Hochschild Mining annual production in line after strong Q4

22nd Jan 2025 07:58

(Sharecast News) - Shares in Hochschild Mining plunged on Wednesday after the South America-focused miner forecast higher production costs due to soaring inflation in Argentina and a slower-than-expected ramp up of operations at its Mara Rosa mine in Brazil.

The company said it expected a 5%-10% increase in all-in sustaining cost for 2024 - above guidance of between $1,510-1,550 per gold equivalent ounce.

Argentina's inflation rate rose to 2.7% from 2.4% a month earlier. Economists have also been concerned about the impact on companies after controversial President Javier Melei's decision to slow the pace of the local currency's devaluation.

The fall in Hochschild's share price of up to 18% in early trade came despite full-year production meeting guidance after a strong final quarter and full contribution from Mara Rosa.

Fourth-quarter attributable production was 98,255 gold equivalent ounces or 8.2 million silver equivalent ounces, slightly stronger than Q3. Overall, 2024 attributable production was 347,374 gold equivalent ounces or 28.8 million silver equivalent ounces.

Hochschild said the results were in line with guidance, partly due to a better-than-forecast performance at the Inmaculada mine in Peru.

Eduardo Landin, Chief Executive Officer said: "The new Mara Rosa mine had a full quarter of operations, and, in Peru, Inmaculada continued to outperform expectations. Additionally, our acquisition of the Monte do Carmo project in Brazil is another significant step forward in our portfolio's development, and we are excited for the low-cost growth opportunity it offers going forward."

Reporting by Frank Prenesti for Sharecast.com