Hochschild Mining Share Discussion Threads

[juju44] 09/11/2017 13:58

Could you be right this time DT - hope so. You need it for your nerves

[dt1010] 09/11/2017 13:45

Break out coming here

[stevea171] 09/11/2017 13:06

Shakey. HOC have been questioned about this. The answer was in the main, yes, but if there is a compelling project with compelling economics they would consider some debt funding for such a project only.

At the moment and with current PM prices where they are there is no such project.

Even Volcan in northern Chile with 9.5 million oz gold is far removed from being developed and remains on the back burner. Although with gold at $10,000 it might qualify!?!!

[dt1010] 09/11/2017 13:02

I think q1 18 will be good for Pms and likewise Hoc. The company is making all the right moves and shareholders will be rewarded.

[shakeypremis] 09/11/2017 12:52

All funded from free cash flow hopefully Stevea

[stevea171] 09/11/2017 12:36

Fieldhouse & Mikky. You're welcome. HOC is consolidating its production, profitability and life of mine at the existing 4 mines. 3 out of these 4 are now secured with the other, Arcata being addressed.

This will be the launch pad for expansion via new mines, joint ventures etc in the coming years.

[juju44] 09/11/2017 12:35

Nope - and they wont be firm for long

[mikkydhu] 09/11/2017 12:33

Thank you, Steve, for your very helpful information...today as well as frequently in the past.

Does anyone think that the firmness in pm prices at the moment may be due to Saudi princes turning their cash into gold before the Saudi authorities freeze or seize it?

[fieldhouse] 09/11/2017 12:23

Thanks stevea171 for your very informed update interpretation.Underlines the strategy that has been forecast.Very happy to hold

[stevea171] 09/11/2017 11:40

Mikky. Pallancata is a relatively new mine. It commenced operations in 2008 if I remember correctly. All of this production till now has come from the main Pallancata vein system. Pablo vein system is a satellite system some kilometers away and not connected to the original discovery.

So "Pablo has opened up a new district" is quite correct and it means there are good chances other significant commercial vein systems will be discovered in the surrounding area.

[mikkydhu] 09/11/2017 11:31

I couldn't believe the figures either. But how else do you read slide 9 of the Denver Gold Forum Presentation?

This slide is headed "Pablo Close to Production". At the bottom of the page it says "Pablo has opened up a new district"

It does seem that all the information on that page refers to Pablo and not to Pallancata as a whole. Maybe I am reading it wrong. Maybe the presentation of the information is misleading.

I really don't know. But whatever the figures, the message is quite clear: that Pablo Is a very big deal.

[stevea171] 09/11/2017 11:23

Shakey. HOC's aim is to make use of spare processing capacity of the mills at Selene (Pallancata), Arcata and Ares. In total c. 4,000 t/d. 8 million Ag equiv oz for Pallacata is possible, however:

HOC's philosophy is not production at any cost. They want each mine/production unit to be as efficient as possible and as profitable as possible. The price they receive for their silver and gold is out of their hands. So they want to ensure that all production ounces are maximising profit. If PM prices go down some oz may be cut. If PM prices go up some oz may be added.

This mainly applies to Arcata and Pallancata where some/all production has been marginal at these or lower PM prices.
San Jose and Inmaculada have more margin for profit. Inmaculada especially so at an AISC of c. $700 per gold equiv oz.

[shakeypremis] 09/11/2017 11:00

Looks like mikkydhu thought the new Pablo vein would produce 2400tpd by itself, doesn't look like that's quite accurate. During 2016 Pallancata produced around 670tpd. But with the introduction of Pablo vein Hochschild plan to increase production at Pallancata to 2400tpd, some 1700tpd exta. Not quite 2400 but still a very nice increase. That should produce over 8m silver eq oz per year if the plant was to run and process ore for 300 days of the year. Not bad.

[stevea171] 09/11/2017 10:54

Any uncertainty by institutions of HOC meeting or exceeding production guidance for this year and further increasing next year with lower costs at Pallancata are now laid to rest.

When fund managers are reviewing investments going into 2018 this announcement is significant in giving confidence to their present allocations of funds in portfolios to HOC or more likely to increase HOC allocations as a result of the greater certainty of improved performance.

