REG - Hochschild MiningPLC - Interim Results
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RNS Number : 7708W Hochschild Mining PLC 27 August 2025
27 August 2025
Hochschild Mining PLC
Interim Results
Six months ended 30 June 2025
Hochschild Mining PLC ("Hochschild" or the "Company") (LSE: HOC) (OTCQX:
HCHDF) is pleased to announce its interim results for the six months ended 30
June 2025.
Financial Highlights
§ Revenue up 33% at $520.0 million (H1 2024: $391.7 million)(( 1 (#_ftn1) ))
§ Adjusted EBITDA up 27% at $224.5 million (H1 2024: $177.1 million)(( 2
(#_ftn2) ))
§ Profit before income tax (pre-exceptional) of $109.3 million (H1 2024:
$83.1 million)
§ Profit before income tax (post-exceptional) of $140.1 million (H1 2024:
$69.4 million)
§ Basic earnings per share (pre-exceptional) of $0.12 (H1 2024: $0.10)
§ Basic earnings per share (post-exceptional) of $0.18 (H1 2024: $0.08)
§ Cash and cash equivalents balance of $109.8 million as at 30 June 2025 (31
December 2024: $97.0 million)
§ Net debt of $202.3 million as at 30 June 2025 (31 December 2024: $215.6
million)(2)
§ Interim dividend of $1.0 cent per share ($5.1 million)
Operational Highlights 3 (#_ftn3)
§ H1 2025 attributable production of 161,597 gold equivalent ounces or 13.4
million silver equivalent ounces (H1 2024: 152,792 gold equivalent ounces or
12.7 million silver equivalent ounces)
§ Attributable all-in sustaining costs (AISC)(2) from operations of $1,914
per gold equivalent ounce (H1 2024: $1,432) or $23.1 per silver equivalent
ounce (H1 2024: $17.3)
§ Mara Rosa mine update
o Processing plant restarted and ramping up
o Mechanical filter repairs and operational improvements currently being
tested with mined ore
o Mining operations continued as planned
o New Brazil country manager appointed
Project & Exploration Highlights
§ 2025 Brownfield drilling programme commenced with encouraging early drill
results from Inmaculada and Mara Rosa
§ Development work continues at the Monte Do Carmo project
Sustainability Highlights 4 (#_ftn4)
§ Continued strong performance across all key metrics
§ Lost Time Injury Frequency Rate of 1.08 (FY 2024: 1.25)(( 5 (#_ftn5) ))
§ Water Consumption of 132lt/person/day (FY 2024: 138lt/person/day)
§ Domestic waste generation of 0.83 kg/person/day (FY 2024:
0.93kg/person/day)
§ ECO score of 5.57 out of 6 (FY 2024: 5.58)(( 6 (#_ftn6) ))
§ Hochschild recently joined the United Nations Global Compact
Revised 2025 full year guidance
§ FY 2025 Mara Rosa production target revised to 35,000-45,000 ounces
(previously 94,000-104,000 ounces)
§ Revised operations attributable production target:
o 291,000- 319,000 gold equivalent ounces (previously 350,000-378,000
ounces)
§ Revised operations attributable all-in sustaining costs target:
o $1,980-$2,080 per gold equivalent ounce (previously $1,587-$1,687 per gold
equivalent ounce)
§ Revised Mara Rosa sustaining and development capital expenditure expected
to be approximately $29-$30 million (includes $18 million for remedial
activities)
$000 unless stated Six months to 30 June 2025 Six months to 30 June 2024 % change
Attributable silver production (koz) 3,812 4,070 (6)
Attributable gold production (koz) 116 104 12
Revenue 520,010 391,740 33
Adjusted EBITDA 224,472 177,141 27
Profit/(loss) from continuing operations (pre-exceptional) 66,495 64,026 4
Profit/(loss) from continuing operations (post-exceptional) 97,274 51,486 89
Basic earnings/(loss) per share (pre-exceptional) $ 0.12 0.10 20
Basic earnings/(loss) per share (post-exceptional) $ 0.18 0.08 125
_______________________________________________________________________________________
A live conference call and audio webcast will be held at 2.30pm (London time)
on Wednesday 27 August 2025 for analysts and investors.
