Share Name Share Symbol Market Type Share ISIN Share Description
Hochschild LSE:HOC London Ordinary Share GB00B1FW5029 ORD 25P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -4.70p -1.76% 261.80p 261.50p 262.10p 265.10p 258.60p 263.40p 357,318 12:59:36
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Mining 318.4 -173.9 -35.3 - 1,323.59

Hochschild (HOC) Latest News

More Hochschild News
Hochschild Takeover Rumours

Hochschild (HOC) Share Charts

1 Year Hochschild Chart

1 Year Hochschild Chart

1 Month Hochschild Chart

1 Month Hochschild Chart

Intraday Hochschild Chart

Intraday Hochschild Chart

Hochschild (HOC) Discussions and Chat

Hochschild Forums and Chat

Date Time Title Posts
28/10/201612:19Hochschild - Silver Mining, the place to be!7,886
01/9/201615:11Hochschild Mining4,992
24/1/201408:31Gold and Silver in South America - Hochschild14
13/11/200708:23Heritage Oil - Canadian Cairn?7

Add a New Thread

Hochschild (HOC) Most Recent Trades

Trade Time Trade Price Trade Size Trade Value Trade Type
View all Hochschild trades in real-time

Hochschild (HOC) Top Chat Posts

Hochschild Daily Update: Hochschild is listed in the Mining sector of the London Stock Exchange with ticker HOC. The last closing price for Hochschild was 266.50p.
Hochschild has a 4 week average price of 267.15p and a 12 week average price of 274.98p.
The 1 year high share price is 327.60p while the 1 year low share price is currently 38.75p.
There are currently 505,571,505 shares in issue and the average daily traded volume is 1,005,204 shares. The market capitalisation of Hochschild is £1,333,697,630.19.
simonthe1st: This is what happened to the HOC share price on 21/07/2016, the day on which the Q2 Mining Production Results were announced: Open: 217 Lowest: 207 Highest: 226 Close: 220 One week later on 28/07/2016, the close was 272, an increase of 25% No advice intended! Do your own research!!
simonthe1st: ifthecapfits4 Oct '16 - 16:43 - 7205: "What is causing this drop?" HOC has dropped today because gold and silver prices have been manipulated down. It's the manipulators taking advantage of the China bank holiday. China is the world's biggest consumer of physical gold and silver. Those in control in the West are buying and hoarding physical gold and silver in readiness for the inevitable economic crash and obviously want to buy as cheaply as possible, hence the paper manipulation. And there was no U.S. data today to boost gold and silver. Plenty of U.S. data is due over the next few days starting tomorrow, though, and this could boost gold and silver (and therefore HOC) significantly if weak. Meantime, good buying opportunity imo in advance of HOC's Q3 Mining Production Results due next week. And as stated in post 7165, the HOC share price went up 25% in the week following the Q2 results.
simonthe1st: The HOC share price soared following the Q2 Mining Production Results.
simonthe1st: There was not just end of week profit taking yesterday afternoon but also of course end of month profit taking. The HOC share price data for September is: Open: 241.60p Low: 237.35p High: 304.10p Close: 290.20p So the share price increase for the month of September was 20%.
simonthe1st: That Interactive Investor 'HOC Share Of The Week' article might impact favourably on the HOC share price over the next few days. Remember, it was published after close on Friday.
topicel: DT! No offence but it seems to me you only read and report on commentary from one side of the golden/silver coin. Quite clearly the HOC share price is related in large part to the price of silver, and quite clearly it is being taken down and all the open-minded commentary suggests rate hikes are coming, and some, whatever we and the gold Bulls think the economy can stand Stateside, or internationally for that matter. So, while you sit on a nice pile from 68p and have done well, would it not be as wise to react to the short term direction the shoal is moving and do as Goldenshares and others have done and play both sides of those coins? That list of ten things to worry about for US shares from BOAML included their anticipation of far faster rate rises than most have factored in. You seem certain it can't happen, won't happen indeed, in September. But that isn't the time frame that matters, it is the perception that has changed. Selling now must be an option if the trajectory has altered, whether you're too busy to trade or not. Time will tell and I'm long, but the signs of three attempts to break seriously above three pounds here (and £20 at Fresnillo) plus the continuing rout among most other PM shares, does kind of make any sensible investor consider his position. All we hear from those ZeroHedge guys is conspiracy this and conspiracy the other, conveniently forgetting they too have an agenda... And no, I ain't short and never have shorted anything. Buy and sell is my simple motto! As a closing thought, do you think it will be £3 again before it is £2.50? If you have as many as you say, and you even think the latter and aren't silly greedy, why not sell and lock in gains that might not come back? The future is not ours to tell but the rational play is possible, sometimes... Topicel
