Hochschild cuts guidance, less than expected
South America-focused Hochschild Mining dropped its production guidance for 2023, but by less than analysts expected, with permit troubles at Inmaculada finally behind it.
Hochschild reported a pre-tax profit of $800,000 for the first half, compared with a profit of US$15.3 million a year earlier.
Attributable production was 136,878oz gold-equivalent for the six months to June, compared with 157,380oz in the previous six months.
The miner trimmed its 2023 guidance to 289,000-303,000oz AuEq, compared with a previous forecast of 301,000-314,000oz AuEq.
Delays drove this drop to the Inmaculada project's modified environmental impact assessment. The permit was finally approved on August 1, extending the project for 20 years.
All-in sustaining costs have been revised to between $1490/oz and $1580/oz. "The main driver is the acceleration of development capex at San Jose from 2024," RBC Capital Markets said in a note.
But AISC is expected to be lower next year, thanks to increased production at Inmacculada, while the high-cost Pallancata is put on care and maintenance, and production starts from the low-cost Mara Rosa project.
Meanwhile, Hochschild reports that the Mara Rosa project in Brazil is advancing on budget and schedule, with total project progress at 92%, and first production is guided for the half of next year.
Analysts at Barclays noted "better than expected production and cost guidance for 2023, although this is partly offset by higher than expected capex spend in 2023".
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