TIDMHOC
RNS Number : 3279O
Hochschild Mining PLC
31 January 2023
_____________________________________________________________________________________
31 January 2023
Production Report for the 12 months ended 31 December 2022
Ignacio Bustamante, Chief Executive Officer said:
"Our mines have delivered a robust operational performance in
the fourth quarter, in particular at Inmaculada, where the team has
also had to contend with a significant level of local and national
disruption and the associated logistical challenges. We are proud
to have ended the year only marginally below guided production but
in line with costs despite significant inflationary pressures.
The permitting process for the Inmaculada Modified Environmental
Impact Assessment remains ongoing and we are currently expecting a
government decision by the end of the first quarter. With the
assumption of a positive outcome, we have provided guidance for
2023.
Today we have also disclosed a very encouraging initial resource
from the new Royropata zone, close to where we are currently mining
at Pallancata. We have already commenced the initial phases of the
permitting process and are excited that, with strong exploration
upside potential and high-grade structures with good widths, the
new zone can be the driver of Pallancata's medium to long-term
future."
Operational highlights
-- Full year attributable production ([1])
o 206,013 ounces of gold
o 11.0 million ounces of silver
o 358,826 gold equivalent ounces versus guidance of
360,000-375,000 ounces
o 25.8 million silver equivalent ounces
-- Solid operational performance despite moderate impact in Q4
from Peru social disruption
-- 2022 all-in sustaining costs expected to meet guidance of
$1,330-1,370 per gold equivalent ounce ($18.5-19.0 per silver
equivalent ounce)
Exploration & Project highlights
-- Inferred Mineral Resource of 51.2 million silver equivalent
ounces announced at Royropata Zone, Pallancata
o Average width of 5 metres at a combined Ag Eq grade of
848g/t
-- Mara Rosa project in Brazil advancing on schedule and on
budget - total project progress at 50% with first production
anticipated in H1 2024
-- Positive PEA study results from Snip project in Canada
Financial position
-- Total cash of approximately $144 million as at 31 December
2022 ($387 million as at 31 December 2021) reflecting:
o $197 million invested in acquisition and project capital
expenditure at Mara Rosa
o $21 million invested in Snip project
-- Net debt of approximately $175 million as at 31 December 2022
(net cash of $86 million as at 31 December 2021)
-- Current Net Debt/LTM EBITDA of approximately 0.69x as at 31
December 2022
-- 2022 Full Year Results rescheduled for 20 April 2023 to allow
for anticipated government decision on Inmaculada Modified
Environmental Impact Assessment ("MEIA")
2022 ESG highlights
-- Lost Time Injury Frequency Rate of 1.37 (2021: 1.26)
([2])
-- Accident Severity Index of 93 (2021: 676) ([3])
-- Water consumption of 171lt/person/day (2021:
193lt/person/day)
-- Domestic waste generation of 1.05 kg/person/day (2021:
1.00kg/person/day)
-- ECO score of 5.27 out of 6 (2021: 5.29) ([4])
2023 guidance
-- 2023 guidance assumes Peruvian government approval for
Inmaculada MEIA by the end of Q1 2023
-- Production target:
o 301,000-314,0000 gold equivalent ounces (25.0-26.0 million
silver equivalent ounces) using 83x gold silver ratio
-- All-in sustaining costs target:
o $1,370-$1,450 per gold equivalent ounce ($16.5-$17.5 per
silver equivalent ounce) using 83x gold silver ratio
-- Total sustaining and development capital expenditure expected
to be approximately $125-135 million
-- Mara Rosa project capital expenditure expected to be
approximately $100-110 million
________________________________________________________________________________________
A conference call will be held at 2.00pm (London time) on
Tuesday 31 January 2023 for analysts and investors.
