 1.05) [2]
-- Accident Severity Index of 474 (2019: 54) [3]
-- Water Consumption of 231lt/person/day (2019:
206lt/person/day)
-- Domestic waste generation of 1.18 kg/person/day (2019:
1.04kg/person/day)
-- ECO score of 5.74 out of 6 (2019: 4.82) [4]
2021 guidance
-- Production target of 360,000-372,000 gold equivalent ounces
(31.0-32.0 million silver equivalent ounces)
-- All-in sustaining costs expected to be $1,210-$1,250 per gold
equivalent ounce ($14.1-14.5 per silver equivalent ounce)
-- Total sustaining and development capital expenditure expected
to be approximately $120-130 million
-- Brownfield exploration budget expected to be approximately
$34 million
-- Greenfield and advanced project budget set at approximately
$11 million
-- $14 million budget for BioLantanidos rare earth deposit in
Chile
________________________________________________________________________________________
A conference call will be held at 2.00pm (London time) on
Wednesday 20 January 2021 for analysts and investors.
Dial in details as follows:
UK Toll-Free Number: 0800 279 7204
International Dial in: +44 (0)330 336 9411
US/Canada Toll-Free Number: 888-254-3590
Pin: 7673348#
A recording of the conference call will be available on demand
on the Company's website: www.hochschildmining.com
________________________________________________________________________________________
Note: All equivalent figures calculated using the Company
gold/silver ratio of 86x.
Overview
In Q4 2020, Hochschild Mining PLC (HOC.LN) (OTCMKTS: $HCHDF)
("Hochschild" or "the Company") delivered attributable production
of 94,035 gold equivalent ounces or 8.1 million silver equivalent
ounces, representing a strong ongoing recovery versus the previous
two quarters with the Inmaculada and Pallancata mines in full
production throughout the period. Overall 2020 attributable
production was 289,293 gold equivalent ounces or 24.9 million
silver equivalent ounces, at the high end of the Company's revised
forecasts but reflecting the impact from Covid-related disruptions
throughout the year.
The Company expects that its all-in sustaining costs for 2020
will be at $1,200-$1,250 per gold equivalent ounce ($14.0-14.5 per
silver equivalent ounce), lower than revised guidance.
TOTAL GROUP PRODUCTION [5]
Q4 2020 Q3 2020 Q4 2019 12 mths 12 mths
2020 2019
-------- -------- -------- --------
Silver production
(koz) 3,719 3,085 4,641 11,821 20,163
Gold production
(koz) 65.67 47.83 78.05 207.08 321.58
Total silver equivalent
(koz) 9,366 7,198 11,354 29,631 47,818
Total gold equivalent
(koz) 108.91 83.69 132.02 344.54 556.03
Silver sold (koz) 3,803 3,146 4,662 11,846 20,062
Gold sold (koz) 66.57 47.62 77.48 207.77 317.52
------------------------- -------- -------- -------- -------- --------
Total production includes 100% of all production, including
production attributable to Hochschild's joint venture partner at
San Jose.
ATTRIBUTABLE GROUP PRODUCTION
Q4 2020 Q3 2020 Q4 2019 12 mths 12 mths
2020 2019
-------- -------- -------- --------
Silver production
(koz) 3,187 2,514 3,780 9,808 16,808
Gold production
(koz) 56.97 39.20 64.02 175.24 269.89
Silver equivalent
(koz) 8,087 5,884 9,285 24,879 40,019
Gold equivalent
(koz) 94.03 68.42 107.97 289.29 465.34
------------------- -------- -------- -------- -------- --------
Attributable production includes 100% of all production from
Inmaculada, Pallancata and 51% from San Jose.
Production
Inmaculada
Product Q4 2020 Q3 2020 Q4 2019 12 mths 12 mths
2020 2019
------------ ------------ ------------ --------
Ore production
(tonnes treated) 340,854 205,712 327,906 948,937 1,338,569
Average grade silver
(g/t) 152 156 179 154 163
Average grade gold
(g/t) 4.23 4.29 5.09 4.33 4.71
Silver produced
(koz) 1,393 873 1,359 4,034 5,747
Gold produced (koz) 43.55 26.58 43.82 129.17 189.18
Silver equivalent
(koz) 5,138 3,159 5,127 15,143 22,016
Gold equivalent
(koz) 59.75 36.73 59.62 176.09 256.00
Silver sold (koz) 1,404 858 1,356 4,020 5,732
Gold sold (koz) 44.05 26.17 44.16 129.70 188.59
---------------------- ------------ ------------ ------------ -------- -----------------
Inmaculada's fourth quarter production was 43,550 ounces of gold
and 1.4 million ounces of silver, which amounts to gold equivalent
production of 59,749 ounces. The operation has recovered well since
early September 2020 and fourth quarter output was in line with the
same period of 2019. Overall in 2020, Inmaculada has delivered gold
equivalent production of 176,086 ounces (2019: 256,001 ounces),
with the reduction versus 2019 due to the impact of two Covid-19
related stoppages during the year. Grades have proved to be
slightly lower than originally budgeted due to delays in mine
sequencing resulting from the stoppages.
