Share Name Share Symbol Market Type Share ISIN Share Description
Hochschild Mining 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
  -8.50p -3.72% 220.10p 220.30p 220.90p 233.70p 218.90p 226.40p 942,896 16:35:21
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Mining 557.3 87.7 7.3 34.2 1,118.05

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Date Time Title Posts
20/2/201820:47Hochschild Mining - The Serious Traders Thread1,116
20/2/201808:49Hochschild - Silver Mining, the place to be!18,346
28/1/201803:12Hocschild Mining - Long Term Value Proposition52
23/11/201708:16Hochschild Mining5,060
22/11/201712:07Hocschild Mining - The Serious Traders Thread2

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Hochschild (HOC) Most Recent Trades

Trade Time Trade Price Trade Size Trade Value Trade Type
2018-02-20 16:52:37220.60400882.40O
2018-02-20 16:51:29225.423,3887,637.20O
2018-02-20 16:51:29222.439002,001.86O
2018-02-20 16:35:21220.106,43314,159.03O
2018-02-20 16:35:21220.10123,791272,463.99UT
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Hochschild (HOC) Top Chat Posts

Hochschild Daily Update: Hochschild Mining is listed in the Mining sector of the London Stock Exchange with ticker HOC. The last closing price for Hochschild was 228.60p.
Hochschild Mining has a 4 week average price of 204.30p and a 12 week average price of 204.30p.
The 1 year high share price is 337.60p while the 1 year low share price is currently 204.30p.
There are currently 507,971,505 shares in issue and the average daily traded volume is 1,453,484 shares. The market capitalisation of Hochschild Mining is £1,118,045,282.51.
goldenshare888: If world finance was a level playing field we would all be looking at much higher PM prices and HOC share price well north of 500p in my view. 2018 could well be our year here DT, here's to 400p - 700p range! Good weekend all. :)
charles clore: If the threat of nuclear war can't lift PMs for more than 12 hours it signals to me that the HOC share price could hit 2 quid before it hits 3! Someone is obviously selling these off hard...
goldenshare888: This appears to have disconnected from subdued PM prices lately. This price action bodes well, and if the past is any guide, the quality miners pre-empted the forthcoming rise in PM prices by up to six months! The undervaluation here to forward earnings is also playing a part in the HOC share price appreciation, I am sure. If results good (which I am sure they will be) then I can see this 350p - 400p short term. If PM prices take off then 550p+ :))
lauders: Is this correct though DT1010: As I read posts across the internet, I see utter disgust with the metals complex. It seems this sideways action in 2017 has worn investors out. I have seen many cash in their chips in utter disgust over the last few months. Yet, all we have been doing in 2017 is moving sideways, while maintaining over support. This is simply how the market works. Before you are able to see any major rally, most in the market have to either be out of the market or positioned the wrong way. Just consider where all the money has to come from that chases a 3rd wave into a parabolic rally. And, based on what I am reading out in the blog-o-sphere, along with the BPGDM being down in the 25 region, it certainly seems the market is doing its job of pushing investors out. The HOC share price has increased 60.5% this year. FRES has increased 29.5%, RRS 19.5%, GLEN 19% and AAL 12.4%. I know the latter has diamonds and other commodities too. There are also others who have not fared that well, but still the above gains do not paint the scenario expressed by the author do they?
charles clore: IMHO the HOC share price is not going to get up and fight. The GDXJ has sold it out and even Eduardo de Hochschild has sold - both at the top I might add. That tells me that they thought it was overvalued and so they topsliced. It is now where it should be - in the 260's range (imho)
hectorp: HOC share price last few days has been stronger than silver which retested 1700 having been at 17.40 so yes I trust silver is soon to be closer to 18.00 probably next week though.
shakeypremis: Gotta love how the HOC share price reacts lol
onedayrodders: Means the shares will find another level higher (or lower) than today's share price For example if you look at the chart the shares have been rated between £2-3 over the lats 6 months. If the price of silver moves up to say $20 then HOC share price should re-rate to around £4-5 last seen back in 2012. If the price of Silver falls then they could re-rate lower. Hope that helps ODR
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.
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
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