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Our good friend Jeromey Powell is also between a rock and a hard place!
I’m looking for £1.50 as a first target - been accumulating in the high 70s
HOC's pulling like a train at the minute! RNS, saying Mara Rosa is complete could be imminent and this should put some petrol on fire... most important thing is not to sell before a re-rate but very tempting after such a long wait.
Gold at over 2k currently, expecting a strong performance from HOC tomorrow, 100 incoming?
Hi Stanley, if you compare the share prices of gold mines over the past year it is clear that HOC is performing much better than US shares, such as Sibanye. This is because US investors are buying into a stronger dollar rather than gold. However, this state of affairs will change dramatically if the US becomes embroiled in the ME. Hence Biden's visit to Israel today to try to prevent escalations and a weakening dollar imo.
Luckily, HOC does not operate in the ME and PM prices are slowly recovering. Hochschild needs to get Mara Rosa going on time (in Q1 2024). This combined with a reduction of borrowings and increased cash should put us firmly on the road to 150 and beyond.
Sorry for repeating myself.
The market is grossly under-estimating the inevitably deteriorating situation in the ME imo. The actions taken by Israel , regardless of how justified and surgical they may be, are bound to be followed by escalating reprisals on both sides and so on. This is all part of Iran's long-awaited strategy for the annihilation of Israel.
Thanks for those posts Noel. Iran is the culprit here. Its religious leaders are committed to removing Israelis from the geographical centre of what they perceive as a modern Islamic empire. They fund Hamas and the much more powerful Hizbollah. AndJoe Biden has just released billions of dollars to Iran, much of which will be spent on Iran possessing a nuclear capability. China may then seize the opportunity to attack Taiwan etc. Happy days all.
I wouldn't be happy making gain due to a war premium, but it is not ordinary people who start wars, so I would be happy if my investments save me from the economic consequences of the wars started by the evil rulers of the world. Here is a thought-out forecast -
"The Sword Of Damocles: An Economic Worst-Case Scenario For The Israeli-Palestine War"
https://www.zerohedge.com/geopolitical/sword-damocles-economic-worst-case-scenario-israeli-palestine-war
"Israel-Hamas War Latest: Israeli Troops Amass At Border As Iran Warns It Will Intervene If Ground Offensive Launched"
https://www.zerohedge.com/geopolitical/israel-hamas-war-latest-israeli-troops-amass-border-iran-warns-against-ground
Hi thornyone. You are right about world events being a reason to buy gold and that thought now makes me regret giving my post the heading of "Great day" on a day that saw great suffering and tragedy.
I had looked at the board and the surprise of seeing that no one had commented on the notable price movements knocked other thoughts, temporarily, from my mind.
I will get no joy from gains that are the result of a war premium.
To reply to your post Noel.
Hamas , Hizbollah. israel/US versus Iran. 3rd world war. Buy gold.
Healthy if support is found at 80, not 85. (last sentence)
Sorry, plots should read pivots.
Sp, broke above 2 bullish plots today. Also recent low coincides with long term bullish uptrend line from November 2022. The weekly chart shows bullish Japanese candlestick doji, high of 83.55, which HOC, requires to close above to give buy signal. The weekly doji, signifies positive accumulation. The short term down trend line from August 2023, reveals 85, as the level that price requires to close above, to resume uptrend. If sp, retreats for any reason, it would be healthy is support is found at 85 sp, level.
Gold and silver prices rocketing, HOC sp up by over 6% and no one comments?
That's a good sign, because it means the real interest hasn't yet started - and when it does - !!!!
Bloodbath again, all markets and commodities are down but we've been hit the hardest... so just topped up with a target of 95.
Nice 5% for the brave this morning 😁
If price sticks here you will be right, will be good and then good news next year should lift us
I see there's a lot of negative opinion and HOC is down 4% as I write.
H1 was a break even half. My estimates show 2023 H2 will repeat that.
But 2024 looks a lot more positive. Here's why:
1/ Pallancata falls away. I questioned HOC 18 months ago why this wasn't going into C&M. Clearly in retrospect they should have done that sooner than Q4 2023. Their rationale was that there was potential at Royropota, but I fail to see the connection i.e. new exploration near a mine doesn't mean keeping an existing mine open, unless there was some politics going on?
2/ Political situation in Peru improved. Moreover HOC is now multi country so far less reliant on Peru.
3/ Inmaculada. The rise in AISC is largely down to the env't permit and new exploration should drive down the AISC back below $1300. I model it at $1250.
4/ San Jose is a great example of this. The AISC has been driven down over 10% in H1 2023 through capital expenditure. I see San Jose continuing in a steady state.
5/ Mara Rosa is 6 months away from first pour. Modelling 20koz in H1 2024 and 50k in H2 2024 the numbers start to get exciting.
6/ Royropota is 2026/2027. Any investment decision will be balanced with paying down debt.
7/Cash generation FCF is forecast at 18.6% yield for 2024. I don't think people understand how quickly the debt can be paid down. It will be largely gone in 24 months.
8/ The write downs may yet yield value. Azuca, Crespo, Aclara are written down based on accounting rules not based on any physical event. There's possible upside but all of these adjustments are non-cash in any case.
Conclusion: Using H2 2024 forecasts, I arrive to a forward PE of 3.5 at today's market price. That's based on a run rate of 100k/oz @ $1000 AISC for Mara Rosa, Inmaculada 260k/oz @ $1250, San Jose 88k/oz @ $1550. With $100m overheads.
In other words HOC is cheap in my opinion, and today's results don't reflect the forward tajectory.
GLA
Yes, no investor should be surprised. These results are conducive to the Q2 2023 production report released in July.
Market already had most of bad news already baked in judging by SP response
Core cpi later today. PMs really going to have to go higher for this to break above 100p now.
Shame to see cash and net debt smacked
Maybe a rise into them but they are pretty dire with low production, very high costs and sizeable losses. Pallancata is closing in the next 3 months which will help the losses and not much further reduc3 production as nearly spent. However jam tomorrow, always jam tomorrow. When Mara Rosa comes on stream it will help but then there is hefty investment in the new pallancata and we will already have maybe $200m debt or near half cap especially if price falls much on these sad results. Jam tomorrow is a little further off.