simonthe1st: Some of the miners are back to close to their 2011 highs but HOC at 312p has a long way to go to reach its 2011 high of almost 700p. That suggests to me a very big HOC share price rise over the next few weeks fuelled by the even better than expected results.
simonthe1st: brutus It is reasonable to assume there was a deliberate and successful attempt to temporarily manipulate the HOC share price down after the results to facilitate the closing of short positions and enable buying at much lower levels, hence the suspicious temporary drop to almost 290 on Wednesday. That would explain it being reported that JP Morgan had issued a neutral rating the day after JP Morgan were quoted as saying "Hochschild is inexpensive versus peers".
hectorp: Yes Dimon is a snake, so is Junker. Steve, Your chart about silver to gold ratio is very important, as a return to at least a median situation - I will say that is about 60/1 is the most likely position in under a year. ie, it could be that gold sticks at $1400 by Xmas, but silver is $25-26. This would have silver around 60/1 . This outlook isn't yet priced into HOC share price which I am sure you're aware of too. HOC's profitabliity must approach an exponential ratio relative to HOC's profits prospect at silver $14. H
rathkum: If Silver Prices Start Another Leg Up, Hochschild Should Be One Of The Best Performers May 27, 2015 8:07 AM ET | 2 comments | About: Hochschild Mining PLC (HCHDF) Disclosure: The author has no positions in any stocks mentioned, but may initiate a long position in HCHDF over the next 72 hours. (More...) Summary Hochschild is one of the biggest silver miners in the world. Despite the ongoing medium-term bear market in silver prices, the company has been delivering value to its shareholders. This year a new mine, Inmaculada, is expected to start its operations. Inmaculada is an excellent asset in the company's mineral portfolio - therefore it could be a catalyst for a rapid increase in the company's share prices. Hochschild Mining (OTCPK:HCHDF) is one of the oldest miners - the company started its operations in 1911. Today, the company is one of the biggest silver miners in the world. According to the Silver Institute, Hochschild, with 16.2 million ounces of silver production a year, ranked number thirteen in the world. Why am I writing an article on this company? Well, in my opinion, if the precious metals bull market is not finished yet (and I believe it is not) and the next leg up starts again (I believe it has just started), silver should outperform gold as was the case many times before. Therefore, silver miners' shares should outperform gold miners' as well. What is more, most recently many precious metals companies have implemented successful cost cutting measures. This, together with an operating leverage offered by precious metals miners' shares against gold and silver prices, should be a dominant factor promoting investment in the miners' shares, at least in the beginning and medium stage of the next leg-up in the precious metals market (in the late stages of the commodity cycle the miners' shares usually underperform against gold and silver prices). In my opinion, Hochschild is a company which qualifies for a big promotion in the next phase of the bull market in gold and silver. The main factors standing behind this thesis are: The company is an expert in exploiting the so-called epithermal vein deposits - all three mines that Hochschild currently runs are epithermal vein deposits. Silver is the main metal extracted by the company - in 2014 silver sales accounted for 65.1% of total sales. Hochschild is an experienced manager of its mineral portfolio - new mines start their operations when the current output generated by the operating mines is leveling off or even declining; therefore, in the long term, the company's output is generally rising. These management skills translate into relatively high returns on invested capital reported by the company. Since 2012, in response to a severe bear market in precious metals, the company has implemented successful cost cutting measures. As I am discussing below, Hochschild, if business conditions are not favorable, has the ability to withdraw from the economically doubtful projects - in my opinion, this is a pro-shareholder value approach. Now, let me discuss some of the above features in more detail. Current operations Reserves Hochschild currently runs three mines, which are core businesses for the company: Arcata and Pallancata, located in Peru, and San Jose in Argentina (the company holds a 51% stake in San Jose). All these mines are epithermal vein deposits and all have been in operation for many years (Arcata, which started its operations in 