8th Sep 2015 06:52
LONDON (Alliance News) - Hochschild Mining PLC Tuesday said commercial production has begun at the Inmaculada mine and the company has made a "significant new discovery" at the Pallancata mine, both in Peru.
The miner said initial production began on June 5, and since then approximately 25,000 ounces of gold and 622,000 ounces of silver have been commercially produced to date, a portion of which was produced during the ramp-up and commissioning phase.
"We have successfully achieved commercial production at Inmaculada, and I congratulate the operations team on completing a quick and efficient ramp-up," said Chief Executive Ignacio Bustamante.
The mine is expected to produce between 7.0 to 8.0 million ounces of silver equivalent before the end of 2015 and between 12.0 to 13.0 million ounces of silver equivalent in 2016. The company has forecast an all-in-sustaining cost of around USD10 per ounce.
"Hochschild will strengthen its cashflow generation and enter into a new phase of margin improvement. We expect that, with high production levels at a very competitive all-in sustaining cost, Inmaculada will be the company´s key mining operation for many years to come," added Bustamante.
Hochschild said it began recognising revenue from the mine from August 1.
The processing plant at the mine has been inspected successfully and the final mill operating permit is expected later this month, it said.
In a separate statement Tuesday, the miner said it has discovered a new high-grade vein at the Pallancata mine property in south west Peru.
"The new east-west vein, is expected to lead to a significant expansion of the mine's mineral resources and substantially improve the operational outlook for the Pallancata mine," the company said in a statement.
The new discovery, named the Pablo vein, stretches along an east-west strike for 700 metres and has "significant thickness" of greater than 10 metres wide. It is part of a major regional structure, currently extending to about 2 kilometres, which will be explored over the medium term, it said.
"The Pablo vein has the significant advantage of being within our property and with its proximity to our current infrastructure, the capital required to access the vein is expected to be low," said Bustmante.
"There is also sufficient capacity at the operation's plant, Selene, to process the new higher grade material. The next steps are to delineate an inferred resource and we expect to update the market on our progress and the operational strategy going forward in the fourth quarter," he added.
By Joshua Warner; [email protected]; @JoshAlliance
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