REG - Hochschild MiningPLC - Q1 2023 Production Report
10/05/2023 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230510:nRSJ8616Ya&default-theme=true
RNS Number : 8616Y Hochschild Mining PLC 10 May 2023
____________________________________________________________________________________
10 May 2023
Production Report for the 3 months ended 31 March 2023
Ignacio Bustamante, Chief Executive Officer said:
"We remain on track to deliver our annual targets with an improved social
situation in Peru and current mine plans delivering increased production going
forward at San Jose and also at Inmaculada, subject to approval of the mine's
Modified Environmental Impact Assessment which we expect in the second
quarter. Finally, we continue to make encouraging progress at our Mara Rosa
project in Brazil which has now reached 77% completion and is on schedule and
on budget for first production in H1 2024."
Operational highlights
§ Q1 2023 attributable production(( 1 (#_ftn1) ))
o 39,735 ounces of gold
o 2.1 million ounces of silver
o 64,514 gold equivalent ounces
o 5.4 million silver equivalent ounces
§ 2023 guidance reiterated:
o Production of 301,000-314,000 gold equivalent ounces (25.0-26.0 million
silver equivalent ounces)
o All-in sustaining costs of $1,370-1,450 per gold equivalent ounce
($16.5-17.5 per silver equivalent ounce)
§ Peruvian government decision on Inmaculada Modified Environmental Impact
Assessment ("MEIA") expected during Q2 2023
Project & Exploration highlights
§ Mara Rosa project in Brazil advancing on schedule and on budget - total
project progress at 77% with first production anticipated in H1 2024
o 27,600oz of gold hedged from March to December 2024 at a price of $2,100
per ounce
§ 2023 brownfield drilling campaign at San Jose expected in Q2; Peru
exploration timing subject to Inmaculada MEIA approval
ESG highlights
§ Lost Time Injury Frequency Rate of 0.96 (FY 2022: 1.37)(( 2 (#_ftn2) ))
§ Accident Severity Index of 35 (FY 2022: 93)(( 3 (#_ftn3) ))
§ Water Consumption of 165lt/person/day (FY 2022: 171lt/person/day)
§ Domestic waste generation of 0.98 kg/person/day (FY 2022:
1.05kg/person/day)
§ ECO score of 5.88 out of 6 (FY 2022: 5.27)(( 4 (#_ftn4) ))
Strong financial position
Total cash of approximately $103 million as at 31 March 2023 ($144 million as
at 31 December 2022)
§ Net debt of approximately $218 million as at 31 March 2023 ($175 million as
at 31 December 2022)
§ Current Net Cash/LTM EBITDA of approximately 0.95x as at 31 March 2023
§ 29,250 ounces of gold hedged for the remainder of 2023 at a price of $2,047
per ounce
________________________________________________________________________________________
A conference call will be held at 2.30pm (London time) on Wednesday 10 May
2023 for analysts and investors.
Dial in details as follows:
International Dial in: +44 330 551 0200;
UK Toll-Free Number: 0808 109 0700;
US Toll Free: 866 580 3963
Canada Toll Free: 866 378 3566
Password: Hochschild Q1 Production
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 (http://www.hochschildmining.com)
________________________________________________________________________________________
Overview
In Q1 2023, Hochschild delivered attributable production of 64,514 gold
equivalent ounces or 5.4 million silver equivalent ounces with Inmaculada
temporarily impacted by the delay in the approval of the MEIA affecting mine
development, as expected, as well as further disruption from the Peruvian
national protests. In addition, there have also been lower grades at San Jose
in Argentina and Pallancata in Peru. The Company remains on track to meet its
overall attributable production target for 2023 of 301,000-314,000 gold
equivalent ounces or 25.0-26.0 million silver equivalent ounces.
The Company reiterates that its all-in sustaining cost for 2023 is on track to
be in line with the guidance of between $1,370 and $1,450 per gold equivalent
ounce (or $16.5 and $17.5 per silver equivalent ounce).
