TIDMHOC
RNS Number : 8968F
Hochschild Mining PLC
21 July 2021
_____________________________________________________________________________________
21 July 2021
Production Report for the 6 months ended 30 June 2021
Ignacio Bustamante, Chief Executive Officer said:
"The second quarter results have been solid across our
operations and we remain on course to deliver our production and
cost targets for the year. In addition, drill results have
continued to be encouraging at Inmaculada with 29 million silver
equivalent ounces of high grade Inferred resources already added in
the first half. We have also seen further positive results from the
Snip project in Canada. Finally, today we have also announced that
we will be holding a capital markets presentation in September
which will cover our exciting rare earths project in Chile."
Operational highlights
-- Q2 2021 attributable production: ([1])
o 53,418 ounces of gold
o 3.1 million ounces of silver
o 89,381 gold equivalent ounces
o 7.7 million silver equivalent ounces
-- H1 2021 attributable production
o 106,261 ounces of gold
o 5.9 million ounces of silver
o 175,119 gold equivalent ounces
o 15.1 million silver equivalent ounces
-- On track to deliver overall 2021 production target of
360,000-372,000 gold equivalent ounces or 31.0-32.0 million silver
equivalent ounces
-- 2021 all-in sustaining costs on track to meet $1,210 and
$1,250 per gold equivalent ounce guidance ($14.1 and $14.5 per
silver equivalent ounce)
-- Full Covid-19 protocols remain in place at all operations
Exploration highlights
-- Hochschild to host rare earths capital markets presentation on 8 September 2021
-- Brownfield programme added significant high-grade Inferred resources in H1:
o 29 million silver equivalent ounces added year-to-date from
Angela North vein at Inmaculada
o 7 million silver equivalent ounces added year-to-date at San
Jose
-- Drilling campaigns executed at Pallancata, Corina, Cochaloma, Arcata and Crespo
-- Further high grade drill results achieved at Skeena
Resources' Snip project in British Columbia
ESG highlights
-- 2020 Sustainability Report recently published
-- Lost Time Injury Frequency Rate of 1.31 (2020: 1.38) ([2])
-- Accident Severity Index of 684 (2020: 474) ([3])
-- Water Consumption of 215lt/person/day (2020: 231lt/person/day)
-- Domestic waste generation of 1.01 kg/person/day (2020: 1.18kg/person/day)
-- ECO score of 5.36 out of 6 (2019: 5.74) ([4])
Strong financial position
-- Total cash of approximately $257 million as at 30 June 2021
($232 million as at 31 December 2020)
-- Net cash of approximately $51 million as at 30 June 2021 ($22
million as at 31 December 2020)
-- Current Net Cash/LTM EBITDA of approximately 0.131x as at 30 June 2021
________________________________________________________________________________________
A conference call will be held at 1.30pm (London time) on
Wednesday 21 July 2021 for analysts and investors.
Dial in details as follows:
International Dial in: +44 330 027 1846
UK Toll-Free Number: 0800 031 4838
US/Canada Toll Free: 800-367-2403
Pin: 1291361
Please dial into the call approximately ten minutes before the
1.30pm start time.
A recording of the conference call will be available on demand
on the Company's website: www.hochschildmining.com
________________________________________________________________________________________
Overview
In Q2 2021, Hochschild Mining PLC ("Hochschild" or "the
Company") (LSE: HOC) (OTCQX: HCHDF) delivered attributable
production of 89,381 gold equivalent ounces or 7.7 million silver
equivalent ounces with another solid performance from Inmaculada
and increases at Pallancata and San Jose versus the first quarter.
In the first half of 2021 as a whole, Hochschild produced 175,119
gold equivalent ounces or 15.1 million silver equivalent ounces (on
an attributable basis) with production increasing
quarter-on-quarter and year-on-year. The Company remains on track
to meet its 2021 production target of between 360,000 and 372,000
gold equivalent ounces or between 31.0 and 32.0 million silver
equivalent ounces.
The Company reiterates that its all-in sustaining cost for 2021
is on track to be in line with guidance for the year of between
$1,210 and $1,250 per gold equivalent ounce (or $14.1 and $14.5 per
silver equivalent ounce).
