Hochschild Mining interims boosted by Immaculada record

Hochschild Mining said first-half pre-tax profit from continuing operations rose to $54.9m from $38.6m driven by record production at its Inmaculada mine and control over costs.

Revenues rose to $372.3m from $340.8m and adjusted underlying earnings were up 19% to $161.9m. The interim dividend was increased 42% to 1.965 cents a share.

The company reported production of 19.9m attributable silver or 268,237 attributable gold equivalent ounces, up 11% on 2017.

Hochschild said it was on track to deliver attributable production target of 38m silver equivalent ounces for 2018 and put the company on track to meet its full year target of 38m silver equivalent ounces (514,000 gold equivalent ounces).

“Inmaculada's output of 138,427 gold equivalent ounces was characterised by strong grades and boosted by inventory in process at the beginning of the year leaving the mine well ahead of the run rate to meet its forecasted 235,000 ounces,” the company said.

“All-in sustaining costs at $615 per gold equivalent ounce were low reflecting the good operational performance but also some second-half phasing of capital expenditure which we expect will raise the number to the forecast full year levels ($700-$750 per gold equivalent ounce).”

“Hochschild Mining has delivered a strong first half performance with record production at Inmaculada and a very solid performance on the costs front leaving us on track to achieve our 2018 targets,” said chief executive Ignacio Bustamante.

“Our brownfield programme has started to generate some exciting results with the key achievement of the addition of 800,000 gold equivalent ounces (59.2 million silver equivalent ounces) of resources at Inmaculada as well as good progress at Arcata.”

The company said precious metal prices were currently nearing the bottom of their recent trading range.

“However, Hochschild's operational performance combined with a strong balance sheet, exciting early results from our brownfield programme, a significant recent devaluation in the Argentine peso and no current hedges in place leave us in a beneficial position,” it added.