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Hochschild Mining

Hochschild Mining shares slide as profits drop on lower silver prices

The FTSE 250 company said it was on track to deliver its 2019 production target of 457,000 gold equivalent ounces

Hochschild Mining -
The average silver price decreased 7% in the first half

Hochschild Mining PLC (LON:HOC) shares dropped after the precious metals miner reported a decline in first-half pre-tax profit, dented by lower silver prices.

Post-exceptional profit before income tax fell 23.5% to US$29.5mln for the six months to the end of June, as the average silver price decreased 7% to offset a 2% rise in gold.

Revenue edged down 4.7% to US$354.5mln

Total gold equivalent production dropped to 245,325 ounces from 256,939 ounces after the Arcata mine in Peru was placed on temporary care and maintenance in February.

The FTSE 250 company said it was still on track to deliver its 2019 production target of 457,000 gold equivalent ounces.

"Hochschild has delivered another strong first half operational performance with the second highest level of production in our history and solid cost control leaving us firmly on track to meet our 2019 goals,” said chief executive Ignacio Bustamante.

“In parallel, we are in the middle of another busy period of brownfield exploration with new veins discovered at Inmaculada and the first campaign at the Palca zone already underway whilst further programmes are due in the second half at all our operations as well as in new areas such as Corina, Cochaloma and Pablo Sur.

“Healthy cashflow generation has continued to strengthen our balance sheet and we are therefore in a good position to execute our brownfield and greenfield strategy in addition to assessing acquisitions and investing in our innovation programme.”

Shares fell 2.7% to 215p in morning trading.

Quick facts: Hochschild Mining

Price: £2.05

Market: LSE
Market Cap: £1.05 billion
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