REG - Hochschild MiningPLC - Q3 2023 Production Report
18/10/2023 07:00
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RNS Number : 4394Q Hochschild Mining PLC 18 October 2023
_____________________________________________________________________________________
18 October 2023
Production Report for Q3 and the 9 months ended 30 September 2023
Eduardo Landin, Chief Executive Officer said:
"Hochschild Mining's third quarter was operationally our strongest yet in 2023
and we expect to meet both our revised full year production and our cost
targets. In addition, during the period, Inmaculada's Modified Environmental
Impact Assessment was approved by the Government of Peru for an additional 20
years. Finally, we have made more strong progress at our Mara Rosa project in
Brazil which is now at 98% completion, and we continue to be on schedule and
on budget and expecting first production in H1 2024."
Operational highlights
§ Strongest quarter year-to-date(( 1 (#_ftn1) ))
o 49,999 ounces of gold
o 2.6 million ounces of silver
o 81,619 gold equivalent ounces
o 6.8 million silver equivalent ounces
§ Robust 9-month operational performance
o 133,356 ounces of gold
o 7.1 million ounces of silver
o 218,498 gold equivalent ounces
o 18.1 million silver equivalent ounces
§ On track to deliver revised full year attributable production target of
289,000-303,000 gold equivalent ounces (24.0-25.0 million silver equivalent
ounces)
§ 2023 all-in sustaining costs on track to meet revised guidance of
$1,490-1,580 per gold equivalent ounce ($18.0-19.0 per silver equivalent
ounce)
Project Development highlights
§ Construction of Mara Rosa project in Brazil advancing on schedule and on
budget - total project progress at 98%
Strong financial position
§ Total cash of approximately $114 million as at 30 September 2023 ($94
million as at 30 June 2023)
§ Net debt of approximately $261 million as at 30 September 2023 ($227
million as at 30 June 2023)
§ Current Net Debt/LTM EBITDA of approximately 1.12x as at 30 September 2023
ESG highlights
§ Lost Time Injury Frequency Rate of 1.00 (FY 2022: 1.37)(( 2 (#_ftn2) ))
§ Accident Severity Index of 35 (FY 2022: 93)(( 3 (#_ftn3) ))
§ Water Consumption of 166lt/person/day (FY 2022: 171lt/person/day)
§ Domestic waste generation of 0.96 kg/person/day (FY 2022:
1.05kg/person/day)
§ ECO score of 5.85 out of 6 (FY 2022: 5.27)(( 4 (#_ftn4) ))
Capital Markets Event
§ Capital Markets Event to be held on 22 November 2023 in London where the
Company will set out its long-term strategy
________________________________________________________________________________________
A conference call will be held at 2.30pm (London time) on Wednesday 18 October
2023 for analysts and investors.
Dial in details as follows:
UK Toll-Free Number: 0808 109 0700
International Dial in: +44 (0)330 551 0200
US Toll-Free Number: 866-580-3963
Canada Toll-Free Number: 866-378-3566
Pin: Hochschild Mining Q3
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 Q3 2023, Hochschild Mining PLC (HOC.LN) (OTCMKTS: $HCHDF) ("Hochschild" or
"the Company") delivered attributable production of 81,619 gold equivalent
ounces or 6.7 million silver equivalent ounces, representing an 13% increase
versus the second quarter of 2023. This was underpinned by a strong period at
the Inmaculada mine. Overall year-to-date attributable production is 218,498
gold equivalent ounces or 18.1 million silver equivalent ounces. The Company
is on track to meet its revised overall attributable production target for
2023 of 289,000-303,000 gold equivalent ounces or 24.0-25.0 million silver
equivalent ounces.
The Company reiterates that its all-in sustaining cost for 2023 is on track to
be in line with the revised guidance of between $1,490 and $1,580 per gold
equivalent ounce (or $18.0 and $19.0 per silver equivalent ounce).
