Precious metals miner Hochschild Mining (LON: HOC) has been forced to halt operations at its Arcata gold and silver mine in Peru, saying that low silver prices had left the company little choice aside from suspension.
Hochschild, which operates three mines in southern Peru and one in southern Argentina, said Arcata would be on “full care and maintenance” by the second quarter of 2019.
“This decision has been expected but is still disappointing for the organization … but the continuing low silver price over some years and current geological conditions leaves us no option,” chief executive officer Ignacio Bustamante said in a statement.
Spot silver prices have gained as much as 15% since bottoming out in November. But while the metal is currently trading at around $15.70 per ounce, prices have been on a steady downward path since peaking above $20 per ounce in June 2016, partly due to slower industrial demand.
Hochschild will continue exploration work at Arcata, its first mining operation dating back to 1964, and will regularly review market conditions for a potential restart of operations.
The mine, located in Arequipa, southern Peru, produced an estimated 6,250 koz of silver and 20 koz of gold in 2018.