REG - Hochschild MiningPLC - Q4 2023 Production Report

Hochschild MiningAnnouncement

24/01/2024 07:15

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240124:nRSX6833Aa&default-theme=true

RNS Number : 6833A  Hochschild Mining PLC  24 January 2024

 

 

 

 

 

_____________________________________________________________________________________

24 January 2024

 

 

 

Production Report for the 12 months ended 31 December 2023

 

Eduardo Landin, Chief Executive Officer said:

"Our operational team delivered a robust performance in the fourth quarter of
2023, and we have therefore ended the year at the top end of our revised
production guidance with costs anticipated to be in line with expectations. I
am also very pleased with our safety and environmental performance, where we
achieved our best results in recent Company history.

 

In Brazil, we are in the final stages of the Mara Rosa project's construction
and commissioning phases and are looking forward to the first gold pour in
February. This exciting new mine forms a key part of our recently announced
growth strategy and is set to enable Hochschild to increase output this year
by over 15%."

 

Operational highlights

§  Full year attributable production(( 1  (#_ftn1) ))

o  186,091 ounces of gold

o  9.5 million ounces of silver

o  300,749 gold equivalent ounces at the high end of revised guidance of
289,000-303,000 ounces

o  25.0 million silver equivalent ounces

§ 2023 all-in sustaining costs expected to meet revised guidance of
$1,490-1,580 per gold equivalent ounce ($18.0-19.0 per silver equivalent
ounce)

Project highlights

§  Mara Rosa project is 99.8% complete with first gold pour expected in
February

o  On time and on budget

o  5 million hours completed on the project without any loss time accidents

Financial position

§ Total cash of approximately $89 million as at 31 December 2023 ($144
million as at 31 December 2022)

§ Net debt of approximately $252 million as at 31 December 2022 (net debt of
$175 million as at 31 December 2022)

§ Current Net Debt/LTM EBITDA of approximately 0.97x as at 31 December 2023,
improved from 1.12x in September 2023

§ Zero cost collar executed for 100,000oz of 2024 gold production from
Inmaculada an average floor of $2,000/oz and an average cap of $2,252/oz

2023 ESG highlights

§ Lost Time Injury Frequency Rate of 0.99 (FY 2022: 1.37)(( 2  (#_ftn2) ))

§ Accident Severity Index of 37 (FY 2022: 93)(( 3  (#_ftn3) ))

§ Water Consumption of 163 lt/person/day (FY 2022: 171 lt/person/day)

§ Domestic waste generation of 0.93 kg/person/day (FY 2022: 1.05
kg/person/day)

§ ECO score of 5.76 out of 6 (FY 2022: 5.27)(( 4  (#_ftn4) ))

Growth in 2024

§ New Mara Rosa mine set to produce 83,000-93,000 ounces of gold at AISC of
$1,090-$1,120 per ounce

§ Overall production target:

o  343,000-360,000 gold equivalent ounces

§ All-in sustaining costs target:

o  $1,510-$1,550 per gold equivalent ounce

§ Total sustaining and development capital expenditure expected to be
approximately $171-178 million

________________________________________________________________________________________

 

A conference call will be held at 2.00pm (London time) on Wednesday 24 January
2024 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 Mining

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 Q4 2023, Hochschild Mining PLC (HOC.LN) (OTCMKTS: $HCHDF) ("Hochschild" or
"the Company") delivered attributable production of 82,251 gold equivalent
ounces or 6.8 million silver equivalent ounces, slightly stronger than Q3.
Overall 2023 attributable production was 300,749 gold equivalent ounces or
25.0 million silver equivalent ounces. The result was at the upper end of
revised guidance, due to a better-than-forecast performance at Inmaculada.

 

The Company reiterates that its all-in sustaining cost for 2023 is expected to
be in line with the revised guidance of between $1,490-1,580 per gold
equivalent ounce ($18.0-19.0 per silver equivalent ounce)

 

TOTAL GROUP PRODUCTION

                                Q4 2023  Q3 2023  Q4 2022  12 mths    12 mths

2023
2022
 Silver production (koz)        3,086    3,205    3,632    11,683     13,596
 Gold production (koz)          64.41    60.81    68.11    225.77     244.63
 Total silver equivalent (koz)  8,432    8,252    9,285    30,423     33,900
 Total gold equivalent (koz)    101.59   99.42    111.87   366.54     408.43
 Silver sold (koz)              3,231    2,911    3,596    11,567     13,536
 Gold sold (koz)                68.14    53.93    67.40    221.86     242.89

Total production includes 100% of all production, including production
attributable to Hochschild's joint venture partner at San Jose.

