Curtailed mines see Hochschild withdraw guidance, cancel dividend

Hochschild Mining reported attributable gold production of 59,425 ounces in its first quarter on Wednesday, alongside three million ounces of silver.

The FTSE 250 company said that made for 94,123 gold equivalent ounces, or 8.1 million silver equivalent ounces.

It said activities at Inmaculada and Pallancata were still limited to critical environmental and safety priorities as a result of the ongoing Covid-19 coronavirus pandemic, with San Jose in a phased ramp-up process, following the receipt of permission to restart production.

The firm also confirmed the withdrawal of its 2020 guidance.

Hochschild said it remained in a “strong” financial position, however, with total cash standing at around $178m as at 31 March, up from $166m on 31 December.

Net debt totalled $36m on the same date, slightly wider than the $33m at the end of December.

The board also confirmed that its proposal to pay a 2019 final dividend had been withdrawn.

“The current global situation is extremely challenging for everyone and, at Hochschild, our priority remains the health and safety of our employees and stakeholders who have been vital in helping us manage this situation,” said chief executive officer Ignacio Bustamante.

“Although our operations in Peru remain suspended, we continue to work with the government on our potential strategies for remobilisation and ramp-up, whilst in Argentina, we are steadily beginning to restart the San Jose operation.

“Our mines delivered a solid start to the year producing 94,000 gold equivalent ounces or 8.1 million silver equivalent ounces although output was of course impacted from the middle of March.”

In addition, Bustamante said the firm’s exploration programmes had been curtailed across the Americas, and in particular in Peru, just prior to the end of the rainy season.

“Hochschild is in a strong financial position with low net debt, significant liquidity and we expect to be firmly back on track once this temporary period of disruption is resolved.”

At 0829 BST, shares in Hochschild Mining were down 0.35% at 120.77p.