Last checked at 23 Nov 2012 07:00
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23 November 2012
Advanced Project Permitting Update
Hochschild Mining plc ("Hochschild" or "the Company") announces an update to its Advanced Projects' schedule.
As previously stated in the Interim Results announcement in August, changes were made by the Peruvian government to the submission requirements for construction permit applications which, together with the number of industry applications being processed, will lead to a longer than anticipated permitting process.
Hochschild now expects to receive the final mill construction permits for both the Inmaculada and Crespo projects in the second half of 2013 with commissioning for both projects' mills now scheduled for the second half of 2014.
Furthermore, following the substantial progress made by the Company during the year with regards to detailed engineering and also procurement and construction contracts, the revised total capital expenditure estimate for Inmaculada is now expected to be approximately $350 million. In addition, the above mentioned delays combined with the strengthening of the Peruvian Sol are expected to add approximately $20 million to that total.
At the Crespo project, optimisation of the processing stage has allowed the Company to maintain its capital expenditure estimate at approximately $110 million despite the permitting delays.
Commenting on the announcement, Ignacio Bustamante, CEO, said:
"We highlighted earlier this year the regulatory changes to the permitting process in Peru and are now in a position to give clarification on the effect of the resulting delays on our Advanced Projects. We have made significant progress during 2012 in the development of both projects and in obtaining the government approval for the Environmental Impact Study at Inmaculada and are confident that on receipt of the final mill construction permits, now expected in the second half of 2013, we will be in a good position to rapidly advance towards production. Despite this delay, both projects continue to be very profitable even at long term analyst consensus prices and are expected to generate significant value for the Company whilst we also remain excited by their strong geological upside."
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Enquiries:
Hochschild Mining plc
Charles Gordon +44 (0)20 7907 2934
Head of Investor Relations
RLM Finsbury
Charles Chichester +44 (0)20 7251 3801
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 almost fifty years' experience in the mining of precious metal epithermal vein deposits and currently operates four underground epithermal vein mines, three located in southern Peru and one in southern Argentina. Hochschild also has numerous long-term projects throughout the Americas.
Forward looking Statements
This announcement contains certain forward looking statements which may relate to matters such as the business, strategy, investments, production, major projects and their contribution to expected production and other plans of Hochschild Mining plc and its current goals, assumptions and expectations relating to its future financial condition, performance and results.
Forward-looking statements include, without limitation, statements typically containing words such as "intends", "expects", "anticipates", "targets", "plans", "estimates" and words of similar import. 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 be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. Factors that could cause or contribute to differences between the actual results, performance or achievements of Hochschild Mining plc and current expectations include, but are not limited to, legislative, fiscal and regulatory developments, competitive conditions, technological developments, exchange rate fluctuations and general economic conditions. Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser.
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, 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.