Hochschild Mining revises 2013 exploration budget down by 29 per cent

FTSE 250-listed mining company Hochschild Mining has revised its expected 2013 exploration budget down by 29 per cent to 55m dollars following a review of the company's discretionary elements.

In an update issued on Tuesday, the company reported that temporary reductions in the greenfield programme would represent 53% of the overall reduced figure.

In addition, brownfield exploration programmes at the company's main operations were expected to focus on the development of potential resources as opposed to further resource life-of-mine increases.

The company said that the 2013 production target had been maintained at 20m attributable silver equivalent ounces. Unit cost increases in Peru were now expected to be at 10-15% for 2013 and unit cost increases in Argentina were to be maintained at 10-15% for 2013.

Sustaining capital expenditure at main operations was expected to be approximately $160m.

Hochschild said that it had also made progress with regard to its operating cost base and had identified key savings following ongoing negotiations with equipment and material suppliers as well as changes to the mine development budget, which it said was expected to materially impact both the unit cost per tonne at the main operations as well as the forecast level of sustaining capital expenditure.

Ignacio Bustamante, Chief Executive Officer of Hochschild Mining, said: "The company has moved swiftly to implement plans that were put in place as part of our ongoing review of market conditions and has already begun to deliver significant savings without impacting our overall long term exploration-led strategy."

MF