Not so shiny...

Thursday, Mar 26 2009 by

Hochschild Mining Plc announced disappointing full year results -

  • 42% increase in revenue to $433.8 million
  • Solid financial position with a year end cash balance of $116.1 million
  • It reported a loss attributable to shareholders after tax and exceptional items of $19m for the 12 months ended 31 December 2008 versus a profit of $85.1m a year ago. The numbers were hit by $45m of exceptional items, including an impairment of $34.7m relating to fixed assets at the Selene, Moris and San Felipe operations. The writedown mirrors rival companies in responding to plunging metals prices and a slump in demand. Rio Tinto cut the value of its aluminum unit by $7.9 billion in February.
  • Profit from continuing operations before tax slumped to $9.4m from $116.7m. The group pointed to lower silver prices, the anticipated decline in average grades at Ares and Selene, cost inflation and higher treatment charges.
  • On Monday, the Latin American miner said labour strikes had started at all four of its mines in Peru...  Hochschild is negotiating with local workers and Peruvian labor authorities to reach a resolution regarding workers' claims for greater profit sharing.



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Hochschild Mining plc is engaged in mining, processing and sale of silver and gold. It has approximately three operating mines (Arcata, Pallancata and Inmaculada) located in southern Peru and approximately one operating mine (San Jose) located in Argentina. Its segments include Arcata, Pallancata, San Jose, Inmaculada, Exploration and Other. Arcata and San Jose business units are engaged in the sale of gold, silver, dore and concentrate. Pallancata business unit is engaged in the sale of concentrate. Inmaculada business unit is engaged in the sale of gold, silver and dore. The Exploration segment explores and evaluates areas of interest in brownfield and greenfield sites to extend the life-of-mine of existing operations and to assess the feasibility of new mines. The Other segment includes Empresa de Transmision Callalli S.A.C., a power transmission company; HMX, S.A. de C.V., a service company in Mexico, and Empresa de Transmision Aymaraes S.A.C., a power transmission company. more »

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2 Posts on this Thread show/hide all

Betasurfer 26th Mar '09 1 of 2

Silver has risen 25% since January but is trading at a wide discount to gold - the ratio is currently at 69 (Gold = 943.9, Silver = 13.7 - Not sure if that means that there's more to come. This article suggests otherwise:

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Betasurfer 26th Mar '09 2 of 2

This is a good, albeit old, summary of the Bull Case for Silver -

I didn't know about the medical applications for silver

Today silver is used in many health-care products. Specifically, the ‘silver bullet’ is used by nearly every hospital in the world to prevent bacterial infections in burn victims and allow the body to restore naturally the burnt tissue. Increasingly, wound dressings and other wound care products incorporate a layer of fabric containing silver for prevention of secondary infections. Surgical gowns and draperies also include silver to prevent microbial transmission. Other medical products containing silver are catheters and stethoscope diaphragms.

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