Hochschild Mining Share Discussion Threads

[nilla159] 20/2/2024 15:45

Hi Steve, thanks once again for your valued input onto this thread.I have also topped up on Hoc.The next few months should be very interesting in my opinion and hopefully profitable to boot.

[m w] 16/2/2024 16:02

A good game been played here should be over £1 now with news eminent on the first pour from their new mine

[stevea171] 16/2/2024 10:16

Silver back to $23, gold back above $2000 again.

[stevea171] 16/2/2024 09:53

Mara Rosa's first gold pour is to be within the next 2 weeks according to HOC's forecast made only 3 weeks ago. So we should see an announcement next week or the week after. The new CEO is unlikely to make such a forecast unless he is certain he can hit this target.

24/1/24. HOC Q4 Production report:
"In Brazil, we are in the final stages of the Mara Rosa project's construction and commissioning phases and are looking forward to the first gold pour in February.

This exciting new mine forms a key part of our recently announced growth strategy and is set to enable Hochschild to increase output this year by over 15%."

[rathkum] 15/2/2024 12:56

Rómulo Mucho, new Minister of Energy and Mines – Energiminas
February 15, 2024

The current director of Institute of Mining Engineers of Peru (IIMP)Rómulo Mucho will be the new Minister of the Energy and Mines portfolio, replacing Óscar Vera. Born in A lots of, graduated as a mining engineer from the National University of the Altiplano. Subsequently, he worked since the 1980s in various mines, including Tintaya and Hochschild Mining.

In the years 2005 and 2006, during the Government of President Alejandro Toledo, he held the position of Vice Minister of Mines.

Much is a well-known figure in the sector and a defender of modern mining. “We must make the population understand that mining is important, that it is the main engine of the economy, and now with family farming that needs support. Many projects can come together with agricultural exports. This had been advancing at a rate of 10% to 15% annually, today it has stopped”he recently commented to a media outlet.

He stated that a solution to get out of the economic recession is to unblock mining projects. Among the projects that hope to see the light during these months are: Antamina Replacement, Raura Replacement, Romina, Huancapetí Expansion, Tantahuatay Replacement, Chalcobamba Phase I, among others.

Minem has a portfolio of 70 mining exploration projects valued at US$521 million, which are located in 16 departments. Among them, La Zanja, Quicay II, Picha, Tambomayo and Soledad stand out. Peru remained the second largest producer of copper and zinc globally. Furthermore, at the Latin American level, it consolidated itself as the leading producer of zinc and tin.

[rathkum] 14/2/2024 18:05

President Dina Boluarte announced a reshuffle of her Cabinet that involved changes in the leadership of key ministries of Economy and Energy and Mines, as the country seeks to emerge from an economic recession. The Ministry of Economy and Finance will now be led by José Arista, who had already held the post briefly in 2020 as part of the Cabinet of former President Manuel Merino. Meanwhile, Rómulo Mucho was sworn in as the new Minister of Energy and Mines of the world's second largest copper producer, replacing Óscar Vera, and will have the challenge of facing the recovery of a sector historically weighed down by social conflicts. After that, Gonzalo Tamayo, former Minister of Energy and Mines, welcomed the appointment of Eng. Mucho Mamani.

"It is an excellent decision because Rómulo Mucho is a specialist who knows the mining sector very well and who I am sure will promote the projects that are about to come out and move forward with the process of improvement in the regulation that has not yet been completed," he said exclusively to Rumbo Minero.

The also partner of Macroconsult added that Mr. Mucho "also clearly understands the possibility of coexistence between the use of the natural resources of mining and hydrocarbons with the environment and the communities."

For his part, Pedro Gamio, former Deputy Minister of Energy, remarked that the current head of Minem, Rómulo Mucho, "is a first-rate professional with extensive experience in the mining sector. I am sure that he will give the best of himself to relaunch a sector that is very important to provide resources to the State and for Peru to be empowered within the fourth industrial revolution."