 

ATTRIBUTABLE GROUP PRODUCTION

                          Q4 2023  Q3 2023  Q4 2022  12 mths    12 mths

2023
2022
 Silver production (koz)  2,450    2,624    2,931    9,517      11,003
 Gold production (koz)    52.73    50.00    56.94    186.09     206.01
 Silver equivalent (koz)  6,827    6,774    7,657    24,962     28,102
 Gold equivalent (koz)    82.25    81.62    92.26    300.75     338.57

Attributable production includes 100% of all production from Inmaculada,
Pallancata and 51% from San Jose.

 

Production

Inmaculada

 Product                          Q4 2023                 Q3 2023                 Q4 2022                   12 mths    12 mths

2023
2022
 Ore production (tonnes treated)  301,127                 300,076                 323,870                   1,137,109  1,329,177
 Average grade silver (g/t)       186                     166                     182                       177        156
 Average grade gold (g/t)         4.63                    3.97                    4.29                      4.09       3.81
 Silver produced (koz)            1,500                   1,442                   1,602                     5,515      5,936
 Gold produced (koz)                      39.35                    36.19                  42.36             137.40     154.85
 Silver equivalent (koz)                   4,766                  4,446                     5,118           16,919     18,788
 Gold equivalent (koz)                     57.42                   53.57                   61.66            203.85     226.36
 Silver sold (koz)                1,587                   1,340                   1,599                     5,488      5,918
 Gold sold (koz)                  41.95                   33.32                   42.15                     136.66     154.93

 

Fourth quarter production at Inmaculada was 39,354 ounces of gold and 1.5
million ounces of silver, which amounts to a gold equivalent output of 57,425
ounces, with higher tonnage and grades from newer mining areas. Overall, in
2023, Inmaculada has delivered gold equivalent production of 203,849 ounces
(2022: 226,363 ounces), slightly above the revised forecast published in
August.

Pallancata

 Product                          Q4 2023                       Q3 2023                         Q4 2022                       12 mths    12 mths

2023
2022
 Ore production (tonnes treated)  51,738                        122,681                         155,530                       414,044    559,799
 Average grade silver (g/t)                    199                            171                            139              155        151
 Average grade gold (g/t)         0.84                          0.73                            0.68                          0.64       0.69
 Silver produced (koz)            288                           578                             600                           1,746      2,368
 Gold produced (koz)              1.22                          2.56                            2.95                          7.39       10.98
 Silver equivalent (koz)                     390                             791                            845               2,359      3,279
 Gold equivalent (koz)                       4.70                          9.53                           10.18               28.43      39.50
 Silver sold (koz)                285                           576                             561                           1,785      2,315
 Gold sold (koz)                  1.20                          2.57                            2.80                          7.52       10.76

 

In Q4, Pallancata produced 0.3 million ounces of silver and 1,224 ounces of
gold bringing the silver equivalent total to 0.4 million, with the mine still
operating a little later in the quarter than expected. Overall, in 2023,
Pallancata produced 2.4 million silver equivalent ounces (2022: 3.3 million
ounces) slightly above the revised forecast (2.0 -2.2 million ounces). In Q4,
as previously announced, Pallancata suspended operations and was placed on
care and maintenance.

 

The process of amending Pallancata's environmental impact assessment ("Third
MEIA") to incorporate the Royropata discovery into the permitted area formally
began in December and is advancing on schedule. Feasibility engineering is
over 90% completed and environmental and social baseline studies will be
conducted during 2024.

 

San Jose (the Company has a 51% interest in San Jose)

 Product                          Q4 2023                 Q3 2023  Q4 2022               12 mths    12 mths

2023
2022
 Ore production (tonnes treated)  154,308                 152,729  152,692               579,100    507,189
 Average grade silver (g/t)       297                     271      332                   270        369
 Average grade gold (g/t)         5.51                    5.16     5.38                  5.03       5.55
 Silver produced (koz)            1,297                   1,184    1,430                 4,422      5,292
 Gold produced (koz)              23.84                   22.05    22.80                 80.99      78.80
 Silver equivalent (koz)                   3,276          3,015            3,323         11,144     11,833
 Gold equivalent (koz)                     39.47          36.32           40.03          134.26     142.57
 Silver sold (koz)                1,339                   994      1,435                 4,274      5,303
 Gold sold (koz)                  24.54                   18.03    22.46                 77.23      77.20

 

The San Jose mine experienced lower than expected grades, resulting in
production of 1.3 million ounces of silver and 22,836 ounces of gold in the
quarter, which represents 3.3 million silver equivalent ounces. This amounts
to a 2023 total production of 11.1 million silver equivalent ounces (2022:
11.8 million ounces).

