Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Sotolo don't be gloomy just pray for another silver squeeze as I do most days.
https://on.ft.com/3exVtSX
Even the FT found it all quite exciting and the year is yet young.
of course depends on time frame and other miners you choose. However Hoc has fallen from 320 last August. Over the same period the HUI a collection of miners has fallen a little over 10%, of course sterling accounts for a bit of the difference but a 40% drop is still a lot and over the last month Hoc is also down while the Hui and most miners including Fres are up. So you could say we are both right depending on the period, but Hoc has definitely recently underperformed. We are on track to produce 32m ounces this year so I am not sure how 25.3 million added in a year replaces that but expect somehow it does. As we both knows there are many ways to interpret the figures and more of the market interprets them my way, but hopefully yours will turn out to be better than mine and we shall soon be back over £3. hope so and lets stop this silly arguing and just respect each others views x
Hochschild has fallen in tandem with commodity prices over the past 8 months as has nearly every other gold or silver major minus perhaps Centamin and a couple of others which crashed earlier due to operational issues.
The Russian miners have been largely shielded owing to their already sizeable discounts and maybe a hint of FOMO following the hostile takeovers of HGM and TSG.
More to the point, FRES is down 18% in the past six months compared to HOC down 11% in the same period. Even Barrick Gold is down 9% so your comment suggesting HOC is worse than the majority doesn't add up.
As for the comment concerning a lack of replacement ounces, you must have missed Hochschild drilled more than 100,000m of infill drilling up to the beginning of 2021 adding 25.3 million silver equivalent ounces to the reserves. Hochschild have not only replaced depleted reserves over the course of the past year but they have added to it as well!
Total reserves as at December 2020 were 112.2moz Ag Eq compared to 106.1moz Ag Eq at the end of 2019.
I should also add the most recent reserves and resources statement does not include the latest January 2021 drill work which will be included in the 2021 statement. The increased exploration spend this year is designed to 'replace' the 31-32 million silver equivalent ounces forecast for this year and there is no reason to doubt Hochschild won't achieve that.
Thanks and thanks Shareminator for your views, let’s hope gold and silver continue to rise to lift our share and particularly push it above the 50,100 and 200 day averages of 203. 208 and 223. It would be lovely if at least some of all the various bad news that has steadily pushed down our share price turned good. As Rothschild said sell the rumour buy the fact, hopefully the election is already discounted and it won’t turn out as bad as expected for Hoc after. Also as Shareminator points out costs have been well controlled over the last years, I think at the expense of exploration for replacement ounces a few years ago, now with costs on the rise replacement ounces may be on the up too, and as Shareminator points out we could be surprised by costs being less than forward guidance. Feeling a little hopeful for once, but sadly gloom has turned out right with this one the last 6 months.
Well I just checked the prelims to see what is going on with you two and they do mention it under outlook for 2021
§ Greenfield and advanced project budget set at approximately $11 million
§ $14 million budget for Biolantanidos rare earth deposit in Chile
§ $7 million budget approved to begin construction of ore sorting pilot plant at Inmaculada
Shareminator I always want to investigate the reason the share price has fallen consistently over the last 6 and more months, more than many other miners, and it is not just the Peruvian election as started way before. I am talking about 2021 that affects us now, not 2020. have been very clear that after Covid hit and the 2020 outlook changed Hoc did very well to keep costs as down as they did but they look like they'll be higher this year, 2021, a contributor to our lower share price along with lower ounces imho. Yes around 2013 we had some high cost mines and replacement exploration that was heavily cut as gold prices tumble and cash needed conserving, and then we closed expensive Arcata, but now costs are as said rising according to management for this year. You call me a liar, for saying I talk to Hoc and the words they used about aisc "Brownfield exploration is in the AISC. Then you have $11m greenfield and $14m for BL and a further $7m for the ore sorting pilot plant". It is sad that you think people here have the time to make up emails with Hoc, and suggest they are cutting and pasting from preliminary results which did not say this which is why I asked the company, instead you should be pleased and encouraging if they share them, and it would be nice if you could point out kindly if they interpret them wrong and why. I also point out completely wrong figures when put out by hoc which are corrected. Please disagree with my thesis but please also be civil about it. I respect and appreciate your opinions, I just like to explain the reasons for a share's fall and try to come to a view on whether and for how long it will continue. Have a lovely Weeknd all and good to be back at 200p and looks exciting and we look quite good value for the first time in a while imho
Sotolo who are you trying to kid? HOC withdrew guidance in April 2020, 2 months after issuing it. You know this and yet still continue to post in a disingenuous manner.
