It was already clear that Hochshild Mining (HOC) would see a major decline in production this year because of Covid-19 shutdowns. Now, the gold and silver miner has confirmed a probable 40 per cent drop in output.
The company announced guidance of 280,000-290,000 ounces gold equivalent for 2020 on Monday. Last year, the Peru miner produced 477,400oz gold equivalent. Inmaculada, its largest operation, has been shut down twice this year due to the pandemic. The first was in March as part of the government’s prevention strategy. The second closure happened in July, after several workers contracted the virus.
There will also be a hit to earnings from the all-in sustaining cost (AISC) across its operations, which will climb to $1,250-$1,290 an oz, around 30 per cent ahead of previous guidance. Hochschild produced 126,835oz gold equivalent in the first half, so is expecting a smooth final few months of the year.
Earnings will be supported by the gold and silver prices climbing significantly this year, although the combination of lower production and higher costs could see the bottom line take a hit.
Hochschild expects capital spending to fall from $205m last year to $110m-$120m, because of projects being suspended or slowed down.
The miner was trading 3 per cent higher on the guidance update, at 239p.