Pallancata
Product Q4 2020 Q3 2020 Q4 2019 12 mths 12 mths
2020 2019
------------- ------------- ------------- --------
Ore production
(tonnes treated) 186,454 144,417 206,109 519,611 915,877
Average grade silver
(g/t) 231 254 258 247 278
Average grade gold
(g/t) 0.81 0.88 0.98 0.87 1.01
Silver produced
(koz) 1,241 1,046 1,524 3,679 7,259
Gold produced (koz) 4.37 3.63 5.60 12.93 25.95
Silver equivalent
(koz) 1,617 1,358 2,005 4,790 9,491
Gold equivalent
(koz) 18.80 15.80 23.31 55.70 110.36
Silver sold (koz) 1,287 1,096 1,502 3,654 7,161
Gold sold (koz) 4.56 3.83 5.47 12.80 25.45
---------------------- ------------- ------------- ------------- -------- -----------------
In Q4, Pallancata produced 1.2 million ounces of silver and
4,372 ounces of gold, bringing the silver equivalent total to 1.6
million. Tonnage was higher in the fourth quarter and grades
decreased in line with the revised mine plan. Overall in 2020,
Pallancata produced 4.8 million silver equivalent ounces (2019: 9.5
million ounces) with the reduction versus the original forecast
(7.2 million ounces) due to the effects of the Covid-19 related
stoppage and the resulting impact on the mine plan.
San Jose (the Company has a 51% interest in San Jose)
Product Q4 2020 Q3 2020 Q4 2019 12 mths 12 mths
2020 2019
-------- -------- -------- --------
Ore production
(tonnes treated) 110,019 128,789 145,490 401,202 544,165
Average grade silver
(g/t) 345 313 426 357 443
Average grade gold
(g/t) 5.62 4.72 6.89 5.63 6.81
Silver produced
(koz) 1,085 1,165 1,759 4,108 6,846
Gold produced (koz) 17.75 17.62 28.64 64.99 105.48
Silver equivalent
(koz) 2,611 2,680 4,222 9,697 15,917
Gold equivalent
(koz) 30.36 31.17 49.09 112.76 185.08
Silver sold (koz) 1,112 1,192 1,804 4,172 6,846
Gold sold (koz) 17.97 17.62 27.85 65.28 102.82
---------------------- -------- -------- -------- -------- --------
The San Jose operation experienced another stoppage in the
fourth quarter due to an increase in Covid-19 infections in the
region causing a halt to operations for 20 days from 15 November to
5 December 2020. A reduced level of staff remained on-site to
oversee the final production of the unit's revised 2020 output
target following permission from the Santa Cruz provincial
authorities to restart operations.
Production in the p eriod was 1.1 million ounces of silver and
17,748 ounces of gold which makes 2.6 million silver equivalent
ounces. This amounts to a 2020 total of 9.7 million silver
equivalent ounces (2019: 15.9 million ounces). Whilst the mine
restarted operations in late April 2020, following the first
Covid-19 stoppage, continuing restrictions on the movement of
people in Argentina throughout the remainder of the year resulted
in a revised mine plan and lower grades.
Average realisable prices and sales
Average realisable precious metal prices in Q4 2020 (which are
reported before the deduction of commercial discounts) were
$1,869/ounce for gold and $26.2/ounce for silver (Q4 2019:
$1,510/ounce for gold and $18.4/ounce for silver).
For 2020 as a whole, average realisable precious metal prices
were $1,814/ounce for gold and $22.3/ounce for silver (2019:
$1,414/ounce for gold and $16.5/ounce for silver).
