Hoschschild mining suspends 2013 full year dividend

DividendMax Ltd.

Hoschschild mining suspends 2013 full year dividend

Financial highlights

Revenue of $622.2 million (2012: $818.0 million)

Adjusted EBITDA of $195.5 million (2012: $384.8 million)

EPS of $(0.15) (2012: $0.19)

Cash balance of $291.0 million & short term borrowings reduced to $17.8 million

Full year dividend suspended

Minority investments valued at $52.4 million

Cashflow optimisation programme already delivered $145 million of savings:

o Production costs reduced by $48 million versus initial guidance

o Administration costs reduced by $19 million versus 2012

o Sustaining capital expenditure reduced by $33 million versus initial guidance

o Exploration costs reduced by $25 million versus initial guidance

Acquisition & Refinancing highlights

Key acquisition of Pallancata and Inmaculada minorities completed

o Consolidates minority shareholding in assets already controlled and operated by Hochschild

o Inmaculada set to reduce average unit cost

Refinancing completed in January 2014

o 7.75% $350 million Senior Notes issued due 2021

Operational highlights

Full year production of 20.5 million attrib. silver equivalent ounces achieved, exceeding 20.0 million target

Main operation all-in sustaining costs lowered by 14% to $18.6 per ounce;

Inmaculada project set to begin commissioning in Q4 2014

o Plant construction on track with all key equipment delivered

o Mine development, infrastructure, energy and engineering targets significantly developed

Resource life-of-mine increased to 10.0 years

2014 Outlook

2014 production target set at 21.0 million attributable silver equivalent ounces

2.0 million silver ounces sold forward for 2014 at $22 per ounce; 33,000 gold ounces sold forward for 2014 at $1,338 per ounce

0-5% reduction in all-in sustaining costs expected for 2014

Sustaining capital expenditure expected to be $130 million

Exploration and geology budget set at approximately $30 million

Companies mentioned