TOTAL GROUP PRODUCTION
Q2 2021 Q1 2021 Q2 2020 H1 2021 H1 2020
-------- -------- -------- --------
Silver production
(koz) 3,700 3,321 1,482 7,021 5,018
Gold production
(koz) 62.76 62.31 25.17 125.07 93.59
Total silver equivalent
(koz) 9,097 8,680 3,647 17,778 13,067
Total gold equivalent
(koz) 105.78 100.93 42.40 206.72 151.94
Silver sold (koz) 3,823 3,182 1,794 7,005 4,897
Gold sold (koz) 63.18 61.14 35.90 124.32 93.58
------------------------- -------- -------- -------- -------- --------
Total production includes 100% of all production, including
production attributable to Hochschild's joint venture partner at
San Jose.
ATTRIBUTABLE GROUP PRODUCTION
Q2 2021 Q1 2021 Q2 2020 H1 2021 H1 2020
-------- -------- -------- --------
Silver production
(koz) 3,093 2,829 1,124 5,922 4,108
Gold production
(koz) 53.42 52.84 19.65 106.26 79.07
Silver equivalent
(koz) 7,687 7,373 2,813 15,060 10,908
Gold equivalent
(koz) 89.38 85.74 32.71 175.12 126.84
------------------- -------- -------- -------- -------- --------
Attributable production includes 100% of all production from
Inmaculada, Pallancata and 51% from San Jose.
Production
Inmaculada
Product Q2 2021 Q1 2021 Q2 2020 H1 2021 H1 2020
-------- -------- -------- --------
Ore production
(tonnes treated) 334,657 337,480 93,475 672,137 402,371
Average grade silver
(g/t) 163 158 166 160 154
Average grade gold
(g/t) 3.92 3.92 4.62 3.92 4.42
Silver produced
(koz) 1,358 1,419 377 2,777 1,768
Gold produced (koz) 39.60 39.80 12.60 79.40 59.05
Silver equivalent
(koz) 4,763 4,842 1,461 9,606 6,846
Gold equivalent
(koz) 55.39 56.31 16.98 111.70 79.60
Silver sold (koz) 1,355 1,414 579 2,769 1,758
Gold sold (koz) 39.85 39.65 19.76 79.49 59.48
---------------------- -------- -------- -------- -------- --------
Inmaculada's second quarter production was 39,599 ounces of gold
and 1.4 million ounces of silver which amounts to a gold equivalent
output of 55,389 ounces. Grades and tonnage were in line with
expectations. Overall in the first half of 2021, Inmaculada
produced 111,696 gold equivalent ounces (H1 2020: 79,604 ounces),
driven by better than expected gold and silver grades. This was a
significant increase versus the same period of 2020 when the
operation was severely impacted by stoppages caused by the global
pandemic.
Pallancata
Product Q2 2021 Q1 2021 Q2 2020 H1 2021 H1 2020
-------- -------- -------- --------
Ore production
(tonnes treated) 162,052 126,950 46,234 289,002 188,740
Average grade silver
(g/t) 234 240 276 237 257
Average grade gold
(g/t) 0.86 0.85 0.98 0.86 0.92
Silver produced
(koz) 1,103 897 373 2,000 1,392
Gold produced (koz) 4.09 3.18 1.30 7.28 4.92
Silver equivalent
(koz) 1,455 1,171 485 2,626 1,815
Gold equivalent
(koz) 16.92 13.61 5.64 30.54 21.10
Silver sold (koz) 1,229 771 310 2,000 1,271
Gold sold (koz) 4.56 2.72 1.08 7.29 4.41
---------------------- -------- -------- -------- -------- --------
In the second quarter, Pallancata produced 1.1 million ounces of
silver and 4,094 ounces of gold bringing the silver equivalent
total to 1.5 million ounces. Overall in H1 2021, Pallancata's
output was 2.6 million silver equivalent ounces (H1 2020: 1.8
million ounces), with the focus of the team currently on mine
development and brownfield exploration in expectation of an
extension to the mine life.
As disclosed previously, on 18 June 2021, it was announced that
a road accident had occurred involving a bus operated by one of the
Company's contractors carrying workers from the Pallancata
operation to the city of Arequipa in southern Peru. It is with deep
regret that this resulted in 26 fatalities involving 16 Company
employees and ten from contracting organisations.
One of the key priorities following the incident has been to
ensure the best possible provision of hospital care to the injured.
Emergency transfers were arranged to nearby facilities in Nazca and
Ica and to private clinics in Lima, as required. Hochschild's Human
Resources team have remained in constant contact to provide all the
requisite support and this will continue throughout the recovery
phase.
The Company's other focus has been on supporting the families of
all of those who lost their lives. Following news of the accident,
the Company established a Crisis Committee with key personnel from
the Operations, Human Resources and Health divisions deployed to
ensure in-situ support on financial, legal and logistical matters
to affected families with one point of contact assigned to each
family. This also included provision of necessary transport and
accommodation as well as psychological support.
