We would love to hear your thoughts about our site and services, please take our survey here.
there's pretty much no support for the current gov in lima and if people elsewhere feel they will also lose their jobs due to the current gov then game over.
@pokerchips yes and castillo + free peru being fairly new faces to the national political scene helped them with being less tarnished by corruption allegations (especially when running against Fujimori). But I think some of that initial lustre of being different to traditional politicians is wearing off... people are realising they're all the same! So when faced with do you want corrupt but inept politicians running the country or corrupt and a bit more sensible politicians most would prefer the latter...
lol literally you snooze you lose
i'm sure more dirt will come out on the current gov as the anti corruption guys do more digging.
@breaktwister agreed, I think it's to help the gov strengthen their hand when discussing how much more to tax the miners (something the finance ministry is still working on). Given the high turnover in ministers and already drop in support since Castillo came into power I doubt anything will actually be enacted before the current administration is ousted from power.
BTW worth mentioning that anti-corruption investigators already carried out a search of the presidential palace last friday into alleged influence peddling by a close Castillo aide and the opposition is working on impeachment proceedings.
Pretty much no one has put in extra capital into Peru since Pedro Castillo came into power. But that was why the shares were in the 1.30-1.60 range before this news. This news further highlights the political risks with the current administration, but at current prices a lot of downside priced in. If the current gov is toppled (very likely whenever given how split political opinions are and policies seem amateurish already) and a more moderate party comes in, then HOC can go up 2-3x from here (assuming silver prices stay where they are/go higher - but I think most people looking at HOC have a positive view on gold/silver).
@happydaddock these mines are |90% of the NAV of the company... the initial sell off was largely justified (but also due to liquidity). The info from the investor call though makes me more comfortable with the situation now.
Seems to be more a gov ploy to get more economic interest in future mine permits judging by comments from the mining minister. But that's just the political uncertainties for future exploration...which was largely in the price before today. If anything, let's see how long the current government will last if they keep up these stunts (my view is not that long with a split congress and split public opinions).
I think will recover back to that price soon. Seems like push back to this proposal will be fierce from local communities, the business lobby and moderate politicians (which is still the majority). The investor call was a good effort by management to calm the markets. They've complied with all environmental regulations and it's a heavily regulated industry. Also the jobs and investments it provides to Peru's economy is massive.
munchbox clearly wrong here... it seems to be a push by the new PM who's been in the role for 2 weeks... and the current government almost lost a vote of no confidence (only still in power because the prior PM candidate who was very unpopular as wanted to nationalise some gas fields got replaced for the current one). I don't think this move is that popular within the government and definitely not with congress... I can't see this current government lasting that long...
There are mining royalties on top of corporate tax rates but levels depend on profitability of mines. Lower margin mines won’t be as affected by a tax increase. HOC post tax profits could be hit by around 20% in a very aggressive scenario of a 40% increase in tax from here. So if price in some chance of that not happening/gets diluted given the fragmented Parliament then say 10% impact and then given that Peru is 75% of the asset base, an underperformance vs other PM miners not affected by this of around 6-8% sounds about right and we are somewhat there already...
@perma.bear for a company that has disappointed on operations for a while (and has been priced in over time with the share price decline) to deliver something that's overall in-line is pretty good and hints at an operational turn around. Still early days, management will need to prove themselves through the year, but at least gives me some confidence.
JMT, pro investors focus on future earnings expectations, ie. try to forecast metals prices and production (volumes and costs), then think if that's priced in or not. If you're positive on the metals you can get better returns than buying the metals via the miners if production is stable/improving from operational leverage (and sometimes leverage on the balance sheet). Yes it makes it a potentially riskier way to play higher PM prices if you get an operational dud that isn't priced in, but you have more upside potential (and better risk/reward if you understand the operational risks).
I sold some HOC to get back into FRES yesterday after doing the reverse late last year... and did more of the switch today (and will do more if the spread widens more). Production will get better towards end of year, yes they had some delays but price is now pricing the operational risk in, giving more room for upside surprises and ability to run up with PM prices.
And key point is none of the guidance downgrades we've seen in the last couple of results and updates and no delays in Juanicipio start up now. Sure this isn't the definitive proof that operational issues are over (if it was we'd be rocketing), but if you think they're at an operational turning point and think gold/silver prices will be stable or up from here then today's drop is a nice opportunity with lots of upside potential.
http://www.fresnilloplc.com/media/495310/280421-fres-1q21-prod-report.pdf
Looks alright, guidance for full year maintained and Juanicipio on track and ramping up
https://www.mining-journal.com/gold-and-silver-news/news/1409020/hochschild-enters-ususd10m-deal-over-nevada-gold-project small deal but on the right tracks to diversify geography and access more resources
Looks like HOC just did a small deal with NV Gold for a project in Nevada. Good to see management continuing to diversify geographic exposure and hunt out more resources.
Let’s see what they say on the call. Numbers look ok. But as markets are forward looking, the election overhang is the biggest concern... there’s already a decent underperformance and valuation discount vs other miners built up post 1st round elections, so if can get some good exploration news and Castillo reverses his current lead in the polls then we can re-rate up a lot quickly...