As Hochschild Mining (HOC) outlined in its interim results for 2015, mine plan sequencing and the timing of staff vacations can negatively affect production at the start of each year. An update for the first quarter of 2016 suggests anything but seasonal weakness.
The South America-based group saw a 79 per cent increase in silver equivalent ounces in the period, ahead of guidance and again demonstrating the scale and quality of the Inmaculada mine. That progress has put the company "firmly on track" to reach a full-year target of 32m ounces, and increased the cash pile to $105m (£73m) by 15 April, thanks to average realised prices of $1,266 per ounce (oz) of gold and $16.2 per oz of silver. If these prices continue, UBS reckons Hochschild's net debt could reach parity with cash profits by December. Analysts at the bank also expect diluted earnings per share of 1¢ and net earnings of $7m this year, against a loss per share of 14¢ and a net loss of $62m in 2015.
