|
Highlights
·
59% increase in Measured & Indicated Resources to 76.0 million silver
equivalent ounces
·
29% increase in silver equivalent grades to 498 g/t
·
12% increase in total resources to 128.3 million silver equivalent ounces
Hochschild Mining
plc ("Hochschild" or "the
Company") is pleased to announce an increase in both the total Mineral
Resource estimate and Measured and Indicated Resources for the Inmaculada gold-silver project located in Hochschild's existing southern Peru cluster, following
the announcement of a positive scoping study published by International
Minerals Inc ("IMZ") in September 2010. The project, in which Hochschild now owns a controlling 60% stake (IMZ holds
the remaining 40%), is currently at feasibility stage with completion
expected in 2011. The Company is committed to commencing production in
December 2013 at a processing capacity of 3,000 tonnes
per day.
The
previous resource estimate was based on drilling results prior to 15 May
2010. Subsequently, 67 drill holes from higher grade areas of the Angela vein
have been completed and incorporated into the database. As a consequence,
Measured & Indicated resources have increased by 59% to 76.0 million
silver equivalent ounces with a corresponding grade increase of 29%. Summary
results (on a 100% basis, applying a 180 g/t silver equivalent cut-off grade
and a silver to gold ratio of 60:1) are as follows:
·
Measured & Indicated resources: 4.7mt at an average grade of 5.2 g/t gold
and 186 g/t silver containing approximately 795,000 ounces of gold and 28.3
million ounces of silver.
·
Inferred resources of 2.7mt at an average grade of 6.1 g/t gold and 247 g/t
silver containing approximately 521,000 ounces of gold and 21.0 million
ounces of silver.
Hochschild expects
the results to significantly improve the economics of the project detailed in
the 2010 scoping study. Furthermore, after applying the Company's marginal
silver equivalent cut-off grade of 98 g/t, the grade and resource figures
increase further, see table 1 below for full details. The Company will
publish updated valuations and sensitivity analysis relating to Inmaculada in its full year results announcement on 29
March 20111.
Ignacio
Bustamante, CEO of Hochschild Mining comments:
"The
significant increase in resources and grades at Inmaculada
highlights the tremendous value of this joint venture in which we have a
controlling stake and the excellent geological potential which will provide
us with additional profitable ounces. The feasibility study at Inmaculada is also well underway and on track for
completion this year with production coming on line in December 2013".
1 The
Company will apply a cut-off grade of 98 g/t in the annual resource statement
Table
1:For comparison purposes, updated resources based on silver equivalent
cut-off grades of 98 g/t, 180 g/t and 250 g/t are summarised
below:
|
kt
|
Ag (g/t)
|
Au (g/t)
|
Ag Eq
(g/t)
|
koz Au
|
Moz Ag
|
Moz Ag Eq
|
% change in contained
oz
|
% Grade change
|
98 g/t Ag cutoff2
|
|
|
|
|
|
|
|
|
|
Measured
|
1,094
|
125
|
4.7
|
405
|
164
|
4.4
|
14.2
|
-1%
|
-2%
|
Indicated
|
4,518
|
177
|
4.7
|
456
|
676
|
25.7
|
66.3
|
99%
|
21%
|
Measured + Indicated
|
5,612
|
167
|
4.7
|
446
|
840
|
30.1
|
80.5
|
68%
|
15%
|
Inferred
|
3,553
|
199
|
5.0
|
498
|
568
|
22.8
|
56.8
|
-15%
|
5%
|
Total
|
9,165
|
179
|
4.8
|
466
|
1,407
|
52.9
|
137.3
|
20%
|
7%
|
180 g/t cutoff
|
|
|
|
|
|
|
|
|
|
Measured
|
941
|
136
|
5.1
|
443
|
155
|
4.1
|
13.4
|
-7%
|
7%
|
Indicated
|
3,806
|
198
|
5.2
|
512
|
640
|
24.2
|
62.6
|
88%
|
36%
|
Measured + Indicated
|
4,747
|
186
|
5.2
|
498
|
795
|
28.3
|
76.0
|
59%
|
29%
|
Inferred
|
2,648
|
247
|
6.1
|
614
|
521
|
21.0
|
52.3
|
-22%
|
29%
|
Total
|
7,395
|
208
|
5.5
|
540
|
1,316
|
49.4
|
128.3
|
12%
|
24%
|
250 g/t cutoff
|
|
|
|
|
|
|
|
|
|
Measured
|
698
|
153
|
6.0
|
514
|
135
|
3.4
|
11.5
|
-20%
|
24%
|
Indicated
|
2,951
|
226
|
6.1
|
591
|
578
|
21.5
|
56.1
|
68%
|
57%
|
Measured + Indicated
|
3,649
|
212
|
6.1
|
577
|
713
|
24.9
|
67.6
|
42%
|
49%
|
Inferred
|
1,998
|
295
|
7.4
|
737
|
473
|
18.9
|
47.3
|
-29%
|
55%
|
Total
|
5,647
|
241
|
6.5
|
633
|
1,186
|
43.8
|
115.0
|
0%
|
46%
|
Previously
reported (180 g/t cutoff)
|
|
|
|
|
|
|
|
|
|
Measured
|
1,080
|
107
|
5.1
|
413
|
178
|
3.7
|
14
|
|
|
Indicated
|
2,747
|
137
|
4.0
|
377
|
354
|
12.1
|
33
|
|
|
Measured
