Hochschild Mining surges on Numis upgrade

Hochschild Mining surged on Tuesday as Numis upgraded its stance on the stock to ‘buy’ from ‘hold’ and lifted the price target to 290p from 220p.

The brokerage said the company’s second-quarter production results were ahead of its expectations thanks to better grades at the Inmaculada mine.

“These were a good set of results and highlight the ongoing operational turnaround by the company since the commissioning of Inmaculada in 2015,” it said.

Numis upgraded its 2016 production estimates on the back of the update and the improved guidance and lifted its FY earnings per share forecasts from $0.07 to $0.11, which is above consensus of $0.09.

Hochschild said last week that production for 2016 would be higher than previously estimated as it noted a big jump in gold and silver output for the first half.

The company is due to publish its interims on 17 August and Numis expects earnings before interest, tax, depreciation and amortisation of $124m, with EPS of $0.04, in line with consensus.

At 1230 BST, Hochschild shares were up 9.7% to 248.90p.