For a live webcast of the presentation please click on the link below:
https://brrmedia.news/HOC_IR_2025 (https://brrmedia.news/HOC_IR_2025)
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Pin: Hochschild Mining Interim 2025
_______________________________________________________________________________________
Enquiries:
Hochschild Mining PLC
Charles Gordon
+44 (0)20 3709 3264
Head of Investor Relations
Hudson Sandler
Charlie
Jack
+44 (0)207 796 4133
Public Relations
_______________________________________________________________________________________
Non-IFRS Financial Performance Measures
The Company has included certain non-IFRS measures in this news release. The
Company believes that these measures, in addition to conventional measures
prepared in accordance with IFRS, provide investors an improved ability to
evaluate the underlying performance of the Company. The non-IFRS measures are
intended to provide additional information and should not be considered in
isolation or as a substitute for measures of performance prepared in
accordance with IFRS. These measures do not have any standardised meaning
prescribed under IFRS, and therefore may not be comparable to other issuers.
About Hochschild Mining PLC:
Hochschild Mining PLC is a leading precious metals company listed on the
London Stock Exchange (HOCM.L / HOC LN) and crosstrades on the OTCQX Best
Market in the U.S. (HCHDF), with a primary focus on the exploration, mining,
processing and sale of silver and gold. Hochschild has over fifty years'
experience in the mining of precious metal epithermal vein deposits and
operates two underground epithermal vein mines: Inmaculada, located in
southern Peru; and San Jose in southern Argentina, and an open pit gold mine,
Mara Rosa, located in the state of Goiás, Brazil. Hochschild also has
numerous long-term projects throughout the Americas.
CHIEF EXECUTIVE OFFICER'S STATEMENT
During the first half of 2025, Hochschild Mining delivered another period of
steady progress across our business despite the operational issues in Brazil.
We remain fully aligned with our strategy which is anchored around four key
pillars: brownfield exploration, operational efficiency, ESG leadership, and
disciplined capital allocation. This clear strategic focus continues to guide
our decisions and drive our aim to generate value for all our stakeholders.
Whilst challenges at our Mara Rosa mine affected first-half performance, we
are confident that we now have the right team in place to drive a turnaround.
The operational review and temporary suspension of the plant will enable us to
set a foundation for reliable production. Moving forward, this strengthened
team will also play a vital role in advancing the development of Monte Do
Carmo.
Operations
Although our operations delivered a mixed performance in the first half of the
year, our flagship Inmaculada mine in Peru delivered a strong performance,
with production slightly ahead of expectations, at 106,197 gold equivalent
ounces (H1 2024: 109,502 ounces). At San Jose in Argentina, production was
moderately lower than expected at 52,769 gold equivalent ounces (H1 2024:
56,737 ounces) with the production plan forecasting rising production in the
second half.
Mara Rosa experienced a challenging first half of the year, with operations
impacted by heavier-than-usual seasonal rainfall and contractor performance
issues. These conditions restricted access to higher-grade zones within the
pit and further exacerbated existing issues with filtering processes and
delaying efforts to recover from mine waste removal backlogs carried over from
2024. I initiated and led a thorough review of the operation, following the
resignation of our Chief Operating Officer in May. This review covers all
aspects of mining, processing and permitting, and included a four-week
suspension of the processing plant to perform essential maintenance and to
allow the manufacturer to carry out mechanical filter repairs. Normal mining
activities have continued throughout the period.
Gold production for the first half at Mara Rosa totalled 28,416 ounces, up
from 14,354 ounces in the same period last year. During the mine's review
process we remained actively engaged with all our stakeholders, including the
local authorities and communities and are focused on restoring performance and
unlocking the full potential of this asset. As part of this review, we were
able to quickly implement a full reorganisation of our Brazilian operation,
including the appointment of a new Brazil General Manager.
Projects
In terms of strategic delivery, we continued to make progress across our key
exciting future growth projects. In Brazil, detailed engineering studies at
our new Monte Do Carmo project in the Tocantins state is well underway and the
installation licence is already secured. With the permitting pathway
substantially de-risked and the lessons learnt from our experience at Mara
Rosa being applied, we are preparing the project for a potential construction
decision sometime in the first half of 2026. In Peru, we have advanced the
Royropata project, having secured all necessary land easements in 2024. The
team is currently preparing the necessary documentation to submit the Modified
Environmental Impact Assessment application to the Peruvian government, which
will also be in 2026.
