Hochschild Mining Plc (LON:HOC) said it expects to produce 5% less gold and silver in the next year, while costs rise “moderately” due to a $22mln investment to expand tailings storage at its Inmaculada gold and silver mine in Peru.
In an update on Friday, the FTSE 250 metal miner said it expects production to fall to 432,000 gold equivalent oz or 35mln silver equivalent oz, down from this year’s output guidance of 457,000 oz which it remains “on track to meet”.
READ: Hochschild to become one of "lowest cost rare earth producers" after acquisition of Chilean deposit
Costs will also notch up to between US$1,015 and US$1,045 per gold equivalent oz as it begins a US$22mln project to expand tailings storage at its Inmaculada gold and silver mine, in a bid to make up for lower production at its other Peruvian mine.
This marks an increase from the $960-$1,000 spent per gold equivalent ounce in 2019.
The precious metals miner also said it anticipated a “record output” from Inmaculada of approximately 257,000 gold equivalent oz, with 14mln silver equivalent ounces produced at the San Jose mine in Argentina.
The Pallancata mine is expected to produce 7mln silver equivalent oz, with output projections reduced to allow further time for ongoing brownfield exploration, after lower grades were produced at the mine.
Ignacio Bustamante, chief executive officer, said: “Following permitting delays at Pallancata, we have decided to give our brownfield exploration team more time to deliver additional resources and have therefore reduced the operation's expected production to 7mln silver equivalent ounces.”
Shares in the company sank 2% to 186.7p in early trading on Friday.