- Hochschild forecasts lower annual production as COVID-19 disrupts operations.
- The British firm’s Inmaculada mine in Peru is now operating at full capacity.
- The London-based miner forecasts a rise in operating costs this year.
In an announcement on Monday, Hochschild Mining plc (LON: HOC) said that its annual production is likely to come in lower than originally expected due to the Coronavirus pandemic that has so far infected more than 347 thousand people and caused over 41 thousand deaths. The ongoing health crisis, it added, specifically weighed on its mining operations in Argentina and Peru this year.
Shares of the company jumped more than 2% on market open on Monday. At 239 pence per share, Hochschild is now roughly 35% up year to date in the stock market after recovering from a low of 93 pence per share in March. Confused about choosing a reliable stockbroker to trade online? Here’s a list of a top few to make selection easier for you.
Hochschild’s Inmaculada is now operating at full capacity
Hochschild operates one mine in Argentina and two in Peru. For annual attributable production in 2020, the company said it was now targeting 280 thousand to 290 thousand gold equivalent ounces. In terms of silver equivalent ounces, its target is 24 million to 25 million. Last month, the miner reported £4.91 million of pre-tax profit in fiscal H1.
In April, when Prime Minister Boris Johnson’s government ordered a nationwide lockdown that saw all non-essential businesses to suspend operations, Hochschild was pushed into withdrawing its guidance for full-year production that, at the time, stood at 422 thousand gold equivalent ounces (36 million silver equivalent ounces).
The London-based firm has been committed to speeding up operational recovery at Inmaculada in recent weeks as the government eased COVID-19 restrictions. On Monday, Hochschild said that its flagship mine in Peru is now operating again at its full capacity.
Hochschild forecasts a rise in operating costs this year
In the first half of the current fiscal year, the overall output of zinc, gold, and copper was reported to have declined in Peru on a year over year basis. The western South American country is a prominent global exporter of metals. Hochschild’s peer, BHP Group, also revealed a 4% decline in annual profit last month.
Reduced production in 2020, the British miner added, is also likely to result in a slight increase in operating costs. Government-imposed restrictions on transport and lower grades, as per Hochschild, will also weigh on its performance this year.
At the time of writing, Hochschild Mining plc is valued at £1.23 billion and has a price to earnings ratio of 456.74.