Hochschild Mining on track to meet 2017 targets

Hochschild Mining reported ‘robust’ attributable production in its second quarter on Wednesday, with 4.2 million ounces of silver, 60,815 ounces of gold, 9.3 million silver equivalent ounces and 126,007 gold equivalent ounces.

The FTSE 250 firm said attributable production in the first half as a whole was in line with expectations, at 8.9 million ounces of silver, 121,430 ounces of gold, 17.9 million ounces of silver equivalent - up from 17 million in the first half of 2016 - and 242,208 ounces of gold equivalent - rising from 229,063 ounces.

Its board said it was “on track” to deliver on its overall 2017 production target of 37 million silver equivalent ounces, with all-in sustaining costs per silver equivalent ounce expected to meet its $12.20-$12.70 guidance.

A total of 22,000 metres of drilling remained scheduled for the second half of the year, Hochschild confirmed.

On the financial front, the company said it had total cash of $144m as at 30 June, up from $144m on 31 December 2016, and had repaid $18.5m of debt in the first half.

Net debt stood at $160m on 30 June, down from $187m on 31 December, and its current net debt-to-LTM EBITDA ratio was around 0.5x at the end of the first half.

“Hochschild has continued to deliver a strong and steady production performance in the first half of the year and we are therefore pleased to reiterate both our 2017 output and cost forecasts,” said chief executive Ignacio Bustamante.

“During the second half, we can look forward to increasing contributions from our new Pablo vein at Pallancata as well as starting the key portion of our 2017 brownfield exploration programme.”