TIDMHOC
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])
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])
-- Accident Severity Index of 35 (FY 2022: 93) ([3])
-- 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])
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
________________________________________________________________________________________
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] All equivalent figures assume a gold/silver ratio 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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