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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Hochschild Mining Plc | LSE:HOC | London | Ordinary Share | GB00B1FW5029 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 3.00 | 1.98% | 154.40 | 154.20 | 154.80 | 155.00 | 151.80 | 152.60 | 241,661 | 10:06:38 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Silver Ores | 693.72M | -55.01M | -0.1069 | -14.39 | 791.24M |
From Apr 2019 to Apr 2024
TIDMHOC
RNS Number : 1921N
Hochschild Mining PLC
16 January 2019
_____________________________________________________________________________________
16 January 2019
Production Report for the 12 months ended 31 December 2018
Ignacio Bustamante, Chief Executive Officer said:
"Hochschild has delivered a production increase in 2018 with output growing for the sixth consecutive year, again driven by a record performance from our Inmaculada mine and increased output from Pallancata. Our costs for 2018 are expected to be in line with positively revised expectations and we maintain a robust financial position with a further $50 million of medium-term debt repaid in December.
We have had a very successful year of brownfield exploration at Inmaculada with over 1.3 million gold equivalent ounces of inferred resources added from structures close to the current mining infrastructure. Geological prospects at Pallancata and San Jose remain strong and we can look forward to an exciting 2019 programme which has good potential to add significant low cost ounces to our resource base."
Operational highlights
-- Record full year attributable production in 2018([1])
o 260,436 ounces of gold
o 19.7 million ounces of silver
o 526,650 gold equivalent ounces
o 39.0 million silver equivalent ounces (versus revised target of 38.5 million silver equivalent ounces)
-- Record production at Inmaculada: 251,090 gold equivalent ounces (2017: 239,479 ounces)
-- Production at Pallancata up 22% to 9.4 million silver equivalent ounces (2017: 7.7 million ounces)
-- 2018 all-in sustaining costs on track to meet positively revised guidance of $940-$970 per gold equivalent ounce ($12.7-13.1 per silver equivalent ounce)
Exploration highlights
-- Inmaculada brownfield drilling programme added 95 million silver or 1.3 million gold equivalent ounces of inferred resources in 2018
-- Brownfield programmes set to continue at Inmaculada and San Jose in Q1 2019 and at Pallancata in Q2/Q3 2019 following receipt of permits
Strong financial position
-- Total cash of approximately $80 million as at 31 December 2018 ($257 million as at 31 December 2017) after $50 million debt repayment in Q4 and temporary increase in working capital of $10 million
-- $198 million of debt repaid in 2018
-- Net debt of approximately $76 million as at 31 December 2018 ($103 million as at 31 December 2017)
-- Current Net Debt/ LTM EBITDA of approximately 0.30x as of 31 December 2018
2019 guidance(1)
-- Production target of 457,000 gold equivalent ounces (37.0 million silver equivalent ounces) excluding Arcata
-- Final decision on Arcata future expected before Full Year results in February
-- All-in sustaining costs expected to be $960-$1,000 per gold equivalent ounce ($11.8-12.3 per silver equivalent ounce)[2]
-- Total sustaining and development capital expenditure expected to be approximately $130-140 million including $15 million of mine development at Inmaculada to access newly discovered veins
-- 2019 brownfield exploration budget expected to be $27 million with greenfield budget set at $10 million
________________________________________________________________________________________
A conference call will be held at 2.00pm (London time) on Wednesday 16 January 2019 for analysts and investors.
Dial in details as follows:
International Dial in: +44 333 300 0804
UK Toll-Free Number: 0800 358 9473
Pin: 44129365#
A recording of the conference call will be available for one week following its conclusion, accessible from the following telephone number:
International: +44 333 300 0819
UK Toll Free: 0800 358 2049
Pin: 301275703#
________________________________________________________________________________________
Note: 2018 equivalent figures calculated using the previous Company gold/silver ratio of 74x. All 2019 forecasts assume the average gold/silver ratio for 2018 of 81x.
Overview
Hochschild delivered another strong quarter of attributable production with 127,728 gold equivalent ounces or 9.5 million silver equivalent ounces primarily driven by the continuing ramp-up of production from the Pablo vein at Pallancata and a robust period at San Jose partially offsetting a scheduled quarter of lower output at Inmaculada. Overall 2018 attributable production was a record 39.0 million silver equivalent ounces (526,650 gold equivalent ounces) which was due to a record year at Inmaculada as well as a much higher production from Pallancata.
