Hochschild Mining reports robust first-half production

Hochschild Mining reported robust first-half production numbers and a solid financial position in an update on Wednesday, having produced 103,752 ounces of gold and 4.1 million ounces of silver, amounting to 152,792 gold equivalent ounces and 12.7 million silver equivalent ounces.

The FTSE 250 company said that for the second quarter alone, production included 57,815 ounces of gold and 2.1 million ounces of silver, for 83,034 gold equivalent ounces, and 6.9 million silver equivalent ounces.

It reiterated its 2024 production guidance, expecting to produce between 343,000 and 360,000 gold equivalent ounces.

All-in sustaining costs were projected to range from $1,510 to $1,550 per gold equivalent ounce.

Operational highlights for the half-year included the Mara Rosa mine achieving commercial production with a strong forecast for the second half of the year.

Additionally, Hochschild secured shareholder approval from Cerrado Gold for an option to acquire the Monte do Carmo project, involving an initial payment of $15m and further instalments totaling $45m on exercising the option.

The company also started its 2024 brownfield drilling programme, with promising early results from the Inmaculada and Mara Rosa sites.

In terms of environmental, social, and governance (ESG) performance, Hochschild reported a lost time injury frequency rate of 1.08, an accident severity index of 62, and a significant reduction in water consumption to 136 litres per person per day.

Domestic waste generation remained steady at 0.94 kilograms per person per day, while the company's ECO score improved to 5.85 out of six.

Financially, Hochschild's total cash position rose to $89m as of 30 June, up from $73m at the end of March.

Net debt narrowed to $271m from $282m over the same period, with a current net debt-to-last 12 months EBITDA ratio of 0.8x.

“We have delivered a robust second quarter with another good performance from Inmaculada and a first material contribution from our new Mara Rosa mine in Brazil and remain on track to meet our annual production and cost guidance,” said chief executive officer Eduardo Landin.

“We can now look forward to a substantial increase in output in the second half which, when combined with the current strong precious metal prices, is expected to see the company generate significant free cash flow.”

Reporting by Josh White for Sharecast.com.