Dial in details as follows:
UK Toll-Free: 0808 109 0700
International Dial in: +44 (0)330 551 0200
US Toll-Free: 866-580-3963
Canada Toll-Free: 866-378-3566
Password: Hochschild
A recording of the conference call will be available on demand
on the Company's website: www.hochschildmining.com
________________________________________________________________________________________
Overview
In Q4 2022, Hochschild Mining PLC (HOC.LN) (OTCMKTS: $HCHDF)
("Hochschild" or "the Company") delivered attributable production
of 97,652 gold equivalent ounces or 7.0 million silver equivalent
ounces, slightly stronger than Q3. Overall 2022 attributable
production was 358,826 gold equivalent ounces or 25.8 million
silver equivalent ounces. The small shortfall versus the overall
2022 guidance is because the reduced contribution at Pallancata
could not be fully offset by higher output at Inmaculada. This was
due to local community disturbances in Q4 along with the wider
political and subsequent civil unrest in Peru since December.
The Company reiterates that its all-in sustaining cost for 2022
is expected 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
Q4 2022 Q3 2022 Q4 2021 12 mths 12 mths
2022 2021
-------- -------------- -------- --------
Silver production
(koz) 3,632 3,858 3,892 13,596 14,746
Gold production
(koz) 68.11 62.57 68.22 244.63 262.39
Total silver equivalent
(koz) 8,536 8,364 8,804 31,209 33,638
Total gold equivalent
(koz) 118.56 116.16 122.28 433.46 467.19
Silver sold (koz) 3,596 3,895 3,877 13,536 14,712
Gold sold (koz) 67.40 62.79 67.80 242.89 260.71
------------------------- -------- -------------- -------- -------- --------
Total production includes 100% of all production, including
production attributable to Hochschild's joint venture partner at
San Jose.
ATTRIBUTABLE GROUP PRODUCTION
Q4 2022 Q3 2022 Q4 2021 12 mths 12 mths
2022 2021
-------- -------- -------- --------
Silver production
(koz) 2,931 3,006 3,209 11,003 12,174
Gold production
(koz) 56.94 52.71 56.91 206.01 221.42
Silver equivalent
(koz) 7,031 6,802 7,306 25,835 28,116
Gold equivalent
(koz) 97.65 94.47 101.48 358.83 390.50
------------------- -------- -------- -------- -------- --------
Attributable production includes 100% of all production from
Inmaculada, Pallancata and 51% from San Jose.
Production
Inmaculada
Product Q4 2022 Q3 2022 Q4 2021 12 mths 12 mths
2022 2021
-------------- ------------- ------------ ----------
Ore production
(tonnes treated) 323,870 348,105 341,577 1,329,177 1,349,892
Average grade silver
(g/t) 182 151 191 156 174
Average grade gold
(g/t) 4.29 3.75 4.03 3.81 4.05
Silver produced
(koz) 1,602 1,519 1,850 5,936 6,236
Gold produced (koz) 42.36 39.82 41.99 154.85 165.73
Silver equivalent
(koz) 4,652 4,386 4,873 17,085 18,168
Gold equivalent
(koz) 64.61 60.91 67.69 237.29 252.34
Silver sold (koz) 1,599 1,514 1,843 5,918 6,216
Gold sold (koz) 42.15 40.06 41.95 154.93 165.86
---------------------- -------------- ------------- ------------ ---------- ----------
Fourth quarter production at Inmaculada was 42,362 ounces of
gold and 1.6 million ounces of silver, which amounts to a gold
equivalent output of 64,612 ounces, with higher-than-expected
recoveries offset by lower tonnage due to the disruption from local
and national disturbances. Overall in 2022, Inmaculada has
delivered gold equivalent production of 237,289 ounces (2021:
252,337 ounces), in line with the revised forecast published in
August and slightly reduced versus 2021 owing to budgeted lower
grades.