Meanwhile, Arturo Vásquez, also former Deputy Minister of Energy, mentioned that "the appointment of Mr. Rómulo Mucho is appropriate given his vast experience in the mining sector. He knows well what has to be done to reactivate different projects, in addition to working on the unblocking that has to be done in different public entities and above all he has a management of the social part". "He has been promoting a lot the coexistence between agriculture and mining. That's very good news. It is clear that the government has realized that without mining we will not be able to reactivate the economy," he emphasized.

[stevea171] 14/2/2024 10:19

Another week closer to Mara Rosa start up. We are now half way through Q1 so can't be too much longer to wait ....

Gold take down yesterday with the dollar going the other way on the back of US inflation figures. This is the first time gold has gone sub $2000 in 2 months and it has spent almost the entirety of the past 3 months above $2000. I would expect it to be bouncing back within a few days. Just noise. Gold will be heading much higher this year imo.

I have topped up my HOC holding today.

[stevea171] 07/2/2024 20:03

Aclara. What I would like to know is how the Penco Module and Carina project are to be funded. Barua never talks about this. Is HOC to be diluted from 20% if it doesn't provide new funding in cash raises or will they go for huge borrowing from a consortium of banks and/or finance companies? Eduardo holds another 36% in Aclara separately and would not want to be diluted.

Penco module development capex $130 million.
Carina development to cost $579 million.

"Aclara speeds up project in Goiás, Brazil"
Interview by Brasil Mineral

In this interview with Brasil Mineral, the company's CEO, Ramon Barua Costa, talks about the advantages of the Carina project.

According to the Preliminary Economic Assessment recently completed by Aclara, in order to put the project into operation it is estimated that a ~US$579 million investment will be required, a figure that could be confirmed by the Pre-Feasibility Study that the company is commissioning (Aclara is currently selecting engineering companies to carry out the PFS).

[stevea171] 07/2/2024 18:57

Analysts are conservative and adjust their conservative estimates, up or down to the current way the wind is blowing. For commodities and company target share prices.

They are constantly playing catch up so I pay little attention to their forecasts!

Silver will have its day in the sun. But when?!! HOC also.

[theoracleofomaha] 07/2/2024 17:56

Regarding silver price, CPM group (the only source I listen to about silver & gold prices directly) claimed 4 months ago that they predict silver will average in the low to mid $30's range in the period around 2024 - 2025. However, just 1 month ago they gave a 2024 average price projection of $23.70.

Either way Gold is the most important PM for us, and even if it was to remain at current price, if HOC meet their own production estimates they should have some very profitable years ahead.

[stevea171] 07/2/2024 15:26

Gold: $2040. Silver $22.33. Gold:silver ratio: 91:1

This gold to silver ratio of 91 is very high on an historic basis.

Gold has been doing well with holding its break out above $2000 but silver has been range bound for the past 3.5 years and has made no corresponding move.

When it happens, likely in the next PM surge, silver should quickly move to $28, $30 and then $50.

Every man and his dog will want a piece of the action. Of the London listed miners HOC and FRES are the most liquid with decent exposure to silver. Then, if not before, we should see the HOC share price hitting 200p, 300p and more. (HOC was last at 300p in mid 2020 and 200p in 2021.)

[stevea171] 07/2/2024 10:53

Mara Rosa start up and first pour is likely to be this month imo. Officially Q1.
It could be any time now.

Production guidance for 2024: 83-93k oz gold (FY c. 100k oz).
This suggests start up is immanent.

If all goes well as expected there should be a lot of publicity and interest in the company with it being their first new mine since 2015, with a low AISC to replace Pallancata now on care & mtnce until Royropata permitting comes through.