I asked you what management were predicting so you're choosing not to take into account their revised guidance, despite the global pandemic leading to the closure of mines..
Revised cost guidance, released half way through the year was $14-14.5 per silver equivalent ounce. Again for your benefit..
"The revised all-in sustaining cost from operations in 2020 is expected to be between $1,250 and $1,290 per gold equivalent ounce or $14.5 and $15.0 per silver equivalent ounce. The increase versus the original guidance reflects the impact of Covid-19 related stoppages including: reduced production resulting in higher capital expenditure per ounce; temporary lower grades due to revised mine plan sequencing; and the impact of government transport restrictions on the availability of people at San Jose. In addition, the figure reflects an increase in infill drilling at Inmaculada to convert Inferred into Measured and Indicated resources."
You're quite happy to spin lies about rising costs in recent years but seem incapable of sharing truths about beating cost guidance last year and in most of the previous years.
I highly doubt a representative of Hochschild told you those costs were separate and not already included within the CAPEX. It's clear you've just copied highlighted costs from the preliminary results and listed these as separate. They are not.
$8.65m was earmarked for Biolantanidos (BL) last year in the Capex table down from $60m the previous year. The sum of $14m for BL in 2021 is therefore already included in the capex guidance.
Greenfield is treated exactly the same, falling under operating & exploration capex.
Shareminator, you asked me what forward aisc guidance was given for 2020 so I told you, I also said they did well to only go a bit over given covid, which of course implies covid closures affected it, but they did well. The 14.1 to 14.5 guidance was for this year so we do not yet know if they will be ahead or behind. On aisc capex this is what Hoc told me last time I asked “Then you have $11m greenfield and $14m for BL and a further $7m for the ore sorting pilot plant”. I do not think the exceptional covid costs you mention count as capex. I do think about what I write, I just write what I think, that may be different to what you think; please disagree but I am looking at the figures, do say if I get them wrong or you interpreted differently, but I am trying to explain where and why I see profits and why price has fallen. All the best and thanks!
More rubbish then..
They withdrew February guidance barely 2 months after issuing it. Are you seriously trying to argue that the company would have missed cost guidance otherwise? Hopefully you think before posting a reply..
Forward guidance of $14-14.5 per silver equivalent ounce was issued in the summer after mines reopened and production ramped up and remained unchanged for the remainder of the year. Hochschild beat this revised guidance as I mentioned in one (or possibly more) of the earlier posts. They have beaten cost guidance in most of the previous years too. I bothered to check just so I could make that point.
Again what "non AISC capex" are you talking about? Exceptional costs relating to stoppages ($44.7m) and Covid relief initiatives ($27.6m) are the ONLY major expenses deducted from the $270m EBITDA and they are NOT recurring.
The tax, royalities and depreciation (non-cash item) are nothing out of the ordinary.
Again, for your benefit, Hochschild include capex within their reported AISC.
Hi Shareminato, in answer to your question: Forward guidance for 2020 was “All-in sustaining costs expected to be $1,040-$1,080 per gold equivalent ounce ($12.1-12.5 per silver equivalent ounce)”. Ended up at $12.8 which is pretty good considering Covid. I mention non aisc capex as I have been discussing it with Hoc, as higher and helps in working out reduction in profit. I have never suggested all capex is non aisc, but non aisc capex is a significant item, for instance with Cey it has shot up to around $200 an ounce. Nice to see a bit of a rise in light of soaring metals, for on e beating worries, have a good weekend
PWND
And what were management predicting last year? AISC came in at $12.8 per ounce despite forecasts of $14-14.5 and given they nearly always beat forecasts I will stick my neck out and say $14 is the ceiling.