TOTAL GROUP PRODUCTION
Q3 2023 Q2 2023 Q3 2022 YTD 2023 YTD 2022
Silver production (koz) 3,205 2,955 3,858 8,598 9,964
Gold production (koz) 60.81 54.12 62.57 161.36 176.51
Total silver equivalent (koz) 8,252 7,447 9,052 21,991 24,614
Total gold equivalent (koz) 99.42 89.72 109.06 264.95 296.56
Silver sold (koz) 2,911 3,011 3,895 8,336 9,940
Gold sold (koz) 53.93 55.29 62.79 153.72 175.49
Total production includes 100% of all production, including production
attributable to Hochschild's joint venture partner at San Jose.
ATTRIBUTABLE GROUP PRODUCTION
Q3 2023 Q2 2023 Q3 2022 YTD 2023 YTD 2022
Silver production (koz) 2,624 2,386 3,006 7,067 8,071
Gold production (koz) 50.00 43.62 52.713 133.36 149.07
Silver equivalent (koz) 6,774 6,006 7,381 18,135 20,444
Gold equivalent (koz) 81.62 72.36 88.93 218.50 246.32
Attributable production includes 100% of all production from Inmaculada,
Pallancata and 51% from San Jose.
Production
Inmaculada
Product Q3 2023 Q2 2023 Q3 2022 YTD 2023 YTD 2022
Ore production (tonnes treated) 300,076 257,768 348,105 835,981 1,005,307
Average grade silver (g/t) 166 181 151 174 147
Average grade gold (g/t) 3.97 3.92 3.75 3.89 3.66
Silver produced (koz) 1,442 1,300 1,519 4,015 4,334
Gold produced (koz) 36.19 30.64 39.82 98.04 112.48
Silver equivalent (koz) 4,446 3,843 4,824 12,153 13,670
Gold equivalent (koz) 53.57 46.30 58.12 146.42 164.70
Silver sold (koz) 1,340 1,357 1,514 3,901 4,319
Gold sold (koz) 33.32 32.10 40.06 94.71 112.78
Third quarter production at Inmaculada was 36,193 ounces of gold and 1.4
million ounces of silver which amounts to a gold equivalent output of 53,569
ounces with better-than-expected tonnage and gold grades contributing to a
strong operational period. Year-to-date, Inmaculada's output is 146,424 gold
equivalent ounces (Q3 YTD 2022: 164,700 gold equivalent ounces), placing
Inmaculada in a strong position to meet its revised annual forecast of
192,000-200,000 ounces.
On 2 August 2023, the Company announced that the Modified Environment Impact
Assessment ("MEIA") for Inmaculada had received regulatory approval from
SENACE, Peru's National Service of Environmental Certification for Sustainable
Investments.
Pallancata
Product Q3 2023 Q2 2023 Q3 2022 YTD 2023 YTD 2022
Ore production (tonnes treated) 122,681 123,782 145,212 362,305 404,269
Average grade silver (g/t) 171 147 149 148 155
Average grade gold (g/t) 0.73 0.60 0.64 0.61 0.69
Silver produced (koz) 578 493 601 1,458 1,768
Gold produced (koz) 2.56 2.06 2.63 6.17 8.03
Silver equivalent (koz) 791 664 819 1,969 2,434
Gold equivalent (koz) 9.53 8.00 9.87 23.73 29.32
Silver sold (koz) 576 497 593 1,500 1,754
Gold sold (koz) 2.57 2.06 2.60 6.32 7.96
In Q3, Pallancata produced 0.6 million ounces of silver and 2,558 ounces of
gold bringing the silver equivalent total to 0.8 million, with silver grades
higher than budgeted and better than the first two quarters of the year.
Overall, in the first nine months of the year, Pallancata has produced 2.0
million silver equivalent ounces (Q3 2022 YTD: 2.4 million ounces). However,
as previously announced, Pallancata will suspend operations and be placed in
care and maintenance during Q4.
