Hochschild Mining’s earnings drop on covid-19-led mine closures

Selene mine plant in southern Peru, which processes ore from Hochschild Mining nearby Pallancata silver-gold mine. (Image: Hochschild Mining.)

Hochschild Mining on Thursday posted a 21% drop in full-year core earnings as a run of pandemic-driven production roadblocks wiped out the boost from higher gold prices.

Hochschild, which operates two mines in southern Peru and one in Argentina, said adjusted earnings before interest, tax, depreciation and amortization fell to $270.9 million from $343.3 million last year.

The company reported revenue of $621.8 million, compared to $755.7 million in 2019. All-in sustaining costs (AISC) from operations of $1,098 per gold equivalent ounce (2019: $990) or $12.8 per silver equivalent ounce (2019: $11.5) below its revised full-year cost guidance of $1,200-$1,250 per gold equivalent ounce or $14.0-14.5 per silver equivalent ounce.

The miner in April 2020 withdrew its earlier output forecast of 422,000 gold equivalent ounces or 36 million silver equivalent ounces, after it was forced to temporarily shut all of its mines due to lockdowns.

The miner posted full-year attributable production of 289,293 gold equivalent ounces (24.9 million silver equivalent ounces) at higher end of attributable production guidance of 280-290,000 gold equivalent ounces (24.0-25.0 million silver equivalent ounces).

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