Exploration
Exploration remains a key pillar of our growth strategy, and we are building
on a record year of resource additions in 2024, with encouraging early results
from ongoing drilling programmes at all three of our operations. At
Inmaculada, continued success in the northern extension of the deposit has
reinforced our confidence in the long-term potential at the deposit. New
mineralisation has been identified beneath the main pit at Mara Rosa, and work
is ongoing to extend the life-of-mine at San Jose. We expect to provide
further updates on these programmes at the full-year results.
Financial results
Financial results reflect the increased production and significantly increased
commodity pricing in the period versus H1 2024. Gold production was higher
versus H1 2024 and therefore, when combined with a 28% increase in the average
gold price achieved, revenue increased by 33% to $520.0 million (H1 2024:
$391.7 million). Attributable AISC was $1,914 per gold equivalent ounce (H1
2024: $1,432 per ounce) with the significant increase due to the production
issues at Mara Rosa and higher costs in Argentina reflecting inflation in the
country and lower production. Cost inflation was further exacerbated by the
impact of strong precious metal prices in royalties and selling expenses in
Argentina, and workers' profit sharing in Peru. Adjusted EBITDA of $224.5
million (H1 2024: $177.1 million) mostly reflects the higher precious metal
prices and increased production levels offset by significantly higher costs.
Pre-exceptional earnings per share was $0.12 (H1 2024: $0.10 per share) and
post-exceptional earnings per share was $0.18 (H1 2024: $0.08 per share).
Our financial position remains strong, with solid cash generation from
Inmaculada and the benefit of higher precious metal prices during the period.
As of 30 June 2025, we reported cash and cash equivalents of $109.8 million
(31 December 2024: $97.0 million), with net debt reduced to $202.3 million.
This compares to net debt of $215.6 million at year-end 2024. During the
period, we also repurchased the stream on Monte Do Carmo for $13 million,
partially removing a long-term encumbrance on the project and increasing our
future exposure to gold prices. Indebtedness ratios improved slightly with net
debt to EBITDA decreasing from 0.51x at 31 December 2024 to 0.43x at 30 June
2025. The Board is pleased to declare an interim dividend of 1.0 cent per
share ($5.1 million).
Sustainability
Between 2024 and the first half of 2025, we achieved an 87% improvement in our
ESG KPIs, a significant increase from the 56% improvement recorded between
2023 and 2024. Starting in 2025, our environmental and social KPI tracking has
expanded to include Mara Rosa. Key achievements include an all-time high local
workforce representation of 66% (2024: 59%), 32% of goods procured from local
businesses (2024: 26%) and an impressive 89% waste recycling rate (2024:
57%). We also became a signatory of the UN Global Compact and published a
standalone, independently certified Sustainability Report with reference to
the GRI Standards. Our environmental, health, and safety performance remains
strong, with an ECO Score of 5.57 out of 6 (2024: 5.58), no new cases of
work-related illness, a Lost Time Injury Frequency Rate (LTIFR) of 1.08 (2024:
1.25), and zero fatalities. Our Safety and Environmental Cultural
Transformation Programs continue to make strong progress. These achievements
are reflected in our latest MSCI ESG rating of BBB, and our inclusion in the
FTSE4Good Index Series.
Outlook
Looking ahead, Hochschild remains focused on maintaining stability across its
operations whilst carefully managing operational challenges in Brazil and the
corresponding cost pressures. At Mara Rosa, testing at the processing plant is
ongoing and filter performance continues to improve; however, we have revised
our production forecast for the asset to 35,000-45,000 ounces for 2025
(previously 94,000-104,000 ounces). Our production guidance for Inmaculada and
San Jose remains unchanged, meaning our revised Group production guidance is
291,000-319,000 gold equivalent ounces (previously 350,000-378,000 ounces).
As a result of the revised forecast at Mara Rosa, combined with sustained
inflationary pressures in Argentina, the mining of lower-grade border areas of
the veins at San Jose, and the impact of higher precious metal prices on
royalties and export taxes in Argentina, we have updated our guidance on
overall all-in sustaining cost from operations to $1,980 - $2,080 per gold
equivalent ounce.
I would like to thank all our employees, contractors, local communities, and
shareholders for their continued support and commitment. With a revitalised
team in place and a clear strategy guiding us forward, we are confident in our
ability to drive a recovery in Brazil. As we stay focused on delivering our
objectives, we remain committed to building a stronger, more resilient
business - one that is well-positioned for sustainable growth and long-term
success.
