TIDMHOC
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])
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])
-- Accident Severity Index of 37 (FY 2022: 93) ([3])
-- 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])
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
________________________________________________________________________________________
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] 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] 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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