Hochschild Mining achieves record production in first half

Hochschild Mining reported “another very strong quarter” in its second-quarter production numbers on Wednesday, with attributable production for the period reaching 5.0 million ounces of silver and 68,477 ounces of gold.

The FTSE 250 company said the quarter saw production of 10.1 million silver equivalent ounces or 136,201 gold equivalent ounces.

For the half-year, attributable production reached “record” levels, with Hochschild reporting 9.7 million ounces of silver and 137,507 ounces of gold.

That made for 19.9 million silver equivalent ounces or 268,237 gold equivalent ounces.

The firm said it was on track to deliver its overall 2018 production target of 514,000 gold equivalent ounces, or 38 million silver equivalent ounces.

Additionally, its 2018 all-in sustaining costs were on target to meet guidance of between $960 and $990 per gold equivalent ounce, or between $13.0 and $13.4 per silver equivalent ounce.

Hochschild’s exploration programme was also delivering “exciting” results, according to the board, with its brownfield programme continuing to add resources as “further encouraging results” were received from Inmaculada at Millet, Divina and Lola veins.

An estimated resource update for Inmaculada was expected at the firm’s interim results in August, while “encouraging” results were also being delivered at Arcata, where developments were being prioritised over inferred resource additions.

San Jose drilling was set to restart after poor seasonal weather conditions, the board said, adding that it had made “good progress” on permitting for its “exciting” 2019 drilling programme.

Looking at the finances, Hochschild said it had total cash of around $142m as at 30 June, up from $109m at the end of March.

Net debt stood at approximately $66m at the end of June, narrowing from $100m as at 31 March, with the current net debt-to-last 12 months EBITDA sitting around 0.20x at period end.

“Hochschild has delivered another very strong operational quarter with output at all our mines in line with expectations and therefore completes a record half for the company,” said chief executive Ignacio Bustamante.

“We are firmly on track to meet our production target for the year of 514,000 gold equivalent ounces - 38 million silver equivalent ounces - within our guided cost levels.

“We have also continued to see exciting results from our ambitious brownfield exploration plan. In particular, drilling at Inmaculada is expected to add substantial resources close to the current mining infrastructure whilst the programme at Arcata has also made good progress.”