Pallancata
Product Q4 2022 Q3 2022 Q4 2021 12 mths 12 mths
2022 2021
---------------- ---------------- --------------- --------
Ore production
(tonnes treated) 155,530 145,212 128,228 559,799 530,681
Average grade silver
(g/t) 139 149 177 151 212
Average grade gold
(g/t) 0.68 0.64 0.85 0.69 0.84
Silver produced
(koz) 600 601 648 2,368 3,261
Gold produced (koz) 2.95 2.63 3.14 10.98 13.05
Silver equivalent
(koz) 812 790 874 3,158 4,200
Gold equivalent
(koz) 11.28 10.97 12.14 43.86 58.33
Silver sold (koz) 561 593 642 2,315 3,263
Gold sold (koz) 2.80 2.60 3.12 10.76 13.03
---------------------- ---------------- ---------------- --------------- -------- --------
In Q4, Pallancata produced 0.6 million ounces of silver and
2,950 ounces of gold bringing the silver equivalent total to 0.8
million, with treated tonnage slightly higher-than-expected but
offset by lower grades. Overall in 2022, Pallancata produced 3.2
million silver equivalent ounces (2021: 4.2 million ounces) with
the reduction versus the revised forecast (3.4 -3.6 million ounces)
due to the effects of lower-than-budgeted grades in line with the
current declining production profile.
San Jose (the Company has a 51% interest in San Jose)
Product Q4 2022 Q3 2022 Q4 2021 12 mths 12 mths
2022 2021
-------------- -------------- -------- --------
Ore production
(tonnes treated) 152,692 149,138 143,398 507,189 539,229
Average grade silver
(g/t) 332 413 346 369 344
Average grade gold
(g/t) 5.38 4.86 5.77 5.55 5.47
Silver produced
(koz) 1,430 1,739 1,393 5,292 5,250
Gold produced (koz) 22.80 20.12 23.10 78.80 83.62
Silver equivalent
(koz) 3,072 3,188 3,056 10,966 11,270
Gold equivalent
(koz) 42.67 44.28 42.45 152.31 156.53
Silver sold (koz) 1,435 1,788 1,392 5,303 5,233
Gold sold (koz) 22.46 20.13 22.73 77.20 81.83
---------------------- -------------- -------------- -------- -------- --------
The San Jose mine enjoyed a solid quarter with tonnage slightly
better than expected, resulting in production of 1.4 million ounces
of silver and 22,800 ounces of gold which represents 3.1 million
silver equivalent ounces. This amounts to a 2022 total of 11.0
million silver equivalent ounces (2021: 11.3 million ounces) with
the decrease versus 2021 reflecting first quarter Covid-related
employee absences and a fire in the crushing area, both of which
temporarily affected operations and explain the reduction in
tonnage. This was partially offset by better-than-budgeted gold
grades.
Average realisable prices and sales
Average realisable precious metal prices in Q4 2022 (which are
reported before the deduction of commercial discounts) were
$1,767/ounce for gold and $25.8/ounce for silver (Q4 2021:
$1,811/ounce for gold and $25.3/ounce for silver).
For 2022 as a whole, average realisable precious metal prices
were $1,791/ounce for gold and $23.3/ounce for silver (2021:
$1,781/ounce for gold and $24.9/ounce for silver).
Advanced Project: Mara Rosa
The Mara Rosa project in Brazil is progressing according to
schedule and budget with total project progress at 50% and detailed
engineering 96% complete. The Company continues to expect first
production in H1 2024.
Earthworks
Site clearance for the processing plant and earthworks are at an
advanced stage (92% and 96% respectively) whilst the reservoir is
fully operational and already receiving pumped water from the pit.
All sites being prepared for the processing plant have been
finished on time therefore allowing civil works to start according
to schedule.
Procurement
Currently purchase orders have been issued for 90% of the
project equipment. Deliveries are on schedule with key equipment
such as the crusher, conveyor belts, HDPE pipes, aluminium cabling
for transmission lines, hydrocyclones, agitators and equipment for
the wastewater treatment station already received. Key material
packages that are pending include pipes and valves which are
expected to be closed in the first quarter.
Processing plant
The civil works contractor is fully mobilised and work on the
plant site area is at 32% completion rate. The concrete base for
the grinding area is complete with walls and equipment columns
currently progressing and expected to be finished by the end of
February whilst deliveries for the tanks are due the same
month.
