REG - Hochschild MiningPLC - Q1 Production Report
24/04/2024 07:00
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RNS Number : 7733L Hochschild Mining PLC 24 April 2024
_____________________________________________________________________________________
24 April 2024
Production Report for the 3 months ended 31 March 2024
Eduardo Landin, Chief Executive Officer said:
"We have delivered a good start to 2024 with production and costs at
Inmaculada and San Jose on track to meet guidance for the year. The Mara Rosa
mine started operations during the quarter, on time and on budget, and we are
currently completing the final phase of the ramp-up process with the start of
commercial production expected very soon.
Hochschild's balance sheet remains strong and, with rising precious metal
prices and full production in Brazil, we expect to generate robust free
cashflow during the remainder of the year. "
Operational highlights
§ Q1 2024 attributable production(( 1 ))
o 45,937 ounces of gold
o 2.0 million ounces of silver
o 69,758 gold equivalent ounces
o 5.8 million silver equivalent ounces
§ 2024 guidance on track:
o Production of 343,000-360,000 gold equivalent ounces
o All-in sustaining costs of $1,510-1,550 per gold equivalent ounce
Project & Exploration highlights
§ Mara Rosa mine commercial production expected in new few weeks
§ 2024 brownfield drilling campaign at Inmaculada delivering strong results
to date
§ Option secured to acquire Monte do Carmo project, Brazil
§ Drilling also commenced at San Jose, Pallancata and Monte do Carmo
§ Sale of Crespo project completed for cash consideration of $15 million and
a 1.5% NSR
ESG highlights
§ Lost Time Injury Frequency Rate of 1.34 (FY 2023: 0.99)(( 2 ))
§ Accident Severity Index of 47 (FY 2023: 37)(( 3 ))
§ Water Consumption of 136lt/person/day (FY 2023: 163lt/person/day)
§ Domestic waste generation of 0.94kg/person/day (FY 2023: 0.93kg/person/day)
§ ECO score of 5.77 out of 6 (FY 2023: 5.76)(( 4 ))
Financial position
§ Total cash of approximately $73 million as at 31 March 2024 ($89 million as
at 31 December 2023) reflects Mara Rosa investment, payment for Monte do Carmo
option and temporary working capital changes
§ Net debt of approximately $282 million as at 31 March 2024 ($258 million as
at 31 December 2023)
§ Current Net Debt/LTM EBITDA of approximately 0.90x as at 31 March 2024
_______________________________________________________________________________________
A conference call will be held at 2.00pm (London time) on Wednesday 24 April
2024 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 Mining'
Please dial into the call approximately ten minutes before the 2.00pm 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 2024, Hochschild delivered attributable production of 69,758 gold
equivalent ounces or 5.8 million silver equivalent ounces with slightly
better-than-expected production from both Inmaculada and San Jose and
including a first small contribution from the new Mara Rosa mine. The Company
remains on track to meet its overall attributable production target for 2024
of 343,000-360,000 gold equivalent ounces or 28.5-29.9 million silver
equivalent ounces.
The Company reiterates that its all-in sustaining cost for 2024 is on track to
be in line with the guidance of between $1,510 and $1,550 per gold equivalent
ounce (or $18.2 and $18.7 per silver equivalent ounce).
TOTAL GROUP PRODUCTION
Q1 2024 Q4 2023 Q1 2023 12 mths
2023
Silver production (koz) 2,427 3,086 2,438 11,683
Gold production (koz) 53.79 64.41 46.44 225.77
Total silver equivalent (koz) 6,892 8,432 6,292 30,423
Total gold equivalent (koz) 83.03 101.59 75.81 366.54
Silver sold (koz) 2,445 3,231 2,414 11,567
Gold sold (koz) 52.18 68.14 44.50 221.86
Total production includes 100% of all production, including production
attributable to Hochschild's joint venture partner at San Jose.
ATTRIBUTABLE GROUP PRODUCTION
Q1 2024 Q4 2023 Q1 2023 12 mths
2023
Silver production (koz) 1,977 2,450 2,057 9,517
Gold production (koz) 45.94 52.73 39.73 186.09
Silver equivalent (koz) 5,790 6,827 5,355 24,962
Gold equivalent (koz) 69.76 82.25 64.51 300.75
Attributable production includes 100% of all production from Inmaculada,
Pallancata, Mara Rosa and 51% from San Jose.
