Hochschild sees 2018 earnings drop on metals prices, costs
Peruvian precious metals miner Hochschild Mining saw its annual profit plunge 88% last year due to slumping metals prices and rising costs,
Net income fell to US$6.7mn for full-year 2018 from US$53.9mn in 2017, as sales dipped 3% to US$704mn from US$723mn, Lima-based Hochschild said in a statement.
All-in sustaining costs rose to US$931/oz gold equivalent last year from US$910/oz in 2017, Hochschild said. The company had US$79.7mn in cash and US$157mn in debt through December 31.
Prices declined to US$/1,268oz gold and US$15.30/oz silver last year from US$1,270/oz gold and US$16.90/oz silver in 2017.
Hochschild also posted a tax charge and FX loss in Argentina last year, in addition to bond repayment costs and US$4.9mn owed by US refiner Republic Metals, which filed for bankruptcy.
The company, which also has operations in Argentina, Mexico and Chile, set 2019 production guidance at 37Moz silver equivalent, with all-in sustaining costs expected to range from US$11.80-12.30/oz. Hochschild produced 39Moz silver equivalent in 2018, including 19.7Moz silver and 260,440oz gold.
Guidance excluded output from its Arcata mine, which the company closed down this month due to high costs. Hochschild plans to allocate US$130-140mn to capex this year, including US$37mn for exploration.
"We want assets that could navigate profitably in all price cycles," CEO Ignacio Bustamante said on a conference call to discuss financial results. "If Arcata requires a US$16-17/oz silver price, that wouldn't be a priority for us."
EXPLORATION
The company, which last year signed JVs with Mirasol Resources in Chile and for the Condor deposit in Peru, plans further drilling this year at the Inmaculada mine's Angela vein, the Pallancata, San José and Arcata mines and metallurgical studies at its Volcan gold project in Chile.
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