[dt1010] 09/11/2017 10:13

That should add at least a penny onto the share price

Expect that penny to get sold into though. Grrrr Woof!

[shakeypremis] 09/11/2017 09:58

If mikkydhu's numbers in posts 17737 & 177739 are correct we could be looking at an extra 12m ounces silver equivalent per year from the Pablo vein. Almost a 30% increase from current production levels.

[dt1010] 09/11/2017 09:58

Top its a play on PM prices. Geo political risk is a potential driver for PMs. As for debt, the whole 'america is going to hell' BS is so tired and yes maybe it'll happen one day but no point expecting it to happen as a PM driver.

I think ramp up of delivery, debt renegotiation and reduction, growing revenues, profits and dividends coupled with a gradual rise in gold (I don't see gold dropping in 18) will bring in buyers for the stock

[stevea171] 09/11/2017 09:52

As this Pablo announcement is factored in and improved results start to come through from Pallancata, analysts will start to announce upgrades, increasing target prices and buy/hold/sell ratings.

Means little to PI's but institutions are guided by this.

Firmed up production profile. incl Q3 actual and confirmed guidance for FY which is on track for 37 million Ag equiv oz.

Traditionally Q3 and Q4 are the strongest quarters for HOC production.

After Q3 result:
HOC attributable production (million Ag equiv oz).

........... Q1....... Q2..... Q3..... Q4 ...... FY

2016.......7.4 ......9.5.....9.9.....8.6 ......35.5 (Q4 affected by Pallancata dispute)

2017.......8.6 ......9.3....10.3.....9.5?......37.7? (guidance 37.0)

After Pablo permit announcement 9/11/2017:
HOC attributable production (million Ag equiv oz).

........... Q1....... Q2..... Q3..... Q4 ...... FY

2016.......7.4 ......9.5.....9.9.....8.6 ......35.5

2017.......8.6 ......9.3....10.3....10.3?......38.5? (guidance 37.0)

So Q4/17 production result in January will show a massive jump on the comparative Q4/16 result.
Q4/16 production was impacted by the shut down of production at Pallancata due to the dispute that was resolved in Q1 this year.

[topicel] 09/11/2017 09:45

In the last 18 months there has been a few occasions when a 45% rise has happened within 2-4 week periods and so, as we are still lingering on support probably waiting on the tax and debt ceiling fun and games in the States, more than any other outcome, as to the direction PMs will take, we just have to be patient.

Do we believe the debt is unsustainable, that the Senate will block the tax reforms and the dollar, DOW will tumble as a result?

That is always the bet here. The NK/Iran potential is probably limited now unless they actually do something really daft, but meanwhile HOC provides a solid company to park your spare cash in.

Still better than Carney's 0.5%, is it not? Unless you think we haven't bottomed of course...

Topicel

[dt1010] 09/11/2017 09:33

Chartist would probably say we'll be stuck in this range until gold and silver rally sustainably.

Putting timescale on that is impossible.

Could be years.

But we hope for a rally in PMs in 18. Just for the hell of it.

Glass half full.

[ifthecapfits] 09/11/2017 08:56

Charts above would indicate that we are consolidating in the 220/240 range before the next move up. Be interesting to see some charts from a chartist is there is one on this board.

[juju44] 09/11/2017 08:54

Just no enthusiasm for anything to do with PMs. Buy glaxo

[dt1010] 09/11/2017 08:38

I remain very optimistic here and think that the zig zagging recently represents a bottoming out.

It's up to gold and silver now to move up..

Yawn

Just want 335p and then I'm off to see the Wizard.

That's just a mere 45% increase from these levels (cries).

[stevea171] 09/11/2017 08:36

Institutions still getting out of bed. Haven't read the papers or switched on the PC yet .....

So this is Pallancata sorted. Production was reduced here in previous years because the main vein system production was struggling to be economic with the low PM prices. This year production has come back at the main vein system but may be reduced again now as Pablo takes the lead role.

Arcata is last to be addressed of the 4 mines with current mining from narrow veins and low production giving rise to high costs. The exploration program this year has made new discoveries at Arcata with more to come this quarter as the drilling program proceeds.
Of particular interest are the long drill results which have yet to be announced. Next year we should start to see production improve with lower costs here as well.