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28 November 2014
Hochschild Mining Operational Update
Overview
§ Core operation mine plans revised to deliver profitable ounces in lower precious metal price environment
§ 2015 attributable production target of 24.0 million silver equivalent ounces
§ All-in sustaining costs expected to be $15-16 per silver equivalent ounce in 2015
§ On track to exceed 2014 production target of 21.0 million attributable silver equivalent ounces
§ All-in sustaining costs per silver equivalent ounce are on track to fall by up to 5% in 2014.
Hochschild Mining plc today announces that, as part of its ongoing cashflow optimisation programme, further cost efficiencies have been targeted to reduce operating expenditure and ensure that all the Company's mines can deliver profitable ounces in 2015. In this regard, the mine plans of the Arcata and Pallancata operations have been optimised with the operational focus expected to be on accessible ore areas requiring reduced capital expenditure with cut-off grades reflecting the current weaker metal price environment. Plant throughput is expected to be reduced to 1,500 tonnes per day at Arcata and 1,800 tonnes per day at Pallancata, with the San Jose operation in Argentina continuing at its current level. The resulting production target for 2015 from the three current operations plus the Inmaculada project (expected to deliver 6-7 million silver equivalent ounces) is 24 million silver equivalent ounces.
The emphasis on profitable ounces at all operations with reduced levels of sustainable capital expenditure for 2015 is expected to have a positive effect on the Company's overall costs with the all-in sustaining cost for the Company now expected to be reduced to between $15 to $16 per ounce in 2015. Sustaining capital expenditure for current operations is budgeted at approximately $45 million, in part reflecting a significant temporary cut in development capital expenditure.
Ignacio Bustamante, Chief Executive Officer commented:
"In the current weak precious metal environment, Hochschild has reacted decisively to preserve capital and optimise cashflow by maintaining our focus on the production of profitable ounces as part of our successful ongoing cost reduction programme. Understandably, this has entailed a review of mine plans across the Company which will consequently reduce production but also reduces overall costs and capex in 2015 allowing us to produce profitable ounces at all our operations."
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A conference call will be held at 2.30pm (London time) on Friday 28 November 2014 for analysts and investors.
Dial in details as follows:
UK: +44 (0) 20 3003 2666
Password: Hochschild
A recording of the conference call will be available for one week following its conclusion, accessible from the following telephone number:
UK: +44 (0) 20 8196 1998
Access code: 5344155
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Enquiries:
Hochschild Mining plc
Charles Gordon +44 (0)20 3714 9044
Head of Investor Relations
Finsbury
Charles O'Brien +44 (0)20 7251 3801
Public Relations
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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 almost 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 has numerous long-term projects throughout the Americas.
