TIDMHOC
RNS Number : 1989Q
Hochschild Mining PLC
26 October 2021
_____________________________________________________________________________________
26 October 2021
Production Report for Q3 and the 9 months ended 30 September
2021
Ignacio Bustamante, Chief Executive Officer said:
"Operationally, the third quarter was our strongest so far of
2021 and we remain firmly on track to meet both our full year
production and our cost targets. We have also had another
successful period of drilling with the addition of further high
grade resources at both Inmaculada and at San Jose.
It has been a very busy period for business development with the
exercise of our option on the high-grade Snip gold project in
British Columbia and the announcement of the proposed demerger of
our exciting rare earths business, Aclara Resources Inc.
Furthermore, we retain a strong balance sheet to assess further
opportunities to add to our long-term project pipeline throughout
the Americas."
Operational highlights
-- Strongest quarter year-to-date ([1])
o 58,252 ounces of gold
o 3.0 million ounces of silver
o 93,630 gold equivalent ounces
o 8.1 million silver equivalent ounces
-- Robust 9 month operational performance
o 164,513 ounces of gold
o 9.0 million ounces of silver
o 268,749 gold equivalent ounces
o 23.1 million silver equivalent ounces
-- On track to deliver 2021 overall production target of
360,000-372,000 gold equivalent ounces (31.0-32.0 million silver
equivalent ounces)
-- 2021 all-in sustaining costs on track to meet $1,210-$1,250
per gold equivalent ounce guidance ($14.1-14.5 per silver
equivalent ounce)
Exploration & Business Development highlights
-- Brownfield programme added further high-grade Inferred
resources in Q3:
o 43.4 million silver equivalent ounces added year-to-date from
Angela North vein at Inmaculada
o 9.1 million silver equivalent ounces added year-to-date at San
Jose
-- Proposed Demerger & Listing of Aclara Resources Inc. on
the TSX announced
-- Option exercised over Skeena Resources' Snip gold project
Strong financial position
-- Total cash of approximately $270 million as at 30 September
2021 ($257 million as at 30 June 2021)
-- Net cash of approximately $64 million as at 30 September 2021
($51 million as at 30 June 2021)
-- Current Net Cash/LTM EBITDA of approximately 0.16x as at 30
September 2021
ESG highlights
-- Lost Time Injury Frequency Rate of 1.21 (FY 2020: 1.38)
([2])
-- Accident Severity Index of 457 (FY 2020: 474) ([3])
-- Water consumption of 201lt/person/day (FY 2020:
231lt/person/day)
-- Domestic waste generation of 0.98 kg/person/day (FY 2020:
1.18kg/person/day)
-- ECO score of 5.39 out of 6 (FY 2020: 5.74) ([4])
________________________________________________________________________________________
A conference call will be held at 2.30pm (London time) on
Tuesday 26 October 2021 for analysts and investors.
Dial in details as follows:
UK Toll-Free Number: 0800 358 6377
International Dial in: +44 (0)330 336 9125
US/Canada Toll-Free Number: 888-394-8218
Pin: 5531566#
A recording of the conference call will be available on demand
on the Company's website: www.hochschildmining.com
________________________________________________________________________________________
Overview
In Q3 2021, Hochschild Mining PLC (HOC.LN) (OTCMKTS: $HCHDF)
("Hochschild" or "the Company") delivered attributable production
of 93,630 gold equivalent ounces or 8.1 million silver equivalent
ounces, representing a 5% increase versus the second quarter of
2021 and featuring a particularly strong period at the Inmaculada
mine. Overall year-to-date attributable production is 268,749 gold
equivalent ounces or 23.1 million silver equivalent ounces. The
Company remains on track to meet its production target for 2021 of
360,000-372,000 gold equivalent ounces or 31.0-32.0 million silver
equivalent ounces.
The Company reiterates that its all-in sustaining cost for 2021
is on track to be in line with the guidance of $1,210-$1,250 per
gold equivalent ounce ($14.1-14.5 per silver equivalent ounce).
