Hochschild silver output rises; hedges below spot prices

Jan 21 (Reuters) - Silver (Shenzhen: 300221.SZ - news) miner Hochschild Mining Plc (LSE: HOC.L - news) said 2014 production exceeded its expectations and that it had hedged 6 million ounces of silver for this year.

Shares (Frankfurt: DI6.F - news) in the company fell as much as 3.6 percent as the hedging was made at $17.75 per ounce, below the spot silver prices of about $18.20 per ounce.

An increasing number of precious metals miners, battered by the fall in prices over the last two years, are selling planned output forward to better control their cash flow. Silver fell 36 percent in 2013 and 19 percent in 2014.

The miner said this hedge was in addition to a previous agreement to hedge 38,000 ounces of gold for 2015 at $1,300 per ounce.

The London-listed company, which has mines and exploration projects in Peru, Chile, Argentina and Mexico, said it produced 22.2 million silver equivalent ounces in 2014 compared with its target of 21 million silver equivalent ounces.

Hochschild said it continued to expect 2015 production target of 24 million silver equivalent ounces, with all-in sustaining costs of between $15 and $16 per ounce.

Shares in the company were down 3.6 percent at 125.75 pence at 0909 GMT on the London Stock Exchange (LSE: LSE.L - news) . (Reporting By Mamidipudi Soumithri in Bengaluru; Editing by Gopakumar Warrier)