Eduardo Landin, Chief Executive Officer
26 August 2025
OPERATING REVIEW
OPERATIONS
Note: All 2025 and 2024 silver/gold equivalent production figures assume a
gold/silver ratio of 83:1.
Production
In H1 2025, Hochschild delivered attributable production of 161,597 gold
equivalent ounces or 13.4 million silver equivalent ounces, with the increase
resulting from an increased contribution from Mara Rosa versus H1 2024 when
the mine was commissioning and ramping up production.
Total group production
Six months to Six months to
30 June 2025 30 June 2024
Silver production (koz) 4,624 5,016
Gold production (koz) 131.74 120.16
Total silver equivalent (koz) 15,559 14,989
Total gold equivalent (koz) 187.45 180.59
Silver sold (koz) 4,618 5,114
Gold sold (koz) 131.06 118.25
Total production includes 100% of all production, including production
attributable to Hochschild's minority shareholder at San Jose.
Attributable group production
Six months to Six months to
30 June 2025 30 June 2024
Silver production (koz) 3,812 4,070
Gold production (koz) 115.67 103.75
Silver equivalent (koz) 13,413 12,682
Gold equivalent (koz) 161.60 152.79
Attributable production includes 100% of all production from Inmaculada and
Mara Rosa and 51% from San Jose.
The operational issues at Mara Rosa have resulted in a reduction in the
production forecast. Plant testing is currently ongoing and the forecast
therefore reflects the absence of output throughout most of the third quarter
and includes a staged ramp-up in production thereafter. The forecasts for
Inmaculada and San Jose remain unchanged. The revised guidance for 2025 is as
follows:
Revised attributable 2025 production forecast split
Operation Oz Au Eq
Inmaculada 199,000-209,000
San Jose 57,000-65,000
Mara Rosa 35,000-45,000
Total 291,000-319,000
Costs
Attributable AISC from operations in H1 2025 was $1,914 per gold equivalent
ounce or $23.1 per silver equivalent ounce (H1 2024: $1,432 per gold
equivalent ounce or $17.3 per silver equivalent ounce)(( 7 (#_ftn7) )),
significantly higher than H1 2024 mainly due to the higher costs and reduced
production related to the issues at Mara Rosa as well as net inflation and
lower grades in Argentina. In addition, higher precious metal prices resulted
in increased royalties, selling expenses in Argentina, and increased workers´
profit sharing expense in Peru.
The expected attributable all-in sustaining cost from operations for 2025 has
been revised to $1,980-$2,080 per gold equivalent ounce which reflects the
significant reduction in production forecast for Mara Rosa, an additional
$18.0 million for addressing operational issues at the mine, net inflation in
Argentina and the mining of reduced grades from border areas of the veins at
San Jose, and the impact of higher precious metal prices on royalties and
selling expenses in Argentina.
Revised attributable 2025 AISC forecast split
Operation $/oz Au Eq
Inmaculada 1,605-1,705
San Jose 2,200-2,350
Mara Rosa 3,400-3,800
Total from operations 1,980-2,080
Inmaculada
The 100% owned Inmaculada gold/silver underground operation is located in the
Region of Ayacucho in southern Peru. It commenced operations in 2015.
Inmaculada summary Six months to Six months to % change
30 June 2025 30 June 2024
Ore production (tonnes) 672,720 537,774 25
Average silver grade (g/t) 153 190 (19)
Average gold grade (g/t) 3.47 4.25 (18)
Silver produced (koz) 2,961 3,086 (4)
Gold produced (koz) 70.52 72.32 (2)
Silver equivalent produced (koz) 8,814 9,089 (3)
Gold equivalent produced (koz) 106.20 109.50 (3)
Silver sold (koz) 2,951 3,032 (3)
Gold sold (koz) 71.19 71.19 -
Unit cost ($/t) 138.2 144.6 (4)
Total cash cost ($/oz Au co-product) 939 739 27
All-in sustaining cost ($/oz Au Eq)(( 8 (#_ftn8) )) 1,535 1,321 14
Production
Inmaculada's first half production was 70,520 ounces of gold and 3.0 million
ounces of silver, which amounts to a gold equivalent output of 106,197 ounces
(H1 2024: 109,502 ounces), a 3% reduction from the first half of 2024 due to
expected reduced grades, partially offset by higher-than-expected tonnage
resulting from ongoing efficiency initiatives begun in H1 2024.
