Hochschild Mining Share Discussion Threads

[stevea171] 25/8/2020 21:29

Sotolo. Predicting st share prices is a fool's errand.
Especially just now with so many factors in play that could take the share price up or down or one cancelling others out.
At this point in time the company is not prepared to give revised guidance for the FY which is just months away. What does that tell you?

[sotolo] 25/8/2020 20:36

Stevea where do you see Hoc share price going in next few months IF gold and silver stay where they are now?

[stevea171] 25/8/2020 19:34

D3009. Thanks.
When Arcata was put on care and mtnce early last year it still had millions of ounces of resources. It was not mined out. Arcata is a silver/gold mine with about 70-75% silver. The problem was three fold. One was the price of silver. The second was the resources remaining were mainly in narrow veins and lastly the cost of mining and the AISC incl exploration and development was way above the silver price making it loss making and uneconomic at the time.

Since Q1/19 HOC has carried out exploration at Arcata and regionally to try to find new areas that would be commercial with limited success. Remember Arcata has been in production for most of the past 50 years.

There are a number of possibilities which are all being explored and considered incl:

NW Arcata
Ares area, near by, where HOC has another smaller shut down mine and mill.
Condor which is in small scale independent production near by that HOC has bought into that can potentially be scaled up with the output trucked to the Arcata mill.

So HOC does not want to rush into any decision that it might later regret. There are significant costs both financial and employment wise every time a mine is put on C&M and is later restarted.

[d3009] 25/8/2020 18:40

Steve, I take my hat off to you in your forecasting of Hoc, I was banking on the reopening of Arcata, in early 2019 when it went into Care and Maintenance I seem the recall an announcement saying it would be brought back into production if price exceeded 22 dollars, after the telco last week it was apparent this was not going to be the case and that the reopening of Arcata was subject to drilling results from the new potential targets. Looking at the grades too all down so as you predicted it was very bad the results and being reflected in the share price Although in for the long term, like yourself I can see the spectre of market collapse and the big second leg down, this said the politicians have a good knack at kicking the can down the road and now the old Sino/US negotiations are back on the table just to give the markets a boost when needed. Usual caveats apply DYOR etc.

[stevea171] 25/8/2020 12:52

Sotolo. It depends how far forward the market is prepared to look ....

For now PM miner prices are collectively reacting to the falls in gold and silver prices whereas prior to that they were collectively reacting to $2000+ gold. With results, some individuality is appearing incl HOC. Some miners have been left unscathed by the CV and have suffered no shut downs. We will have to watch what happens when the metal prices start the next move higher.

I am still waiting for the overdue BIG ONE. ie Market crash. September is only days away and seems to fit the bill, timing wise. S&P is back to an all time high that is completely unjustified based on the US economy and world outlook. So we will have to see how this plays out in the PM sector.

2021 is miles off. There is a lot to be negotiated before then. A November Presidential election makes the next few months even more perilous than usual with both parties going all out to win. With looting, burning, riots and anarchy in the streets and a civil war in prospect!

[sotolo] 25/8/2020 12:19

Thanks also Steve. I too have said first half result would be dire, and as you say third quarter will be bad too leading to very poor full year. However markets look forward and if no resurgence of Covid, political or mining problems, and exploration proceeds we’ll, then I make the forward PE for next year current gold and silver prices tumble 5 fold from 33 to around 7,!! so I actually think this looks better value than AAZ POG ALTN is my maths wrong?

[juju44] 24/8/2020 20:54

Teacup and my dream that the gangsters had a meeting and decided to rob another few billion of the lumpen by printing another trillion to manipulate the metals lower

[d3009] 24/8/2020 20:09

Be interested to understand how that prediction came about Juju, charts or have you been looking into the bottom of the teacup again?

[juju44] 24/8/2020 17:51

Party over for the metals

[digger18] 23/8/2020 19:43

Thanks for your assessment Steve, which i pretty much concur with. I think I will just hold at present and see what happens to the POS over the next few weeks. I am probably over invested in Aaz already, but eagerly awaiting JORC update. I came out of POG due to the management turmoil, but happy to go back when settled. Hoc has been good to me over the years and a positive is the lack of debt. Interesting times !

[stevea171] 23/8/2020 14:37

Digger. Thanks. I'm having a bit of a rest from posting here as the results were very disappointing as I expected.

When they announced their Q2/H1 production figures last month I commented that that result could give a first half loss which is exactly what was reported last week. The market price of HOC was way ahead of itself so is now coming back to earth!

H2/20 production is also not going to be anywhere near normal as Inmaculada has had 4 weeks of a second shut down in July with ramping back up in progress since 28/7 and expected to be complete by 31/8. San Jose at 60-70% currently with return to work proceeding slowly because of inter region travel restrictions but hoped to be complete by end of year. Pallancata is back to 100%.

No FY guidance to be given before Inmaculada is in full production. Probably September.

The good news is the gold and silver pricing but on much reduced output.

Massive drilling program for H2 to make up for CV suspension in H1. I doubt it can all be completed in the time remaining and certainly not publish full drill results despite Ignacio's optimism. I expect at the minimum some drill results and analysis into next year.

