Hochschild Mining plc (LON:HOC) has swung to a 2016 profit, boosted by the first full year of production at its flagship Inmaculada gold and silver mine in Peru, cost cuts and improved commodity prices.
The miner, which also has operations in Chile and Argentina, posted a pre-tax profit of $108.3mln in 2016, compared to a $256.2mln loss a year earlier.
Revenue increased to $688.2mln from $469.1mln as production of gold and silver rose 48% and 17% respectively.
Production was supported by the Inmaculada and Arcata mines in Peru and the Argentinian mine San Jose.
Total attributable production included 17.3mln ounces of silver, compared to 14.7mln the previous year, and 246,100 ounces of gold, up from 166,020 in 2015. Silver equivalent sold rose to 35.4mln ounces from 27.1mln ounces and gold equivalent sold increased to 479,640 ounces from 365,370 ounces.
The group also said reduced costs, combined with the recovery of gold and silver prices, helped to lift earnings.
Net debt was lowered to $187.4mln at the end of December from $350.5mln the prior year while the cash and cash equivalent balance rose to $140.0mln from $84.0mln.
“Our financial performance has allowed us to significantly reduce leverage and at the same time reward shareholders for their support with a return to dividends during the year,” said chief executive Ignacio Bustamante.
The company proposed a dividend of 1.38c per share.
Looking ahead, Hochschild expects attributable production to rise to 37mln silver equivalent ounces, driven by further 17mln ounces from Inmaculada and a first contribution from the new Pablo vein at Pallancata in Peru.
Shares dipped 0.2% to 231.26p in early trading.