Brownfield exploration
Inmaculada
In Q4 2020, 1,374m of drilling for potential resources and
8,459m of resource drilling was carried out. Selected results are
below:
Vein Results (potential/resource drilling)
Shakira IMS-20-019: 1.3m @ 1.3g/t Au & 70g/t Ag
IMS-20-020: 2.9m @ 2.2g/t Au & 159g/t Ag
IMM-20-022: 1.2m @ 22.1g/t Au & 21g/t Ag
IMM-20-023: 5.6m @ 9.0g/t Au & 397g/t Ag
IMS-20-025: 3.0m @ 5.2g/t Au & 241g/t Ag
IMS-20-032: 7.6m @ 2.5g/t Au & 287g/t Ag
IMS-20-032: 0.8m @ 1.0g/t Au & 94g/t Ag
IMS-20-036: 2.5m @ 4.7g/t Au & 337g/t Ag
IMS-20-037: 1.5m @ 0.8g/t Au & 103g/t Ag
IMS-20-038: 1.0m @ 2.1g/t Au & 30g/t Ag
IMS-20-039: 0.8m @ 1.1g/t Au & 60g/t Ag
IMS-20-048: 1.8m @ 2.0g/t Au & 119g/t Ag
IMS-20-049: 4.6m @ 14.0g/t Au & 303g/t
Ag
------------------------------------------
Millet IMS-20-041: 1.2m @ 2.7g/t Au & 150g/t Ag
IMS-20-042: 7.2m @ 2.2g/t Au & 153g/t Ag
------------------------------------------
Angela extension IMS-19-006: 1.2m @ 8.1g/t Au & 60g/t Ag
IMS-20-035: 3.5m @ 3.1g/t Au & 76g/t Ag
------------------------------------------
Tula TLO-20-014: 1.1m @ 7.7g/t Au & 236g/t Ag
TLO-20-016: 1.8m @ 1.5g/t Au & 82g/t Ag
TLO-20-018: 1.2m @ 2.5g/t Au & 95g/t Ag
TLO-20-020: 1.8m @ 6.4g/t Au & 158g/t Ag
------------------------------------------
Diana DIV-20-049: 2.0m @ 1.5g/t Au & 86g/t Ag
DIV-20-050: 0.9m @ 1.9g/t Au & 98g/t Ag
DIV-20-055: 0.9m @ 1.5g/t Au & 79g/t Ag
DIV-20-060: 1.0m @ 2.1g/t Au & 73g/t Ag
DIV-20-061: 1.0m @ 1.7g/t Au & 99g/t Ag
DIV-20-063: 1.2m @ 0.9g/t Au & 54g/t Ag
DIV-20-064: 1.0m @ 0.9g/t Au & 212g/t Ag
DIV-20-066: 1.7m @ 1.8g/t Au & 49g/t Ag
DIV-20-067: 1.0m @ 1.4g/t Au & 104g/t Ag
DIV-20-069: 1.1m @ 2.3g/t Au & 72g/t Ag
DIV-20-070: 1.1m @ 1.6g/t Au & 30g/t Ag
DIV-20-072: 1.0m @ 2.7g/t Au & 93g/t Ag
DIV-20-073: 0.8m @ 2.0g/t Au & 43g/t Ag
DIV-20-075: 0.9m @ 1.5g/t Au & 53g/t Ag
------------------------------------------
Perla SBE-20-055: 1.1m @ 1.8g/t Au & 9g/t Ag
SBE-20-060: 0.8m @ 4.1g/t Au & 60g/t Ag
SBE-20-061: 1.1m @ 3.2g/t Au & 166g/t Ag
SBE-20-066: 0.8m @ 1.8g/t Au & 75g/t Ag
------------------------------------------
Lucrecia SBE-20-039: 1.0m @ 2.0g/t Au & 131g/t Ag
SBE-20-042: 0.9m @ 3.7g/t Au & 81g/t Ag
SBE-20-050: 1.1m @ 1.3g/t Au & 44g/t Ag
SBE-20-060: 1.0m @ 0.6g/t Au & 87g/t Ag
SBE-20-066: 0.9m @ 0.9g/t Au & 117g/t Ag
------------------------------------------
Noelia SBE-20-046: 0.8m @ 3.2g/t Au & 90g/t Ag
SBE-20-065: 6.1m @ 8.8g/t Au & 1,086g/t
Ag
SBE-20-067: 0.9m @ 1.4g/t Au & 26g/t Ag
------------------------------------------
Peta DIV-20-050: 1.3m @ 3.7g/t Au & 50g/t Ag
DIV-20-063: 0.8m @ 2.6g/t Au & 42g/t Ag
DIV-20-066: 1.4m @ 1.1g/t Au & 66g/t Ag
------------------------------------------
During the first quarter of 2021, the goal is to carry out
2,500m of potential drilling in the extension of the Angela vein as
well as the Eduardo vein structure.
The current infill drilling programme at Inmaculada is expected
to be completed by the end of January 2021. A substantial increase
in the deposit's reserve base is expected to be confirmed at the
Full Year results in February 2021, although January drill work
will not be included in the audited 2020 mineral resources and
reserve estimates, published at the same time.
Pallancata
In the fourth quarter at Pallancata, 4,657m of potential
drilling was carried out in the continuation of the Pallancata
vein, at Farallon and Royropata and using long drill holes from
inside the mine. A new structure has been located 150m to the south
of the Pablo Vein.
