Silver prices hit Hochschild profits despite record production
Hochschild saw good results last year, but struggled with the market conditions as silver prices faltered.
The London-listed gold and silver miner, which operates in South America, increased gold production by two per cent to 260,000 ounces, while silver output was up three percent to nearly 20m ounces.
Read more: Hochschild falls as miner sees lowered output
“We did much better than we guided the market. We exceeded the production, we were significantly better than our positively revised guidance of cost,” chief executive Ignacio Bustamante told Morning Wire today.
But the company’s record production was not enough to keep the wolves from the door, with pretax profits dropping 40 per cent to $38m (£29m) and revenue declined three per cent to $704m, hit by a weak silver market.
Last week, Hochschild announced that “low silver price over some years and current geological conditions” had forced it to temporarily close its Arcata mine in southern Peru.
Opened in 1964, Arcata is the company’s first mine, and still has plenty resources, Hochschild said.
Read more: Hochschild Mining beats targets to hit record production of gold and silver
Hochschild revised down 2019 guidance to 457,000 gold equivalent ounces from 527,000 last year.
Bustamante said the firm was unlikely to close down more mines, but added he would “take action” if any of its operations loses money.