2012 Annual General Meeting
Address to Shareholders
Hochschild Mining plc ("Hochschild") held its Annual General Meeting of shareholders in London today. Eduardo Hochschild, Executive Chairman, made the following remarks:
"I am pleased to report that Hochschild Mining plc once again delivered a resilient performance in 2011, despite the continued global economic crisis. The company met its key objectives for the year; including the completion of feasibility studies for two of our Advanced Projects, the achievement of our annual operating targets, and the ongoing evolution of our exploration based strategy.
To give you a brief overview of results: production was in line with expectations, at 22.6 million attributable silver equivalent ounces, and the Company recorded an impressive 42% increase in EBITDA to $563 million, on the back of revenue of almost $1 billion, principally due to strong precious metals prices. Earnings per share was up by 75% to 49 cents.
With that in mind, the Board has recommended a final dividend for the year of 3 cents per share, bringing the total dividend for 2011 to 6 cents per share, a 20% increase over the total dividend for 2010. This confirms the confidence we have in the business going forward and the ongoing strength of our balance sheet.
In 2011, our management team firmly embedded the exploration strategy within the Company. During the year we completed over 315,000 metres of drilling and we raised our exploration budget for 2012 to $90 million, another record for the Company. This considerable commitment has already begun to bear fruit, with an 11% increase in the life-of-mine of our core assets in 2011, to 9.7 years, and an increase in our 'Company Maker' pipeline from eight to 13 projects, significantly strengthening our project pipeline. I firmly believe that this strategy will deliver profitable long-term production growth to our shareholders.
In 2012 we expect to see the first crucial steps in the construction phase of our two exciting projects at Inmaculada and Crespo, which have the potential to contribute attributable annual production of 10 million silver equivalent ounces, increasing current production levels by 50%.
Hochschild Mining remains in a very solid financial position with a cash balance of US$590 million as at 31 March 2012, and minority investments of over US$396 million. The Board remains confident that the Company has the financial flexibility to continue to pursue high return investment opportunities, whether in brownfield expansion at our existing mines, value enhancing acquisitions, or adding to our exploration investment.
During 2011 there were a number of changes to the Board. In light of Dionisio Romero's decision to retire as a Non-Executive Director after today's meeting and Sir Malcolm Field retiring at the end of this year, we appointed Dr Graham Birch and Rupert Pennant-Rea as Non-Executive Directors. Both Graham and Rupert bring with them extensive and relevant experience in the natural resource industry.
As this is their last AGM, I would like to express my sincere gratitude to both Malcolm and Dionisio for their counsel and invaluable contributions to Hochschild since joining the Board back in 2006.
I am pleased to confirm that Jorge Born was appointed by the Board yesterday to replace Dionisio on the Company's Nominations Committee.
Finally, on behalf of the Board, I would like to thank the entire talented Hochschild team for another year of strong performance in 2011, and our shareholders, for your continued support."
Hochschild Mining plc
Charles Gordon +44 (0)20 7907 2934
Head of Investor Relations
Charles Chichester +44 (0)20 7251 3801
About Hochschild Mining plc
Hochschild Mining plc is a leading precious metals company listed on the London Stock Exchange (HOCM.L / HOC LN) with a primary focus on the exploration, mining, processing and sale of silver and gold. Hochschild has almost fifty years' experience in the mining of precious metal epithermal vein deposits and currently operates four underground epithermal vein mines, three located in southern Peru, one in southern Argentina and one open pit mine in northern Mexico. Hochschild also has numerous long-term prospects throughout the Americas.
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