Hochschild Mining PLC on Wednesday reported a swing to an annual loss due to exceptional costs, but it said it aims to ramp up gold production as the metal enjoys record prices.
The gold and silver miner with operations in South America said revenue fell 5.7% to $693.7 million from $735.6 million. Cost of sales decreased 3.7% to $508.2 million from $527.6 million. Exploration expenses were 63% lower at $21.3 million compared to $56.8 million.
The company said it turned to a pretax loss of $43.5 million in 2023 from a profit of $25.8 million a year prior, noting exceptional items.
Hochschild booked exceptional items costs of $97.0 million for 2023, compared to a gain of $1.4 million in 2022.
The company reported $63.3 million costs due to an impairment loss at the Azuca and Crespo projects, a $17.4 million cost at the San Jose mining unit, restructuring charges of $9.0 million at Pallancata as it placed the operation in care and maintenance, and an impairment of the investment in Aclara Resources Inc of $7.2 million.
Pretax profit excluding exceptional items jumped to $53.5 million from $24.3 million.
Despite the improvement in underlying profitability, the company said it would be inappropriate to restore dividends at this stage.
‘At this time, our financial targets include the reduction of our existing debt levels in the medium-term and for this reason, we have continued to take advantage of the gold price strength and executed a number of hedges for the next few years at Inmaculada and Mara Rosa,’ Chair Eduardo Hochschild said.
Net debt as at December 31 increased 47% to $258.0 million from $175.1 million a year prior.
Looking ahead, Hochschild expects overall gold production of between 343,000 and 360,000 gold equivalent ounces for 2024, at least 14% higher than 300,749 ounces in 2023.
The company targets all-in sustaining costs of between $1,510 and $1,550 per gold equivalent ounce, an increase of at least 3.9% from $1,454 in 2023.
From its new Mara Rosa project in Brazil which reported its first gold pour last month, it expects an output of 83,000 to 93,000 ounces of gold for 2024.
Chief Executive Officer Eduardo Landin said: ‘We made strong progress at our new Mara Rosa mine in Brazil, which is now in production, on time and on budget. Furthermore, we obtained a crucial permit at Inmaculada in Peru, ensuring an exciting, long-term future for the operation. We remain confident of a strong year ahead as we continue to execute our stated strategy of driving long-term production growth whilst reducing costs.’
Hochschild shares were down 4.2% to 105.80 pence each on Wednesday morning in London.
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