21st Jul 2021 12:39
(Alliance News) - Hochschild Mining PLC on Wednesday said it is on course to meet its annual output and cost guidance after a strong first-half performance across its operations.
Shares in Hochschild were trading up 2.8% at 150.40 pence each in London on Wednesday afternoon.
Hochschild operates a number of mines in Peru, Chile and Argentina, including two underground mines operating in southern Peru and one in southern Argentina.
Chief Executive Ignacio Bustamante noted: "The second quarter results have been solid across our operations, and we remain on course to deliver our production and cost targets for the year. In addition, drill results have continued to be encouraging at Inmaculada with 29 million silver equivalent ounces of high-grade inferred resources already added in the first half. We have also seen further positive results from the Snip project in Canada."
Particularly strong year-on-year performance in the second quarter and first half reflect pandemic-related stoppages at the Inmaculada mine in Peru, Hochschild said.
In the second quarter to June 30, Hochschild produced 3.1 million attributable ounces of silver, up 9.3% from 2.8 million in the first quarter, and considerable above the 1.1 million reported in the second quarter of 2020.
Silver equivalent ounces also rose, 4.3% quarter-on-quarter to 7.7 million in the recent quarter from 7.4 million in the first, and up sharply from 2.8 million a year prior.
The FTSE 250-listed miner said it sold 3.8 million ounces of silver in the recent quarter, 20% higher than the previous quarter sales of 3.2 million ounces and considerably above the 1.8 million sold in the same period a year before.
Average realisable prices reached USD27.9 per ounce, up 41% year-on-year from USD19.8, suggesting silver sales revenue of around USD106.0 million in the second quarter.
Meanwhile, Hochschild saw attributable gold production reach 53,418 ounces in the second quarter, rising 1.1% from 52,840 ounces in the previous quarter, and up sharply from 19,650 ounces in the same period a year prior.
Gold equivalent ounces hit 89,381, up 4.2% from 85,740 ounces quarter-on-quarter, and once again up steeply year-on-year from 32,710 ounces.
In the second quarter, the miner sold 63,180 ounces of gold, a 3.3% increase since the 61,140 ounces sold in the first quarter and 75% higher than the 35,900 ounces sold a year prior.
Hochschild's second quarter average realised per ounce price rose to USD1,838 from USD1,826 the previous year, which implies gold sales worth about USD116.1 million.
Silver and gold production and sales also increased in half-year ended June 30, the company said.
Hochschild's attributable production included 106,261 ounces of gold and 5.9 million ounces of silver, up year-on-year from 76,070 and 4.1 million ounces respectively.
Silver sales rose by 43% to 7.0 million ounces in the first half, from 4.9 million a year prior, as average realised silver prices reached USD26.3 per ounce, up 62% from USD16.2 in the first half of 2020, implying sales worth around USD184.1 million.
In the same half-year period, gold sales reached 124,320 ounces in the recent half, 33% higher year-on-year from 93,580 ounces, with an average realised price of USD1,772 per ounce - up slightly from USD1,701 per ounce - to suggest average gold sales worth USD220.3 million in the first half.
Considering its recent half Hochschild said it maintains its previous guidance and expects to deliver 360,000 to 372,000 of gold equivalent ounces and 31.0 million to 32.0 million silver equivalent ounces in 2021. In comparison, during 2020, Hochschild produced 175,241 ounces of gold and 9.8 million ounces of silver.
Hochschild added that it was on track to meet its average price guidance of USD1,210 and USD1,250 per gold equivalent ounce and USD14.1 to USD14.5 per silver equivalent ounce, somewhat below average prices already realised in 2021 to date.
By Scarlett Butler; [email protected]
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