Hochschild Regulatory News (HOC)

17 Oct 2007 07:01

Hochschild Mining PLC17 October 2007 Hochschild Mining plc Quarterly Production Report for the three months to 30 September 2007 ("Q3") Highlights: * 27% increase in total attributable silver production year-on-year and 11% increase quarter-on-quarter * 26% increase in total attributable gold production year-on-year and 1% increase quarter-on-quarter * Commenced production at the Moris mine in Mexico and Pallancata in Peru, thus expanding from operating three mines in one country to six mines in three countries, during the course of 2007 * Completed expansion at the Selene plant, doubling throughput capacity * Capacity ramp-up at the San Jose plant taking longer than initially planned although we expect to reach full capacity during the fourth quarter of 2007 * We are confident of coming very close to our 2007 production target of 26 million silver equivalent attributable ounces Eduardo Hochschild, Chairman of Hochschild Mining plc, commented "We are pleased with a strong set of production results for the period with anincrease of 27% in silver production and 26% in gold. These results reflect thebenefit of the capacity expansions at our three original operations in Peru,Ares, Arcata and Selene, as well as the initial incremental production from thenew operations, San Jose and Pallancata. Although ramp up of San Jose did nottake place as quickly as originally planned, we believe we will achieve fullcapacity during the fourth quarter of 2007. We remain confident of coming closeto our 2007 production target of 26 million silver equivalent ounces". Overview: Production volumes for the three months to 30 September 2007 ("Q3") weresignificantly higher compared with the same period of 2006. The increase inproduction was primarily a result of capacity expansions at Arcata, Ares andSelene, higher grades at Arcata and Ares and incremental production from SanJose and Pallancata. During the fourth quarter of this year, we will benefitfrom additional production from all our mines in Peru, as well as productionfrom San Jose and Moris as they reach full capacity. Capacity Expansions: We successfully completed the expansion at the Selene plant taking the plantfrom 350 ktpa to 700 ktpa. We have now completed plant expansions at all threeof our original operations in Peru. We continue to make progress on theengineering work required to double capacity at San Jose in Q3 2008. Inaddition, our Board approved a further expansion of the Arcata plant to 618 ktpain Q4 2008. New Projects: At the San Jose operation in Southern Argentina, the mine is operating at fullcapacity and we have built a stockpile of over 60,000 tonnes. The ramp-up of theSan Jose plant is taking longer than expected due to some fine tuning of theGekko process, but we remain confident in reaching full capacity during thefourth quarter of this year. During Q3 both the Moris mine in Mexico and Pallancata in Peru enteredproduction. At the Moris mine we have been processing ore through the crushingplant and feeding it to the ADR plant since late September. We began processingthe Pallancata ore through the Selene plant during Q3 and will continue toramp-up production over the next months. The mineral currently being processedfrom Pallancata includes a high degree of ore from mine developments, whichcontain lower grades than the average reserve grade for Pallancata. During the early part of Q3 we generated sufficient resources at San Felipe tojustify taking the project to feasibility stage, which was subsequently approvedby the Board. We are also currently drilling in Azuca in Peru, Gonzalito and Claudia inArgentina and El Gachi in Mexico. We expect to release positive results by end2007. Joint Ventures: We remain active in our joint venture and acquisition strategy and continue towork diligently in evaluating joint venture and acquisition targets. During2007, we have increased our project portfolio through joint ventures withCardero Resources, Hidefield, Silver Standard and Mirasol Resources forproperties in Argentina. In addition, we entered into an option agreement toacquire 100% of the Tres Chepas copper-gold skarn project in Chile, a strategicalliance with Exmin Resources in Mexico and an option agreement to acquire 100%of the Gavilanes silver-gold epithermal vein project in Mexico. Our plan is to continue to grow through mid-sized, bolt-on acquisitions that fitour niche strategy of being an underground, precious metals mining companyfocused in the Americas. Our objective is to strengthen our interest in specificgeological regions in the Americas by making anchor investments in strategicmining districts and