Ignacio Bustamante - Chief Executive Officer Ramon Barua - Chief Financial Officer

Dominic O'kane - J.P Morgan Cazenove Ian Rossouw - Barclays

Hello and welcome to today’s Hochschild Q2 2015 Mining Production Results. [Operator Instructions] Just to remind you, the call is being recorded. I’ll now hand you to our host Ignacio Bustamante, CEO.

Thank you, Mark. Hello everyone and welcome to our second quarter production conference call. I’m Ignacio Bustamante, CEO. We also have on the call Ramon Barua, our CFO; and in London, Charlie Gordon, our Head of Investor Relations. As we normally do, I’ll give you a short summary of what we published this morning and then hand the call over for questions. I’m sure you all saw that the second quarter has been an exciting one for Hochschild, with the announcement of the first production from our Inmaculada mine in early June. The subsequent ramp up process has continued since then with tonnes per day at the plant reaching an average of 2,500 tonnes. We expect to keep the average capacity of 3,500 tonnes per day at beginning of August. Recoveries have trended as expected to around 80% in June with the target of reaching 95% in gold and 90% in silver by the end of the year. Production for this quarter included some 5,000 gold equivalent ounces from Inmaculada or just over 300,000 silver equivalent ounces, and we remain on schedule to hit our 2015 forecast from the new mine of between 6 million to 7 million silver equivalent ounces with all-in sustaining costs, as you know, expected to be just over $700 per ounce over the life of mine. I should add that in 2016 production from this new mine will result in Hochschild’s gold/silver split being almost 50/50. Our other operations in Peru and Argentina delivered a solid increase on the first quarter, which were as we scheduled, driven by an increasing grade at Pallancata, a consistent performance at Arcata, and a rising tonnage at San Jose after the holiday affected the first quarter in Argentina. Production was 3.4 million ounces of silver, and 23,000 ounces of gold, making 4.8 million silver equivalent ounces. For the first half as a whole, we delivered 6.3 million ounces of silver and just over 40,000 ounces of gold. We remain on track to hit our 24 million ounce full year target, which will incorporate an expected stronger second half at San Jose, and of course, the new production from Inmaculada. The cash balance at the end of the first half was around $84 million, which includes approximately $63 million of further project expenditure at Inmaculada. During the period, we also were able to refinance the $75 million of short-term lines we took out in the first quarter and have extended the maturity of a significant portion of these lines through to mid 2016 at a better average annual rate of 0.9%. We have had satisfying cash in terms of costs, and are firmly on track to achieve our all-in sustaining cost forecast of between $15 to 16 per silver equivalent ounce for the year. As we have mentioned, at the current ratio of around 75 times gold to silver. This number comes down to between $13 to $14 per silver equivalent ounce. It’s also worth reminding you that in such a difficult price environment we have protections for the balance sheet in place in the form of our 6 million ounces of silver production hedge for this year at $17.75 per ounce. This is in addition to the already announced hedge of 38,000 ounces of gold. Of course, as we move into the second half, we will start to feel the positive effects of the low cost Inmaculada production as well. And with that, I’d like to open up for any questions that you may have.

[Operator Instructions] We have one question in the queue so far, that’s from Dominic O'kane of J.P Morgan. Dominic O'kane: Hello. Just a quick question on Inmaculada CapEx. Could you maybe just elaborate on the expected spend in second half and also in 2016? And how we should think about in terms of construction CapEx versus development CapEx versus working capital?

Sure, certainly. This is Ramon Barua, Dominic. At the beginning of the year, we gave guidance to the market that we were going to spend a final $72 million of CapEx in Inmaculada. As Ignacio pointed out, we have so far spent $63 million, so we have a little bit more going. In terms of mine CapEx, no, the way that the development is designed is that we’re going to be spending around $30 million this year and $30 million in 2016, and that will allow us to have the mine fully developed for roughly the next six years, okay. So you should assume that for the next six years, there is not going to be any development CapEx, just sustaining CapEx which is very low probably in the range of $5 million to $10 million spending depending on the year. Probably at the end of those six years, we will start to spend some money for the development to access new areas of either the Angela vein where there are resources or other veins in the area. In terms of working capital, so far we have spent during the year around $12.5 million, that right now is in the form of the stockpile that we have out of the mine, 270,000 ounces plus, and also some production that we already have in our safety box. We’re not selling the production from Inmaculada at this point until we get the final permit from the authorities. However, that should take around, I’d say, 60 days. And in the meantime, we are working on the final details with some of our clients by which they will advance us up to 80% of the value of that inventory so that we can start compensating for the working capital. But the cash position that you’re seeing now only has the hit of the $12.5 million cost, but not the benefit of those advances. I don’t know if that’s clear. Dominic O'kane: Yes, thank you.

[Operator Instructions] And we have one further question coming through, that’s from Ian Rossouw of Barclays. Go ahead sir, your line is open.

Ramon, just to go a bit more detail about this working capital. So do you expect they need to start getting reseating in 60 days. Is this upfront advance you’re talking ahead of that 60 days permit approvals?

That is correct.

Okay. And when do you expect that to come in? I’m just trying to get a sense of how low you expect the cash balance to fall until things start to generate cash?

The reality is that right now we have $84 million and the advances have a cost to us of around a level of plus 3.5%, okay. And that compares poorly with what we’re having – the credit lines that we are accessing here locally that have a cost of around 0.8%, 0.9% that you have seen. So right now, we have decided to extend those maturities, maintain more cash on hand. And as long as we’re not pressured to take on the advances, we’ll try to keep it that way. If the cash drops to a certain level in which we prefer to monetize that inventory, then we’ll do so. But as part of the cash optimization plan, we can save an interest, we’ll hold on that.

Okay.

If we needed then, we could access that at any point. So we have that option, but we don’t want to use it anytime.

Okay. But if you don’t access those advances, what’s the working capital outflow as you ramp up the mine for the next couple of months or just the cash burn basically? I’m trying to get a sense of how low can the cash balance go. I realize that there is some buffer on these advances, but to get an idea.

I would say somewhere around $8 million a month probably. That will be the working capital, the cost that we would incur monthly without [indiscernible] any benefit now.

[Operator Instructions] Gentlemen, there seems to be no further questions coming through.

Thank you very much, Mark. And in case if you have any additional questions, please feel free to contact Charlie Gordon at our London office directly. And we thank you very much for your time today. Good bye.

This now concludes the call. Thank you all very much for attending. You may now disconnect your lines.