Last checked at 20 Nov 2008 07:00
Hochschild takes steps to address current market conditions
Reduction of workforce by 150 corporate jobs
Optimisation of capex allocation to preserve strong cash position
Delay of San Felipe project
On track to meet 2008 production target of 26 million silver equivalent ounces
In light of the decision to reduce capex and given the current price environment for zinc, the Company has concluded that it is prudent to delay development of the San Felipe project. Over the previous 6 months, zinc prices have fallen by 46% from a high of $2,267/mt to the current price of $1,218/mt. However, Hochschild remains confident about the long term value of San Felipe and will continue to review the timing of the project.
Hochschild's focus for 2009 is to deliver profitable production and the Company is undertaking a review of its cut-off prices to ensure economic grades are mined throughout all of its operations. 2009 production targets will be reported in the Company's Production Statement in January.
Miguel Aramburú, Chief Executive Officer, commented:
"We are taking a proactive response to challenging market conditions. By controlling costs we are ensuring that the Company is well placed to face this volatile price environment. Hochschild is in solid financial health, with over US$130 million of cash on the balance sheet. We have a strong management team and over 40 years' experience in underground mining and a high quality portfolio of assets in the Americas. We are well positioned to deal with the challenges ahead.
At the same time, we remain positive about the future of silver and gold prices as historically, these have remained solid through periods of financial instability."
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A conference call will be held at 8.30am (London time) on 20 November 2008 for analysts and investors.
Dial in details as follows:
UK +44 (0)20 7162 0025
A recording of the conference call will be available for one week following its conclusion, accessible from the following telephone numbers:
Dial +44 (0)20 7031 4064 Access Code 817989
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Enquiries:
Hochschild Mining plc
Isabel Lütgendorf +44 (0)20 7907 2934
Head of Investor Relations
Ignacio Rosado +511 437 6007
Chief Financial Officer
Finsbury
Robin Walker +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 for Reuters / HOC LN for Bloomberg) with a primary focus on the exploration, mining, processing and sale of silver and gold. Hochschild currently operates five underground epithermal vein mines, four located in southern Peru and one in southern Argentina and one open pit mine in northern Mexico. Hochschild also has over sixteen long-term prospects throughout the Americas. Hochschild has over forty years experience in the mining of precious metal epithermal vein deposits. For further information please visit www.hochschildmining.com