REG - Hochschild MiningPLC - Production Report for 6 months ended 30 June 2024

Hochschild MiningAnnouncement

24/07/2024 07:00

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RNS Number : 5541X  Hochschild Mining PLC  24 July 2024

 

_____________________________________________________________________________________

24 July 2024

 

Production Report for the 6 months ended 30 June 2024

 

Hochschild Mining PLC ("Hochschild" or "the Company") (LSE: HOC) (OTCQX:
HCHDF) is pleased to announce its production report for H1 2024.

 

Eduardo Landin, Chief Executive Officer commented:

"We have delivered a robust second quarter with another good performance from
Inmaculada and a first material contribution from our new Mara Rosa mine in
Brazil and remain on track to meet our annual production and cost guidance. We
can now look forward to a substantial increase in output in the second half
which, when combined with the current strong precious metal prices, is
expected to see the Company generate significant free cashflow."

 

Operational highlights

§ Q2 2024 attributable production:(( 1 ))

o  57,815 ounces of gold

o  2.1 million ounces of silver

o  83,034 gold equivalent ounces

o  6.9 million silver equivalent ounces

§ H1 2024 attributable production

o  103,752 ounces of gold

o  4.1 million ounces of silver

o  152,792 gold equivalent ounces

o  12.7 million silver equivalent ounces

§ Reiterate 2024 guidance:

o  Production of 343,000-360,000 gold equivalent ounces

o  All-in sustaining costs of $1,510-1,550 per gold equivalent ounce

Project & Exploration highlights

§ Mara Rosa mine in commercial production with strong second half forecast

§ Cerrado Gold Inc. shareholders approved Hochschild's purchase of an option
to acquire Monte do Carmo project

o  $15 million paid already for the option cost; $45 million to be paid in
instalments if the option is exercised

o  Exploration & technical work ongoing

§ 2024 Brownfield drilling programme commenced with encouraging early results
from Inmaculada and Mara Rosa

ESG highlights

§ Lost Time Injury Frequency Rate of 1.08 (FY 2023: 0.99)(( 2 ))

§ Accident Severity Index of 62 (FY 2023: 37)(( 3 ))

§ Water Consumption of 136lt/person/day (FY 2023: 163lt/person/day)

§ Domestic waste generation of 0.94 kg/person/day (FY 2023:
0.93kg/person/day)

§ ECO score of 5.85 out of 6 (FY 2023: 5.76)(( 4 ))

Financial position

§ Total cash of approximately $89 million as at 30 June 2024 ($73 million as
at 31 March 2024)

§ Net debt of approximately $271 million as at 30 June 2024 ($282 million as
at 31 March 2024)

§ Current Net Debt/LTM EBITDA of approximately 0.8x as at 30 June 2024

 

 

________________________________________________________________________________________

 

A conference call will be held at 2.30pm (London time) on Wednesday 24 July
2024 for analysts and investors.

Dial in details as follows:

International Dial in: +44 330 551 0200

UK Toll-Free Number: 0808 109 0700

US Toll Free: 866-580-3963

Canada Toll Free: 866 378 3566

Password: Hochschild Mining

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:

________________________________________________________________________________________

 

Overview

In Q2 2024, Hochschild delivered attributable production of 83,034 gold
equivalent ounces or 6.9 million silver equivalent ounces with a
better-than-expected performance at Inmaculada and a solid first major
contribution from the new Mara Rosa operation. In the first half of 2024,
Hochschild produced 152,792 gold equivalent ounces or 12.7 million silver
equivalent ounces (on an attributable basis).  The Company remains on track
to meet its overall 2024 attributable production target of 343,000-360,000
gold equivalent ounces or 28.0-29.9 million silver equivalent ounces.

 

The Company reiterates that its all-in sustaining cost for 2024 is expected to
be in line with the guidance of between $1,510 and $1,550 per gold equivalent
ounce (or $18.2 and $18.7 per silver equivalent ounce).