Infrastructure
Construction of infrastructure for the main access route is
ongoing to allow delivery of materials and heavy equipment. A
preliminary drainage system that will guarantee access to critical
path areas was completed in Q4 whilst the main project drainage
system is 60% complete.
The power supply for the mine will be provided by the building
of a 67km, 138kv transmission line from the Porangatu substation
with work currently 45% advanced and expected to be completed by
June 2023.
Sustainability
Environmental controls to monitor construction work have been
implemented to ensure compliance with applicable permits. In
September, the "Knowledge Trail" was inaugurated with the presence
of local authorities and the Hochschild COO. The trail consists of
an open ecological area with 13 stations highlighting local
history, culture, archaeological and environmental information, and
project history. The trail will be used as a learning tool by local
schools among other local stakeholders and to date almost 500
people have visited. Local supplier and labour training programmes
are continuing with over 80 local suppliers already on standby.
Health and Safety
Hochschild's health and safety corporate standards are currently
being implemented at the project, including the introduction of the
Company's Seguscore safety indicator. The project has recently
surpassed one million injury-free working hours and year-to-date
Frequency and Severity Indexes are currently at zero. Finally,
Covid-19 prevention protocols are in place with no positive cases
recorded to date.
Development Project: Snip
At the end of the year, a Preliminary Economic Assessment was
received from Ausenco Engineering Canada Inc. on the Snip project
in British Columbia. Highlights are given below.
Mineral Resource Estimate (effective as of 20 June 2022)
Category Domain Tonnes Au Grade Total Au
(000) (g/t) Metal
Content
(000 oz)
-----------
Indicated Twin Main 3,847 9.8 1,217
----------- ------- ---------
Twin West 293 8.1 76
----------------------------- ------- ---------
Total Indicated 4,140 9.7 1,293
------- ---------
Inferred Twin Main 829 12.3 329
----------- ------- ---------
Twin West 207 11.0 73
----------------------------- ------- ---------
Total Inferred 1,036 12.1 402
------- ---------
Notes
1 These mineral resources are not mineral reserves and do not
have demonstrated economic viability.
2 The independent qualified person MRE, as defined by National
Instrument ("NI") 43-101 guidelines, is Marc Jutras P.Eng.,
M.A.Sc., Principal, Mineral Resources at Ginto Consulting Inc.
3 Follows CIM definitions (2014) for mineral resources.
4 Results are presented in-situ and undiluted and considered to
have reasonable prospects for economic extraction.
5 Reported for an underground scenario at a cut-off grade of 3.0
g/t
6 The number of tonnes and ounces were rounded to the nearest
thousand.
7 Estimates are in total for the property and have not been
adjusted to reflect the proportion attributable to Hochschild on
the basis of its joint venture participation.
The update of the mineral resources of the project follows a
drilling campaign of 83 surface and underground holes carried out
in 2021 and 2022. The drill hole database is comprised of 3,507
historical drill holes and 415 holes drilled by Skeena from 2016 to
2021 and 69 holes drilled by Hochschild in 2022. The historical
holes were validated from a set of twin holes drilled by Skeena in
2021 and Hochschild in 2022.
Mining
The Snip Project contemplates the underground exploitation of
the Mineral Resources of both Twin Main and Twin West deposit at a
planned rate of 1,350 to 1,500 tpd over an eight-year period. Total
mineralised material in the Life of Mine (LOM) is 3.7mt @ 7.1 g/t
Au, with an average gold production of 100 koz per year. A
pre-production period of two years, including rehabilitation and
dewatering of existing tunnels and the ramp-up period in year two,
will allow for the start of full production beginning in year
three.
Processing
The process plant design is based on composite samples that
represent the underground mining plan. The circuit selected is a
gravity and whole ore leach process to produce gold doré bars. The
plant is designed for a through put of 1,350 tpd based on
availability of 92%. The metallurgical recovery is estimated at
96%. The process flowsheet consisted of: three-stage crushing and
ball mill grinding circuits; gravity and leach + carbon-in-leach
(L/CIL) circuits; desorption and carbon regeneration;
electrowinning and smelting; and cyanide destruction of tailings
using SO /air process.
