"Hochschild has continued its strong operational performance in the second quarter of 2019, with year-on-year increases at all three of our mines, resulting in our second strongest half of production on record," said CEO Ignacio Bustamante.
Production for the first semester of 2019 was 138,078oz gold and 8.7Moz silver for 245,325oz gold-equivalent or 19.9Moz silver-equivalent. The company said it remained on track to deliver overall 2019 production of 457,000oz gold-equivalent (37Moz silver-equivalent).
At its Inmaculada flagship mine in Ayacucho, Peru, second quarter production was 49,751oz gold and 1.5Moz driven by higher than expected gold (4.85 grams a tonne) and silver (170g/t) grades offset by lower silver recoveries.
Its Pallancata mine, also in Ayacucho, produced 1.9moz silver and 6,838oz gold during the quarter. Its San Jose saw slightly higher than expected gold and silver grades resulting in production of 1.7Moz silver and 27,588oz gold.
Hochschild is seeking to extend the mine life at Inmaculada having modified its environmental impact assessment to incorporate new areas into its production plan. Inmaculada mines at 3,850tpd and is permitted to increase this to 4,200tpd.
Brownfield exploration has discovered several new veins from a new zone to the west of the Angela vein at its flagship Inmaculada mine in Peru and infill drilling is ongoing. Drilling will also start soon at the nearby Cochaloma and Pablo Sur zones along with a new campaign at the recently permitted Corina area to the north of Selene.
Hochschild had $95 million in cash as at June 30 and net debt of $61 million. It has reduced its debt significantly over the last two years from $360 million at the end of 2017, including paying back some $100 million in debt in recent months.
Shares in Hochschild (LSE:HOC) are trading at 210p, valuing the company at £1.1 billion. Its share price has increased 27.5% so far this year.