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Hochschild Mining has a mountain to climb

While geographic diversification makes sense, tough macro conditions make the Peru-focused miner’s life that much harder
October 20, 2022

At last month’s Denver Gold Forum, the most prominent corporate event in the gold mining calendar, some attendees were just as interested in the precious metal producers’ copper holdings. Analysts noted the clear shift in focus from professional investors, who had previously seen the red metal as a valuation drag.

Tip style
Sell
Risk rating
High
Timescale
Medium Term
Bull points

Free cash flow positive 

Dividend-paying

Bear points

Expensive production and rising costs

Intensive capex and project risk

Weaker metals prices

Permitting uncertainty in Peru

Like gold, copper is not trading strongly right now but has good long-term drivers. At the same time, gold is getting more expensive to mine, and there is not so much to recommend it as a saleable product because of rising interest rates and the seemingly unassailable strength of the US dollar. 

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