In the first quarter, the plan is to execute 3,000m of potential
drilling to continue to test the continuity of the Pallancata vein
and 1,500m of drilling at Cochaloma.
Corina
At Corina, to the north of Selene, 2,318m of resource drilling
was executed in the fourth quarter in the Corina structure with the
key results below:
Vein Results (potential drilling)
Corina DHCOR-20015: 25.7m @ 2.5g/t Au & 23g/t
Ag
including 2.5m @ 10.1g/t Au & 62g/t Ag
DHCOR-20018: 1.3m @ 1.2g/t Au & 14g/t Ag
DHCOR-20019: 4.8m @ 1.4g/t Au & 23g/t Ag
DHCOR-20020: 23.3m @ 4.9g/t Au & 43g/t
Ag
DHCOR-20021: 9.3m @ 3.9g/t Au & 47g/t Ag
including 2.3m @ 8.4g/t Au & 88g/t Ag
DHCOR-20022: 1.2m @ 1.4g/t Au & 3g/t Ag
DHCOR-20025: 4.8m @ 3.6g/t Au & 19g/t Ag
------------------------------------------
Drilling continues with resource and potential drilling in the
Corina vein and associated structures to the north east of the
system.
San Jose
In the fourth quarter at San Jose, 9,433m of potential drilling
was carried out in the Saavedra and Target Titan area and 2,361m of
resource drilling was executed in the Betania and Isabel structures
close to San Jose with early results below:
Vein Results (potential/resource drilling)
Alina SJD-2176: 1.2m @ 1.1g/t Au & 319g/t Ag
----------------------------------------
Ramal HVNX SJD-2184: 1.2m @ 4.0g/t Au & 557g/t Ag
SJD-2188: 1.3m @ 13.8g/t Au & 3,149g/t
Ag
----------------------------------------
Betania (Saavedra) SJD-2207: 4.0m @ 1.4g/t Au & 760g/t Ag
----------------------------------------
Isabel SJD-2210: 1.6m @ 5.6g/t Au & 648g/t Ag
SJD-2211: 1.6m @ 3.7g/t Au & 376g/t Ag
----------------------------------------
Luisa SJD-2210: 0.9m @ 2.2/t Au & 722g/t Ag
----------------------------------------
During Q1 2021, 2,000m of resource drilling is planned at the
Betania and Isabel veins with campaigns also continuing at the
Telken zone close to Cerro Negro and at Aguas Vivas to the north
west of San Jose.
Arcata
Following the early receipt of the exploration permit at Arcata,
5,022m was drilled in the Fatima, Tres Reyes and the West veins
with selected results below:
Vein Results (potential drilling)
Fatima DDH-609-S20: 3.0m @ 1.4g/t Au & 760g/t
Ag
---------------------------------------
Tres Reyes DDH-611-S20: 1.3m @ 1.5g/t Au & 313g/t
Ag
---------------------------------------
Jenny DDH-611-S20: 0.9m @ 0.7g/t Au & 204g/t
Ag
---------------------------------------
A further 3,000m of drilling is planned for the first quarter of
2021 at the Baja, Fatima and Tres Reyes veins.
Crespo
At the Crespo open pit project close to Arcata, 1,973m of
potential drilling was carried out in the fourth quarter to confirm
the lateral continuity of the orebody as well as a potential
deepening of the breccia and testing of the surrounding colluvial
deposits.
Target Results (potential/resource drilling)
Lateral extension DDH-CRE-2001: 26.2m @ 1.2g/t Au & 82g/t
Ag
----------------------------------------
Extension at depth DDH-CRE-2002: 16.5m @ 0.3g/t Au & 14g/t
Ag
DDH-CRE-2002: 12.8m @ 0.3g/t Au & 1g/t
Ag
----------------------------------------
When the team returns in the second quarter after the rainy
season, the programme will continue with 2,000m of drilling aimed
at the extension and deepening of hydrothermal breccias and the
colluvial deposits.
Financial position
Total cash was approximately $231 million as at 31 December 2020
resulting in a net cash position of approximately $21 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.
LEI: 549300JK10TVQ3CCJQ89
- ends -
[1] All equivalent figures assume a gold/silver ratio of 86x
[2] Calculated as total number of accidents per million labour
hours
([3]) Calculated as total number of days lost per million labour
hours.
[4] The ECO Score is an internally designed Key Performance
Indicator measuring environmental performance in one number and
encompassing numerous fronts including management of waste water,
outcome of regulatory inspections and sound environmental practices
relating to water consumption and the recycling of materials.
[5] 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.
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