Why are you segregating Capex from AISC? It is clearly listed in the AISC table and therefore already factored into the guidance.
"So costs nearing 25% up on 2019"... and silver nearing 60% up in that time... doesn't help make your point, neither does pretending all capital expenditure is separate from the published AISC.
As I've already explained the higher silver price today matters if you're comparing 2019 production of 38.7 moz vs 2021 forecast production of 31-32 moz.
$750m revenue in 2019 will be surpassed by more than $900m this year (Silver: $26/oz + Gold: $1750/oz).
Thankfully Hochschild management have a history of under promising and achieving their targets.
$1,807 / $27.2
There's +80% on offer right here peeps, believe it or not .......
BOOM!
Management is saying more than $14 silver equivalent aisc this year, actually $14.1-14.5 and then higher capex on top, or $1210-1250 gold aisc. So costs nearing 25% up on 2019 and with lower production and increased capex about 40 or 50% lower profit I guess, which justifies the lower share price before the politics, particularly with the not very exciting exploration news and Chilean politics and delay on rare earths. As ever so so so hope your optimism trounces my pessimism and proves me and management projections totally wrong
For the benefit of those incapable of presenting the facts or prone to distorting the truth, here are the AISC on a per silver equivalent ounce basis:
2020: $12.8
2019: $11.5
2018: $12.6
2017: $12.3
2016: $11.2
2015: $12.9
2014: $17.4
2013: $18.6
Prior to this period reporting of costs was provided on a per tonne basis.
Clearly costs have not run rampant nor are they destroying company value. They have been consistently below $13/oz for the past 6 years and are considerably lower than they were prior to 2015.
AISC set against local inflation in Argentina, Chile and even Peru shows management has offset most of the inflationary pressures over this period and this is still the case if you measure the data from 2015 (when costs reduced to the current level). Only in recent years has the price of silver recovered and the company are now able to enjoy significantly improved margins on a per ounce basis.
Hochschild often beat their annual cost forecasts and even last year during the pandemic they kept costs below their revised forecasts. Now their forecast costs this year are the same (on a per ounce basis) as their revised forecast for 2020. It is completely unreasonable to assume costs do not rise of course and they are expecting to offset some of this outlined in their 2021 forecast with a substantial increase in production.
Even assuming a worst case 10% rise in AISC to $14/oz, the price of silver is more than 20% up on last years average price received and we have 4 million ounces hedged at a higher price.
Sorry halfpenny, but I already own physical silver, purchased when prices and premiums were lower and stored away for my daughter’s future. I hope this silver raid pushes the spot price higher for my investments but I won’t go along with peer pressure, social media bots, and memes telling me to buy silver on a specific date. Good luck to those that do though.
You lot would give an aspirin a headache. Why not join in and buy some physical silver instead of moaning. I am buying 1kg to give my support to the cause. This might work but doing nothing certainly will not.
The Twitter silver pump brigade are a handful of the same accounts just retweeting the same things over and over. Not sure what they are expecting will happen tomorrow! But it won’t be the massacre they are harping on about!
I think Sotolo makes. some very valid points personally,
Sotolo, You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time...
100notout, I hold because HOC is a gold miner with some silver, one third hedged, gold will probably fall more before it then rises substantially, but I don’t want to miss out and don’t like trading so happy to hold through the falls in anticipation of better times
If the price of silver increases Hoc will increase as they are sitting on rather a lot of it... If you think Hoc are dead in the water why not sell and move on? It seems rather strange to profess to being a holder yet having very little belief in the company's prospects.
GRAMMAR CORRECTED First quarter: gold oz nearly 60% by value, silver a bit ove 40%, with 2.8m oz of silver. A bit ove one third of this is hedged rather which means overall, as said, around a quarter of Hoc profit depends on the changing silver price.
First quarter gold oz nearly 60% by value, silver a bit ove 40%, with 2.8m oz of silver. A bit ove one third hedged rather so overall as said around a quarter of Hoc profit depends on changing silver price.