Mara Rosa.
Initial Mine Life 10 years
Average Annual Production ~80koz Au (~100koz AU over the first four years)
Average Annual AISC US$950-$1,000/oz Au
P&P Reserves 900k oz
M&I Resources 1.2 million oz
Initial Capex US$200m
Sustaining Capex ~US$40m
After-Tax NPV @ 5% @ US$1,800/oz Au US$200m - US$240m
After-Tax IPR @ US$1,800/oz Au 24% - 26%

[stevea171] 04/2/2024 21:50

2025 for a permit for Royropata would be a massive boost but as with all of Peru's red tape I'll believe it when I see it!

[rathkum] 02/2/2024 21:25

This could be very positive for Royropata


Minem expects to reduce the deadlines for starting a mining project from 2 years to 6 months by 2025

The ministry launched the first phase of the Digital Single Window for mining. By the end of the first half of the year, the TUPAs of the entities involved would be aligned to begin simplifying the processes. After a meeting with executives of more than 30 mining companies operating in the country, the head of the Ministry of Energy and Mines (Minem), Óscar Vera, together with the Deputy Minister of Mines, Henry Luna, announced the launch of the first phase of the Digital Single Window (VUD) for mining.

"I think the result is quite positive, it is a commitment of the Government and we are trying to meet the expectations of the mining entrepreneurs to streamline the procedures and allow us to reduce the times, which exceeded two years, we hope that with the implementation of this process they will not reach a time greater than 6 months, which is something that will put us at the level of other countries in the world that have short times," he said.

The meeting was attended by executives from the companies Anglo American, Bear Creek, Buenaventura, Chinalco, Las Bambas, Zafranal, Southern, Goldfields, among others. Vera explained that the process of implementing the SUV consists of three phases: the first related to mining exploration; the second refers to the processes to authorize mining exploitation and the third refers to the processes to grant a concession of benefit.

Minister Vera indicated that his ministry seeks to align the Single Text of Administrative Procedures (TUPA) of the institutions that are part of the VUD (Ingemmet, Senace, Sernanp, Ministry of Culture, Sunarp, ANA, Serfor, Sucamec and the Superintendence of National Assets). In this way, the entities will work together, meeting the deadlines for the approval of permits. Deputy Minister Luna explained to Rumbo Minero that in about three months the legal areas of each entity will meet and that by this first semester they would have finished that.

"To reach the 6-month target, we need to modify the TUPAS of the 9 entities to shorten the deadlines. Also, try to make them parallel processes to avoid finishing one process and then moving on to the next. When we have the regulations that allow us to simplify processes, we can only systematize and with a single code it would be a single table," he said.

Reduction of deadlines Deputy Minister Luna said that the expected reduction from 2 years to 6 months of the procedures for mining exploration and exploitation projects would be completed in 2025. He commented that Minem seeks to implement the Digital Single Window (VUD) by the end of this year. "We have to dialogue and reach a consensus and the PCM, which is the one that leads, will approve this and only from there will we be able to talk about a definitive VUD, already with a cut in times," he said.

"Now we are showing what the reality is, in the second phase we are going to meet with the legal team of the 9 institutions and we are going to see what steps are being duplicated, and we are going to shorten those processes and only then are we going to talk about simplification," he told Rumbo Minero. He pointed out that the 9 institutions that make up the VUD will conclude the identification of all the processes this month. In Peru, the procedures to authorize a mining project take between two and in some cases up to four years.

"By February we are going to finish the identification of all the processes, both exploitation, exploration, beneficiation and mining expansions that last approximately two years, since that lengthens the time," he said

[rathkum] 02/2/2024 08:32

FTSE 350 Review: The gold miners best-placed to grow
Only Endeavour Mining has kept pace with the gold price, but its recent drama shifts the focus onto smaller players
February 1, 2024
by Alex Hamer

Gold hit a new record high at the end of last year, and has floated above the $2,000 an ounce (oz) mark since. Gold and silver companies have not enjoyed the same progress, with equity and earnings upside limited by investor caution and higher costs. A longer-term view points to the tough time mining investors have had; in the past five years, only Endeavour Mining (EDV) has come close to matching the gold price.