Production
Inmaculada
Product Q1 2024 Q4 2023 Q1 2023 12 mths
2023
Ore production (tonnes treated) 263,024 301,127 278,138 1,137,109
Average grade silver (g/t) 181 186 176 177
Average grade gold (g/t) 4.21 4.63 3.78 4.09
Silver produced (koz) 1,509 1,500 1,274 5,515
Gold produced (koz) 36.70 39.35 31.21 137.40
Silver equivalent (koz) 4,555 4,766 3,864 16,919
Gold equivalent (koz) 54.88 57.42 46.56 203.85
Silver sold (koz) 1,387 1,587 1,204 5,488
Gold sold (koz) 34.01 41.95 29.29 136.66
Inmaculada's first quarter production was 36,700 ounces of gold and 1.5
million ounces of silver which amounts to gold equivalent output of 54,877
ounces (Q4 2023: 57,420 ounces). This was in line with the 2024 plan and puts
the mine on track to achieve its annual target. Lower tonnage and grades
versus the previous quarter are due to the scheduled mine development catch-up
resulting from the 2023 permit delay.
San Jose (the Company has a 51% interest in San Jose)
Product Q1 2024 Q4 2023 Q1 2023 12 mths
2023
Ore production (tonnes treated) 125,520 154,308 128,499 579,100
Average grade silver (g/t) 258 297 215 270
Average grade gold (g/t) 4.58 5.51 3.88 5.03
Silver produced (koz) 919 1,297 778 4,422
Gold produced (koz) 16.03 23.84 13.68 80.99
Silver equivalent (koz) 2,249 3,276 1,913 11,144
Gold equivalent (koz) 27.09 39.47 23.05 134.26
Silver sold (koz) 1,057 1,339 784 4,274
Gold sold (koz) 18.25 24.54 13.52 77.23
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 February this year. Production was 0.9 million ounces of silver
and 16,027 ounces of gold, which makes 27,094 gold equivalent ounces and keeps
the mine on track to achieve its annual target.
Average realisable prices and sales
Average realisable precious metal prices in Q1 2024 (which are reported before
the deduction of commercial discounts) were $2,106/ounce for gold and
$23.6/ounce for silver (Q1 2023: $1,956/ounce for gold and $23.0/ounce for
silver).
Mara Rosa project
Mara Rosa
Product Q1 2024 Q4 2023 Q1 2023 12 mths
2023
Ore production (tonnes treated) 86,192 - - -
Average grade silver (g/t) - - - -
Average grade gold (g/t) 1.03 - - -
Silver produced (koz) - - - -
Gold produced (koz) 1.06 - - -
Silver equivalent (koz) 88 - - -
Gold equivalent (koz) 1.06 - - -
Silver sold (koz) - - - -
Gold sold (koz) - - - -
The Mara Rosa mine delivered its first gold pour in February and produced just
over 1,000 ounces of gold in the period. Ramp-up is progressing according to
schedule and commercial production is expected in the next few weeks.
Health and Safety
Hochschild's health and safety standards have been implemented at the project,
including the introduction of the Company's Seguscore safety indicator. The
project has recently surpassed six million injury-free working hours and
year-to-date Frequency and Severity indices are currently at 0.16 and 0.80
respectively.
Human Resources
The operational personnel hiring programme is 83% complete and negotiations on
a collective agreement with the local unions has been completed.
Mining
Total mining in Q1 was 782kt of which 217kt was ore and 565kt of waste. Both
the waste dumps and ore stockpiles are complete.
Plant
The thickener and Ball Mill no 1 were successfully commissioned in January
2024 whilst Ball Mill no 2 was commissioned in February. The leaching tanks
were also successfully commissioned in the first quarter along with the
elution and smelting areas with the filtration plant commencing its
commissioning in February. There is no remaining equipment to be commissioned
in order to advance to commercial production.
Permitting & Sustainability
The operating license was received in January 2024 whilst, also in Q1, the H2
2023 environmental and social performance report was submitted to the Goias
Environmental Agency.
Brownfield exploration
Inmaculada
During the first quarter of the year, the team carried out 4,051m of drilling
for potential in the Tesoro, Nicolas, Andrea, Josefa, Rita, Split Josefa,
Laura, and Split JNE vein structures with the key results coming from the
Tesoro and Nicolas veins.
