24th Nov 2021 17:35
(Alliance News) -Â Shares in Hochschild Mining PLC recovered somewhat on Wednesday after the Peruvian government backtracked on plans to shutter mines.
Shares in the gold miner rose 6.6% on Wednesday in London to finish at 122.00 pence. However, the stock still remains lower for the week-to-date after falls of 27% and 4.5% on Monday and Tuesday respectively.
The stock tanked on Monday after Hochschild noted the risk that the Peruvian government may close two of its three running gold and silver mines, one of which is its largest in terms of production and has represented around three-quarters of its cashflow.
However, the government on Wednesday reaffirmed its respect for the current legal framework.
"We rule out the closure and request for the unilateral withdrawal of the operations of the mining units, which comply with the legal requirements and conditions established in national and sectoral legislation, and which have the corresponding permits in force," the government said.
Mining companies can request extensions or modifications to their permits in line with current regulations, the government added, and these requests will be evaluated in accordance with legislation.
Hochshild Mining operates three underground mines, two located in southern Peru, being the Pallancata and Inmaculada mines, and one in southern Argentina called San Jose.
By Lucy Heming;Â [email protected]
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