The sector-wide view is narrow in this case because of the small number of miners in London’s top two indices. But there is value there, given the path of the gold price and the fact miners are now getting a hold on costs. The smallest of this cohort, Centamin (CEY) just announced a lower-than-expected all-in sustaining cost for 2024, raising profit expectations.

The Egyptian miner did report higher operating costs for the second half, however, so the outlook is not entirely set fair. Still a one-mine play, Centamin is also throwing cash at more drilling in the same region as its Sukari mine.

The other three precious metals specialists had a less dramatic 2023. Hochschild Mining (HOC) received its long-awaited permit for an expansion of the Inmaculuda mine in Peru, and its share price rebounded to over 100p, a 40 per cent bounce. The miner was also boosted by its new Brazilian operation, Mara Rosa. Having a mine outside Peru also cuts the single-country risk discount applied.

Hochschild’s adjusted Ebitda is expected to climb by 22 per cent this year to $289mn, as per broker Peel Hunt, although this is still $100mn below the 2021 figure.

Favourite

We have buy ratings on Endeavour, Fresnillo and Centamin, after turning bearish on Hochschild in 2022 over its permitting issues. But that issue is now cleared up, and the company is set to expand output significantly in the coming year, so we shift the company back to the favourites list. It will take some time for the profits to flow through, but Hochschild is now on more stable footing, albeit 25 per cent more expensive than when we first put it on a sell rating. Peel Hunt forecasts that adjusted cash profit will rise from $237mn in 2023 to $289mn this year.

[stevea171] 31/1/2024 13:19

I think in the gold and miner bull market getting under way there is every chance a major would go for a large resource such as this.
HOC has recently done the work to update the MRE and PFS and place it into a separate company - Tiernan Gold with its own CEO. It is now in the shop window with an agency to manage the advertising and bring interested parties forward.

When gold and miners are running hot (if ever that day comes back again!) or before, yes, Volcan should fly off the shelf .... :-)

[sotolo] 31/1/2024 08:14

So do you think someone will now offer to buy it?

[stevea171] 30/1/2024 12:06

Sotolo. Volcan is an expensive development that has been beyond HOC for the past 14 years. Today the estimate is $900 million cap ex. Combine that with issues to do with water, labour, and Socialist governments. It is high risk and has never been viable for HOC the way things have worked out over this period. If things didn't work out with a HOC development it could bankrupt the company.

HOC is a specialist underground vein miner. That's where their expertise lies for the past 50 years since Arcata began. Mara Rosa is just the second departure from this. Volcan is open pit low grade mining of dirt in a high altitude desert with extreme temperatures, virtually no rainfall and no resident labour supply. The mines already there are part of much larger portfolios that can carry the risk of their Maracunga mines.

The MRE is for 9.8 million oz M&I. There is an additional 1.2 million oz that is inferred but in for free plus exploration potential.

[spacedust] 30/1/2024 12:02

Needs to clear 110p

[sotolo] 30/1/2024 11:18

Stevea, why do you think they have had this for 14 years now and never developed, sold or exploited it, ie as they say it has been dormant for many years. They also say “ Readers are cautioned that the PEA is preliminary in nature. It includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA will be realized. “. We might sell it one day which would be a super bonus but can’t count on it imho

[stevea171] 30/1/2024 10:16

Volcan project has 10 million oz MRE resource. At a conservative $20 in the ground valuation (in use by the mining industry) this gives a minimum worth of $200 million.
HOC net debt is approx $252 million.
So a sale of Volcan would pretty much clear the debt.

Presentation:

[stevea171] 29/1/2024 14:27

They are confident as they should be as they've done all this before for a much larger plant.

[danmart2] 29/1/2024 13:59

If the brazil operation is delayed, this will plummet 10%

[stevea171] 29/1/2024 10:12

Kitco gold price ($2028):


Kitco was hacked a month or so ago and the site was down for some days. Since then their usual charts have not been available.

17/12/23. The owners of the website Kitco.com are reporting their website was hit by a "cyber incident" and most of it is DOWN, including the online sales store!