(Alliance News) - 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 USD693.7 million from USD735.6 million. Cost of sales decreased 3.7% to USD508.2 million from USD527.6 million. Exploration expenses were 63% lower at USD21.3 million compared to USD56.8 million.
The company said it turned to a pretax loss of USD43.5 million in 2023 from a profit of USD25.8 million a year prior, noting exceptional items.
Hochschild booked exceptional items costs of USD97.0 million for 2023, compared to a gain of USD1.4 million in 2022.
The company reported USD63.3 million costs due to an impairment loss at the Azuca and Crespo projects, a USD17.4 million cost at the San Jose mining unit, restructuring charges of USD9.0 million at Pallancata as it placed the operation in care and maintenance, and an impairment of the investment in Aclara Resources Inc of USD7.2 million.
Pretax profit excluding exceptional items jumped to USD53.5 million from USD24.3 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 USD258.0 million from USD175.1 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 USD1,510 and USD1,550 per gold equivalent ounce, an increase of at least 3.9% from USD1,454 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.
By Tom Budszus, Alliance News slot editor
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Hochschild (HOC)