Hochschild Mining to cut costs next year amid lower prices
Precious metals miner Hochschild Mining is on track to beat its 2014 production target, but said that a revision of its core mine plans will limit growth next year.
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The company, which operates in North, Central and South America, said it has reviewed its mine plans in order "to deliver profitable ounces in lower precious metal price environment".
Hochschild is targeting further cost efficiencies to reduce operating expenditure in 2015.
"In this regard, the mine plans of the Arcata and Pallancata operations have been optimised with the operational focus expected to be on accessible ore areas requiring reduced capital expenditure with cut-off grades reflecting the current weaker metal price environment," it said.
All-in sustaining costs are now expected to fall to between $15 and $16 per ounce next year, down from $16.8 per ounce in the first half of 2014.
Attributable production is forecast to be 24m silver equivalent ounces in 2015. For 2014, Hochschild said it should exceed its 21m ounce target.
"In the current weak precious metal environment, Hochschild has reacted decisively to preserve capital and optimise cashflow by maintaining our focus on the production of profitable ounces as part of our successful ongoing cost reduction programme," said chief executive Ignacio Bustamante.
"Understandably, this has entailed a review of mine plans across the company which will consequently reduce production, but also reduces overall costs and capex in 2015 allowing us to produce profitable ounces at all our operations," he said.
The stock was down 2.3% at 95.5p by 08:22 on Friday.