16th Jan 2019 08:46
LONDON (Alliance News) - Hochschild Mining PLC on Wednesday said its gold and silver production increased in 2018, but output is set to fall in 2019 following a weak fourth quarter.
Shares were trading 2.2% lower on Wednesday morning at 169.20 pence each.
For the three months to the end of December, gold output totalled 72,222 ounces, down from 74,270 ounces recorded in the third quarter of 2018, and down from 82,790 ounces produced in the final quarter of 2017.
Silver production was also lower at 5.8 million ounces compared to 5.9 million ounces recorded in the third quarter and 6.1 million ounces produced in the same period the prior year.
Despite a decrease in output in the final quarter, the silver and gold miner said it delivered a strong annual result, primarily driven by the continuing ramp-up of production from the Pablo vein at Pallancata mine in Peru.
Total gold production in 2018 was 304,510 ounces of gold and 22.7 million ounces of silver, up 1.4% from 300,210 ounces, and up 1.8% from 22.3 million ounces, respectively, reported in 2017.
Inmaculada's fourth quarter production was 37,743 ounces of gold, down 6.0% quarter-on-quarter, and 1.3 million ounces of silver which was flat on the prior quarter. This amounted to gold equivalent production of 54,705 ounces with extracted grades being better than expected.
Overall in 2018, Inmaculada delivered record gold equivalent production of 251,090 ounces, representing a 5% improvement on 239,479 ounces produced in 2017.
Pallancata mine produced 2.1 million ounces of silver and 7,200 ounces of gold in the final quarter of 2018, bringing the silver equivalent total to 2.6 million ounces, unchanged quarter-of-quarter, but up sharply on 1.9 million ounces produced in the year before.
The ramping up process for the Pablo vein was completed in the fourth quarter of 2018, Hochschild said, with tonnage increasing, but grades reducing.
The full year production was 9.4 million silver equivalent ounces, a 22% improvement year-on-year, driven by the mix of material from Pablo.
Meanwhile, operations at San Jose in Argentina delivered a strong final quarter with increases in grade resulting in production of 1.7 million ounces of silver and 25,719 ounces of gold, up 9.8% and 7.1% quarter-on-quarter, respectively. However, on the year-on-year basis, gold production reduced from 29,650 ounces and 1.9 million ounces of silver.
The overall production at San Jose for 2018 was 13.3 million silver equivalent ounces, down 4% versus 2017, due to lower grades.
Looking ahead, Hochschild said it intends to produce 457,000 gold equivalent ounces and 37.0 million silver equivalent ounces in 2019, lower compared to 526,650 gold equivalent ounces and 39.0 million silver equivalent ounces recorded in 2018.
"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," said Chief Executive Ignacio Bustamante.
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