Hochschild Mining’s (HOC) short-term future is up in the air after the Peruvian government extended its mandatory quarantine period beyond 31 March. The government said it would keep the lockdown rules in place until 12 April, Easter Sunday.
The gold and silver miner’s major mines are in Peru and it has one operation in Argentina, which is in care and maintenance after a government order. Hochschild has not yet updated guidance, with the end of the Covid-19 shutdowns unclear. Its previous forecast for 2020 was 36m silver equivalent ounces (oz) or 422,000 oz of gold.
Usually when a mine is closed for repairs, for example, it means the company has stopped its ore production but continues processing stockpiled material. In this scenario, everything has shut down except care and maintenance work.
Going by the existing guidance, a month of zero production will knock off around 3m oz of silver equivalent from this year’s production, although the return to production at full capacity will take a week or so. The company upped its total dividend by 11 per cent at its preliminary results in February, but the payment date in May leaves it plenty of time to have another look at the $12m (£9.8m) final payout.
Hochschild’s share price is down 22 per cent since 9 March, when the major Covid-19 sell-off started. Its shares came down 8 per cent on Friday morning after Peru announced the shutdown extension.
