15th Aug 2018 09:42
LONDON (Alliance News) - Hochschild Mining PLC on Wednesday said its profit declined moderately in the first half of 2018 as it continues to invest in drilling campaigns.
The FTSE 250-listed miner said pretax profit dropped slightly to USD38.6 million in the first six month of 2018 from USD39.9 million reported in the same period a year earlier, despite revenue rising to USD372.3 million from USD340.8 million.
Exploration expenses increased to USD13.0 million from USD7.1 million the year before, as Hochschild said it continued to invest in brownfield and greenfield exploration. Finance costs also jumped to USD22.8 million from USD13.3 million.
In addition, the company said it recognised a foreign exchange loss of USD4.3 million compared to USD500,000 loss in the first half of 2017, as a result of exposures in currencies - primarily the Argentinean peso.
During the period, gold production rose by 13% year-on-year to 137,510 ounces from 121,430 ounces, while silver production increased 8% to 9.7 million ounces from 8.9 million ounces.
The result was driven by significant increases at Inmaculada and Pallancata mines, located in the south of Peru. Inmaculada's record output was characterised by strong grades and boosted by inventory in process at the beginning of the year.
At Pallancata, better grades from developments, ancillary veins and from the new Pablo vein have increased production and lowered costs, Hochschild said.
In the first half of 2018, the company sold 11.1 million ounces of silver at an average price of USD16.2 per ounce, generating a revenue of USD179.5 million. This was 0.3% lower than USD180.1 million revenue delivered for the same period in 2017 due to a decline in the average silver price received. In the prior year, the average silver price achieved was USD17.1 per ounce.
Revenue from gold sales came in 15% higher year-on-year at USD206.9 million versus USD179.4 million the year prior, due to a 10% rise in production and a 5% increase in the gold price. The company sold 158,000 ounces of gold at an average price of USD1,309 per ounce compared to USD1,251 per ounce in the first half of 2017.
"Hochschild Mining has delivered a strong first-half performance with record production at Inmaculada and a very solid performance on the costs front leaving us on track to achieve our 2018 targets," said Chief Executive Ignacio Bustamante.
Shares in Hochschild Mining were trading 0.2% lower on Wednesday at 168.60 pence each.
Related Shares:
Hochschild