 

Average realisable prices and sales

Average realisable precious metal prices in Q4 2023 (which are reported before
the deduction of commercial discounts) were $2,036/ounce for gold and
$23.7/ounce for silver (Q4 2022: $1,767/ounce for gold and $25.8/ounce for
silver).

 

For 2023 as a whole, average realisable precious metal prices were
$1,974/ounce for gold and $23.7/ounce for silver (2022: $1,791/ounce for gold
and $23.3/ounce for silver).

 

Advanced Project: Mara Rosa

The Mara Rosa project is progressing on schedule and budget with total project
progress at 99.8%. The Company continues to expect first gold pour during the
month of February and commercial production in the second quarter.

 

Health and Safety

Proactive corporate safety indicators are being monitored to ensure optimal
working conditions for all personnel and the project has completed
approximately five million hours without loss time accident. Frequency and
severity indices for 2023 were 0.54 and 2, respectively, both better than
corporate goals

Procurement

 Main plant reagents and materials, including cyanide, balls for the mills,
lime and activated carbon have been purchased and deliveries are on track to
meet the start of operations.

 

Mine and Pre-Stripping

Total pre-stripping volume was 2,091 kt of which there is approximately 136.5
kt to guarantee availability of mineral for the ramp-up and operation. Waste
dumps and ore stockpiles are complete and being used.

 

Processing plant

The crushing and screening areas were commissioned during Q4 whilst
commissioning began of the thickener and ball mill.  Full project
commissioning and the beginning of the project's ramp-up is expected during
the first quarter.

 

Quality control teams are consistently monitoring all critical project
progress such assembly of metallic structures, equipment, piping, welding and
commissioning activities.

 

Infrastructure

Construction of the dry stack was completed in December 2023 and the Pequi
water reservoir is fully operational and filled to 95% capacity with the water
required for 2024 operations.

 

The Administrative buildings are fully operational including offices,
cafeteria, first aid and nursery areas.

 

Permitting & Sustainability

During Q4, Mara Rosa received authorisation for commissioning of the wet
circuit with the dry circuit already permitted.  During early December, the
project was visited by officials from EPA-Goias to assess the issuance of the
Operating License which is expected to occur in February.

 

The Company organised three festivities to celebrate Children's Day in Mara
Rosa and Amaralina with over 3,100 participants whilst on 2 November, a
meeting with the local communities from both towns was held with the objective
of updating them on project progress and strengthening local relationships and
dialogue.

 

Brownfield exploration

Inmaculada

In Q4 2023, the Company performed 900m of potential drilling, intercepting two
new structures, Nicolas and Andrea, which will be further investigated in this
quarter.

 

 Vein     Results (potential drilling)
 Nicolas  IMS23-207: 1.8m @ 27.0g/t Au & 5,768g/t Ag
 Andrea   IMS23-207: 3.3m @ 19.4g/t Au & 79g/t Ag
 Saly     IMS23-207: 2.2m @ 3.2g/t Au & 90g/t Ag

 

San Jose

At San Jose, the brownfield team carried out 906m of potential drilling and
4,420m of resource drilling in the Suspiro, Sigmoid Molle, Guadaluoe veins
with the key vein expected to be the Suspira quartz sulphide vein which has
high silver grades.

 

 Vein         Results (potential/resource drilling)
 Suspira      SJD-2737: 1.2m @ 17.4g/t Au & 2,477g/t Ag
 Tensiona EW  SJM-647: 1.0m @ 7.7g/t Au & 938g/t Ag
 RML861V      SJD-2728: 1.1m @ 6.9g/t Au & 615g/t Ag
 Sig Molle    SJM-647: 2.8m @ 5.7g/t Au & 656g/t Ag
 RML861w      SJD-2731: 1.3m @ 5.5g/t Au & 8g/t Ag

 

The plan for the first quarter is to perform 1,500m of potential drilling at
San Jose in the Telken North and Cerro Saavedra areas.

 

Financial position

Total cash was approximately $89 million as at 31 December 2023, resulting in
net debt of approximately $252 million.

 

To ensure an ongoing level of cash flow stability from Inmaculada, the Company
has secured a zero-cost collar with JPMorgan for 100,000 ounces of our 2024
gold production with an average floor at $2,000/oz and an average cap at
$2,252/oz.

 

 

____________________________________________________________________________________

 

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  (#_ftnref1) 2023 equivalent figures calculated using the Company
gold/silver ratio of 83x. All 2024 forecasts assume the average gold/silver
ratio for 2023 also at 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  TSTKXLFLZFLZBBE