TIDMHOC
RNS Number : 0448T
Hochschild Mining PLC
20 July 2022
_____________________________________________________________________________________
20 July 2022
Production and Project Development Report for the 6 months ended
30 June 2022
Hochschild Mining PLC ("Hochschild" or "the Company") (LSE: HOC)
(OTCQX: HCHDF) is pleased to announce its production report for H1
2022 and an update on its project portfolio.
Ignacio Bustamante, Chief Executive Officer said:
"Following a strong second quarter, we remain on track to meet
our full year production and cost forecasts. Furthermore, this has
been achieved despite operational issues at Pallancata and San Jose
and in an environment of considerable economic challenges. We have
also made good progress at our two development projects in Brazil
and Canada as well as our 2022 brownfield drilling programme."
Operational highlights
-- Q2 2022 attributable production: ([1])
o 49,133 ounces of gold
o 2.6 million ounces of silver
o 85,819 gold equivalent ounces
o 6.2 million silver equivalent ounces
-- H1 2022 attributable production
o 96,360 ounces of gold
o 5.1 million ounces of silver
o 166,708 gold equivalent ounces
o 12.0 million silver equivalent ounces
-- On track to deliver overall 2022 production target of
360,000-375,000 gold equivalent ounces (26.0-27.0 million silver
equivalent ounces)
-- 2022 all-in sustaining costs on track to meet guidance of
$1,330-1,370 per gold equivalent ounce ($18.5-19.0 per silver
equivalent ounce)
Project & Exploration highlights
-- Mara Rosa project in Brazil advancing on schedule - total
project progress at the end of June was 7% with key final permit
expected in Q3
-- Drilling commenced at Snip with encouraging results -
pre-feasibility study to be completed by end of 2022
-- Pallancata medium-term drill programme delivering positive
results - continuing to test short-term targets
ESG highlights
-- Lost Time Injury Frequency Rate of 1.28 (FY 2021: 1.26)
([2])
-- Accident Severity Index of 72 (FY 2021: 676) ([3])
-- Water Consumption of 175lt/person/day (FY 2021:
193lt/person/day)
-- Domestic waste generation of 1.01 kg/person/day (FY 2021:
1.00kg/person/day)
-- ECO score of 5.35 out of 6 (FY 2021: 5.29) ([4])
Strong financial position
-- Total cash of approximately $205 million as at 30 June 2022
following completion of the Amarillo acquisition ($387 million as
at 31 December 2021)
-- Net debt of approximately $106 million as at 30 June 2022
(net cash of $86 million as at 31 December 2021)
-- Current Net Debt/LTM EBITDA of approximately 0.34x as at 30
June 2022
________________________________________________________________________________________
A conference call will be held at 2.30pm (London time) on
Wednesday 20 July 2022 for analysts and investors.
Dial in details as follows:
International Dial in: +44 330 165 4012
UK Toll-Free Number: 0800 279 6877
US/Canada Toll Free: 800-289-0720
Pin: 1215129
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
________________________________________________________________________________________
Overview
In Q2 2022, Hochschild delivered attributable production of
85,819 gold equivalent ounces or 6.2 million silver equivalent
ounces with a solid performance from Inmaculada and an increase at
San Jose versus the first quarter. In the first half of 2022 as a
whole, Hochschild produced 166,708 gold equivalent ounces or 12.0
million silver equivalent ounces (on an attributable basis) with
production increasing quarter-on-quarter. The Company remains on
track to meet its overall attributable production target for 2022
of 360,000-375,000 gold equivalent ounces or 26.0-27.0 million
silver equivalent ounces.
The Company reiterates that its all-in sustaining cost for 2022
is on track to be in line with the guidance of between $1,330 and
$1,370 per gold equivalent ounce (or $18.5 and $19.0 per silver
equivalent ounce).