 

TOTAL GROUP PRODUCTION

                                Q2 2024  Q1 2024  Q2 2023  H1 2024  H1 2023
 Silver production (koz)        2,589    2,427    2,955    5,016    5,393
 Gold production (koz)          66.37    53.79    54.12    120.16   100.55
 Total silver equivalent (koz)  8,097    6,892    7,447    14,989   13,739
 Total gold equivalent (koz)    97.56    83.03    89.72    180.59   165.53
 Silver sold (koz)              2,669    2,445    3,011    5,114    5,425
 Gold sold (koz)                66.06    52.18    55.29    118.33   99.79

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

 

ATTRIBUTABLE GROUP PRODUCTION

                          Q2 2024  Q1 2024  Q2 2023  H1 2024  H1 2023
 Silver production (koz)  2,093    1,977    2,386    4,070    4,442
 Gold production (koz)    57.81    45.94    43.62    103.75   83.36
 Silver equivalent (koz)  6,892    5,790    6,006    12,682   11,361
 Gold equivalent (koz)    83.03    69.76    72.36    152.79   136.88

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

 

Production

Inmaculada

 Product                          Q2 2024                   Q1 2024                 Q2 2023               H1 2024  H1 2023
 Ore production (tonnes treated)  274,750                   263,024                 257,768               537,774  535,905
 Average grade silver (g/t)       198                       181                     181                   190      178
 Average grade gold (g/t)         4.29                      4.21                    3.92                  4.25     3.85
 Silver produced (koz)                      1,578           1,509                           1,300         3,086    2,573
 Gold produced (koz)                       35.62                     36.70                  30.64         72.32    61.85
 Silver equivalent (koz)          4,534                     4,555                   3,843                 9,089    7,707
 Gold equivalent (koz)            54.63                     54.88                   46.30                 109.50   92.86
 Silver sold (koz)                1,645                     1,387                   1,357                 3,032    2,561
 Gold sold (koz)                  37.18                     34.01                   32.10                 71.19    61.39

 

Inmaculada's second quarter production was 35,617 ounces of gold and 1.6
million ounces of silver which amounts to a gold equivalent output of 54,626
ounces, with both tonnage and grades in the period better-than-plan due to the
implementation of continuous improvement projects at site. Overall, in the
first half of 2024, Inmaculada produced 109,502 gold equivalent ounces (H1
2023: 92,856 ounces), an 18% improvement on the first half of 2023 when the
mine was impacted by permit delays.

 

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

 Product                          Q2 2024               Q1 2024                 Q2 2023                 H1 2024  H1 2023
 Ore production (tonnes treated)  143,333               125,520                 143,563                 268,853  272,063
 Average grade silver (g/t)       252                   258                     288                     255      254
 Average grade gold (g/t)         4.38                  4.58                    5.40                    4.47     4.68
 Silver produced (koz)            1,011                 919                     1,163                   1,929    1,941
 Gold produced (koz)              17.46                 16.03                   21.42                   33.49    35.09
 Silver equivalent (koz)                  2,460                  2,249                  2,940           4,709    4,854
 Gold equivalent (koz)                    29.64                  27.09                   35.42          56.74    58.48
 Silver sold (koz)                1,022                 1,057                   1,157                   2,079    1,941
 Gold sold (koz)                  17.04                 18.25                   21.14                   35.29    34.66

 

Q2 production at San Jose was 1.0 million ounces of silver and 17,463 ounces
of gold which is 2.5 million silver equivalent ounces with
higher-than-forecast grades offset by lower tonnage. This brings the total for
the first half of the year to 4.7 million silver equivalent ounces (H1 2023:
4.9 million ounces).

 

Mara Rosa

 Product                          Q2 2024                             Q1 2024                        Q2 2023  H1 2024  H1 2023
 Ore production (tonnes treated)  466,552                             86,192                         -        552,744  -
 Average grade silver (g/t)       -                                   -                              -        -        -
 Average grade gold (g/t)         1.32                                1.03                           -        1.28     -
 Silver produced (koz)            -                                   -                              -        -        -
 Gold produced (koz)                        13.29                                 1.06               -        14.35    -
 Silver equivalent (koz)                   1,103                                    88               -        1,191    -
 Gold equivalent (koz)                           13.29                            1.06               -        14.35    -
 Silver sold (koz)                -                                   -                              -        -        -
 Gold sold (koz)                  11.84                                -                             -        11.84    -

 

The Mara Rosa mine reached commercial production in mid-May and produced
13,291 ounces of gold in the period. The processing plant has already reached
nominal capacity of 7,000 tonnes per day and ongoing optimisation initiatives
are currently in place with the aim of reaching a stable throughput of 8,000
tonnes per day.

 

Average realisable prices and sales

Average realisable precious metal prices in Q2 2024 (which are reported before
the deduction of commercial discounts) were $2,291/ounce for gold and
$30.2/ounce for silver (Q2 2023: $1,958/ounce for gold and $23.4/ounce for
silver). For H1 2024, average realisable precious metal prices were
$2,210/ounce for gold and $27.0/ounce for silver (H1 2023: $1,957/ounce for
gold and $23.3/ounce for silver).