The formal investigation, which is looking into both the cause
of the accident and the transport contractor's procedures, remains
ongoing and although the Company cannot comment on its outcome,
indications are that Hochschild's strict bus transfer safety
protocols had been implemented by the contractor. These include:
the use of high quality buses in excellent condition; minimum
three-vehicle convoys with an additional lead car; an allocation of
three experienced drivers for each bus, operating in limited
shifts; and the requirement for all buses to be equipped with the
Company's standard speed-tracking and driver-fatigue monitoring
technology. Hochschild continues to work closely together with the
relevant authorities as they progress their investigations.
Both the Pallancata and Selene operations were halted for two
days of mourning following the accident and the Company has held
constructive dialogue with the operations' unions, who have been
supportive.
San Jose (the Company has a 51% interest in San Jose)
Product Q2 2021 Q1 2021 Q2 2020 H1 2021 H1 2020
-------- -------- -------- --------
Ore production
(tonnes treated) 144,849 101,345 77,491 246,194 162,394
Average grade silver
(g/t) 304 344 329 321 401
Average grade gold
(g/t) 4.69 6.53 5.04 5.45 6.36
Silver produced
(koz) 1,239 1,005 732 2,244 1,858
Gold produced (koz) 19.07 19.33 11.27 38.40 29.62
Silver equivalent
(koz) 2,879 2,667 1,701 5,546 4,406
Gold equivalent
(koz) 33.47 31.01 19.78 64.48 51.23
Silver sold (koz) 1,239 997 904 2,236 1,868
Gold sold (koz) 18.77 18.77 15.05 37.54 29.69
---------------------- -------- -------- -------- -------- --------
Q2 production at San Jose was 1.2 million ounces of silver and
19,067 ounces of gold which is 2.9 million silver equivalent ounces
and brings the total for the first half of the year to 5.5 million
silver equivalent ounces (H1 2020: 4.4 million ounces). Grades were
lower with ongoing Covid-related restrictions on labour
availability in the country limiting the Company's ability to
access certain planned mining zones. In addition, low grade mineral
from developments was used to fill up plant capacity.
Average realisable prices and sales
Average realisable precious metal prices in Q2 2021 (which are
reported before the deduction of commercial discounts) were
$1,838/ounce for gold and $27.9/ounce for silver (Q2 2020:
$1,826/ounce for gold and $19.8/ounce for silver). For H1 2021,
average realisable precious metal prices were $1,772/ounce for gold
and $26.3/ounce for silver (H1 2020: $1,701/ounce for gold and
$16.2/ounce for silver).
Brownfield exploration
Inmaculada
In Q2 2021, 1,300m of potential drilling was carried out as well
as 13,150m of resource drilling with selected results below:
Vein Results (potential/resource drilling)
Angela NE IMS21-069: 1.2m @ 7.1g/t Au & 533g/t Ag
IMS21-078: 9.7m @ 14.1g/t Au & 424g/t Ag
IMS21-085: 3.5m @ 5.2g/t Au & 149g/t Ag
IMS21-088: 3.7m @ 5.9g/t Au & 304g/t Ag
IMS21-089: 2.1m @ 1.9g/t Au & 109g/t Ag
IMS21-100: 1.4m @ 3.2g/t Au & 171g/t Ag
------------------------------------------
Ramal Piso Angela IMS21-100: 1.7m @ 2.9g/t Au & 196g/t Ag
------------------------------------------
Juliana connection IMS21-079: 2.0m @ 12.8g/t Au & 527g/t Ag
IMS21-088: 1.4m @ 6.8g/t Au & 292g/t Ag
------------------------------------------
Split 1 IMS21-089: 2.7m @ 1.8g/t Au & 181g/t Ag
------------------------------------------
Split 2 IMS21-096: 2.4m @ 8.0g/t Au & 387g/t Ag
------------------------------------------
During Q3, the plan is to carry out 2,500m of potential drilling
and 3,000m of resource drilling in the Juliana North vein
structure.
Pallancata
At Pallancata, 1,636m of potential drilling was executed testing
the continuation of the Pallancata, Pablo and Marco veins and
whilst quartz vein structures were intercepted, the results were
not economic. At Cochaloma, drilling in the Esperanza and Cochaloma
veins also yielded no significant results.