TOTAL GROUP PRODUCTION
Q3 2021 Q2 2021 Q3 2020 YTD 2021 YTD 2020
-------- -------- -------- ---------
Silver production
(koz) 3,833 3,700 3,085 10,854 8,103
Gold production
(koz) 69.09 62.76 47.83 194.17 141.42
Total silver equivalent
(koz) 9,775 9,097 7,198 27,552 20,264
Total gold equivalent
(koz) 113.66 105.78 83.69 320.38 235.63
Silver sold (koz) 3,830 3,823 3,146 10,835 8,043
Gold sold (koz) 68.60 63.18 47.62 192.91 141.20
------------------------- -------- -------- -------- --------- ---------
Total production includes 100% of all production, including
production attributable to Hochschild's joint venture partner at
San Jose.
ATTRIBUTABLE GROUP PRODUCTION
Q3 2021 Q2 2021 Q3 2020 YTD 2021 YTD 2020
-------- -------- -------- ---------
Silver production
(koz) 3,043 3,093 2,514 8,964 6,621
Gold production
(koz) 58.25 53.42 39.20 164.51 118.27
Silver equivalent
(koz) 8,052 7,687 5,884 23,112 16,792
Gold equivalent
(koz) 93.63 89.38 68.42 268.75 195.26
------------------- -------- -------- -------- --------- ---------
Attributable production includes 100% of all production from
Inmaculada, Pallancata and 51% from San Jose.
Production
Inmaculada
Product Q3 2021 Q2 2021 Q3 2020 YTD 2021 YTD 2020
------------ -------- ------------ ----------
Ore production
(tonnes treated) 336,178 334,657 205,712 1,008,315 608,083
Average grade silver
(g/t) 184 163 156 168 155
Average grade gold
(g/t) 4.34 3.92 4.29 4.06 4.38
Silver produced
(koz) 1,608 1,358 873 4,385 2,641
Gold produced (koz) 44.34 39.60 26.58 123.74 85.62
Silver equivalent
(koz) 5,421 4,763 3,159 15,027 10,005
Gold equivalent
(koz) 63.04 55.39 36.73 174.73 116.34
Silver sold (koz) 1,604 1,355 858 4,373 2,616
Gold sold (koz) 44.42 39.85 26.17 123.91 85.65
---------------------- ------------ -------- ------------ ---------- ---------
Third quarter production at Inmaculada was 44,338 ounces of gold
and 1.6 million ounces of silver which amounts to a gold equivalent
output of 63,038 ounces with higher-than-expected grades and
recoveries contributing to a strong operational period.
Year-to-date, Inmaculada's output is 174,734 gold equivalent ounces
(Q3 YTD 2020: 116,336 gold equivalent ounces), placing Inmaculada
in a strong position to meet its annual forecast of 223,000-228,000
ounces.
Pallancata
Product Q3 2021 Q2 2021 Q3 2020 YTD 2021 YTD 2020
------------- -------- ------------- ---------
Ore production
(tonnes treated) 113,451 162,052 144,417 402,453 333,157
Average grade silver
(g/t) 188 234 254 223 255
Average grade gold
(g/t) 0.79 0.86 0.88 0.84 0.91
Silver produced
(koz) 612 1,103 1,046 2,612 2,438
Gold produced (koz) 2.63 4.09 3.63 9.91 8.55
Silver equivalent
(koz) 838 1,455 1,358 3,464 3,173
Gold equivalent
(koz) 9.75 16.92 15.80 40.28 36.90
Silver sold (koz) 622 1,229 1,096 2,621 2,367
Gold sold (koz) 2.62 4.56 3.83 9.91 8.24
---------------------- ------------- -------- ------------- --------- ---------
In Q3, Pallancata produced 0.6 million ounces of silver and
2,631 ounces of gold bringing the silver equivalent total to 0.8
million, with treated tonnage and grades lower than expected.
Overall in the first nine months of the year, Pallancata has
produced 3.5 million silver equivalent ounces (Q3 2020 YTD: 3.2
million ounces).