 

Brownfield exploration

Inmaculada

During the second quarter of the year, the team carried out a further 5,948m
of drilling for potential and resources in the Tesoro, Nicolas, Andrea, and
Sara vein structures.

 

 Vein     Results (potential)
 Tesoro   IMS24-231A: 7.1m @ 7.6g/t Au & 794g/t Ag

          IMS24-221: 1.0m @ 8.8g/t Au & 27g/t Ag

          IMS24-222: 38.8m @ 5.1g/t Au & 303g/t Ag

          IMS24-227A: 3.1m @ 6.4g/t Au & 141g/t Ag

          IMM24-380: 4.6m @ 3.5g/t Au & 242g/t Ag

          IMS24-219: 3.3m @ 0.3g/t & 21g/t Ag
 Sara     IMM24-386: 1.2m @ 3.2g/t Au & 250g/t Ag

          IMM24-384: 1.6m @ 2.8g/t Au & 164g/t Ag

          IMM24-390: 1.0m @ 2.9g/t Au & 123g/t Ag

          IMM24-388: 1.3m @ 1.8g/t Au & 115g/t Ag

          IMM24-389: 1.2m @ 1.8g/t Au & 111g/t Ag
 Nicolas  IMM24-380: 1.2m @ 0.7g/t Au & 12g/t Ag
 Josefa   IMM24-380: 1.5m @ 11.0g/t Au & 885g/t Ag
 Andrea   IMM24-380: 0.9m @ 3.5g/t Au & 223g/t Ag

          IMS24-221: 2.3m @ 1.7g/t Au & 60g/t Ag

 

During the third quarter, the Company expects to carry out four potential
drill holes in the Kary vein (approximately 2,500m of drilling) as well as
12,000m of resource drilling in the Tesoro and Nicolas veins.

 

San Jose

During the second quarter of the year, the team carried out a further 4,460m
of drilling for potential and resources in the Dalia, Emilia, Sigmoide Odin
Sur vein structures

 

 

 Vein               Results (potential)
 Dalia              SJD-2800: 1.5m @ 30.8g/t Au & 66g/t Ag

                    SJD-2801: 0.8m @ 0.1/t Au & 3g/t Ag
 Emilia             SJM-664: 1.0m @ 6.5g/t Au & 47g/t Ag

                    SJM-669: 0.8m @ 1.6g/t Au & 108g/t Ag

                    SJM-663: 0.8m @ 1.0g/t Au & 74g/t Ag

                    SJM-666: 0.9m @ 0.4g/t Au & 6g/t Ag

                    SJM-668: 0.8m @ 0.1g/t Au & 4g/t Ag
 Sigmoide Odin Sur  SJD-2801: 0.9m @ 1.0g/t Au & 11g/t Ag

                    SJD-2802: 0.9m @ 0.2g/t Au & 47g/t Ag
 Frea               SJD-2844: 3.9m @ 31.6g/t Au & 1,809g/t Ag

                    SJM-663: 12.1m @ 12.4g/t Au & 94g/t Ag

                    SJM-666: 12.0m @ 5.8g/t Au & 45g/t Ag

                    SJM-673: 3.6m @ 3.4g/t Au & 50g/t Ag

                    SJM-669: 2.9m @ 0.9g/t Au & 15g/t Ag

                    SJM-670: 1.0m @ 0.3g/t Au & 8g/t Ag

                    SJD-2847: 1.1m @ 0.3g/t Au & 3g/t Ag

                    SJD-2846: 3.0m @ 0.3g/t Au & 7g/t Ag

                    SJM-668: 4.9m @ 0.2g/t Au & 3g/t Ag

                    SJM-664: 6.2m @ 0.1g/t Au & 5g/t Ag

 

Mara Rosa

The Mara Rosa brownfield programme has already commenced and in the second
quarter, 137m of potential drilling was executed in the Caxias-Anglelim target
as well as 2,800m of resource drilling below the existing Posse pit which
confirmed that mineralisation continues at lower levels.

 

 Vein   Results (resources)
 Posse  24POSP_003: 14.2m @ 0.8g/t Au

        Including: 9.2m @ 1.1g/t Au

        24POSP_004: 35.7m @ 1.4g/t Au

        including: 9.2m @ 2.4g/t Au

                            11.0m @ 2.1g/t Au

                            1.1m @ 15.1g/t Au

 

The plan for the third quarter of 2024 is to carry out six holes of resource
drilling once 2.495m of drilling has been completed below the Posse pit

 

Financial position

Total cash was approximately $89 million as at 30 June 2024 resulting in a net
debt position of approximately $271 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) 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'
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.

 

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 All equivalent figures assume the average gold/silver ratio for 2022 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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