The Company reiterates that its all-in sustaining cost per silver equivalent ounce for 2018 is expected to be in line with the positively revised guidance of $940-$970 per gold equivalent ounce ($12.7-13.1 per silver equivalent ounce).
TOTAL GROUP PRODUCTION
Hot Features
Premium
Q4 2018 Q3 2018 Q4 2017 12 mths 12 mths
2018 2017
-------- -------- -------- --------
Silver production
(koz) 5,791 5,794 5,784 22,720 22,301
Gold production
(koz) 73.10 74.20 80.80 307.77 304.16
Total silver equivalent
(koz) 11,201 11,285 11,763 45,495 44,809
Total gold equivalent
(koz) 151.36 152.49 158.96 614.80 605.52
Silver sold (koz) 5,775 5,845 6,061 22,687 22,295
Gold sold (koz) 72.22 74.27 82.79 304.51 300.21
------------------------- -------- -------- -------- -------- --------
Total production includes 100% of all production, including production attributable to Hochschild's joint venture partner at San Jose.
ATTRIBUTABLE GROUP PRODUCTION
Q4 2018 Q3 2018 Q4 2017 12 mths 12 mths
2018 2017
-------- -------- -------- --------
Silver production
(koz) 4,975 5,051 4,864 19,700 19,141
Gold production
(koz) 60.50 62.43 66.27 260.44 254.93
Silver equivalent
(koz) 9,452 9,671 9,768 38,972 38,006
Gold equivalent
(koz) 127.73 130.68 132.00 526.65 513.60
------------------- -------- -------- -------- -------- --------
Attributable production includes 100% of all production from Arcata, Inmaculada, Pallancata and 51% from San Jose.
Production
Inmaculada
Product Q4 2018 Q3 2018 Q4 2017 12 mths 12 mths
2018 2017
-------- -------- -------- ----------
Ore production (tonnes
treated) 320,400 332,411 337,358 1,323,525 1,295,701
Average grade silver
(g/t) 157 138 146 150 145
Average grade gold
(g/t) 4.32 3.96 4.29 4.36 4.15
Silver produced
(koz) 1,255 1,320 1,363 5,690 5,506
Gold produced (koz) 37.74 40.13 41.53 174.20 165.07
Silver equivalent
(koz) 4,048 4,289 4,436 18,581 17,721
Gold equivalent
(koz) 54.71 57.96 59.95 251.09 239.48
Silver sold (koz) 1,251 1,317 1,445 5,676 5,498
Gold sold (koz) 37.27 39.77 43.48 172.40 162.32
------------------------ -------- -------- -------- ---------- ----------
Inmaculada's fourth quarter production was 37,743 ounces of gold and 1.3 million ounces of silver which amounts to gold equivalent production of 54,705 ounces with extracted grades being better than expected. Overall in 2018, Inmaculada has delivered record gold equivalent production of 251,090 ounces, a 5% improvement on 2017 (2017: 239,479 ounces).
Pallancata
Product Q4 2018 Q3 2018 Q4 2017 12 mths 12 mths
2018 2017
-------- -------- -------- --------
Ore production (tonnes
treated) 231,075 201,009 125,872 717,652 470,903
Average grade silver
(g/t) 317 362 408 362 442
Average grade gold
(g/t) 1.10 1.29 1.70 1.30 1.78
Silver produced
(koz) 2,086 2,086 1,459 7,449 5,956
Gold produced (koz) 7.20 7.34 6.03 26.40 23.47
Silver equivalent
(koz) 2,619 2,629 1,905 9,403 7,693
Gold equivalent
(koz) 35.39 35.53 25.74 127.07 103.95
Silver sold (koz) 2.093 2,090 1,665 7,439 5,940
Gold sold (koz) 7.35 7.30 6.72 26.23 23.29
------------------------ -------- -------- -------- -------- --------
Pallancata produced 2.1 million ounces of silver and 7,200 ounces of gold bringing the silver equivalent total to 2.6 million ounces in Q4. The ramping up process for the Pablo vein was completed in the period with tonnage increasing and grades reducing in line with expectations. The full year result was 9.4 million silver equivalent ounces, a 22% improvement on 2017 (2017: 7.7 million ounces). The overall increase was driven by the above-mentioned new Pablo material in addition to average grades from the mix of material from Pablo, mine developments and ancillary veins being better than planned in the first half of the year.
