Member Info for the_shareminator

Results for the three months ended March 31, 2021

Highlights
EBITDA: $30.3 million and Adjusted EBITDA* of $23.7 million, which represent increases of 412% and 344%, respectively, over the first quarter of 2020.
Steadily rising copper price at its highest price in a decade sitting above US$4.50 per pound.
Florence court decision clears way for construction to begin upon receipt of final key permit.
Bonds refinanced during quarter
At current copper prices Florence project is fully funded (Gibraltar cashflow)
Q1 copper production: 22 million pounds
Q1 molybdenum production: 530 thousand pounds
100% upside on copper price despite new copper put options

Outlook
Mining of the Pollyanna pit in Q2 is expected to result in improved grades and copper production
"We expect much higher grade and production levels in the second half of the year"
H2 operating costs per pound are set to fall and earnings are forecast to increase.
Operating margins expected to be more than $200 million in remaining 9 months of 2021 (current copper prices).
Company able to fully fund Florence without a JV partner.
Draft Underground Injection Control ("UIC") Permit due in June.
Excess cashflow in years ahead including proceeds from potential Florence financing transaction to be used for debt reduction or dividends.

https://www.lse.co.uk/rns/TKO/1st-quarter-results-canzg94jep2e5pc.html

I thought the comparison below to Geodrill's quarterly results very encouraging and could well be the reason investors are increasing / taking new positions in the company.

Here's the link to the full report
https://www.newswire.ca/news-releases/geodrill-reports-first-quarter-2021-financial-results-861605670.html

Keep up the good work stoodio ;)

This one is highly geared and has been incredibly volatile in times of wild commodity swings. There's also a large shorting syndicate on the Aussie exchange or at least there was up until recently. They may have closed positions now.

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.

Gold is trading around $1840/oz and silver $27.5/oz which combined with the forecast second half increase in production will lead to higher profits and cash build.

The average price received for gold sales last quarter was $1,703/ounce whilst silver was $24.4/ounce.

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.

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.

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.

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.

Hummingbird should be making more than $3-4m in free cash this quarter owing to a smaller final loan repayment.

Loan repayments of $8.6m last quarter fall away to $4.6m and no subsequent payments after that which should, all things being equal, see quarterly free cashflow gains of around $6-7m this quarter rising to around the $9-10m level in the second half of the year.

I couldn't with any confidence argue the operational shortcomings are behind us but my hope is that it will be of less significance in the weeks ahead with the USD weakening, gold is likely to continue it's uptrend and move through $1,800.

Hi GABS! Indeed it's outperforming nearly all my other mining stocks this month. Buoyant copper price with recent broker exposure as announced today beginning to have an effect. CAML out in front this year though, between the two I'd wager there's more upside here than any of the other major producers. ATYM starting to build support today as well! I saw you're also holding SQZ, the constant headache that share is. Back above 120 today so that's progress XD

First dividend arrives on Friday. Might have to look into the option of automatic dividend reinvestment for this one moving forwards, especially if they opt for a similar approach to that of CMCL's quarterly div!

Why mention earnings per share halving without any context of the one-off drop in production last year owing to covid lockdowns?

Back in 2016 we produced 35 million ounces, last year just 25 million silver equivalent ounces. This versus the 31-32 million expected in the current year. That is the main reason why EPS was low and the main reason why EPS will recover strongly this year (assuming we meet guidance).

We are in a much strong position today in terms of balance sheet and room for growth;
Cash: $230m vs $140m in 2016
Debt: $210m vs $330m debt in 2016

That is net cash of $20m vs net debt of $190m back in 2016. Aside from the balance sheet the Dividend has more than quadrupled from 1.38c to 6.335c and is set to rise further this year thanks to the projected growth in margins, speaking of which;

The price received for gold jumped from $1215/oz in 2016 to $1814/oz last year
The price received for silver has also jumped from $17/oz back in 2016 to $22.3/oz

Silver hedges between $26 and $27 per ounce have since been agreed for the next 12 months and beyond and the current price is trading 15% higher than the average last year. Gold is down about 2% on last years average. When you compare margins and expected production this current year will blow 2016 out of the water!

The figures which I've sourced from the 2016 FY report support the more general point I would make that HOC are attractively priced today and as a longer term investment for a silver play paying increasingly generous dividends.

Well today's announcement confirms the termination of Chifeng's interest. Still there is now the possibility of Resolute offering equity in either the group or more likely the Bibiani asset only for investment to further the development there. In some ways this could be a positive turn of events if Resolute are able to attract funding and garner the support of the government, which it seems to have now.

I doubt this is the end of dealings with Chifeng or connected parties. It's just the beginning of negotiations under new state policy of tightened restrictions concerning asset sales. Thankfully common sense prevails and no long term damage has been inflicted on the reputation of the Ghanaian mining industry. The recent land and mining reforms might turn out to be a blessing in the long run if Resolute are one of a few trusted miners permitted to operate within the country.

Not complaining but this is a curious reaction to a £1.7 billion write down. I'll take it though! Incredible movements these past few weeks.

Last year generated $108m in EBITDA, which the company state "at current copper prices ... we would have generated roughly $275 million of adjusted EBITDA* in 2020."

First time I've added Centamin to my portfolio in over 6 months. Along with HOC, THS, WPM, POLY and FRES the largest mining stocks in the London listed sector with exposure to gold, silver and precious metals. PAF, RSG and PUR should soon follow the trend up. USD weakening now as inflationary expectations become somewhat more measured and yields normalise around the 1.8% range.

Good to see buyers are out in force today. I believe shares go ex-dividend on the 30th April so fill those ISAs and load up soon.