Hochschild Mining (LON:HOC) reported what Chief Executive Officer Eduardo Landin described as its strongest-ever half-year financial results, supported by higher gold and silver prices, operating cash flow from its Peruvian and Argentine mines, and progress in restoring operations at Mara Rosa in Brazil.
The company produced slightly more than 150,000 ounces in the first half of 2026, Landin said. Revenue rose 62% year over year to $844 million, while adjusted EBITDA increased 119% to $492 million. Earnings per share climbed 208% to $0.37.
Prices, currencies lift costs as well as earnings
Chief Financial Officer Eduardo Noriega said the revenue increase was driven primarily by stronger gold and silver prices, partly offset by scheduled lower production volumes. Cost of sales rose 11%, reflecting higher tonnage and waste movement at Mara Rosa as well as price-linked costs such as royalties, worker profit sharing and export taxes in Argentina.
Hochschild’s attributable all-in sustaining cost was $2,448 per gold-equivalent ounce in the first half. The company revised its full-year all-in sustaining cost guidance to a range of $2,380 to $2,500 per gold-equivalent ounce, while maintaining its production guidance.
Management attributed the revision chiefly to higher metal prices, which increase price-linked royalties and profit sharing, along with foreign-exchange effects in the countries where it operates and local inflation in Argentina. Noriega said more than 50 cost-reduction and efficiency initiatives had helped offset other industry inflation pressures.
- Inmaculada reported all-in sustaining costs of $1,953 per gold-equivalent ounce.
- San José reported all-in sustaining costs of $2,944 per gold-equivalent ounce, affected by lower grades in border areas, royalties, export taxes and Argentine inflation.
- Mara Rosa reported all-in sustaining costs of $3,551 per gold-equivalent ounce, including recovery work at the mine.
Noriega said the company generated approximately $156 million of free cash flow during the first half. Inmaculada generated $288 million and San José generated $149 million, while Mara Rosa used $80 million for measures including installation of a thickener and pit development. Hochschild also reduced debt by $80 million and paid $84 million in dividends, including $58 million to San José joint-venture partner McEwen Mining.
The company maintained full-year capital expenditure guidance of $210 million to $225 million after investing $105 million of sustaining capital in the first half.
Mara Rosa turnaround advances
Landin said Hochschild had completed its operational reorganization at Mara Rosa, where the company has addressed filtering issues, installed and commissioned a thickener, and hired a new mining contractor. The mine’s 2026 production guidance remains 67,000 to 80,000 ounces.
Management said crushing, milling and filtering operations were nearing nameplate capacity in August. Noriega said the company expects the operation to run at a rate of at least 7,000 tonnes per day during the remainder of the year, while the ultimate production outcome will depend on grades at the bottom of the pit.
For 2027, Landin said Mara Rosa could produce around 80,000 ounces annually at current prices and operating rates, though the company plans to complete bottleneck studies after the plant is fully established. He said management’s goal is to set a sustainable production level rather than maximize output for a single year.
Development pipeline and exploration
Hochschild said it submitted the environmental permit application for its Royropata project in Peru. Landin said the review process is expected to take about a year, with the company targeting an approval around August of next year. Royropata contains 3.3 million gold-equivalent ounces, according to the presentation, and Hochschild expects the project to eventually contribute more than 100,000 gold-equivalent ounces annually, with production targeted to begin in 2028.
The company is also advancing Monte do Carmo in Brazil, a 1-million-ounce gold project acquired in 2024 for $60 million. Landin said basic engineering is expected to be completed by year-end, when the company plans to present updated economics and seek a final investment decision from its board. He said construction could take 18 to 24 months and that production could begin by the end of 2028.
At Inmaculada, Hochschild is exploring areas south and northwest of the existing deposit and expects to add around 250,000 ounces of inferred resources this year. Landin also said San José retains exploration potential, with drilling underway at Huevos Verdes West, Ayelén and Maura.
Landin noted that a contractor fatality occurred at Inmaculada in June. He said the company conducted an extensive investigation and applied lessons from the incident.
Capital allocation and outlook
In response to analyst questions, Noriega said administrative expenses in the second half should be similar to first-half levels, with worker profit sharing representing the most significant factor. He also said the $37 million negative working-capital movement seen in the first half should be offset during the second half.
The company held about $110 million of cash in Argentina at the time of the call, Noriega said, and expects to retain a strong local balance sheet to support exploration. He said any distribution of excess cash to shareholders would more likely occur early next year rather than in the second half.
Management said its dividend policy is applied on an annual basis, with Hochschild targeting distributions of 20% to 30% of attributable free cash flow. Noriega said the interim dividend represents a smaller portion of the anticipated full-year payout in order to preserve flexibility for price movements and investment needs.
About Hochschild Mining (LON:HOC)
We are a leading underground precious metals producer focusing on high grade silver and gold deposits, with over 50 years’ operating experience in the Americas.
We currently operate three underground mines, two located in southern Peru and one in southern Argentina. All of our underground operations are epithermal vein mines and the principal mining method used is cut and fill. The ore at our operations is processed into silver-gold concentrate or dore.
Hochschild Mining plc is listed on the Main Market of the London Stock Exchange and is headquartered in Lima, Peru.
