Inmaculada Mine produced over 300,000 ounces of gold equivalent in 2023

However, the momentum of the Inmaculada Mine and the placement of the annual volume at the upper level of the projected range were not sufficient to surpass the results of 2022.

In Q4 2023, Hochschild Mining PLC delivered attributable production of 82,251 gold equivalent ounces or 6.8 million silver equivalent ounces, slightly stronger than Q3. Overall 2023 attributable production was 300,749 gold equivalent ounces or 25.0 million silver equivalent ounces. The result was at the upper end of revised guidance, due to a better-than-forecast performance at Inmaculada.

The Company reiterates that its all-in sustaining cost for 2023 is expected to be in line with the revised guidance of between $1,490-1,580 per gold equivalent ounce ($18.0-19.0 per silver equivalent ounce)

TOTAL GROUP PRODUCTION

Total production includes 100% of all production, including production attributable to Hochschild's joint venture partner at San Jose.

ATTRIBUTABLE GROUP PRODUCTION

Attributable production includes 100% of all production from Inmaculada, Pallancata and 51% from San Jose.

Production

Inmaculada

Fourth quarter production at Inmaculada was 39,354 ounces of gold and 1.5 million ounces of silver, which amounts to a gold equivalent output of 57,425 ounces, with higher tonnage and grades from newer mining areas. Overall, in 2023, Inmaculada has delivered gold equivalent production of 203,849 ounces (2022: 226,363 ounces), slightly above the revised forecast published in August.

Pallancata

In Q4, Pallancata produced 0.3 million ounces of silver and 1,224 ounces of gold bringing the silver equivalent total to 0.4 million, with the mine still operating a little later in the quarter than expected. Overall, in 2023, Pallancata produced 2.4 million silver equivalent ounces (2022: 3.3 million ounces) slightly above the revised forecast (2.0 -2.2 million ounces). In Q4, as previously announced, Pallancata suspended operations and was placed on care and maintenance.

The process of amending Pallancata's environmental impact assessment ("Third MEIA") to incorporate the Royropata discovery into the permitted area formally began in December and is advancing on schedule. Feasibility engineering is over 90% completed and environmental and social baseline studies will be conducted during 2024.  

San Jose (the Company has a 51% interest in San Jose)

The San Jose mine experienced lower than expected grades, resulting in production of 1.3 million ounces of silver and 22,836 ounces of gold in the quarter, which represents 3.3 million silver equivalent ounces. This amounts to a 2023 total production of 11.1 million silver equivalent ounces (2022: 11.8 million ounces).

Average realisable prices and sales

Average realisable precious metal prices in Q4 2023 (which are reported before the deduction of commercial discounts) were $2,036/ounce for gold and $23.7/ounce for silver (Q4 2022: $1,767/ounce for gold and $25.8/ounce for silver).

For 2023 as a whole, average realisable precious metal prices were $1,974/ounce for gold and $23.7/ounce for silver (2022: $1,791/ounce for gold and $23.3/ounce for silver).

Advanced Project: Mara Rosa

The Mara Rosa project is progressing on schedule and budget with total project progress at 99.8%. The Company continues to expect first gold pour during the month of February and commercial production in the second quarter.

Health and Safety

Proactive corporate safety indicators are being monitored to ensure optimal working conditions for all personnel and the project has completed approximately five million hours without loss time accident. Frequency and severity indices for 2023 were 0.54 and 2, respectively, both better than corporate goals

Procurement

 Main plant reagents and materials, including cyanide, balls for the mills, lime and activated carbon have been purchased and deliveries are on track to meet the start of operations.

Mine and Pre-Stripping

Total pre-stripping volume was 2,091 kt of which there is approximately 136.5 kt to guarantee availability of mineral for the ramp-up and operation. Waste dumps and ore stockpiles are complete and being used.

Processing plant

The crushing and screening areas were commissioned during Q4 whilst commissioning began of the thickener and ball mill.  Full project commissioning and the beginning of the project's ramp-up is expected during the first quarter.

Quality control teams are consistently monitoring all critical project progress such assembly of metallic structures, equipment, piping, welding and commissioning activities.

Infrastructure

Construction of the dry stack was completed in December 2023 and the Pequi water reservoir is fully operational and filled to 95% capacity with the water required for 2024 operations.

The Administrative buildings are fully operational including offices, cafeteria, first aid and nursery areas.

Permitting & Sustainability

During Q4, Mara Rosa received authorisation for commissioning of the wet circuit with the dry circuit already permitted.  During early December, the project was visited by officials from EPA-Goias to assess the issuance of the Operating License which is expected to occur in February.

The Company organised three festivities to celebrate Children's Day in Mara Rosa and Amaralina with over 3,100 participants whilst on 2 November, a meeting with the local communities from both towns was held with the objective of updating them on project progress and strengthening local relationships and dialogue.

Brownfield exploration

Inmaculada

In Q4 2023, the Company performed 900m of potential drilling, intercepting two new structures, Nicolas and Andrea, which will be further investigated in this quarter.

San Jose

At San Jose, the brownfield team carried out 906m of potential drilling and 4,420m of resource drilling in the Suspiro, Sigmoid Molle, Guadaluoe veins with the key vein expected to be the Suspira quartz sulphide vein which has high silver grades.

The plan for the first quarter is to perform 1,500m of potential drilling at San Jose in the Telken North and Cerro Saavedra areas.

Financial position

Total cash was approximately $89 million as at 31 December 2023, resulting in net debt of approximately $252 million.

To ensure an ongoing level of cash flow stability from Inmaculada, the Company has secured a zero-cost collar with JPMorgan for 100,000 ounces of our 2024 gold production with an average floor at $2,000/oz and an average cap at $2,252/oz.