TOTAL GROUP PRODUCTION
Q2 2022 Q1 2022 Q2 2021 H1 2022 H1 2021
-------- -------- -------- --------
Silver production
(koz) 3,346 2,759 3,700 6,105 7,021
Gold production
(koz) 60.27 53.68 62.76 113.94 125.07
Total silver equivalent
(koz) 7,685 6,624 8,219 14,309 16,027
Total gold equivalent
(koz) 106.74 92.00 114.15 198.74 222.59
Silver sold (koz) 3,445 2,600 3,823 6,045 7,005
Gold sold (koz) 63.06 49.64 63.18 112.70 124.32
------------------------- -------- -------- -------- -------- --------
Total production includes 100% of all production, including
production attributable to Hochschild's joint venture partner at
San Jose.
ATTRIBUTABLE GROUP PRODUCTION
Q2 2022 Q1 2022 Q2 2021 H1 2022 H1 2021
-------- -------- -------- --------
Silver production
(koz) 2,641 2,424 3,093 5,065 5,922
Gold production
(koz) 49.13 47.23 53.42 96.36 106.26
Silver equivalent
(koz) 6,179 5,824 6,939 12,003 13,573
Gold equivalent
(koz) 85.82 80.89 96.37 166.71 188.51
------------------- -------- -------- -------- -------- --------
Attributable production includes 100% of all production from
Inmaculada, Pallancata and 51% from San Jose.
Production
Inmaculada
Product Q2 2022 Q1 2022 Q2 2021 H1 2022 H1 2021
--------------- --------------- -------- --------
Ore production
(tonnes treated) 327,837 329,364 334,657 657,202 672,137
Average grade silver
(g/t) 137 153 163 145 160
Average grade gold
(g/t) 3.47 3.75 3.92 3.61 3.92
Silver produced
(koz) 1,322 1,493 1,358 2,815 2,777
Gold produced (koz) 34.86 37.81 39.60 72.67 79.40
Silver equivalent
(koz) 3,831 4,216 4,209 8,047 8,494
Gold equivalent
(koz) 53.21 58.55 58.46 111.77 117.98
Silver sold (koz) 1,422 1,383 1,355 2,805 2,769
Gold sold (koz) 37.56 35.16 39.85 72.72 79.49
---------------------- --------------- --------------- -------- -------- --------
Inmaculada's second quarter production was 34,855 ounces of gold
and 1.3 million ounces of silver which amounts to a gold equivalent
output of 53,214 ounces. Grades were lower than expected due to a
temporary mine plan schedule partially offset by higher than
budgeted recoveries. Overall, in the first half of 2022, Inmaculada
produced 111,766 gold equivalent ounces (H1 2021: 117,975 ounces),
driven by better-than-expected recoveries.
The Company is currently in the final stages of the permitting
process of Inmaculada's modified Environmental Impact Assessment
with completion expected during H2.
Pallancata
Product Q2 2022 Q1 2022 Q2 2021 H1 2022 H1 2021
---------------- ---------------- -------------- --------
Ore production
(tonnes treated) 134,276 124,782 162,052 259,058 289,002
Average grade silver
(g/t) 154 165 234 159 237
Average grade gold
(g/t) 0.69 0.74 0.86 0.72 0.86
Silver produced
(koz) 586 581 1,103 1,167 2,000
Gold produced (koz) 2.69 2.70 4.09 5.39 7.28
Silver equivalent
(koz) 780 776 1,398 1,555 2,524
Gold equivalent
(koz) 10.83 10.77 19.42 21.60 35.06
Silver sold (koz) 584 577 1,229 1,161 2,000
Gold sold (koz) 2.66 2.69 4.56 5.36 7.29
---------------------- ---------------- ---------------- -------------- -------- --------
In the second quarter, Pallancata produced 0.6 million ounces of
silver and 2,692 ounces of gold bringing the silver equivalent
total to 0.8 million ounces. Overall, in H1 2022, Pallancata's
output was 1.6 million silver equivalent ounces (H1 2021: 2.5
million ounces). Grades have been lower than expected throughout
the first half and consequently, with the rapid fall in the silver
price in the period, the Company has updated the mine plan for 2022
and is considering all options with regards to future ore
production from the Pallancata mining area.
