Hochschild Mining Targets 500,000 Ounces by 2028 as Royropata Permit Advances

Key Points

• Hochschild Mining aims to reach roughly 500,000 gold-equivalent ounces of annual production by 2028, a projected 60% increase, through existing operations and the Royropata and Monte do Carmo projects.
• Royropata’s environmental permit application has reached the admissibility stage. The predominantly silver project could produce about 150,000 gold-equivalent ounces annually for 10 to 15 years using the existing Selene plant.
• Mara Rosa has reached nameplate output of more than 8,000 ounces in September, while Monte do Carmo is targeted to begin producing about 90,000 ounces annually by late 2028, subject to a final investment decision expected by the end of 2026.

Hochschild Mining LON: HOC outlined plans to expand production through brownfield exploration and the development of its Royropata and Monte do Carmo projects, while highlighting operational progress at its Mara Rosa mine in Brazil and continued performance from its Inmaculada operation in Peru.

The company said its strategy centers on brownfield growth, extending mine lives, operational efficiency, disciplined capital allocation and safety and environmental priorities. It also said it had revised its all-in sustaining cost assumptions to reflect the effect of higher prices on costs.

Royropata permit advances in Peru

Hochschild said it had achieved admissibility for the environmental permit application for Royropata, a project intended to extend the former Pallancata mining area and utilize the existing Selene plant, which has capacity of 3,000 tonnes per day.

The company described Royropata as a predominantly silver deposit with 50 million tonnes of resources grading 1.5 grams of gold and 412 grams of silver per tonne, equivalent to 3.3 million gold-equivalent ounces. It said the deposit has an average width of 30 meters and could support approximately 150,000 gold-equivalent ounces of annual production, mostly silver, for 10 to 15 years.

Hochschild also said it received a drilling permit for 50 new exploration platforms in the district, supporting exploration between 2027 and 2030. The company is targeting additional resources in areas between the former Pallancata mine and Pablo, using technologies including artificial intelligence, underground long-hole drilling and microgravity surveys.

The company said Peru’s new government has signaled a more pragmatic and market-oriented approach, including efforts to formalize mining, address illegal mining and simplify permitting. Hochschild said it still expects permitting challenges but sees improved government attitudes toward project development.

Inmaculada exploration targets longer mine life

Inmaculada, Hochschild’s flagship operation, has produced about 200,000 ounces annually for many years, according to the company. Its current life-of-mine plan calls for production of about 180,000 ounces annually over five-and-a-half to six years, excluding potential new resources.

The company said it has added 5.2 million ounces through brownfield exploration over the past decade and is targeting at least 250,000 ounces from exploration during the current year. It identified the southern area of the mine and the Eduardo vein among prospective zones, while noting further potential at the South and Minascucho areas.

During a question-and-answer session, the presenter said Hochschild expects to spend roughly $30 million on exploration over the next four to five years across its operations. The company said brownfield exploration offers a lower-cost way to add ounces than acquisitions.

Mara Rosa reaches nameplate output

In Brazil, Hochschild said Mara Rosa produced more than 8,000 ounces in September, representing full plant capacity. It said mining, crushing, milling, leaching and filtering operations were functioning at a strong level following a period of operational learning and the addition of technical personnel.

The company said it had implemented a new transportation and hauling contract at Mara Rosa that was generating favorable costs. It also said the mine had completed a pushback that made higher-grade mineral available and was prepared for the rainy season.

Mara Rosa has an expected mine life of about 10 years, with annual production of 80,000 to 90,000 ounces, Hochschild said. The company is conducting exploration along the surrounding orogenic trend in an effort to extend that mine life.

Monte do Carmo targeted for 2028 production

Hochschild said its fully permitted Monte do Carmo gold project in Tocantins, Brazil, is progressing through basic engineering work on waste-rock facilities and pre-stripping. Plant engineering has been completed by Ausenco, and the company is seeking bids for critical equipment and infrastructure packages, including milling, crushing and a power line.

The company said it expects to present a final investment decision for Monte do Carmo by the end of 2026 and aims to begin production at the end of 2028. The project is expected to produce around 90,000 ounces of gold annually.

Hochschild said that, with its existing producing assets and the Royropata and Monte do Carmo projects, it believes it could reach roughly 500,000 ounces of annual gold production in 2028, representing an increase of about 60%.

The company reported $309 million of cash and $51 million of net cash, and said it had paid an interim dividend of $21 million. It said its balance sheet could fund development of Monte do Carmo and Royropata while maintaining its approach to disciplined capital allocation.

About Hochschild Mining (LON:HOC)

We are a leading underground precious metals producer focusing on high grade silver and gold deposits, with over 50 years' operating experience in the Americas. We currently operate three underground mines, two located in southern Peru and one in southern Argentina. All of our underground operations are epithermal vein mines and the principal mining method used is cut and fill. The ore at our operations is processed into silver-gold concentrate or dore. Hochschild Mining plc is listed on the Main Market of the London Stock Exchange and is headquartered in Lima, Peru.

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