San Jose (the Company has a 51% interest in San Jose)
Product Q4 2018 Q3 2018 Q4 2017 12 mths 12 mths
2018 2017
-------- -------- -------- --------
Ore production (tonnes
treated) 146,992 144,852 144,732 556,185 532,676
Average grade silver
(g/t) 401 376 465 397 436
Average grade gold
(g/t) 6.19 5.93 7.26 6.20 6.71
Silver produced
(koz) 1,666 1,517 1,877 6,165 6,448
Gold produced (koz) 25.72 24.02 29.65 96.59 100.47
Silver equivalent
(koz) 3,569 3,294 4,071 13,313 13,883
Gold equivalent
(koz) 48.23 44.51 55.02 179.90 187.60
Silver sold (koz) 1,647 1,573 1,845 6,175 6,501
Gold sold (koz) 25.29 24.66 28.98 95.95 99.63
------------------------ -------- -------- -------- -------- --------
The San Jose operation in Argentina delivered a strong final quarter with planned increases in grade resulting in production of 1.7 million ounces of silver and 25,719 ounces of gold (3.6 million silver equivalent ounces). The overall production results for 2018 was 13.3 million silver equivalent ounces, a 4% reduction versus 2017 due to lower grades partially offset by a small increase in tonnage.
Arcata
Product Q4 2018 Q3 2018 Q4 2017 12 mths 12 mths
2018 2017
-------- -------- -------- --------
Ore production (tonnes
treated) 91,203 93,381 120,384 373,106 499,385
Average grade silver
(g/t) 304 327 311.74 321 308
Average grade gold
(g/t) 0.95 1.01 1.04 0.99 1.07
Silver produced
(koz) 784 872 1,085 3,416 4,391
Gold produced (koz) 2.44 2.72 3.59 10.57 15.15
Silver equivalent
(koz) 965 1,073 1,350 4,199 5,512
Gold equivalent
(koz) 13.04 14.50 18.25 56.74 74.49
Silver sold (koz) 783 866 1,106 3,397 4,357
Gold sold (koz) 2.30 2.55 3.61 9.93 14.96
------------------------ -------- -------- -------- -------- --------
At Arcata, silver production in the fourth quarter was 784,464 ounces with gold production of 2,437 ounces, which resulted in silver equivalent production of 1.0 million ounces. Production for the year was 4.2 million silver equivalent ounces (2017: 5.5 million ounces), a result which reflected significantly reduced tonnage.
A decision on the future of the Arcata operation is expected to be made before the Full Year results on 20 February 2019.
Average realisable prices and sales
Average realisable precious metal prices in Q4 2018 (which are reported before the deduction of commercial discounts) were $1,263/ounce for gold and $15.2/ounce for silver (Q4 2017: $1,283/ounce for gold and $16.7/ounce for silver).
For 2018 as a whole, average realisable precious metal prices were $1,268/ounce for gold and $15.3/ounce for silver (2017: $1,270/ounce for gold and $16.9/ounce for silver).
Brownfield exploration
Inmaculada
On 7 November 2018, the Company disclosed a further update on resource drilling at Inmaculada. The 2018 programme has added at least 95.1 million silver or 1.3 million gold equivalent ounces of inferred resources so far and the final figure for the year will be disclosed when the Company releases its annual Mineral Reserve and Resource Statement with the 2018 Annual Results.
