Last checked at 30 May 2013 11:02
30 May 2013
2013 Annual General Meeting
Address to Shareholders
Hochschild Mining plc ("Hochschild") held its Annual General Meeting of shareholders in London today. Eduardo Hochschild, Executive Chairman, made the following remarks:
"The last year was, once again, a very busy one for our Company. I have no doubt that the progress we achieved together with the implementation of our recent cost optimisation plans will leave Hochschild fully prepared for the challenges that lie ahead with regards to the volatile price environment and the ongoing construction of our Advanced Projects.
Let me begin by giving you a brief overview of our 2012 performance. Production at our mines was 20.3 million attributable silver equivalent ounces which was in line with expectations and we therefore generated revenue of $818million, with EBITDA of $385 million and earnings per share of 19 cents. The Board decided to maintain the total dividend at 6 cents per share.
In 2012, we continued to execute our organic growth strategy by making considerable progress with the approval of the feasibility studies at our two Advanced Projects, Inmaculada and Crespo. I am happy to report that we are on track to obtain permits in the second half of this year with production to be commissioned at both projects in the second half of next year. We are excited by the potential of these projects which will increase our current production levels by 50% and the significant exploration upside opportunity, in particular at Inmaculada.
Our brownfield exploration results were significant, with high grade discoveries at all of our main operations whilst our greenfield exploration programme also saw meaningful progress both in the Company Maker and Medium Scale categories. We remain confident that our commitment to exploration investment over the last few years has been key to creating the foundations for long-term shareholder value.
We have also periodically been able to supplement our organic growth with selective acquisitions and, in November, we announced the purchase of Andina Minerals whose Volcan project presents an attractive opportunity and one that was secured at a purchase price significantly below recent comparable transactions. Clearly this is a project for the long term but we believe it is a viable option to diversify our asset base by building a strong presence in what is arguably one of the most mining friendly jurisdictions.
The recent extreme volatility in the precious metal markets has led us to implementing an action plan to conserve capital and optimise cashflow. Such plans were originally put in place as part of our normal ongoing review of market conditions and I am pleased to report that they have already begun to deliver significant savings, particularly with respect to discretionary elements of our Brownfield and Greenfield exploration programmes with the overall exploration budget reduced by 29% to $55 million. In addition, the management team have identified savings following negotiations with suppliers of equipment and materials as well as through changes to the mine development budget that are expected to materially impact both the unit cost per tonne at our main operations as well as the forecast level of sustaining capital expenditure.
Turning to the composition of our Board, I am delighted that in 2012 we were able to announce the appointment of Enrico Bombieri as an Independent Non-Executive Director. Enrico brings extensive global capital markets' experience from his previous senior management roles at JP Morgan. I am also grateful to Sir Malcolm Field for agreeing to postpone his retirement from the Board until the end of 2013 allowing us to further benefit from his invaluable contribution.
On behalf of the Board, I would like to thank the entire team for another year of resilient performance, and our shareholders for your continued support."
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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.