REG - Hochschild MiningPLC - Q2 2022 Production Report
20/07/2022 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:20220720:nRST0448Ta&default-theme=true
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 (http://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.
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 DRLKKLFFLDLLBBVRecent 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