Hochschild Mining (Hochschild) boss Ignacio Bustamante argued there were “no surprises” in the company’s results, despite a sharp plunge in profits following costs relating to a fire and Covid-driven employee absences.
The London-based gold and silver miner’s profits nosedived from $97.8m to $15.3m, a steep year-on-year drop in the first six months of trading, while revenue also fell to $347.8m from $394.8m over the same period.
The company, which operates in the Americas, is listed on the FTSE 250 and has seen its shares 7.8 per cent at close of trading following the results.
Bustamante told City A.M.: “I believe that a lot of the challenges we are seeing this year are going to be overcome going forward.”
Production was largely in line with internal expectations, although gold and silver output both fell 12 per cent amid lower-than-expected grade discoveries.
Meanwhile costs from operations widened by 30 per cent to $1,371 per gold ounces from $1,055 a year prior.
However, Hochschild added it is on track for its 2022 production target of 360,000 to 375,000 gold equivalent ounces.
Bustamante added:” We are pleased we remain on track with our production targets despite challenging conditions.”
On the upside, Hochschild Mining revealed its projects were advancing on schedule including the Mara Rosa site in Brazil.
Total project progress to date is nine per cent with first production on track for the first half of 2024
Meanwhile, drilling commenced at Snip with encouraging results, and a pre-feasibility study isto be completed by end of 2022
Alongside the trading update, Hochschild declared an interim dividend of 1.95 cents per share, the same dividend it offered shareholders as a year ago.
Despite the difficulties over the six month trading period, investment group Peel Hunt has maintained its ‘buy’ stance towards the miner with a target price of 135p.
It was satisfied that the year’s production and cost guidance had been in line with expectations, including net debt which had stabilised at $109m – with its two key projects on track for completion.
Tim Huff, analyst, said: “Importantly, management has maintained its production and cost guidance for 2022. Mara Rosa construction and Snip are both on schedule, with the miner maintaining its overall capex spend for 2022.”