San Jose (the Company has a 51% interest in San Jose)
Product Q2 2022 Q1 2022 Q2 2021 H1 2022 H1 2021
------------- -------------- --------------- --------
Ore production
(tonnes treated) 131,467 73,892 144,849 205,359 246,194
Average grade silver
(g/t) 383 331 304 365 321
Average grade gold
(g/t) 6.09 6.36 4.69 6.19 5.45
Silver produced
(koz) 1,438 685 1,239 2,123 2,244
Gold produced (koz) 22.72 13.16 19.07 35.88 38.40
Silver equivalent
(koz) 3,074 1,632 2,612 4,706 5,008
Gold equivalent
(koz) 42.69 22.67 36.27 65.37 69.56
Silver sold (koz) 1,440 640 1,239 2,080 2,236
Gold sold (koz) 22.83 11.79 18.77 34.62 37.54
---------------------- ------------- -------------- --------------- -------- --------
Q2 production at San Jose was 1.4 million ounces of silver and
22,718 ounces of gold which is 3.0 million silver equivalent ounces
and brings the total for the first half of the year to 4.7 million
silver equivalent ounces (H1 2021: 5.0 million ounces). Gold grades
were better than expected in the quarter although this was offset
by lower-than-expected tonnage.
As previously reported, in the first quarter the operation
experienced further Covid-related restrictions on labour
availability in the country. In addition, a fire in the crushing
area temporarily affected operations but without any impact on full
year production forecasts or costs (which are expected to be
covered by insurance).
Average realisable prices and sales
Average realisable precious metal prices in Q2 2022 (which are
reported before the deduction of commercial discounts) were
$1,843/ounce for gold and $22.0/ounce for silver (Q2 2021:
$1,838/ounce for gold and $27.9/ounce for silver). For H1 2022,
average realisable precious metal prices were $1,875/ounce for gold
and $23.7/ounce for silver (H1 2021: $1,772/ounce for gold and
$26.3/ounce for silver).
Advanced Project: Mara Rosa
The Mara Rosa project in Brazil is progressing according to
schedule with the following key highlights:
-- Total project progress at the end of June 2022 was 7%
-- Detailed engineering 71% complete
-- Long lead-time equipment (e.g. ball mills and filters) have
been purchased
-- Metso 3-stage crusher being delivered to site
-- EPCM, earthworks, diesel, and mining pre-stripping contracts
being progressed
-- Acquisition of site substation, transformers and water and
sewage treatment facilities completed
-- Construction powerline completed with project powerline
construction ongoing
-- Topsoil removal commenced in areas with no vegetation -
approximately 30% of project area
Development Project: Snip
Approximately 7,300m were drilled from underground in Q2, with
all "twin" holes completed by the end of the quarter. Work in the
third quarter will be focused on finishing the "infill" and"
potential" holes in the programme and logging the resultant core.
Assay results are expected through to the end of the year.
Work on the Pre-Feasibility Study continued with metallurgical
test work, an evaluation of ARD potential in waste samples, and a
flowsheet trade-off study all completed during the quarter.
Processing plant designs and an updated resources model are
expected to be finalised in Q3. The full study remains on track for
completion at the end of the year. In addition, a new 2-year
Environmental Baseline program was approved and data collection
began.
Assay results were received during the period, with the
following highlights:
Vein Results (Twin hole)
215 UG22-297: 2.3m @ 9.5g/t Au & 11g/t Ag
---------------------------------------
215 UG22-289: 8.0m @ 20.2g/t Au & 10g/t Ag
---------------------------------------
221 UG22-291: 3.8m @ 11.8g/t Au & 13g/t Ag
---------------------------------------
226 UG22-289: 8.7m @ 5.8g/t Au & 6g/t Ag
---------------------------------------
233 UG22-297: 4.6m @ 35.0g/t Au & 11g/t Ag
---------------------------------------
246 UG22-293: 2.3m @ 18.8g/t Au & 8g/t Ag
---------------------------------------
Development Project: Volcan
During the second quarter, the Company's 100% owned subsidiary,
Tiernan Gold Corporation continued to advance the Volcan project.