+ Indicated
|
3,827
|
129
|
4.3
|
387
|
532
|
15.8
|
48
|
|
|
Inferred
|
4,388
|
200
|
4.6
|
476
|
645
|
28.3
|
67
|
|
|
Total
|
8,215
|
167
|
4.5
|
435
|
1,177
|
44.1
|
115
|
|
|
2 The
Company will apply a cut-off grade of 98 g/t in the annual resource statement
due to be published on 29 March 2011
Table 2 - Inmaculada scoping study results published on 10
September 2010 (on a 100% basis) (revised information to be
provided with the full year results announcement on 29 March 2011):
Item
|
Units
|
|
Base Case Gold price
|
$ per ounce
|
$1000
|
Base Case Silver
Price
|
$ per ounce
|
$17
|
Initial Mine life
|
years
|
7.5
|
Average annual gold production 6
|
ounces/year
|
117,000
|
Average annual silver
production 6
|
ounces/year
|
4,000,000
|
Average
annual gold Eq. production
|
Au Eq ounces/year
|
180,000
|
Life-of-mine
gold production 6
|
ounces
|
858,000
|
Life-of-mine
silver production 6
|
ounces
|
29,300,000
|
Life-of-mine
gold Eq. production
|
Au Eq. ounces
|
1,346,000
|
Plant processing
rate (~3,000 tpd)
|
tonnes/year
|
1,095,750
|
Metallurgical recovery - gold
|
%
|
88%
|
Metallurgical recovery - silver
|
%
|
83%
|
Initial capital 2
|
US$ millions
|
168
|
Total Cash operating cost 3
|
per tonne processed
|
$52.08
|
Total Cash operating cost 4
|
per ounce
Au Eq.
|
$311
|
Total
Cash operating cost, inc capital 4
|
per ounce
Au Eq.
|
$517
|
Total
Cash operating cost (by-product) 5
|
per
ounce Au (Ag credit)
|
-$94
|
Total
Cash operating cost inc capital (by-product) 5
|
per
ounce Au (Ag credit)
|
$231
|
Pre-Tax IRR
|
%
|
41%
|
Cash Flow (non-discounted)
|
US$ millions
|
$660
|
NPV, 5% discount rate
|
US$ millions
|
$434
|
NPV, 10% discount rate
|
US$ millions
|
$286
|
1) This
Preliminary Economic Assessment or Scoping study is preliminary in nature, in
that it includes inferred mineral resources that are considered too
speculative geologically to have the economic considerations applied to them
that would enable them to be categorised as mineral
reserves, and there is no certainty that the results of the preliminary
economic assessment study will be realised and
actual results may vary substantially.
2) Initial
Capital includes $32.9 million in contingency allowance. Costs are based on
Q3 2010 estimates and no escalation factors have been applied. Value added
tax has not been included in the cost estimates.
3) Total
Cash Operating costs include smelting and refining and Peruvian Government
royalties, but do not include employee profit sharing or depreciation,
depletion or amortization.
4) Total
Cash Costs per ounce of gold equivalent are calculated using a silver-to-gold
ratio of 60:1.
5)
By-product accounting subtracts the revenue generated by silver from the
operating costs as a credit to determine the cost per ounce of gold.
6) Annual
and life-of-mine production figures are after 5% mining losses, 20% mining
dilution and the respective metallurgical recoveries for gold and silver.
7) Mineral
resources that are not mineral reserves do not have demonstrated economic
viability.
Table 3 - Inmaculada sensitivity analyses published on 10 September
2010 (on a 100% basis) and revised information will be provided with the full
year results announcement on 29 March 2011:
Category
|
$1,000/
$17.00
|
$1,300/
$22.10
|
$1,400/
$23.80
|
$1,500/
$25.50
|
IRR
|
41%
|
58%
|
63%
|
68%
|
Cash
flow (US$m)
|
660
|
1,026
|
1,148
|
1,271
|
NPV 5% (US$m)
|
434
|
699
|
787
|
875
|
NPV 10%
(US$m)
|
287
|
483
|
548
|
613
|
Cash flow
and NPVs are all shown pre-tax, but do include Peruvian government royalties
and smelter and transportation charges. Value added tax (generally
recoverable in Peru) was not included in the cash flows.
___________________________________________________________________________
Enquiries:
Hochschild Mining plc
Charles Gordon
+44 (0)20 7907 2934
Head of Investor Relations
Finsbury
Faeth Birch
+44 (0)20 7251 3801
Public Relations
___________________________________________________________________________
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 over
forty years' experience in the mining of precious metal epithermal vein
deposits and currently operates four underground epithermal vein mines, three
located in southern Peru, one in southern Argentina and one open pit mine in
northern Mexico. Hochschild also has numerous
long-term prospects throughout the Americas.
|
|