Hochschild keeps output target despite higher costs

Latin- America focused Hochschild Mining (LON: HOC) maintained its 2026 production guidance after stronger second-quarter operating performance offset rising costs driven by higher metal prices, inflation and stronger local currencies.

The London-listed precious metals producer delivered attributable production of 76,231 gold-equivalent ounces during the quarter, lifting first-half output to 151,830 oz. and keeping the company on pace to achieve its full-year target of 300,000 to 328,000 oz.

Attributable all-in sustaining costs are running about 5% to 10% above the guided range of $2,157 to $2,320 per gold-equivalent ounce because higher gold and silver prices increased royalties, workers’ profit sharing and selling expenses, while currencies strengthened across its operating jurisdictions and inflation remained elevated in Argentina.

Shares in Hochschild rose 3.36% to 460.8p at Wednesday’s close in London, giving the company a market capitalization of £2.38 billion ($3.2 billion).

“We have delivered a solid operational performance during Q2, with Inmaculada and San Jose generating robust operating cash flow while Mara Rosa continued to make good progress as we execute our operational turnaround,” CEO Eduardo Landin said.

“Production improved at the mine compared with Q1, supported by greater plant stability, and initial positive signs from the transition to our new mining contractor.”

Operations improve

The company said Mara Rosa in Brazil posted modestly higher production than the previous quarter as plant reliability improved and a new mining contractor began boosting operating performance. Management is focusing on accessing higher-grade ore, shortening haulage distances and improving water management as part of the turnaround. Inmaculada and San Jose also remained on track to meet full-year guidance.

Growth pipeline

Hochschild said it expects to submit a revised environmental impact assessment for the Royropata project to Peru’s new government in the coming weeks, while Monte Do Carmo in Brazil remains on schedule for an investment decision in the second half of 2026.

The company also generated strong cash flow, ending June with about $309 million in cash and short-term investments and a net cash position of roughly $51 million, compared with net debt at the end of 2025.