Work carried out during the period included updating the Mineral
Resource Estimate as well as developing an optimised mine and
project development plan. During the third quarter, the Company
expects to advance several trade-off studies aimed at creating
additional project value. The results of the engineering work are
expected to be outlined in a new technical report.
Brownfield exploration
Inmaculada
In Q2 2022, 4,200m of drilling was carried out with the best
result below from the Josefa vein:
Vein Results (potential/resource drilling)
Josefa IMM22-139: 2.8m @ 1.9g/t Au & 43g/t Ag
---------------------------------------
During Q3, the plan is to carry out 6,000m of further drilling
in the Josefa vein.
Pallancata
At Pallancata, 12,500m of resource drilling was executed in the
Laura-Demian, Royropata and Miriam structures. Whilst the results
are encouraging, the structures are outside the current permitted
area and will require new permits before being brought into the
mine plan. Quartz-sulfide veins were intercepted with grades of
between 250 and 1,600 silver equivalent grams per tonne. Selected
results are below:
Vein Results (resource drilling)
Miriam DHMIR-A16: 1.3m @ 1.0g/t Au & 155g/t Ag
-----------------------------------------
Demian DLDE-A03: 3.8m @ 0.8g/t Au & 184g/t Ag
DLRY-A08: 1.1m @ 4.1g/t Au & 820g/t Ag
-----------------------------------------
Laura DLDE-A04: 6.1m @ 0.8g/t Au & 251g/t Ag
DLLAU-A08: 1.3m @ 0.5g/t Au & 274g/t Ag
DLLAU-A09: 0.9m @ 4.7g/t Au & 286g/t Ag
DLLAU-A11: 1.9m @ 0.9g/t Au & 298g/t Ag
-----------------------------------------
Royropata DLDE-A06: 4.2m @ 0.6g/t Au & 224g/t Ag
DLRY-A08: 1.5m @ 1.1g/t Au & 345g/t Ag
-----------------------------------------
Royropata 2 DLDE-A06: 1.3m @ 3.0g/t Au & 1,039g/t Ag
DLRY-A08: 3.0m @ 1.8g/t Au & 596g/t Ag
-----------------------------------------
Royropata 4 DLDE-A06: 17.8m @ 1.2g/t Au & 384g/t Ag
DLRY-A08: 5.1m @ 2.3g/t Au & 647g/t Ag
-----------------------------------------
Royropata 5 DLDE-A06: 2.3m @ 3.0g/t Au & 1,446g/t Ag
-----------------------------------------
During Q3, there will be 2,000m of further drilling in the vein
structures in the Royropata system.
San Jose
At San Jose, 3,600m of potential drilling was carried out close
to current operations and 700m of drilling was also executed at the
Ciclon project. Selected results below:
Vein Results (potential/resource)
Agostina SJD-2468: 4.1m @ 7.5g/t Au & 84g/t Ag
SJD-2469: 5.4m @ 3.3g/t Au & 29g/t Ag
SJD-2471: 1.9m @ 1.6g/t Au & 68g/t Ag
---------------------------------------
Ayelen SE SJM-594: 1.5m @ 6.9g/t Au & 648g/t Ag
---------------------------------------
Ciclon DCE22-02: 2.9m @ 1.0g/t Au & 615g/t Ag
---------------------------------------
During Q3, 2,000m of potential drilling will be carried out on
the Ayelen SE vein to find new resources.
Financial position
Total cash was approximately $205 million as at 30 June 2022
resulting in a net debt position of approximately $106 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 owns
the Mara Rosa Advanced Project in Brazil as well as 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 2021 of 72x.
[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.
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