TOTAL GROUP PRODUCTION
Q1 2023 Q4 2022 Q1 2022 12 mths
2022
Silver production (koz) 2,438 3,632 2,759 13,596
Gold production (koz) 46.44 68.11 53.68 244.63
Total silver equivalent (koz) 6,292 9,285 7,214 33,900
Total gold equivalent (koz) 75.81 111.87 86.92 408.43
Silver sold (koz) 2,414 3,596 2,600 13,536
Gold sold (koz) 44.50 67.40 49.64 242.89
Total production includes 100% of all production, including production
attributable to Hochschild's joint venture partner at San Jose.
ATTRIBUTABLE GROUP PRODUCTION
Q1 2023 Q4 2022 Q1 2022 12 mths
2022
Silver production (koz) 2,057 2,931 2,424 11,003
Gold production (koz) 39.73 56.94 47.23 206.01
Silver equivalent (koz) 5,355 7,657 6,344 28,102
Gold equivalent (koz) 64.51 92.26 76.43 338.57
Attributable production includes 100% of all production from Inmaculada,
Pallancata and 51% from San Jose.
Production
Inmaculada
Product Q1 2023 Q4 2022 Q1 2022 12 mths
2022
Ore production (tonnes treated) 278,138 323,870 329,364 1,329,177
Average grade silver (g/t) 176 182 153 156
Average grade gold (g/t) 3.78 4.29 3.75 3.81
Silver produced (koz) 1,274 1,602 1,493 5,936
Gold produced (koz) 31.21 42.36 37.81 154.85
Silver equivalent (koz) 3,864 5,118 4,632 18,788
Gold equivalent (koz) 46.56 61.66 55.80 226.36
Silver sold (koz) 1,204 1,599 1,383 5,918
Gold sold (koz) 29.29 42.15 35.16 154.93
Inmaculada's first quarter production was 31,213 ounces of gold and 1.3
million ounces of silver which amounts to gold equivalent output of 46,559
ounces. Tonnage was lower than the previous quarter, as expected, due to the
anticipated delays in the approval of the MEIA impacting mine development, and
to disruption from the local and national protests in late 2022 and early
2023. This was partially offset by better-than-expected grades. The operation
is back to capacity and production guidance for 2023 is not affected, subject
to approval of the MEIA in the second quarter.
Pallancata
Product Q1 2023 Q4 2022 Q1 2022 12 mths
2022
Ore production (tonnes treated) 115,842 155,530 124,782 559,799
Average grade silver (g/t) 126 139 165 151
Average grade gold (g/t) 0.49 0.68 0.74 0.69
Silver produced (koz) 386 600 581 2,368
Gold produced (koz) 1.55 2.95 2.70 10.98
Silver equivalent (koz) 514 845 805 3,279
Gold equivalent (koz) 6.20 10.18 9.70 39.50
Silver sold (koz) 427 561 577 2,315
Gold sold (koz) 1.69 2.80 2.69 10.76
In the first quarter, Pallancata produced 386,000 ounces of silver and 1,545
ounces of gold bringing silver equivalent total production to 514,000 ounces
with reduced tonnage and grades in line with the current declining production
profile.
San Jose (the Company has a 51% interest in San Jose)
Product Q1 2023 Q4 2022 Q1 2022 12 mths
2022
Ore production (tonnes treated) 128,499 152,692 73,892 507,189
Average grade silver (g/t) 215 332 331 369
Average grade gold (g/t) 3.88 5.38 6.36 5.55
Silver produced (koz) 778 1,430 685 5,292
Gold produced (koz) 13.68 22.80 13.16 78.80
Silver equivalent (koz) 1,913 3,323 1,777 11,833
Gold equivalent (koz) 23.05 40.03 21.41 142.57
Silver sold (koz) 784 1,435 640.2 5,303
Gold sold (koz) 13.52 22.46 11.79 77.20
The first quarter at San Jose in Argentina is traditionally a shorter
operational period due to the scheduled hourly workers' holiday which was
taken during January this year. Due to mine sequencing, grades and recoveries
were lower in Q1 and led to production of 0.8 million ounces of silver and
13,679 ounces of gold which makes 1.9 million silver equivalent ounces.
However, the operation remains on track to meet 2023 full year guidance of
between 6.1 and 6.3 million silver equivalent ounces.
