Hochschild Mining PLC (LON: HOC) has today announced its 2020 guidance following completion of its mine planning and budget process. The Company remains firmly on track to meet its 2019 output guidance of 457,000 gold equivalent ounces or 37.0 million silver equivalent ounces.
Ignacio Bustamante, Chief Executive Officer said:
“Our ongoing strategy is expected to deliver consistent production at competitive costs in 2020, with, once again, an increase in output at Inmaculada. Following permitting delays at Pallancata, we have decided to give our brownfield exploration team more time to deliver additional resources and have therefore reduced the operation’s expected production to 7 million silver equivalent ounces. However, we remain excited by the geological potential surrounding all our operations. Finally, costs are expected to rise moderately due to a one-off $22 million project to increase tailings capacity at Inmaculada and the reduced production at Pallancata.”
2020 Production targets:
- Overall attributable production target for 2020 of 432,000 gold equivalent ounces or 35.0 million silver equivalent ounces.
- Anticipated record output from Inmaculada of approximately 257,000 gold equivalent ounces;
- Solid production of 14 million silver equivalent ounces expected from the 51% owned San Jose mine in Argentina;
- Pallancata expected to produce 7 million silver equivalent ounces – output projections reduced to allow further time for ongoing brownfield exploration owing to permitting delays
2020 Production split
| Operation | Gold production (oz approximate) | Silver production (m oz approximate) |
| Inmaculada | 181,400 | 6.1 |
| Pallancata | 19,300 | 5.5 |
| San Jose (100%) | 93,300 | 6.5 |
| Total | 294,000 | 18.1 |
The all-in sustaining cost from operations in 2020 is expected to be between $1,015 and $1,045 per gold equivalent ounce (or $12.5 and $12.9 per silver equivalent ounce) which includes a $22 million project to expand the tailings storage facility at Inmaculada.
2020 AISC split
| Operation | AISC ($/oz) Au Eq | AISC ($/oz) Ag Eq |
| Inmaculada | 910-940 | 11.2-11.6 |
| Pallancata | 1,110-1,140 | 13.7-14.1 |
| San Jose | 1,130-1,160 | 13.9-14.3 |
| Total from operations | 1,015-1,045 | 12.5-12.9 |
The overall capital expenditure budget for 2020 is approximately $115-130 million allocated:
2020 Capital expenditure split
| Operation | Sustaining & development capital expenditure ($m) |
| Inmaculada | 80-85 |
| Pallancata | 5-10 |
| San Jose | 30-35 |
| Total | 115-130 |
The brownfield exploration budget for 2020 is approximately $36 million with the greenfield and advanced project budget set at approximately $8 million and approximately $7 million for the recently-acquired BioLantanidos deposit in Chile.
Hochschild Mining PLC is a leading precious metals company listed on the London Stock Exchange with a primary focus on the exploration, mining, processing and sale of silver and gold. Hochschild has over fifty years’ experience in the mining of precious metal epithermal vein deposits and currently operates three underground epithermal vein mines, two located in southern Peru and one in southern Argentina. Hochschild also has numerous long-term projects throughout the Americas.
