16th Jul 2014 11:11
(An article published at 09:14 BST misstated a company name. The correct version follows.)
LONDON (Alliance News) - Hochschild Mining PLC Wednesday said it has achieved its USD200 million cash-optimisation programme and is on track to achieve its 2014 silver equivalent production target as first half attributable silver production increased due to higher grades and recoveries.
The FTSE 250-listed precious metals producer, with operations in South and Central America, said its attributable silver equivalent production rate increased 3.4% to 11.9 million ounces for the six months ended June 30 from 11.5 million ounces the previous year, as falls in gold production were significantly offset by a 10% increase in silver production.
The company said its attributable silver production increased to 8.5 million ounces from 7.7 million was down to higher grades and recoveries from its Arcata mine in Peru. However, it said that its volumes processed from the low-grade Macarena Waste Dam Deposit were almost depleted by the end of the first half, as expected.
Hochschild's quarter-on-quarter attributable silver production and attributable silver equivalent production rates remained flat at 4.3 million ounces and 5.9 million ounces, respectively.
However, the company said its attributable gold production fell 13% to 55,450 ounces for the first half from 63,530 ounces previously, but its quarter-on-quarter gold production rates increased slightly to 27,920 ounces from 27,530 ounces.
As a result, the company said it is on track to achieve its full-year production target of 21.0 million attributable silver equivalent ounces whilst its cash optimisation programme target of roughly USD200 million of savings has already been surpassed. Hochschild confirmed that all-in sustaining costs per silver equivalent ounce are on track to fall by as much as 5% in 2014.
The company's attributable production rates include 100% of production from its Arcata, Pallancata and Ares sites, along with 51% of production from its joint venture San Jose project.
In March, Hochschild signed agreements to hedge the sale of 2 million ounces of silver at USD22 per ounce and 33,000 ounces of gold at USD1,338 per ounce, during the period from March to December 2014. Subsequently in June, the company signed additional agreements to hedge the sale of a further 2 million ounces of silver at USD21 per ounce, during the period from July to December 2014.
The company also said on Wednesday that it has seen significant progress at the Inmaculada Advanced Project in Peru and expects plant commissioning to start towards the end of the fourth quarter.
Hochschild shares were up 1.8% to 164.14 pence, putting them in the top FTSE 250 risers during early trading on Wednesday.
By Tom McIvor; [email protected]; @TomMcIvor1
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