22nd Nov 2019 09:10
(Alliance News) - Hochschild Mining PLC on Friday said it is on track for its 2019 output guidance but has cut 2020 guidance for its Pallancata project in Peru due to permitting delays.
Shares in the FTSE 250 constituent were down 2.3% at 182.40 pence in London in morning trading.
Precious metals firm Hochschild said it is still "firmly on track" for its 2019 output guidance of 457,000 gold equivalent ounces or 37.0 million silver equivalent ounces.
However, its overall attributable production target for 2020 is 432,000 gold equivalent ounces or 35.0 million silver equivalent ounces, which includes a drop in Pallancata's expected production to 7 million silver equivalent ounces.
More positively, Hochschild is anticipating record output from its Inmaculada project, also in Peru, of 257,000 gold equivalent ounces. From the 51% owned San Jose mine in Argentina, Hochschild is predicting 2020 production of 14 million silver equivalent ounces
For 2020, the all-in sustaining cost from operations is forecast at USD1,015 to USD1,045 per gold equivalent ounce, or USD12.5 to USD12.9 per silver equivalent ounce. This includes the cost of a USD22 million project aimed at expanding Immaculada's tailings storage facility.
Gold was trading at 1,468.90 an ounce early Friday, while silver was quoted at 17.18 an ounce.
In terms of overall capital expenditure, the budget is around USD115 million to USD130 million allocated to development and sustaining expenses, including the Immaculada storage facility.
The brownfield exploration budget for 2020 is about USD36 million while the greenfield and advanced project budget is approximately USD8 million. The recently acquired BioLantanidos deposit in Chile has a budget of USD7 million.
Chief Executive Ignacio Bustamante, said: "Our ongoing strategy is expected to deliver consistent production at competitive costs in 2020, with, once again, an increase in output at Inmaculada. Following permitting delays at Pallancata, we have decided to give our brownfield exploration team more time to deliver additional resources and have therefore reduced the operation's expected production to 7 million silver equivalent ounces. However, we remain excited by the geological potential surrounding all our operations.
Bustamante added that: "Costs are expected to rise moderately due to a one-off USD22 million project to increase tailings capacity at Inmaculada and the reduced production at Pallancata."
By Anna Farley; [email protected]
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