Not so shiny...

Thursday, Mar 26 2009 by

Hochschild Mining Plc announced disappointing full year results - http://www.stockopedia.com/news/announcement/HOC/090325hoc4244p.htm

  • 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 a precious metals company with a primary focus on the exploration, mining, processing and sale of silver and gold. It has three operating mines (Ares, Arcata and Pallancata) and a plant (Selene used to treat ore from the Pallancata mine) located in southern Peru, one operating mine (San Jose) located in Argentina and one plant (Moris) located in Mexico. It also has a portfolio of projects located across Peru, Argentina, Mexico and Chile at various stages of development. The Pallancata silver/gold property is located in the Department of Ayacucho in southern Peru, approximately 160 kilometers from the Arcata operation. The San Jose silver/gold mine is located in Argentina, in the province of Santa Cruz, 1,750 kilometers south-southwest of Buenos Aires. Effective December 20, 2013, Hochschild Mining plc acquired the remaining 96.807% interest, which it did not already own, in International Minerals Corp. more »

Share Price (Full)
100.9p
Change
1.7  1.7%
P/E (fwd)
20.1
Yield (fwd)
n/a
Mkt Cap (£m)
370.4



  Is Hochschild Mining fundamentally strong or weak? Find out More »


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 - http://www.kitco.com/market). Not sure if that means that there's more to come. This article suggests otherwise: http://www.investorschronicle.co.uk/MarketsAndSectors/Markets/article/20090304/345719de-08cb-11de-ba4c-00144f2af8e8/Silver-set-to-fall-off-golds-bandwagon.jsp

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Betasurfer 26th Mar '09 2 of 2
1

This is a good, albeit old, summary of the Bull Case for Silver - http://www.moneyweek.com/investments/precious-metals-and-gems/why-the-silver-price-is-set-to-soar.aspx

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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