During Q4, 8,341 metres of potential drilling and 10,591 metres of resource drilling was executed in the Millet, Divina, Lola, Lizina, Thalía and Barbara veins. Selected intercepts are detailed below:
Vein Results (resource drilling)
Gera LAD-18-012: 0.9m @ 1.3g/t Au & 32g/t Ag
LAD-18-013: 1.0m @ 1.1g/t Au & 241g/t Ag
LAD-18-016: 0.9m @ 7.4g/t Au & 26g/t Ag
------------------------------------------
Thalia LIA-18-008: 1.0m @ 24.8g/t Au & 150g/t
Ag
LIA-18-009: 0.9m @ 5.8g/t Au & 7g/t Ag
LIA-18-010: 0.8m @ 2.8g/t Au & 96g/t Ag
LIA-18-013: 0.9m @ 3.9g/t Au & 67g/t Ag
BEL-18-017: 0.8m @ 5.8g/t Au & 17g/t Ag
------------------------------------------
Millet MIS-18-008: 0.9m @ 4.8g/t Au & 8g/t Ag
MIS-18-009: 1.2m @ 2.7g/t Au & 45g/t Ag
LIA-18-006: 1.1m @ 2.3g/t Au & 404g/t Ag
LIA-18-009: 1.0m @ 5.0g/t Au & 91g/t Ag
LIA-18-012: 1.0m @ 1.1g/t Au & 282g/t Ag
------------------------------------------
Lourdes tensional MIS-18-008: 4.2m @ 2.8g/t Au & 66g/t Ag
MIS-18-010: 1.5m @ 2.2g/t Au & 218g/t Ag
------------------------------------------
Divina LOL-18-034: 0.9m @ 3.6g/t Au & 26g/t Ag
------------------------------------------
Rosa LOL-18-036: 1.3m @ 2.1g/t Au & 59g/t Ag
LOL-18-038: 0.8m @ 1.2g/t Au & 135g/t Ag
LOL-18-039: 4.0m @ 1.8g/t Au & 271g/t Ag
OLI-18-006: 0.8m @ 26.2g/t Au & 93g/t Ag
------------------------------------------
Rosy LOL-18-033: 0.9m @ 9.0g/t Au & 1,134g/t
Ag
LOL-18-036: 0.8m @ 4.2g/t Au & 188g/t Ag
LOL-18-038: 1.4m @ 1.5g/t Au & 142g/t Ag
LOL-18-040: 0.9m @ 1.5g/t Au & 104g/t Ag
OLI-18-006: 0.8m @ 3.4g/t Au & 224g/t Ag
------------------------------------------
Keyla BEL-18-003: 1.9m @ 5.6g/t Au & 286g/t Ag
BEL-18-007: 2.9m @ 2.8g/t Au & 183g/t Ag
BEL-18-008: 1.0m @ 2.5g/t Au & 235g/t Ag
BEL-18-014: 1.0m @ 2.0g/t Au & 177g/t Ag
BEL-18-015: 3.2m @ 4.6g/t Au & 239g/t Ag
------------------------------------------
Bety BEL-18-001: 2.8m @ 14.5g/t Au & 1,453g/t
Ag
BEL-18-004: 2.9m @ 15.2g/t Au & 1,381g/t
Ag
BEL-18-006: 0.8m @ 10.1g/t Au & 52g/t Ag
BEL-18-012: 6.4m @ 2.1g/t Au & 107g/t Ag
BEL-18-013: 2.6m @ 1.9g/t Au & 82g/t Ag
------------------------------------------
Vein Results (potential drilling)
Thalia tensional BEL-18-018: 3.5m @ 6.8g/t Au & 146g/t Ag
-----------------------------------------
Keyla BEL-18-019: 1.0m @ 4.1g/t Au & 49g/t Ag
-----------------------------------------
Pallancata
Although the focus at Pallancata is on the 2019 drilling programme at Pablo Sur, Palca and Cochaloma, ore control drilling at the Cinthia vein in Ranichico and in Pablo Piso in Q4 has added additional resources.
Vein Results
Pablo DLEP-A38: 8.7m @ 3.6g/t Au & 1,105g/t Ag
DLEP-A39: 8.4m @ 1.0g/t Au & 327g/t Ag
-----------------------------------------
Cinthia DLCN-A01: 0.9m @ 2.7/t Au & 412g/t Ag
DLCN-A02: 1.0m @ 2.6/t Au & 355g/t Ag
-----------------------------------------
San Jose
At San Jose, 2,575 metres were drilled in Q4 for potential resources in Aguas Vivas to test the polymetallic structure with further drilling continuing into the first quarter of 2019.