San Jose (the Company has a 51% interest in San Jose)
Product Q3 2021 Q2 2021 Q3 2020 YTD 2021 YTD 2020
-------- -------- -------- ---------
Ore production
(tonnes treated) 149,637 144,849 128,789 395,831 291,183
Average grade silver
(g/t) 381 304 313 343 362
Average grade gold
(g/t) 5.24 4.69 4.72 5.37 5.64
Silver produced
(koz) 1,613 1,239 1,165 3,856 3,024
Gold produced (koz) 22.12 19.07 17.62 60.52 47.24
Silver equivalent
(koz) 3,515 2,879 2,680 9,061 7,086
Gold equivalent
(koz) 40.88 33.47 31.17 105.36 82.40
Silver sold (koz) 1,605 1,239 1,192 3,841 3,060
Gold sold (koz) 21.56 18.77 17.62 59.10 47.31
---------------------- -------- -------- -------- --------- ---------
The San Jose mine enjoyed a solid quarter with tonnage
moderately better than expected although this was partially offset
by lower than budgeted grades. Production in the period was 1.6
million ounces of silver and 22,123 ounces of gold which makes 3.5
million silver equivalent ounces. This therefore amounts to a nine
month total of 9.1 million silver equivalent ounces (Q3 2020 YTD:
7.1 million ounces).
Average realisable prices and sales
Average realisable precious metal prices in Q3 2021 (which are
reported before the deduction of commercial discounts) were
$1,768/ounce for gold and $22.0/ounce for silver (Q3 2020:
$1,958/ounce for gold and $27.2/ounce for silver). For the first
nine months of 2021, average realisable precious metal prices were
$1,771/ounce for gold and $24.8/ounce for silver (Q3 YTD 2020:
$1,788/ounce for gold and $20.5/ounce for silver).
Brownfield exploration
Inmaculada
In Q3 2021, 2,520m of potential drilling was carried out along
with 9,352m of resource drilling. Selected results are below:
Vein Results (resource drilling)
Juliana NE IMS-21-092: 1.2m @ 3.7g/t Au & 97g/t Ag
IMS-21-127: 4.2m @ 6.5g/t Au & 87g/t Ag
IMS-21-149: 3.4m @ 5.1g/t Au & 163g/t Ag
IMS-21-155: 4.7m @ 6.4g/t Au & 53g/t Ag
IMS-21-156: 2.6m @ 8.8g/t Au & 390g/t Ag
IMS-21-160: 4.1m @ 4.4g/t Au & 55g/t Ag
------------------------------------------
Ramal Juliana IMS-21-127: 1.0m @ 1.8g/t Au & 259g/t Ag
IMS-21-127: 2.8m @ 2.2g/t Au & 115g/t Ag
IMS-21-127: 0.9m @ 2.8g/t Au & 1,958g/t
Ag
IMS-21-149: 1.5m @ 8.7g/t Au & 62g/t Ag
IMS-21-149: 0.9m @ 3.6g/t Au & 111g/t Ag
IMS-21-155: 3.2m @ 7.5g/t Au & 774g/t Ag
IMS-21-156: 1.6m @ 3.3g/t Au & 33g/t Ag
IMS-21-156: 1.6m @ 3.2g/t Au & 31g/t Ag
IMS-21-156: 2.1m @ 13.8g/t Au & 316g/t
Ag
------------------------------------------
Juliana N IMS-21-150: 2.4m @ 20.7g/t Au & 1,255g/t
Ag
IMS-21-151: 1.9m @ 2.0g/t Au & 141g/t Ag
IMS-21-058: 2.4m @ 1.3g/t Au & 119g/t Ag
------------------------------------------
Split 1 IMS-21-153: 2.8m @ 3.0g/t Au & 236g/t Ag
------------------------------------------
During Q4, the programme will focus on 2,000m of resource
drilling in the Juliana North East vein.
Pallancata
At Pallancata, 5,228m of drilling for potential was carried out
at the Mirian, San Javier and the continuation of the Pallancata
vein to the north west. In addition, there was drilling at the
Pablo II target which intercepted quartz veins with grade. Selected
results are below:
Vein Results (potential drilling)
Pablo II DLEP-A64: 2.7m @ 0.4g/t Au & 93g/t Ag
DLEP-A65: 0.9m @ 0.7g/t Au & 222g/t Ag
----------------------------------------
Mirian DLVC-A62: 3.4m @ 1.4g/t Au & 314g/t Ag
----------------------------------------
Norca DLVC-A62: 1.0m @ 1.0g/t Au & 486g/t Ag
----------------------------------------
San Javier DLEP-A62: 1.1m @ 0.6g/t Au & 473g/t Ag
----------------------------------------
Pallancata NW DLPL-969: 0.9m @ 1.6g/t Au & 181g/t Ag
----------------------------------------
In Q4, the programme consists of 5,000m of additional drilling
for potential in the Pallancata, Pablo and Luisa veins.