1964, is the oldest mine in the company's mineral portfolio). As of the end of 2014, Arcata, Pallancata and San Jose had 71.8 million silver equivalent ounces in mineral reserves attributable to Hochschild. Unfortunately, there has been a steady decrease in mineral reserves demonstrated by the core mines; for example, between 2008 and 2014, they decreased by 25.8 million silver equivalent ounces. It is surely a negative factor. On the other hand, the quality of the company's reserves is a positive factor. Except for Inmaculada (a new mine which is expected to start its operations soon), metal prices used for reserves calculation were as follows: Gold: $1,200 per ounce Silver: $18.0 per ounce These prices are close to today's quotations so there is no need to make impairment adjustments to the book value of the currently operating mines. Now, please look at reserves attributable to Arcata, Pallancata and San Jose: Chart 1 (click to enlarge) Source: the company's reports Although each of the currently operating mines demonstrates some exploration and development potential (especially Arcata), a 26.4% decrease in mineral reserves between 2008 and 2014 is quite impressive (of course negatively). Fortunately, Hochschild has found a solution to that problem - this year, the Inmaculada mine is expected to start its operations. Production and costs of production Due to the fact that Hochschild holds a 100% stake in Arcata and Pallancata, and a 51% stake in San Jose, all production numbers are calculated according to the company's stakes (so-called attributable production). The chart 2 (below) shows the number of silver equivalent ounces produced between 2008 and 2014. As the chart shows, after topping in 2009, the company's output was in a steady decline until 2012. Then the output leveled off and in 2014 the company produced 22.2 million silver equivalent ounces. Cash costs of production demonstrated a different pattern. Firstly, between 2008 and 2012, the company experienced a rapid increase in production costs, which went from $7.05 per ounce to $14.2 per ounce. This, together with the falling output, had a negative impact on the company's fundamentals. Fortunately, between 2008 and 2011, silver prices were going up steeply, which was mitigating these negative developments. But as soon as silver prices started going down, lower output and higher production costs were having an adverse effect on the company's bottom line. After a record operating profit of $423.8 million reported in 2012, next year the company saw a 47.9% drop in its operating profit (to $220.6 million). Then, in 2013 and 2014, Hochschild was in the red. Chart 2 (click to enlarge) Source: the company's reports Cash cost calculation includes Hochschild's main operations: Arcata, Pallancata and San José. Cash costs are calculated to include cost of sales, treatment charges, and selling expenses before exceptional items less depreciation included in cost of sales. To minimize the negative effects of lower output, decreasing silver prices and higher costs of production, the company implemented cost cutting measures. As a result, production costs went down from $14.2 per ounce, reported in 2012, to $11.9 in 2014 (a decrease of 16.2%). To demonstrate the company's cost cutting measures, below I have put my own calculations of operating costs. These costs are calculated to include costs of sales, corporate general and administrative costs, selling expenses, other income and other expenses adjusted for exceptional items. The silver prices realized are calculated by dividing the metal revenues by the number of silver equivalent ounces produced (at full, not attributable, amount). Margin is the difference between the silver price realized and production costs. Table 1 (click to enlarge) Source: the company's reports As the table shows, till 2011 all things were going smoothly - although operating costs were going up, the rapidly rising prices of silver were outpacing the increase in operating costs. In effect, the margin was going higher as well. Then, in 2011, things changed - operating costs were still going up but silver prices started to go down. As a result, margin went steeply down from $13.17 per ounce in 2011 to $7.50 per ounce in 2012. Trying to prevent these negative developments, the company implemented cost cutting measures, which brought operating costs down from $20.41 per ounce in 2012 to $18.00 per ounce in 2014. In what way did the company cut its operating costs? There were the following three main components: Exploration - the company cut exploration costs from $64.6 million in 2012 to $18.1 million in 2014. In this way, Hochschild saved $1.59 per ounce of silver equivalent; unfortunately, in the long term that kind of savings is not positive for any mining company - to replenish its reserves, a mining company must explore its projects. Hochschild is no exception and therefore in the not so far future the company will definitely