Capital Costs
The total initial capital cost is C$346.5m and the life-of-mine
sustaining cost is C$239.9m. The initial capital costs are
summarised below:
Initial capital costs
Description C$m
Underground Mine 113.7
------
Process Plant 52.5
------
Tailings Storage Facility 35.4
------
Infrastructure 47.1
------
Total Direct Costs 248.7
------
Indirect costs 39.5
------
Contingency 58.3
------
Total 346.5
------
Project economics
The overall economics of the Project have been evaluated using a
gold price of US$1,700/oz, CAD/USD rate of 0.75 and a discount rate
of 5%. Snip's valuation has been estimated at C$183m post-tax NPV,
with an IRR of 17%. The payback period is expected to be 4 years
from the start of production.
Key project economics
Description Units Value
----------
Au Payable 000oz 797
----------
Processed Tonnes Mt 3.65
----------
Au Grade g/t 7.08
----------
After-tax valuation indicators
----------
Undiscounted cash flow C$m 373
----------
NPV@5% C$m 183
----------
Payback period years 4
----------
IRR % 17
----------
Project Capital (initial) C$m 347
----------
AISC C$/oz Au 1,081
----------
Next steps
The team is currently continuing with the environmental baseline
work and evaluating drill results to define potential drill
programmes for 2023 and beyond.
Brownfield exploration: Pallancata Royropata resource
An initial Inferred Mineral Resource Estimate for the Royropata
Zone to the west of the existing Pallancata mine was completed in
Q4. The Company estimates that the zone contains an Inferred
Mineral Resource of 1.88 million tonnes at an average grade of 667
g/t Ag and 2.42 g/t Au containing 51.2 million silver equivalent
("Ag Eq") ounces at a combined Ag Eq grade of 848 g/t (see table
below).
The programme started in 2019 with two long drill holes, with
the second drill hole intercepting 37.6m of quartz vein without
economic values. In 2022, after a period of geologic interpretation
and 9,800m of drilling, a new vein system, including the Marco
West, (the main structure) Laura, Demian, Royropata 1, and
Royropata 2 veins was discovered (see maps below). The Royropata
system is a tabular sinistral strike-slip fault filled by
hydrothermal quartz with crustiform, coloform, banded, and breccia
textures. The vein strikes 80-90deg and dips 60deg to 75deg to the
southeast, reaching 750m in length and 200m in depth. The host
rocks are dacitic tuffs, andesitic tuffs, and andesitic flow. The
contained minerals are mainly: pyrargyrite, proustite, argentite,
electrum, and pearceite-polybasite at the precious metal level. The
principal gangue mineral is quartz and carbonates and silicified
tuff fragments with an argillic alteration. The Marco vein remains
open to the southwest for another 900m according to the current
geological interpretation.
Audited Royropata Inferred Mineral Resource Estimate
Vein Tonnes Ag (g/t) Au (g/t) Ag Eq (g/t) Ag Eq (moz)
(k)
-------
Marco West 1,497 763 2.81 973 46.8
------- --------- --------- ------------
Laura 247 203 0.62 250 2.0
------- --------- --------- ------------
Royropata 2 80 495 1.48 606 1.6
------- --------- --------- ------------
Demian 27 444 1.55 560 0.5
------- --------- --------- ------------
Royropata 1 26 285 0.81 346 0.3
------- --------- --------- ------------
Total/Average 1,876 667 2.42 848 51.2
------- --------- --------- ------------
Notes
1 Mineral Resources are 100% attributable to Hochschild.
2 Metal prices used for the Mineral Resources calculations: Au:
US$1,800/oz, Ag: US$24/oz.
3 AgEq = (Au x 75) + Ag.
4 AgEq Cut-off: 99 g/t AgEq.
5 Totals have been rounded to the appropriate number of
significant figures.
