Hochschild Mining PLC Strong full 2019

Hochschild Mining (LON: HOC) has today provided a production report for the 12 months ended 31 December 2019.

Operational highlights

• Strong full year attributable production in 20191

o 269,892 ounces of gold

o 16.8 million ounces of silver

o 477,400 gold equivalent ounces

o 38.7 million silver equivalent ounces (versus target of 37.0 million silver equivalent ounces)

• Record production at Inmaculada: 260,126 gold equivalent ounces (2018: 244,445 ounces)
• Record production at San Jose up 10% to 15.4 million silver equivalent ounces (2018: 14.0 million ounces)
• All-in sustaining costs on track to meet guidance of $960-$1,000 per gold equivalent ounce ($11.8-12.3 per silver equivalent ounce) in 20192

Exploration highlights

• Further substantial high grade resources discovered at Inmaculada
• Permits received for key Pablo Sur & Cochaloma exploration targets close to Pallancata with drilling campaigns set to commence in Q1 2020

Strong financial position

• Total cash of approximately $166 million as at 31 December 2019 ($80 million as at 31 December 2018)
• Refinancing of existing $150 million of short term debt with $200 million 5 year loan at LIBOR +1.15%
• Net debt of approximately $34 million as at 31 December 2019 ($77 million as at 31 December 2018)
• Current Net Debt/ LTM EBITDA of approximately 0.10x as at 31 December 2019

2020 guidance

• Production target of 422,000 gold equivalent ounces (36.0 million silver equivalent ounces)
• All-in sustaining costs expected to be $1,040-$1,080 per gold equivalent ounce ($12.1-12.5 per silver equivalent ounce)
• Total sustaining and development capital expenditure expected to be approximately $115-130 million including $22 million expansion of tailings storage facility at Inmaculada
• 2020 brownfield exploration budget expected to be $36 million with greenfield and advanced project budget set at an additional $8 million

Ignacio Bustamante, Hochschild Mining Chief Executive Officer said:

“I am pleased to report that we have delivered a stronger than forecast final quarter. Consequently, the overall 2019 production figure of 38.7 million silver equivalent ounces is comfortably ahead of the 37.0 million ounce target and includes record contributions from our Inmaculada and San Jose mines. Furthermore, our costs for 2019 are expected to be in line with guidance. We have also substantially improved our financial position with strong free cashflow generation and the refinancing of our short-term debt with a new low cost $200 million loan.

At Inmaculada, we have continued to deliver exciting drill results that are further adding to the resource base. In addition, our 2020 brownfield drilling programme is set for an early start in Peru with the welcome news that we have secured permits to drill at the exciting Pablo Sur and Cochaloma targets close to Pallancata. We will provide updates on progress at these and other campaigns as our exploration programme advances.”