Vein Results
Aguas Vivas SJD-1851: 2.7m @ 0.3g/t Au, 44g/t Ag, 1.2%
Cu, 4.6% Pb & 6.4% Zn
SJD-1853: 0.7m @ 0.1g/t Au, 149g/t Ag,
2.6% Cu, 8.2% Pb & 6.4% Zn
SJD-1854: 0.8m @ 0.2g/t Au, 64g/t Ag, 1.2%
Cu, 1.0% Pb & 0.3% Zn
SJD-1855: 0.5m @ 4.0g/t Au, 5g/t Ag, 0.7%
Pb & 2.4% Zn
SJD-1857: 0.6m @ 1.6g/t Au, 18g/t Ag, 0.1%
Cu, 2.7% Pb & 2.2% Zn
SJD-1858: 0.6m @ 0.4g/t Au, 48g/t Ag, 1.0%
Cu, 0.2% Pb & 0.1% Zn
--------------------------------------------
Arcata
In Q4, 4,859 metres potential resource drilling was carried out focusing on the Yoselin, Pamela New, Pamela and Soledad structures. The current programme continues into 2019 with the focus on the Pamela New, Soledad, W and Pamela New structures. Selected results are provided in the table below:
Vein Results
Yoselin DDH-353-JK-18: 1.3m @ 4.6g/t Au & 2,109g/t
Ag
DDH-355-JK-18: 0.8m @ 0.8g/t Au & 312g/t
Ag
-------------------------------------------
Yoselin tensional DDH-353-JK-18: 0.8m @ 3.2g/t Au & 512g/t
Ag
-------------------------------------------
NW System 1 DDH-355-JK-18: 2.0m @ 2.0g/t Au & 778g/t
Ag
-------------------------------------------
NW System 2 DDH-353-JK-18: 0.8m @ 0.7g/t Au & 482g/t
Ag
DDH-355-JK-18: 1.0m @ 1.9g/t Au & 534g/t
Ag
-------------------------------------------
Soledad NW DDH-354-ST-18: 0.8m @ 6.8g/t Au & 1,204g/t
Ag
DDH-595-S-18: 0.8m @ 1.1g/t Au & 288g/t
Ag
-------------------------------------------
Pamela New DDH-355-JK-18: 0.8m @ 0.8g/t Au & 678g/t
Ag
DDH-595-S-18: 0.8m @ 1.4g/t Au & 465g/t
Ag
-------------------------------------------
Financial position
Total cash was approximately $80 million as at 31 December 2018 resulting in net debt of approximately $76 million. This cash balance reflects: substantially lower precious metal prices in the quarter; a temporary increase in working capital of approximately $10 million; the execution of a number of strategic investments; and increased investment in the Company's brownfield exploration programme.
In addition, on 6 December 2018, the Company repaid $50 million of its $100 million medium-term loan with Nova Scotia Bank and Citibank. The Company also refinanced $50 million of its short term debt with Scotiabank at a fixed interest rate of 3.0% for one year.
On 5 November 2018, Republic Metals Corp, a US-based dore refinery which has been a customer of the Company since 2013, filed for Chapter 11 bankruptcy protection. Invoices of approximately $2.3 million (attributable) are currently owed to Hochschild's joint venture Minera Santa Cruz in Argentina and of $0.5 million to the Company's principal operating subsidiary, Minera Ares.
Outlook
The overall attributable production target for 2019 is 457,000 gold equivalent ounces or 37.0 million silver equivalent ounces. The Arcata operation has been excluded from forecasts pending a final decision on the mine's future which, as mentioned above, is expected before the Full Year results in February.
2019 Production split
Operation Gold production (oz approximate) Silver production (m oz approximate)
Inmaculada 170,000 5.8
--------------------------------- -------------------------------------
Pallancata 30,000 7.8
--------------------------------- -------------------------------------
San Jose (100%) 103,000 6.4
--------------------------------- -------------------------------------
Total 303,000 19.9
--------------------------------- -------------------------------------
The all-in sustaining cost from operations in 2019 is expected to be between $960 and $1,000 per gold equivalent ounce (or $11.8 and $12.3 per silver equivalent ounce) which excludes Arcata and includes an investment of $15 million in development costs to incorporate the newly discovered resources at Inmaculada.
2019 AISC split
Operation AISC ($/oz)
Inmaculada 790-830 Au Eq
----------------
Pallancata 13.5-14.0 Ag Eq
----------------
San Jose 13.5-14.0 Ag Eq
----------------
The overall capital expenditure budget for 2019 is approximately $130-140 million allocated to sustaining and development expenditure. This includes a $15 million investment in the above-mentioned new development costs at Inmaculada.
2019 Capital expenditure split
Operation Sustaining & development capital expenditure
($m)
Inmaculada 60-64
---------------------------------------------
Pallancata 30-34
---------------------------------------------
San Jose 40-42
---------------------------------------------
The brownfield exploration budget for 2019 is approximately $27 million with the greenfield and advanced project budget set at approximately $10 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) 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 four underground epithermal vein mines, three located in southern Peru and one in southern Argentina. Hochschild also has 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.
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] 2018 equivalent figures calculated using the previous Company gold/silver ratio of 74x. All 2019 forecasts assume the average gold/silver ratio for 2018 of 81x.
[2] All in-sustaining cost from operations
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 or visit www.rns.com.
END
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