Qualified Persons
P&E Mining Consultants Inc. ("P&E") was engaged by
Hochschild Mining PLC to undertake an audit of the Royropata Zone
Mineral Resources prepared by Hochschild. As part of the reporting
requirements for a Mineral Company listed under the London Stock
Exchange regulations, it is required that Mineral Resource
Estimates be stated in accordance with international reporting
standards. To satisfy this requirement, P&E has followed the
standards of the Joint Ore Reserves Committee of the Australian
Institute of Mining and Metallurgy ("JORC" code 2012), National
Instrument 43-101(2014) and the Canadian Institute of Mining and
Metallurgy ("CIM") Best Practices Guidelines (2019).
P&E audited the Hochschild Mineral Resource Estimate for the
Royropata Zone (part of the Pallancata Mining Unit) to confirm it
is in compliance with JORC, NI 43-101 (2014) and CIM Best Practices
Guidelines (2019) and the methodologies utilized have generated
reliable estimates of tonnage and grade for the mineral assets. The
audit was carried out by David Burga, P.Geo. and Fred Brown P.Geo.
under the direction of P&E President, Eugene Puritch P.Eng.,
FEC, CET. All of the persons named herein are independent Qualified
Persons as defined by National Instrument 43-101 and Competent
Persons as defined by JORC by reason of education, affiliation with
a professional association and past relevant work experience.
P&E concludes that the Royropata Mineral Resource Estimate
provides a reasonable estimation of the Mineral Resource and has
been reported in accordance with the requirements of JORC (Code
2012), NI 43-101 (2014) and CIM Best Practices Guidelines (2019).
P&E notes that the Roypatra 1 Inferred Mineral Resource is
based on three drill hole intercepts, and the Demian Inferred
Mineral Resource is based on four drill hole intercepts. Both
Mineral Resources are relatively small and can be expected to
change as additional drilling results become available. P&E is
of the opinion that Hochschild has adopted a generally prudent and
acceptable approach to their Mineral Resource Estimate and that
their estimate meets the compliancy requirements of JORC, NI 43-101
and CIM
2023 next steps
In 2023, the Company will develop the Mineral Resource including
infill drilling to convert the Inferred Minerals Resources to
Indicated and will also proceed with basic engineering as well as
the environmental permitting process, including baseline studies.
In addition, over the next few quarters, the brownfield team will
also target the upside potential in the Royropata zone, including
the extension of the Marco vein, the Royropata veins and the
Yanacochita and Bolsa structures according to ongoing permitting
progress. These veins are expected to add significant additional
resources.
Other Brownfield exploration
Inmaculada
In Q4 2022, drilling was carried out targeting the Eduardo and
Josefa veins. In addition, there was 2,900m of infill drilling in
the Juliana, Susana-Beatriz, Bety, Barbara and Noelia
structures.
Pallancata
At Pallancata, 2,115m of resource drilling was carried out in
the Cinthya, Lucas, Marco, Mateo, Pablo NE, and Yurika Piso veins.
Selected results are below:
Results (potential drilling)
Vein
Cinthya DLLCN-A17: 1.3m @ 4.8g/t Au & 401g/t Ag
DLLCN-A19: 2.2m @ 2.8g/t Au & 334g/t Ag
-----------------------------------------
San Jose
At San Jose, the brownfield team carried out 5,500m of potential
drilling in the Ayelen SE, Maura, Maura East and Olivia veins and
2,800m of infill drilling in the Julia, Isabel, Odion, Molle and
Perla veins. Selected results are below:
Vein Results (potential/resource drilling)
Maura SJD-2572: 2.5m @ 4.0g/t Au & 216g/t Ag
---------------------------------------
Olivia SJM-609: 1.1m @ 3.0g/t Au & 357g/t Ag
---------------------------------------
Mara Rosa
At Mara Rosa, 5,466m of both potential and resource drilling
were carried out in Q4 in the Campos Verdes, Estrela, Jacuba, Speti
and Joao Lemos shear zones.
