While the gold price is at its highest point in almost a decade, Hochschild Mining (HOC) is not celebrating.
The gold and silver miner has suspended its operations in Peru and Argentina, meaning it is not seeing the benefit from gold at almost $1,700 (£1,377) an ounce (oz).
In the three months to 31 March, Hochschild had been on track but saw a 30 per cent year-on-year drop in silver production, to 3.5m oz, while gold fell 13 per cent because of the shut down in the last two weeks of March. The company has withdrawn its guidance.
Peru has a national lockdown officially in place until 26 April. Hochschild said it was working with the government on “potential strategies for remobilisation and ramp-up”, and is already doing restart work at the San Jose mine in Argentina.
This is not a switch that can be flicked back on instantly. Hochschild said restrictions on moving around the country would mean the return to production would take several weeks. Consequently, Hochschild has held on to its dividend money by cancelling the 2.335c final payout for 2019.
Hochschild increased its cash holding by 7 per cent between the end of 2019 and 31 March, to $178m. Net debt is up 9 per cent to $36m in the same period.