executing a cluster consolidation strategy. The newoperations and the joint ventures that we have entered into to date fit squarelywithin this strategy. TOTAL PRODUCTION(1)-------------------------------------------------------------------------------- Q3 Q2 Q3 2007 2007 2006--------------------------------------------------------------------------------Silver production (Koz) 3,555 3,073 2,706Gold production (Koz) 50.58 48.04 38.59Total silver equivalent (Koz) 6,590 5,955 5,022Total gold equivalent (Koz) 109.83 99.25 83.70Silver sold (Koz) 2,544 2,197 3,943Gold sold (Koz) 46.87 42.71 53.44-------------------------------------------------------------------------------- ARCATA-------------------------------------------------------------------------------- Q3 Q2 Q3Product 2007 2007 2006--------------------------------------------------------------------------------Ore production (tonnes) 106,656 94,421 86,972Average head grade silver (g/t) 578.97 569.03 515.97Average head grade gold (g/t) 1.48 1.44 1.38Concentrate produced (tonnes) 4,457 4,099 3,335Silver grade in concentrate (kg/t) 11.94 11.36 11.63Gold grade in concentrate (kg/t) 0.03 0.03 0.03Silver produced (Koz) 1,711 1,497 1,254Gold produced (Koz) 4.23 3.74 3.20Silver sold (Koz) 896 912 1,916Gold sold (Koz) 2.24 2.18 4.59-------------------------------------------------------------------------------- ARES-------------------------------------------------------------------------------- Q3 Q2 Q3Product 2007 2007 2006--------------------------------------------------------------------------------Ore produciton (tonnes) 84,996 84,138 71,921Average head grade silver (g/t) 255.93 261.80 242.14Average head grade gold (g/t) 13.98 14.66 13.23Dore total (Koz) 671.21 690.15 557.41Silver produced (Koz) 633 650 527Gold produced (Koz) 36.57 38.11 29.37Silver sold (Koz) 646 692 679Gold sold (Koz) 38.56 36.87 39.85-------------------------------------------------------------------------------- SELENE-------------------------------------------------------------------------------- Q3 Q2 Q3Product 2007 2007 2006--------------------------------------------------------------------------------Ore production (tonnes) 125,451 100,389 87,727Average head grade silver (g/t) 275.31 328.00 364.38Average head grade gold (g/t) 1.84 2.32 2.54Concentrate produced (tonnes) 1,090 947 896Silver grade in concentrate (kg/t) 26.69 30.96 32.13Gold grade in concentrate (kg/t) 0.16 0.21 0.21Silver produced (Koz) 923 925 925Gold produced (Koz) 5.66 6.19 6.02Silver sold (Koz) 1,002 594 1,348Gold sold (Koz) 6.07 3.66 9.00-------------------------------------------------------------------------------- PALLANCATA(2)-------------------------------------------------------------------------------- Q3Product 2007--------------------------------------------------------------------------------Ore production (tonnes) 14,723Average head grade silver (g/t) 255.45Average head grade gold (g/t) 1.29Concentrate produced (tonnes) 79Silver grade in concentrate (kg/t) 41.60Gold grade in concentrate (kg/t) 0.17Silver produced (Koz) 105Gold produced (Koz) 0.43Silver sold (Koz) 0Gold sold (Koz) 0.00-------------------------------------------------------------------------------- SAN JOSE(3)-------------------------------------------------------------------------------- Q3Product 2007--------------------------------------------------------------------------------Ore produciton (tonnes) 27,494Average head grade silver (g/t) 543.8Average head grade gold (g/t) 7.2Silver produced (Koz) 182Gold produced (Koz) 3.29Silver sold (Koz) 0Gold sold (Koz) 0.00-------------------------------------------------------------------------------- MORIS(4)-------------------------------------------------------------------------------- Q3Product 2007--------------------------------------------------------------------------------Ore produciton (tonnes) 84,538Average head grade silver (g/t) 4.9Average head grade gold (g/t) 1.8Silver produced (Koz) 1.2Gold produced (Koz) 0.40Silver sold (Koz) 0Gold sold (Koz) 0.00----------------------------------------------------------------------------------------------------------(1) Q3 2007 total production includes 100% of all production, includingproduction attributable to joint venture partners at Moris, San Jose andPallancata.(2) The Company has a 60% interest in Pallancata.(3) The Company has a 51% interest in San Jose.(4) The Company has a 70% interest in Moris. Enquiries:Hochschild Mining plcWray Barber +44 (0)20 7152 6014Head of Investor Relations FinsburyRobin Walker +44 (0)20 7251 3801Public Relations - ends - This information is provided by RNS The company news service from the London Stock Exchange