Average realisable prices and sales
Average realisable precious metal prices in Q1 2023 (which are reported before
the deduction of commercial discounts) were $1,956/ounce for gold and
$23.0/ounce for silver (Q1 2022: $1,916/ounce for gold and $26.0/ounce for
silver).
Advanced Project: Mara Rosa
The Mara Rosa project is progressing according to schedule and budget with
total project progress now standing at 77% and detailed engineering 99%
complete. The Company continues to expect first production in H1 2024.
Procurement
Currently purchase orders have been issued for 93% of the project equipment.
Deliveries are on schedule with key equipment such as the crusher, thickeners,
filters, conveyor belts, HDPE pipes, aluminium cabling for transmission lines,
hydrocyclones, agitators and equipment for the wastewater treatment station
already received.
Earthworks
Site clearance for the processing plant and earthworks activities is complete.
Civil work
Civil works in the processing plant area are advancing in line with schedule
at 86% completion. Work on the crushers and ball mill buildings are finished
whilst leaching and filtering circuits are expected to be completed in May.
Infrastructure assembly
The Electromechanical assembly contractor has been mobilised, and the work is
advancing in line with schedule at 25% progress. 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 77% advanced and expected to be
completed by July 2023.
Sustainability
Environmental controls to monitor construction work have been implemented to
ensure compliance with applicable permits. ESG programmes are advancing as
expected with over 500 people having visited the "knowledge trail" as of March
2023. Procurement from local suppliers has surpassed $9 million and over 320
people from Mara Rosa and Amaralina towns are currently working on the
project. Monthly newsletters covering project progress and sustainability
initiatives are also being distributed to local communities.
Health and Safety
Hochschild's health and safety corporate standards have been implemented at
the project, including the introduction of the Company's Seguscore safety
indicator. The project has recently surpassed two million injury-free working
hours and year-to-date Frequency and Severity Indexes are currently at zero.
Development project: Snip
Due to the need to focus capital elsewhere in Hochschild's portfolio, the
Company terminated, on 4 April 2023, the option with Skeena Resources Limited
("Skeena") to earn-in a 60% interest in the Snip project. Termination of the
project became effective immediately and, as a result, Hochschild has no
liability to complete the Aggregate Expenditure Requirement.
In addition, Hochschild provided confirmation to Skeena that it had satisfied
the Minimum Annual Expenditure Requirement in respect of the 12-month period
that commenced on 14 October 2022. Accordingly, no cash payment is due from
Hochschild to Skeena under the terms of the option agreement.
Brownfield exploration
Although the brownfield team is planning a busy year of drilling, the budget
for the exploration programme in Peru is subject to the Inmaculada MEIA
approval.
In Argentina, the programme has commenced with drilling for potential at the
Ciclon project in the Santa Cruz province with results currently pending.
Financial position
Total cash was approximately $103 million as at 31 March 2023 resulting in a
net debt position of approximately $218 million.
During the quarter, the Company executed two precious metal hedges. Firstly, a
total of 29,250 ounces of gold was hedged for the remainder of 2023 at a
forward price of $2,047 per ounce. In addition, the Company has hedged a
further 27,600 ounces of gold for the period between March 2024 and December
2024 at a forward price of $2,100 per ounce.
_____________________________________________________________________________________
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.
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 (#_ftnref1) All equivalent figures assume the average gold/silver ratio
for 2022 of 83x.
2 (#_ftnref2) Calculated as total number of accidents per million labour
hours
(( 3 (#_ftnref3) ))Calculated as total number of days lost per million labour
hours.
4 (#_ftnref4) 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.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END DRLBKLLBXELFBBERecent news on Hochschild Mining
See all newsREG - Hochschild MiningPLC - Director/PDMR Shareholding
AnnouncementREG - Hochschild MiningPLC - Q1 2025 Production Report
AnnouncementREG - Hochschild MiningPLC - Hochschild Engages the Smithsonian
AnnouncementREG - Hochschild MiningPLC - Annual Report and AGM Notice
AnnouncementREG - Hochschild MiningPLC - Director Declaration
Announcement