San Jose (the Company has a 51% interest in San Jose)
Product Q3 2023 Q2 2023 Q3 2022 YTD 2023 YTD 2022
Ore production (tonnes treated) 152,729 143,563 149,138 424,791 354,497
Average grade silver (g/t) 271 288 413 260 385
Average grade gold (g/t) 5.16 5.40 4.86 4.85 5.63
Silver produced (koz) 1,184 1,163 1,739 3,125 3,862
Gold produced (koz) 22.05 21.42 20.12 57.15 56.00
Silver equivalent (koz) 3,015 2,940 3,409 7,868 8,510
Gold equivalent (koz) 36.32 35.42 41.07 94.80 102.53
Silver sold (koz) 994 1,157 1,788 2,935 3,868
Gold sold (koz) 18.03 21.14 20.13 52.69 54.75
The San Jose mine delivered a solid quarter with moderately higher than
expected tonnage offset by lower-than-expected grades. Production in the
period was 1.2 million ounces of silver and 22,055 ounces of gold which
represents 3.0 million silver equivalent ounces. This therefore amounts to a
nine-month total of 7.9 million silver equivalent ounces (Q3 2022 YTD: 8.5
million ounces).
Average realisable prices and sales
Average realisable precious metal prices in Q3 2023 (which are reported before
the deduction of commercial discounts) were $1,926/ounce for gold and
$23.6/ounce for silver (Q3 2022: $1,667/ounce for gold and $20.4/ounce for
silver). For the first nine months of 2023, average realisable precious metal
prices were $1,946/ounce for gold and $23.6/ounce for silver (Q3 YTD 2022:
$1,801/ounce for gold and $22.4/ounce for silver).
Advanced Project: Mara Rosa
Construction of the Mara Rosa project in Brazil continues to progress
according to schedule and budget with total project progress at 98% completion
and the Company continuing to expect first production in H1 2024.
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 completed approximately four million injury-free
working hours and year-to-date Frequency and Severity Indexes are currently at
0.74x and 2 respectively.
Procurement
All main project equipment has been delivered to site. Contracts have recently
been closed for explosives and blasting, gas supply and the commissioning
management as well as the main raw materials, including cyanide, grinding
media, lime, and activated carbon.
Mine and Pre-Stripping
The pre-stripping contractor has begun blasting work and 1,483kt of ore (79%
progress) has already been moved according to schedule. The target is to
guarantee a stockpile for use during the plant ramp-up period. Construction of
the waste dumps and ore stockpiles has been completed.
Processing plant
Electromechanical assembly commenced and is on schedule at 77% progress with
the individual testing and electrification starting in September 2023. The
grinding area, together with the thickeners and leach tanks are expected to be
mechanically completed and ready in December in time for the commissioning
phase.
Infrastructure
The Pequi water reservoir is operational and is full to 95% capacity, which
secures water for 2024 operation. In addition, the administrative buildings
which house offices, canteen, first aid and nursery areas are fully
operational. The dry stack construction started during the second quarter and
is expected to be completed by the end of this month whilst the transmission
line was completed in September and is already operational.
Permitting and Sustainability
In July, documentation for the operational permit was submitted to the
authorities and is expected to be received in Q4. The project already received
the operational permit for the power line and the authorisation to activate
the main substation in August whilst authorities have also given permission
for the Company to commission the dry circuit.
Sustainability
Several initiatives have been ongoing during the quarter:
o On 21 September, the "Environmental Ambassadors" and the Sustainability
team carried out a planting campaign of 146 native Brazilian trees;
o A year after its inauguration, the Knowledge Trail has reached a milestone
of 1,000 visits and has been visited by a mix of students, local authorities
and people from Mara Rosa and Amaralina towns and the surrounding region;
o In August, the Company donated a recreational space to the neighbouring
town of Porangatu;
o The electrical and mechanical training programme, which will train and
qualify 35 local workers, began in September;
o As part of a municipal support programme, two vehicles were donated in
September to the Mara Rosa town hall to support security in the town.
Brownfield exploration
Following the approval of Inmaculada's MEIA, the brownfield programme has
commenced at the deposit with results expected in Q4 and into 2024.
Financial position
Total cash was approximately $114 million as at 30 September 2023 resulting in
net debt of approximately $261 million.
On 9 August 2023, the Company drew down $60 million from the $200 million
medium-term debt facility signed in 2022 with the Bank of Nova Scotia and BBVA
Securities Inc.
____________________________________________________________________________________
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' of
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 (#_ftnref1) All equivalent figures assume a gold/silver ratio 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.
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