Hochschild to Reduce Output at Two Peruvian Mines

Hochschild Mining plc (LSE:HOC) released an operational update, commenting that it will be reducing plant throughput at its Arcata and Pallancata operations in Peru. Its Argentina-based San Jose operation will continue at its current level.

As quoted in the press release:

The resulting production target for 2015 from the three current operations plus the Inmaculada project (expected to deliver 6-7 million silver equivalent ounces) is 24 million silver equivalent ounces.

The emphasis on profitable ounces at all operations with reduced levels of sustainable capital expenditure for 2015 is expected to have a positive effect on the Company’s overall costs with the all-in sustaining cost for the Company now expected to be reduced to between $15 to $16 per ounce in 2015. Sustaining capital expenditure for current operations is budgeted at approximately $45 million, in part reflecting a significant temporary cut in development capital expenditure.

Ignacio Bustamante, CEO of Hochschild, commented:

In the current weak precious metal environment, Hochschild has reacted decisively to preserve capital and optimise cashflow by maintaining our focus on the production of profitable ounces as part of our successful ongoing cost reduction programme. Understandably, this has entailed a review of mine plans across the Company which will consequently reduce production but also reduces overall costs and capex in 2015 allowing us to produce profitable ounces at all our operations.

Click here to read the full Hochschild Mining plc (LSE:HOC) press release.