Arcata. A lot of interest here. Permits that were not expected until 2021 are now to hand so drilling is brought forward into H2/20. IB says he wants to see results of this drilling before any decision on a restart of operations. He wants to see 4 or 5 years of production resources at least before any restart despite the current silver price. So he is effectively ruling out any Arcata production this year.

Outlook. H2/20 results will be very constrained given this background. Fwd PE Ratio is 33. Peru is still badly affected by the CV.

There are better value PM miners than HOC currently eg AAZ, POG, ALTN.

-- Revenue of $232.0 million (H1 2019: $354.5 million)
-- Adjusted EBITDA of $80.6 million (H1 2019: $153.7 million)
-- Profit before income tax (pre-exceptional) of $13.1 million (H1 2019: $41.5 million)
-- Loss (post-exceptional) of $9.0 million (H1 2019 profit: $16.6 million)
-- Basic loss per share (post-exceptional) of $(0.02) (H1 2019: $0.03 earnings)
-- Net debt of $58.4 million as at 30 June 2020 (31 December 2019: $33.2 million)

[digger18] 23/8/2020 11:24

Missing your comments Stevea!
I see you occasionally comment on Aaz but your thoughts on Hoc and silver are always appreciated.

[dogwalker] 21/8/2020 18:59

I think the share's chart shows currently a zag in a steep zig-zag uptrend. Best seen in log scale with candle-stick chart. Besides the upward -sloping support line, there is also horizontal support coming from the highs in April& May 2018 & again last summer.
There's a convergence between these lines later next week around 225-230 p. Unless pm prices go on down, I'd expect the uptrend in HOC (etc) to resume then, if not before.

[hector_p] 21/8/2020 18:40

Hi Arja, how's it going.

Silver looks pretty good at anything over $26 as it still is. Target mid thirties in a couple of months.

[hector_p] 21/8/2020 18:38

That classic head and shoulders is heading for 180 unless something changes. I'm so relieved I didn't buy last week I was going to.

[d3009] 21/8/2020 17:23

So Arja, you mentioned share price going down to 225p, I can see from the H&S pattern the retraction should be down to 243p, obviously we've broken through this level and the long term support of just over the 200p region. Same with gold the H&S pattern would suggest a potential retraction to 1880 levels. Would be interested to see how you get to 225p for the support of the share price

[arja] 21/8/2020 13:38

gold price is bouncing and mini resistance at 1930 level . Will be interesting to see if it can break it.

[arja] 21/8/2020 13:16

HOC is quite a slow moving stock compared with POLY or FRES but chart suggests it is heading for about 220 assuming gold price does not start to look bullish again .Never a bad idea to short with a CFD or spreadbet as a kind of hedge even if just in a modest way to partially protect the paper profit . I used to do that a lot when I held a stock but now only trade with CFDs and do not always cut my loss quickly as I lack the big D . Gold might be looking to have a short term bounce but far from sure .

[arja] 21/8/2020 12:50

Sotolo ,
I take a more simplistic approach relying on charts but there is more than one way pf making money or losing it at times . The chart for gold has some support at $1920 level and just about there . If it breaks this decisively , minimum target seems to be about 1880 as I read chart . $US strong today too and that often means a weaker gold price of course as gold priced in $US . Sterling weaker after bad news on brexit talks and pound will be the greatest of shorts in a NO DEAL scenario . Well done brexiters !!

[petebreeze37] 21/8/2020 12:48

Sotolo,
Who knows what will happen, the markets were over cooked before convid and now it is painfully obviously that the printing machines must be at full pelt.
One thing for sure is that people are trusting paper money less and less and we know, lead to believe, that previous metals are at very low supply levels.
So I think prices will continue to rise and hoc has been making a profit at much lower prices than today's. I have bought more at these levels and fingers crossed.
Crimex are going to bash precious metals for the next 5 days to get themselves out of a hole. so I can see hoc going lower again

[digger18] 21/8/2020 12:27

It’s a profitable debt free business in a market full of debt and turmoil. Markets including PM’s are moving fast both ways, however, I know where I will leave any investments, and this is one of them.

[sotolo] 21/8/2020 12:21

arja I totally agree, which is why I am happiest when pundits start talking about how gold will fall. I notice a number of them doing that now so hopefully rather than having seen the top this is a correction and on the next rise the market will become even more euphoric, then time to sell. I hope this is the case as staying in and bought more. The 5 stages are
1. displacement,
2. boom,
3. euphoria,
4. profit taking,
5. panic.

I think we are at a correction in 2. And have yet to see true euphoria
However if you are right we have been euphoria, are amidst profit taking and panic comes next. Which would be very sad for me!

Any thoughts from others

[arja] 21/8/2020 12:11

gold chart shows declining high and maybe the party is over for gold. When people start getting excited and saying $3000 or more is on the way , it sometimes indicate something has topped out !

[arja] 21/8/2020 09:14

so really it is better to trade the actual commodity really with a spreadbet or a CFD as much less risky being not exposed to what announcement might come out from a company . Alternatively GBSP , GBS or slvp are possibilities as they mirror the metal concerned albeit with a slight currency risk if not traded in $US.

[hector_p] 20/8/2020 20:16

It implies ALL miners will be hit by closures etc due to Covid19. It is inevitable, but it also works the other way to suggest much lower silver output in a time of rising retail demand. Though that is initially better for silver than the miners they will catch up again. Hoc should too.