Vein Results (potential)
Tesoro IMM23-361: 2.0m @ 21.4g/t Au & 1,284g/t Ag
IMM24-375: 5.0m @ 13.9g/t Au & 1,036g/t Ag
IMS24-213A: 3.2m @ 4.0g/t Au & 53g/t Ag
IMS24-216: 1.3m @ 1.2g/t Au & 216g/t Ag
IMS24-217: 1.5m @ 0.6g/t Au & 85g/t Ag
Nicolas IMS24-213A: 23.5m @ 4.8g/t Au & 164g/t Ag
Including 5.6m @ 16.0g/t Au & 409g/t Ag
IMS24-216: 0.8m @ 1.4g/t Au & 199g/t Ag
Andrea IMS24-375: 0.9m @ 2.3g/t Au & 102g/t Ag
IMS24-213A: 1.7m @ 2.6g/t Au & 120g/t Ag
Josefa IMS24-213A: 0.8m @ 2.5g/t Au & 99g/t Ag
Rita IMS24-375: 0.9m @ 4.1g/t Au & 27g/t Ag
Split Josefa IMM23-212: 0.9m @ 5.0g/t Au & 5g/t Ag
Laura IMS24-215: 1.6m @ 3.3g/t Au & 3g/t Ag
Juliana NE piso IMS24-218: 2.6m @ 8.2g/t Au & 184g/t Ag
Split Juliana NE IMS24-375: 1.8m @ 2.8g/t Au & 293g/t Ag
Juliana NE IMS24-218: 0.8m @ 3.4g/t Au & 116g/t Ag
During the second quarter, the Company expects to complete five remaining
drill holes (approximately 2,500m of drilling) before commencing 11,000m of
resource drilling in the Tesoro and Nicolas veins.
San Jose
Vein Results (potential)
Dalia SJD-2775: 2.8m @ 1.1g/t Au & 221g/t Ag
SJD-2776: 2.6m @ 2.0g/t Au & 513g/t Ag
SJD-2777: 3.5m @ 1.3g/t Au & 86g/t Ag
SJD-2778: 1.7m @ 0.5g/t Au & 19g/t Ag
SJD-2788: 1.5m @ 4.8g/t Au & 51g/t Ag
SJD-2789: 0.9m @ 1.4g/t Au & 125g/t Ag
SJD-2795: 0.9m @ 0.6g/t Au & 90g/t Ag
Majo SJD-2771: 0.9m @ 1.0g/t Au & 173g/t Ag
SJD-2772: 2.7m @ 1.5g/t Au & 161g/t Ag
SJD-2774: 1.1m @ 0.3g/t Au & 14g/t Ag
Odin SJD-2775: 1.0m @ 1.9g/t Au & 216g/t Ag
SJD-2776: 1.3m @ 0.4g/t Au & 12g/t Ag
SJD-2777: 2.3m @ 5.5g/t Au & 70g/t Ag
SJD-2778: 1.4m @ 0.3g/t Au & 54g/t Ag
SJD-2788: 2.7m @ 7.6g/t Au & 360g/t Ag
SJD-2789: 1.6m @ 3.2g/t Au & 287g/t Ag
SJD-2795: 1.7m @ 2.8g/t Au & 137g/t Ag
Sigmoide Odin Sur SJD-2775: 1.5m @ 1.8g/t Au & 166g/t Ag
SJD-2776: 0.9m @ 0.1g/t Au & 13g/t Ag
SJD-2777: 0.9m @ 0.2g/t Au & 43g/t Ag
SJD-2778: 1.0m @ 1.4g/t Au & 70g/t Ag
SJD-2788: 6.2m @ 23.3g/t Au & 314g/t Ag
SJD-2789: 1.5m @ 3.5g/t Au & 281g/t Ag
SJD-2795: 4.7m @ 2.6g/t Au & 60g/t Ag
Saavedra SJD-2773: 1.1m @ 0.2g/t Au & 1g/t Ag
The plan for Q2 is to carry out 800m of drilling to define the potential in
the Frei and Bajo Maura veins.
Financial position
Total cash was approximately $73 million as at 31 March 2024 resulting in a
net debt position of approximately $282 million.
In February, the Group hedged 60,000 ounces of 2025 gold production at a
strike put of $2,000 per ounce and a strike call of $2,485 per ounce to
increase cash flow certainty for the repayment of the Company's medium-term
facilities.
_____________________________________________________________________________________
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
operates two underground epithermal vein mines: Inmaculada, located in
southern Peru; and San Jose in southern Argentina, and an open pit gold mine,
Mara Rosa, located in the state of Goiás, Brazil. 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 2023 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.
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