San Jose
At San Jose, the brownfield team carried out 6,884m of potential
drilling. This was concentrated around the Saavedra area in several
veins including Betania, Jimena, Agostina and Lucy and also in the
area close to the current mine in the Amelia, Huevos Verdes and
Olivia veins. Selected results are below:
Vein Results (potential drilling)
Betania SJD-2328: 2.0m @ 5.5g/t Au & 6g/t Ag
SJD-2351: 1.1m @ 12.6g/t Au & 7g/t Ag
SJD-2371: 6.3m @ 44.4g/t Au & 34g/t Ag
SJD-2378: 1.9m @ 7.3g/t Au & 81g/t Ag
------------------------------------------
Jimena SJD-2353: 2.4m @ 3.8g/t Au & 40g/t Ag
SJD-2372: 1.9m @ 14.5g/t Au & 342g/t Ag
SJD-2378: 2.0m @ 8.5g/t Au & 24g/t Ag
------------------------------------------
Agostina SJD-2378: 2.8m @ 5.1g/t Au & 13g/t Ag
------------------------------------------
Amelia SJD-2329: 3.0m @ 13.0g/t Au & 1,740g/t
Ag
SJD-2342: 4.3m @ 14.9/t Au & 1,381g/t Ag
SJD-2361: 0.9m @ 3.4g/t Au & 323g/t Ag
------------------------------------------
Tensional Huevos Verdes
N SJD-2346: 1.8m @ 6.7g/t Au & 582g/t Ag
------------------------------------------
Olivia SJD-2385: 0.8m @ 2.6g/t Au & 196g/t Ag
SJM-547: 2.0m @ 7.8g/t Au & 366g/t Ag
------------------------------------------
During Q4, the plan is to carry out 3,000m of further drilling
in the Betania, Jimena and Agostina veins.
Greenfield exploration
Snip
In August 2021, at Snip in the Golden Triangle of British
Columbia, Hochschild's partner, Skeena Resources Limited, reported
diamond drill core results from the 2021 phase 3 campaign of
exploration drilling. The Phase 3 program is designed to upgrade
areas of existing Inferred resources from Skeena's 2020 Mineral
Resource Estimate, to the Measured and Indicated categories.
Highlights were [5] :
-- 390.00 g/t Au over 0.80 m (UG21-178)
-- 109.89 g/t Au over 1.19 m (UG21-180)
-- 29.31 g/t Au over 4.17 m (UG21-181)
-- 85.51 g/t Au over 3.50 m (UG21-182)
-- 85.91 g/t Au over 4.00 m (UG21-183)
-- 84.68 g/t Au over 1.94 m (UG21-184)
-- 164.50 g/t Au over 1.00 m (UG21-189)
-- 693.00 g/t Au over 0.50 m (UG21-192)
-- 27.04 g/t Au over 12.50 m (UG21-202)
-- 83.87 g/t Au over 2.44 m (UG21-205)
-- 74.59 g/t Au over 2.76 m (UG21-214)
Skeena disclosed further drill results post-period end in
October from the Phase 3 infill and exploration drilling programme.
These infill results corroborate the modelled mineralization in the
Company's 2020 Mineral Resource Estimate with further detail to be
found on the Skeena Resources website within press releases issued
on 4 October.
https://skeenaresources.com/
On 15 October 2021, the Company announced that it had exercised
its option to start earning in to a 60% interest in the project.
Further details can be found in the press release available on the
Hochschild Mining PLC website:
http://www.hochschildmining.com/en/investors/news
Financial position
Total cash was approximately $270 million as at 30 September
2021 resulting in net cash of approximately $64 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.
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] 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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