increase its exploration expenses. General and administrative expenses - since 2012, Hochschild has reduced these costs by $0.95 per ounce of silver equivalent. Selling expenses - since 2012, the company has seen a drop of $0.33 per ounce of silver equivalent in selling expenses. All these cost cutting measures were not sufficient to keep the company profitable in 2014. Due to much lower silver prices, in 2014, the company reported a negative margin of $0.51 per ounce of silver equivalent. At this point, a question arises - is it possible to cut operating costs further? I have serious doubts. Maybe the company could cut general and administrative expenses a little bit further but I do not think there is much room for any serious cuts. Similarly, it is not possible to cut exploration costs - in the medium or long term it would kill this company as any other miner. The only possibility is to cut production costs, but the scale of such cuts is very limited due to decreasing grades reported at the currently run properties. Please look at the chart below: Chart 3 (click to enlarge) Source: the company's reports Generally speaking, the grades reported by Arcata and Pallancata are much lower today than in 2008 or 2009. The only exception is the San Jose mine, where the grade is more or less the same as in the prior years. Therefore, Hochschild needs something extraordinary to be profitable in today's low silver prices environment. Fortunately, the company has a solution. As in the case of the company's reserves, this solution is called Inmaculada. Inmaculada Inmaculada is an epithermal vein deposit located in Peru. With reserves of 83.5 million silver equivalent ounces, it is a behemoth in the company's mineral portfolio. What is more, these reserves were calculated taking into account the silver and gold prices of $18 and $1,100 per ounce, respectively. Because these prices are very close to today's market prices, any property impairments related to Inmaculada are not expected in the coming future. According to the company's last presentation, with an all-in sustainable cost of production of $11.8 per ounce of silver equivalent, Inmaculada is going to be the lowest cost mine in the Hochschild's mineral portfolio. Let me list a few basic measures presented in the Inmaculada's feasibility study: Pre-production capex (capital expenditures): $315 million Average annual silver equivalent production: 11.6 million ounces Initial life of mine: 6.3 years IRR (internal rate of return): 12% at the silver price of $18 per ounce and the gold price of $1,100 per ounce. In my opinion, it is a decent project. Although the assumptions made by Hochschild are not as conservative (conservative assumptions, in bad times as today, are good assumptions) as in the case of Randgold (NASDAQ:GOLD) (any project implemented by Randgold must bear an internal rate of return of at least 20%, calculated at the gold price of $1,000 per ounce), Inmaculada demonstrates one of the best metrics in the whole industry. Once in operation, it will probably deserve a title of a jewel in the Hochschild's crown. But there is one problem - unfortunately, during the construction phase, the planned pre-production capital expenditures increased substantially from $315 million to $420 million; despite this negative fact, the company has not provided any updates on the project's economics (higher capex means worse economics). Hochschild plans to start production at Inmaculada in the second quarter of 2015. The mine is expected to deliver 6-7 million ounces of silver equivalent this year and 11-12 million in subsequent years. Now, let me present another chart. This time it shows the company's core mineral reserves comprising Inmaculada, Arcata, Pallancata and San Jose: Chart 4 (click to enlarge) Source: the company's reports I think that this picture looks much better than the chart 1. After adding the Inmaculada reserves, one can spot that since 2008 the overall reserves have increased by 67.1 million silver equivalent ounces. It means a compounded annual growth rate of 12.3%. In my opinion, it is an impressive ratio. Nowadays, when it is not easy to replenish mineral reserves, such a ratio confirms Hochschild's uniqueness. What is more, Inmaculada is the best example of the Hochschild's business philosophy: "Add another mine to your working assets when your core mineral reserves are starting to level off (as in the case of Arcata, Pallancata and San Jose)". Sounds simple, but to implement such a strategy the miner: Must know its deposits very well; Must possess an experienced team of geologists to explore both brownfield and greenfield projects; and Must have very detailed plans aimed at putting new mines into operation when the current output is leveling off or even falling. In my opinion, Hochschild is very good at it. The current output has been leveling off since 2012 so now it is the best time to add another mine to the company's mineral