Target Results (potential/resource drilling)
Campos Verdes 1 22CV-001: 5.5m @ 1.5g/t Au
--------------------------------------
Campos Verdes 2 22CV-004: 1.5m @ 0.6g/t Au
--------------------------------------
Campos Verdes 3 22CV-004: 1.4m @ 0.7g/t Au
--------------------------------------
Estrela 1 22ETR-019: 1.2m @ 0.9g/t Au
22ETR-015: 1.3m @ 1.8g/t Au
--------------------------------------
Estrela 2 22ETR-009: 2.4m @ 0.7g/t Au
22ETR-010: 1.0m @ 1.4g/t Au
22ETR-011: 1.8m @ 0.8g/t Au
22ETR-012: 5.2m @ 0.5g/t Au
22ETR-013: 4.3m @ 2.5g/t Au
22ETR-017: 1.2m @ 4.0g/t Au
22ETR-018: 2.0m @ 0.4g/t Au
22ETR-019: 1.1m @ 0.6g/t Au
--------------------------------------
Jacuba 1 22JAC-001: 1.8m @ 0.7g/t Au
22JAC-002: 0.9m @ 1.3g/t Au
22JAC-013: 1.5m @ 0.7g/t Au
--------------------------------------
Jacuba 2 22JAC-001: 1.3m @ 1.3g/t Au
--------------------------------------
Speti 22P-122A: 1.5m @ 12.6g/t Au
22SPT-004: 1.0m @ 0.8g/t Au
22SPT-005: 1.9m @ 0.7g/t Au
22SPT-009: 2.0m @ 0.8g/t Au
--------------------------------------
Financial position
Total cash was approximately $144 million as at 31 December
2022, resulting in net debt of approximately $175 million.
Outlook
Please note that the following guidance for 2023 is subject to
Peruvian government approval of the Inmaculada MEIA during the
first quarter of 2023. Any significant delays or a negative
decision would impact the existing mine plan and resulting levels
of production in 2023. Failure to secure approval of the MEIA would
result in a suspension of operations at Inmaculada during H2 2023
until a new MEIA is approved. The specific date of suspension will
depend on operational factors that are being evaluated.
The overall attributable production target for the year is
301,000-314,000 gold equivalent ounces or 25.0-26.0 million silver
equivalent ounces. [5]
2023 Attributable production split
Operation Oz Au Eq Moz Ag Eq
Inmaculada 204,000-211,000 16.9-17.5
---------------- ----------
Pallancata 24,000-27,000 2.0-2.2
---------------- ----------
San Jose 73,000-76,000 6.1-6.3
---------------- ----------
Total 301,000-314,000 25.0-26.0
---------------- ----------
The all-in sustaining cost from operations in 2023 is expected
to be between $1,370 and $1,450 per gold equivalent ounce (or $16.5
and $17.5 per silver equivalent ounce).
2023 AISC split
Operation $/oz Au Eq $/oz Ag Eq
------------
Inmaculada 1,260-1,320 15.2-15.9
------------
Pallancata 2,050-2,310 24.7-27.8
------------
San Jose 1,400-1,470 17.0-17.7
------------
Total from operations 1,370-1,450 16.5-17.5
------------
The capital expenditure budget for 2023 is approximately
$125-135 million allocated to sustaining and development
expenditure. The Mara Rosa project capital expenditure budget is
set at $100-110 million.
2022 Capital expenditure split
Operation Sustaining & development capital expenditure
($m)
Inmaculada 92-99
---------------------------------------------
Pallancata 2-3
---------------------------------------------
San Jose (100%) 31-33
---------------------------------------------
Total 125-135
---------------------------------------------
____________________________________________________________________________________
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 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.
This announcement contains information which prior to its
release could be considered inside information.
LEI: 549300JK10TVQ3CCJQ89
- ends -
[1] Unless otherwise stated, 2022 equivalent figures calculated
using the previous Company gold/silver ratio of 72x. All 2023
forecasts assume the average gold/silver ratio for 2022 of 83x
[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] All forecast equivalent figures assume a gold/silver ratio
of 83x.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
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END
DRLFBLLXXFLXBBB
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January 31, 2023 02:00 ET (07:00 GMT)
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