At Corina to the north of Pallancata, 3,150m were drilled in the
Corina and Luciano veins with the key result below:
Vein Results (resource drilling)
Corina DHCOR-21-036: 5.5m @ 1.3g/t Au & 3g/t Ag
-----------------------------------------
During Q3, there will be further drilling on the Pallancata,
Pablo, Paola and Pepita veins close to the mine and additional
drilling at Cochaloma and Corina.
San Jose
At San Jose, close to current operations, 3,410m of resource
drilling was executed in the Escondida vein as well as 283m of
potential drilling in the Betania vein. Selected results below:
Vein Results (potential/resource)
Escondida SJD-2267: 1.4m @ 18.4g/t Au & 1,879g/t
Ag
SJD-2273: 1.9m @ 2.5g/t Au & 284g/t Ag
SJD-2280: 1.2m @ 2.4g/t Au & 317g/t Ag
SJD-2280: 2.4m @ 2.7g/t Au & 305g/t Ag
----------------------------------------
Betania SJD-2328: 3.1m @ 5.5g/t Au & 6g/t Ag
----------------------------------------
During Q3, 3,000m of potential drilling will be carried out on
the Betania structure in addition to a target generated by Titan to
the south of San Jose.
Crespo
The Company also carried out 2,180m of potential drilling at the
Crespo open pit project with selected results below:
Vein Results (potential/resource)
Crespo Norte DDHCRE-2001: 17.6m @ 1.2g/t Au & 82g/t
Ag
DDHCRE-2001: 24.5m @ 0.5g/t Au & 15g/t
Ag
----------------------------------------
Arcata
At Hochschild's former mine, Arcata, 2,194m of potential
drilling was carried out in the second quarter in the Fatima, Baja
and Tres Reyes veins with the following key result:
Vein Results (resource drilling)
Baja DHH619-S21: 1.5m @ 2.6g/t Au & 41g/t Ag
----------------------------------------
Greenfield exploration
Snip
In April 2021, at Snip in the Golden Triangle of British
Columbia, Hochschild's partner, Skeena Resources Limited, reported
diamond drill core results from the 2020-2021 campaign of
exploration drilling. The exploratory programme was focused upon
resource expansion and delineating additional mineralisation in
previously unexplored areas of the near mine environment. The
surface-based programme was comprised of ten drill holes totalling
5,366 metres. Highlights were [5] :
-- 45.40 g/t Au over 0.50 m (S20-047)
-- 45.76 g/t Au over 5.60 m (S20-049)
-- 29.52 g/t Au over 4.03 m (S20-049)
-- 37.78 g/t Au over 2.86 m (S20-049)
Skeena disclosed further drill results in May and after the
period end in July from its 2021 Phase 3 infill and exploration
drilling programme. The aim is to upgrade areas of existing
Inferred resources from the Company's 2020 Mineral Resource
Estimate, to the Measured and Indicated categories. Highlights
were(5) :
-- 155.76 g/t Au over 3.22 m (S21-076)
-- 140.50 g/t Au over 0.50 m (S21-078)
-- 8.40 g/t Au over 3.00 m (S21-080)
-- 61.30 g/t Au over 0.50 m (S21-083)
-- 30.72 g/t Au over 3.82 m (S21-099)
-- 48.44 g/t Au over 4.50 m (UG21-126)
-- 33.63 g/t Au over 4.00 m (UG21-169)
-- 25.64 g/t Au over 4.00 m (UG21-172)
-- 58.47 g/t Au over 3.81 m (UG21-175)
-- 46.94 g/t Au over 4.75 m (UG21-176)
-- 110.22 g/t Au over 4.41 m (UG21-177)
Further detail can be found on the Skeena Resources website
within press releases issued on 27 April, 20 May and 7 July:
https://skeenaresources.com/
Financial position
Total cash was approximately $257 million as at 30 June 2021
resulting in a net cash position of approximately $51 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) and
crosstrades on the OTCQX Best Market in the U.S. (HCHDF), 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 2020 of 86x.
[2] Calculated as total number of accidents per million labour
hours. H1 2021 figure excludes the impact of the bus accident on
18th June 2021 pending resolution of internal and external
investigations.
([3]) Calculated as total number of days lost per million labour
hours. H1 2021 figure excludes the impact of the bus accident on
18th June 2021 pending resolution of internal and external
investigations.
[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] True widths range from 60-100% of reported core lengths.
Length weighted Au composites are constrained by geological
considerations. Grade-capping of individual assays has not been
applied to the Au assays informing the length-weighted Au
composites. Samples below detection limit were nulled to a value of
zero.
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