We have a solid asset base and a pipeline of projects spread across the Americas.
Hochschild aims to invest in mineralised districts with the possibility to grow over time. We have a long and successful track record of discovering low-cost resource additions and are currently executing a comprehensive programme at all our deposits across Peru and Argentina. We believe that there are significant further opportunities to extend the lives of our mines and projects and improve the quality of our resources.
In the first half of the year, most of the drilling at Inmaculada was potential drilling at the Huarmapata area and resource drilling in the Josefa vein with the best results from Josefa which them merited further drilling in the second half. In addition, there was 2,900m of infill drilling in the Juliana, Susana-Beatriz, Bety, Barbara and Noelia structures. Much of the planned brownfield exploration work including surface drilling work was curtailed in 2022 by a lack of permits.
In the third quarter of 2022, Hochschild announced a major discovery west of current operations at Pallancata. The new area, named Royropata is part of the extended Royropata system.
An initial Inferred Mineral Resource Estimate for the Royropata Zone to the west of the existing Pallancata mine was completed in Q4. The Company estimates that the zone contains an Inferred Mineral Resource of 1.88 million tonnes at an average grade of 667 g/t Ag and 2.42 g/t Au containing 51.2 million silver equivalent (“Ag Eq”) ounces at a combined Ag Eq grade of 848 g/t.
In 2023, the Company will develop the Mineral Resource including infill drilling to convert the Inferred Minerals Resources to Indicated and will also proceed with basic engineering as well as the environmental permitting process, including baseline studies.
During the year, 18,150 of potential drilling was executed around the mine area and in the Saavedra area in the Ayelen, Ayelen SE, Maura and Maura East veins, among others, in addition to 2,800m of infill drilling in the Julia, Isabel, Odion, Molle and Perla veins. The Company also started to explore the Ciclon project (700m of drilling) further away in the Santa Cruz province.
In 2022 as a whole 19.3 million silver equivalent ounces have been added to the San Jose resource base at a silver equivalent grade of 983 grams per tonne.
The 100%-owned Arcata unit is located in the Department of Arequipa in southern Peru, on a 47,000 hectare site, at an altitude of 4,600 metres above sea level. First concentrate was poured in 1964.
The Arcata underground mine is conformed by vein systems where the epithermal vein deposits are of an intermediate sulphidation type with predominant silver values and variable quantities of gold and base metals. The known structures extend over 29km. The veins are mined by conventional and mechanised cut-and-fill breast or overhand stoping methods utilising timber support. The plant at Arcata produced silver/gold bulk concentrate by flotation.
The mine was placed on temporary care and maintenance in February 2019.
As of 31 December 2021, Measured and Indicated Mineral Resources amounted to 2.1 million tonnes at 1.35 grams per tonne of gold and 421 grams per tonne of silver containing 92,900 ounces of gold and 29.0 million ounces of silver. Inferred Mineral Resources amounted to 3.5 million tonnes at 1.26 grams per tonne of gold and 370 grams per tonne of silver per tonne containing 142.6 thousand ounces of gold and 42.1 million ounces of silver.
There remains significant potential in the Arcata deposit area and in 2022, the Company will aim to drill to the west of the original mine as well as mapping and sampling to the south east.
Historic key mine statistics
|Ore production (tonnes)||373,106||499,385||677,309||648,051||701,947||900,861||773,498||687,966||645,974||643,059|
|Average silver grade (g/t)||321||308||337||323||286||217||271||312||439||503|
|Average gold grade (g/t)||0.99||1.07||1.24||0.99||0.99||0.74||0.83||0.88||1.40||1.56|
|Silver produced (koz)||3,416||4,391||6,343||5,613||5,827||4,984||5,526||6,081||8,099||9,542|
|Gold produced (koz)||10.57||15.15||22.54||15.67||16.89||16.83||17.27||17.38||25.83||28.64|
|Silver equivalent produced (koz)||4,177||5,482||7,966||6,741||7,043||6,196||6,769||7,332||9,959||11,604|
|Silver sold (koz)||3,397||4,357||6,346||5,653||5,621||4,924||5,236||5,979||8,095||8,748|
|Gold sold (koz)||9.93||14.96||22.04||15.30||15.66||15.95||15.90||16.70||24.90||26.02|
|Resources (attrib. Moz Ag Eq)||90.1||105.1||104.2||117.6||108.7||99.4||106.4||112.3||98.7||79.4|
The Ares underground mine is located in the district of Orcopampa, department of Arequipa, on a site covering an area of 22,700 hectares at an altitude of 4,900 ASL. The unit consists primarily of an underground mine and a processing plant where a Merrill-Crowe leaching process using a standard cyanidation technique is employed to produce Dore. The Group discovered the Ares mine, which it fully owns, in 1988 with underground exploration commencing in 1993. The mine was commissioned into production in 1998 and had operating capacity of 1,000 tonnes per day. Extraction of mineral and production at Ares closed in the second quarter of 2014.
Our strategy with regards to our greenfield exploration programme is to maintain and drill a balanced portfolio of early-stage to advanced opportunities using a combination of earn-in joint ventures, private placements with junior exploration companies and the staking of properties.
Current greenfield activity
The greenfield team has recently focused its exploration strategy primarily in North America to diversify geographic risk. The greenfield exploration programme is currently suspended.
In October 2021, Hochschild announced the demerger of 80% of our rare earths business, Aclara Resources Inc as well as the listing on the Toronto Stock Exchange and a concurrent initial public offering which
raised approximately $98 million.
Aclara is a development-stage rare earth mineral resources company with a strategic land package of mineral concessions in Chile. It is developing the Penco Module a project which contains ionic clays that are rich in heavy rare earth elements essential for the current electric revolution. Hochschild retains a 20% stake in Aclara.