Hochschild Mining posts better than expected 2019 production

(Reuters) - Precious metals miner Hochschild Mining <HOCM.L> reported better-than-expected 2019 output, boosted by record production at its Inmaculada mine in southern Peru and said it secured drilling permits for Pallancata, which was delayed last year.

Production from the flagship Inmaculada mine jumped more than 6% to 260,126 gold equivalent ounces Hochschild said on Wednesday, as the company discovered several new high-grade minerals during the period.

Shares in the company were 3.7% higher at 170.2 pence at 0848 GMT.

Hochschild, which operates two mines in southern Peru and one in Argentina, said it expects to produce 422,000 gold equivalent ounces in 2020. In November it forecast 432,000 gold equivalent ounces.

The company said the outlook figures varied because it used a different gold to silver price ratio in November 2019.

Hochschild has suffered from reduced operations at its Pallancata mine due to the delayed permits, which it has now secured, allowing it to drill at the Pablo Sur and Cochaloma targets close to Pallancata.

The company, which operates two mines in southern Peru and one in Argentina, said gold production for the year ended Dec. 31, 2019 was at 477,400 gold equivalent ounces, higher than its forecast of 457,000 gold equivalent ounces.

However, full-year production was 9.4% lower than a year earlier as the company stalled its operations at its Arcata mine in south west Peru in early 2019.

Arcata mine, Hochschild's first mining operation which began back in 1964, was shut in February last year bearing the brunt of low silver prices. The Peruvian mine accounted for more than 9% of the group's total silver production last year.

Silver prices averaged about $16.94 in 2019, a far cry from its record of $49.50 in 2011.

(Reporting by Shanima A in Bengaluru; Editing by Bernard Orr)