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Silver-gold miner Hochschild beats FY'18 output target

London-listed silver and gold producer Hochschild Mining PLC achieved record 2018 attributable production on the back of strong output at its Inmaculada and Pallancata mines in Peru.

The company said Jan. 16 that its attributable output totaled 39.0 million silver equivalent ounces, or 526,650 gold equivalent ounces, beating increased guidance of 38.5 Moz of silver equivalent, or 520,000 gold equivalent ounces. Output in 2017 totaled 38 Moz of silver equivalent, or 513,600 gold equivalent ounces.

Full-year attributable output comprised 19.7 Moz of silver and 260,440 ounces of gold, compared to 19.1 Moz of silver and 254,930 ounces of gold in 2017.

In the fourth quarter of 2018, Hochschild's silver equivalent production dropped to 9.5 Moz, from 9.8 Moz in the year-ago quarter.

A year-over-year increase in silver output during the quarter to 5 Moz from 4.9 Moz was offset by a drop in gold production to 60,500 ounces from 66,270 ounces due to lower-than-expected grades at Inmaculada.

All-in sustaining costs in 2018 are expected to be within guidance of US$940 to US$970 per gold equivalent ounce, or US$12.7 to US$13.1 per silver equivalent ounce.

In 2019, Hochschild expects to produce 37.0 Moz of silver equivalent, or 457,000 gold equivalent ounces at all-in sustaining costs of US$960 to US$1,000 per gold equivalent ounce, excluding output from the Arcata mine in Peru. The company said it will decide on Arcata's future before releasing full-year results Feb. 20.

The total sustaining and development capital expenditure in 2019 is expected to be US$130 million to US$140 million, including US$15 million of mine development at Inmaculada to access newly discovered veins.

The brownfield exploration budget in 2019 is expected to be about US$27 million, with a greenfield budget of approximately US$10 million.