Interim dividend and 2021 guidance
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20 November 2020
Hochschild announces payment of interim dividend and 2021 guidance
Hochschild Mining PLC (HOC.LN) (OTCMKTS: $HCHDF) ("Hochschild" or "the Company") is pleased to announce that, at its scheduled Board meeting on 19 November 2020, the Directors of the Company (the "Board") approved the payment of an interim dividend of 4.0 cents per share ($20.6 million).
This decision was taken following the withdrawal of the recommendation to pay the 2019 final dividend and the postponement of the 2020 interim dividend due to the uncertainties caused by COVID-19 and the risk to the Company's operations. The Board recognises that whilst the Covid-19 crisis continues to affect both Peru and Argentina, Hochschild's balance sheet remains strong with the mines delivering a period of steady operation under strict health protocols supported by robust commodity prices. The Board will consider payment of a final dividend in respect of the financial year ended 31 December 2020 at its next scheduled meeting in February 2021.
The Company is also today announcing its 2021 guidance following the completion of its budget process. Details are provided below. With regards to the current year, Hochschild remains on track to meet revised production guidance of 280,000-290,000 gold equivalent ounces or 24.0-25.0 million silver equivalent ounces. The all-in sustaining cost from operations in 2020 is now expected to be lower than revised guidance at between $1,200 and $1,250 per gold equivalent ounce or $14.0 and $14.5 per silver equivalent ounce.
Ignacio Bustamante, Chief Executive Officer said:
"Hochschild continues to recover well operationally from the Covid-19 related stoppages and with the situation steadily improving in the region, our Board considers the resumption of dividends as one of its priorities and confirms our confidence in the outlook for the business. In addition, we have also published our guidance for 2021 with the production, costs and capital expenditure reflecting the steady recovery. We remain in a healthy financial position and with continued strong precious metal prices and our ambitious brownfield programme in full swing, we can look forward to an exciting 2021."
________________________________________________________________________________________
A conference call will be held at 1.00pm (London time) on Friday 20 November 2020 for analysts and investors.
Dial in details as follows:
UK Toll-Free Number: 0800 279 7204
International Dial in: +44 (0)330 336 9411
US/Canada Toll-Free Number: 888-394-8218
Pin: 3635443#
A recording of the conference call will be available on demand on the Company's website: www.hochschildmining.com
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The overall attributable production target for 2021 is 360,000-372,000 gold equivalent ounces or 31.0-32.0 million silver equivalent ounces. [1]
2021 Attributable production split
|
Operation |
Oz Au Eq |
Moz Ag Eq |
|
Inmaculada |
223,000-228,000 |
19.2-19.6 |
|
Pallancata |
63,000-65,000 |
5.4-5.6 |
|
San Jose |
74,000-79,000 |
6.4-6.8 |
|
Total |
360,000-372,000 |
31.0-32.0 |
The all-in sustaining cost from operations in 2021 is expected to be between $1,210 and $1,250 per gold equivalent ounce (or $14.1 and $14.5 per silver equivalent ounce). This includes a rise in mine development costs at San Jose in order to increase reserves and an increase in development at Inmaculada. Grades at Inmaculada are expected to be lower due to the delay in mine development resulting from the Covid-19 crisis.
2021 AISC split
|
Operation |
$/oz Au Eq |
$/oz Ag Eq |
|
Inmaculada |
1,040-1,080 |
12.1-12.5 |
|
Pallancata |
1,440-1,480 |
16.8-17.2 |
|
San Jose |
1,370-1,400 |
15.9-16.3 |
|
Total from operations |
1,210-1,250 |
14.1-14.5 |
The overall capital expenditure budget for 2020 is approximately $120-130 million allocated to sustaining and development expenditure. This includes a $9 million investment in the delayed expansion of the tailings storage facility at Inmaculada as well as increased mine development work at Inmaculada. At San Jose, mine development work to increase reserves is also forecast to rise.
2021 Capital expenditure split
|
Operation |
Sustaining & development capital expenditure ($m) |
|
Inmaculada |
67-72 |
|
Pallancata |
6-8 |
|
San Jose (100%) |
47-50 |
|
Total |
120-130 |
The brownfield exploration budget for 2021 is approximately $34 million with the greenfield and advanced project budget set at approximately $11 million and approximately $14 million for the BioLantanidos rare earth deposit in Chile which includes approximately $5 million of further exploration.
Currency option and dividend mandate
Shareholders wishing to receive their dividend in US dollars should request a currency election form from the Company's registrars using the contact details provided below. This form should be completed and returned to the registrars by 11 December 2020.
The Company's registrars can also arrange for the dividend to be paid directly into a shareholder's UK bank account. This arrangement is only available in respect of dividends paid in UK pounds sterling. To take advantage of this facility in respect of the announced dividend, a dividend mandate form, also available from the Company's registrars, should be completed and returned to the registrars by 11 December 2020. Alternatively, you can register your bank details via Signal Shares, a secure online site where you can manage your shareholding quickly and easily. To register for Signal Shares just visit www.signalshares.com . All you need is your investor code which can be found on your share certificate or a previous dividend confirmation voucher.
Shareholders who have already completed a currency election form and/or a dividend mandate form need take no further action.
Registrars' Contact Details
· By post: Link Group, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU
· By telephone: 0371 664 0300 (Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. Lines are open between 09:00 - 17:30, Monday to Friday excluding public holidays in England and Wales)
________________________________________________________________________________________
Enquiries:
Hochschild Mining PLC
Charles Gordon +44 (0)20 3709 3264
Head of Investor Relations
Hudson Sandler
Charlie Jack +44 (0)20 7796 4133
Public Relations
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About Hochschild Mining PLC
Hochschild Mining PLC is a leading precious metals company listed on the London Stock Exchange (HOCM.L / HOC LN) 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.
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Forward looking statements
This announcement may contain forward looking statements. By their nature, forward looking statements involve risks and uncertainties because they relate to events and depend on circumstances that will or may occur in the future. Actual results, performance or achievements of Hochschild Mining PLC may, for various reasons, be materially different from any future results, performance or achievements expressed or implied by such forward looking statements.
The forward looking statements reflect knowledge and information available at the date of preparation of this announcement. Except as required by the Listing Rules and applicable law, the Board of Hochschild Mining PLC does not undertake any obligation to update or change any forward looking statements to reflect events occurring after the date of this announcement. Nothing in this announcement should be construed as a profit forecast.
This announcement contains information which prior to its release could be considered inside information.
Note
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (Regulation (EU) No.596/2014). Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.
LEI: 549300JK10TVQ3CCJQ89
- ends -
[1]All equivalent figures assume a gold/silver ratio of 86x. The ratio will be updated in the Q4 2020 Production statement to adjust forecasts for the full year 2020 average ratio.
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