15th Apr 2014 07:16
LONDON (Alliance News) - Hochschild Mining PLC Tuesday said it increased production in its first quarter due to higher grades and recoveries at its Arcata mine in Peru, while it achieved strong cashflow savings but was hit by lower metal prices.
The precious metals producer, with operations in South and Central America, said its attributable silver equivalent production increased 26% to 5.9 million ounces for the three months ended March 31 from 4.7 million ounces the previous year, putting it on track to achieve its 2014 production target of 21.0 million ounces.
The company said production at its Arcata mine rose 36% to 1.9 million ounces from 1.4 million ounces due to higher grades and recoveries along with the processing of certain stock mined in 2013.
Hochschild said its Pallancata operation in Peru was producing in line with the previous year, while its San Jose mine in Argentina increased production due to an increase in throughput capacity.
The company also said that it is continuing to move forward with its USD200 million cash savings programme and has already delivered more than USD145 million in savings.
However, the company said that the average realisable precious metal prices it made in the period was USD1,347 per ounce for gold and USD20.7 per ounce for silver, a significant fall on USD1,600 per ounce for gold and USD29.6 per ounce for silver the previous year.
Hochschild said in March that it swung to a pretax loss in 2013 as lower revenues, higher costs, and impairments hit the company, forcing Hochschild to "suspend" its dividend for the year.
The company said at the time that its revenues fell as its average realised precious metals prices fell due to market price decreases in 2013. Its realised average gold price was USD1,338 per ounce for gold, down from USD1,684 per ounce the previous year, and its realised price for silver was USD22.12 per ounce, rather than USD31.62 per ounce in 2012.
However, the company said in January that its full-year attributable silver equivalent production had exceeded its target following improved production at its San Jose mine.
Hochschild also said in March that it was making excellent progress at the Inmaculada project in Peru with all procurement and infrastructure targets and early site preparation for the plant construction remaining on track with commissioning expected at the end of 2014.
On Tuesday, the company said that strong developmental progress was made during the quarter at Inmaculada, stating that procurement of all the key main equipment for the plant is now complete and will be transported to site in April and May.
Hochschild shares were down 1.1% to 177.75 pence in early trading Tuesday.
By Tom McIvor; [email protected]; @TomMcIvor1
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