portfolio. Adding Inmaculada, a big silver deposit with low production costs, should strengthen the company. Return on invested capital The chart below evidences Hochschild's annual return on invested capital starting 2008: Chart 5 Source: the company's reports As I have written in my article on Fresnillo (OTCPK:FNLPF): "When analyzing companies operating in commodity sectors, one should look at the whole commodity cycle to appraise a company." I believe that the period 2008-2014 represents such a commodity cycle with its bottom at the end of 2008, a top in 2011 and another bottom in 2014. During this cycle, Hochschild generated average annual return on invested capital of 13.9%. It was a better result than returns reported by the company's peers [for example, Randgold: 10.3%, Barrick Gold (NYSE:ABX): 8.1%, Goldcorp (NYSE:GG): 3.2%, AngloGold (NYSE:AU): 6.3%, and Newmont (NYSE:NEM): 7.7%]. What does it mean? Well, assuming that between 2008 and 2014: Hochschild's annual cost of capital was 8.3%; and The average capital invested was standing at $1,304 million each year. It means that the company was delivering $73.0 million per annum to its shareholders ($1,304 million x (13.9% - 8.3%)). It is equivalent of $0.21 per share. Despite creating value for its shareholders, between 2008 and 2014, the company's share price went down from $1.75 to $1.56 per share. In my opinion, this negative divergence between the company's market value and its intrinsic value is not sustainable. What's more, putting into operation a new, excellent asset (Inmaculada) could be a catalyst for a rapid appreciation in the company's share price. Crespo Crespo is a sulfide epithermal deposit located in southern Peru. In January 2012, Hochschild announced completion of the feasibility study on Crespo. Then, in its 2012 Annual Report, the company noted: "This will be a relatively simple open pit project with high gold recovery rates, and as with the Inmaculada project will benefit from operational synergies due to its proximity to the Company's existing operations. The project has an estimated total capital expenditure of approximately $110 million for a 6,850 tons per day operation with an average annual production of 2.7 million silver equivalent ounces from the second half of 2014. In 2012 the Company made good progress at Crespo; the detailed engineering for the mine and the plant was in progress during the fourth quarter and is expected to be completed in the first half of 2013. In addition, the final engineering for the camp design and construction was completed and work on the access road to the project commenced." Then, in early October 2013, Hochschild announced "plans to delay the project in order to better sequence overall Company capital allocation, with the focus now firmly on the construction of the Inmaculada project and the acquisition of the IMZ minorities". I think it was a good decision. Please have a look at the project's economics: (click to enlarge) Source: the company's reports At the silver and gold prices of $23 and $1,300 per ounce, the projected internal rate of return is 8%. It means that Crespo is uneconomical at these prices (negative net present value). At much higher prices of $30 and $1,600 per ounce of silver and gold, the project is economic - but an internal rate of return of 19% is not very impressive at these high prices. Therefore, the abandonment of Crespo was a good decision confirming that Hochschild really cares about shareholders' value. Eduardo Hochschild - the company's main shareholder Hochschild's main shareholder is Eduardo Hochschild, the company's chairman. As of the end of 2014, Mr. Hochschild owned 199,320,272 shares (a 54.3% stake in the company). What is more, between 2008 and 2014, the chairman increased his stake by 18.0 million shares (an increase of 9.91%). I think it is another positive factor standing behind an investment in the company's shares. Summary In my opinion, Hochschild is one of the world's best silver miners. The company operates three very decent silver mines: Arcata, Pallancata and San Jose. This year another mine, Inmaculada, will be added to the company's assets in operation. Inmaculada is going to be the biggest Hochschild mine; additionally it is going to be the lowest cost mine in the company's mineral portfolio. These developments, together with the fact that the company is an experienced miner specializing in epithermal vein deposits, firmly stand behind an investment in Hochschild's shares. What is more, the company is one the few miners delivering value to its shareholders.
Hochschild share price data is direct from the London Stock Exchange
Your Recent History
Gulf Keyst..
FTSE 100
UK Sterlin..
Stocks you've viewed will appear in this box, letting you easily return to quotes you've seen previously.

Register now to create your own custom streaming stock watchlist.

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P:42 V: D:20161028 12:15:36