Hochschild Mining on track after strong third quarter

Hochschild Mining reported “another strong quarter” of attributable production on Wednesday, with 67,797 ounces of gold and 4.3 million ounces of silver produced in the three months ended 30 September.

The FTSE 250 company said its production equated to 121,395 gold equivalent ounces or 9.8 million silver equivalent ounces for the third quarter.

It also reported a “solid” year-to-date operational performance, with 205,875 ounces of gold and 13.0 million ounces of silver produced, making for 366,721 gold equivalent ounces or 29.7 million silver equivalent ounces.

Hochschild Mining said it was on track to deliver its overall 2019 production target of 457,000 gold equivalent ounces, or 37.0 million silver equivalent ounces.

It said its 2019 all-in sustaining costs were on track to meet its guidance of between $960 and $1,000 per gold equivalent ounce, or $11.80 to $12.30 per silver equivalent ounce.

On the exploration front, the company said several new veins had been discovered to the west of Angela at Inmaculada, adding further resources, with Inmaculada infill drilling increasing the Millet vein resource grade by 27%, and drilling ongoing at the Palca zone.

Looking at its finances, the company said its total cash stood at approximately $123m as at 30 September, up from $95m on 30 June.

Net debt was around $30m at period end, narrowing from $61m at the end of June, with the firm’s net debt-to-last 12 months EBITDA standing at approximately 0.10x as at 30 September.

“Hochschild has delivered another strong quarter of output including robust contributions at all three of our mines and we remain on track to meet our annual production and cost targets,” said chief executive officer Ignacio Bustamante.

“Commodity prices have been favourable in the third quarter, and combined with the consistent operational delivery we have been able to reduce leverage further and ended the quarter with net debt of $30m.”

Bustamante said the company had also seen “encouraging” brownfield results, particularly at Inmaculada, where drilling continued to upgrade the quality and quantity of recent discoveries.

“We remain confident for the future and are excited by the acquisition of the low-risk Biolantanidos rare earth deposit in Chile which adds diversified optionality to our portfolio although we will retain our core focus on precious metals.”