Business
Hochschild addresses current
Hochschild addresses current.
About this update from Hochschild Mining Plc
[{"type":"text","content":"\n RNS Number : 5480I Hochschild Mining PLC 20 November 2008 \n \n \n\n\n\n\n\n\nHochschild takes steps to address current market conditions \n\n\n\nReduction of workforce by 150 corporate jobs \n\n\nOptimisation of capex allocation to preserve strong cash position \n\n\nDelay of San Felipe project \n\n\nOn track to meet 2008 production target of 26 million silver equivalent ounces \n\n\n \nIn response to current adverse market conditions and lower prices of base and precious metals, Hochschild Mining plc (“Hochschild”) has initiated a plan to reduce costs and conserve cash holdings. The company is initially cutting 150 jobs and reducing administrative expenses and capital expenditure. As a result of this, and the continued decline in zinc prices, Hochschild has also decided to delay the development of its San Felipe zinc project in northern Mexico until market conditions improve.\n\nHochschild is implementing an initial Group-wide reduction in workforce of 150 positions, predominantly in corporate and administrative functions. The Company has also implemented a number of initiatives to reduce administrative costs further, including a freeze on recruitment. Additionally, Hochschild has deferred almost all of its 2009 capital expenditure, which will be largely limited to sustaining capex at existing operations and already committed investments.\nIn light of the decision to reduce capex and given the current price environment for zinc, the Company has concluded that it is prudent to delay development of the San Felipe project. Over the previous 6 months, zinc prices have fallen by 46% from a high of $2,267/mt to the current price of $1,218/mt. However, Hochschild remains confident about the long term value of San Felipe and will continue to review the timing of the project. \n\nHochschild's focus for 2009 is to deliver profitable production and the Company is undertaking a review of its cut-off prices to ensure economic grades are mined throughout all of its operations. 2009 production targets will be reported in the Company's Production Statement in January.\n \nHochschild continues to maintain a solid cash position with a bal...