Costs
AISC was $1,535 per gold equivalent ounce (H1 2024: $1,321 per ounce)(9). The
increase versus the same period of 2024 was forecasted and is mainly the
result of higher production volumes impacting production costs and higher
workers profit sharing driven by higher precious metal prices. In addition, in
H1 2025 there were scheduled lower gold and silver grades.
San Jose
The San Jose silver/gold mine is located in Argentina, in the province of
Santa Cruz, 1,750km southwest of Buenos Aires. San Jose commenced production
in 2007. Hochschild holds a controlling interest of 51% in the mine and is the
mine operator. The remaining 49% interest is owned by McEwen Mining Inc.
San Jose summary (100%) Six months to Six months to % change
30 June 2025 30 June 2024
Ore production (tonnes) 334,562 268,853 24
Average silver grade (g/t) 185 255 (27)
Average gold grade (g/t) 3.71 4.47 (17)
Silver produced (koz) 1,657 1,930 (14)
Gold produced (koz) 32.80 33.49 (2)
Silver equivalent produced (koz) 4,380 4,709 (7)
Gold equivalent produced (koz) 52.77 56.74 (7)
Silver sold (koz) 1,661 2,079 (20)
Gold sold (koz) 31.71 35.29 (10)
Unit cost ($/t) 307.5 268.4 15
Total cash cost ($/oz Ag co-product) 24.4 17.1 43
All-in sustaining cost ($/oz Au Eq) 2,660 1,809 47
Production
The first half of the year at San Jose in Argentina is traditionally a shorter
operational period due to the scheduled workers' holiday, which occurs in the
first quarter. The operation delivered a better second quarter with higher
grades resulting in the H1 total of 4.4 million silver equivalent ounces (H1
2024: 4.7 million ounces) with tonnage increased versus H1 2024 due to the
expansion of the plant's capacity - completed at the end of 2024 - to process
lower grade material.
Costs
AISC was $2,660 per gold equivalent ounce (H1 2024: $1,809 per ounce) with the
significant increase versus H1 2024 mostly due to: net inflation in Argentina,
the mining of lower-grade border areas of the veins at San Jose, the impact of
higher precious metal prices on royalties and selling expenses, and the impact
of the removal of the export benefit in April 2025 which had allowed the
Company to settle a portion of exports at the blue dollar rate.
Mara Rosa
The Mara Rosa gold mine is located in Brazil, in the province of Goias, 320km
northwest of Brasilia. Mara Rosa reached commercial production in May 2024.
Mara Rosa summary Six months to Six months to % change
30 June 2025 30 June 2024
Ore production (tonnes) 988,637 552,744 79
Average silver grade (g/t) 0.32 - -
Average gold grade (g/t) 0.95 1.28 (26)
Silver produced (koz) 6 - -
Gold produced (koz) 28.42 14.35 98
Silver equivalent produced (koz) 2,365 1,191 99
Gold equivalent produced (koz) 28.49 14.35 99
Silver sold (koz) 6 2 200
Gold sold (koz) 28.16 11.84 138
Unit cost ($/t) 59.7 66.6 (10)
Total cash cost ($/oz Au co-product) 1,866 2,622 (29)
All-in sustaining cost ($/oz Au Eq) 2,627 1,495 76
Production
Following Q1 2025, the Company reported that operations at Mara Rosa were
adversely affected by heavier-than-usual seasonal rainfall and contractor
performance issues. These challenges restricted access to ore-particularly
higher-grade zones-and compounded persistent problems with the filtering
processes. Consequently, efforts to recover from mine waste removal delays,
carried over from the previous year, were further hampered.
To address these issues, the CEO, Eduardo Landin, temporarily assumed
operational responsibilities and initiated a thorough review of mining,
processing, permitting, and waste management activities. As part of this
effort, the Company suspended processing operations for approximately one
month to carry out necessary maintenance and upgrades across the crushing,
milling, and filtering circuits, whilst mining activities continued
uninterrupted.
Production resumed at the plant in July using two of the four tailings
filters, with the remaining two expected to come online in October after
ongoing maintenance and testing. Performance is steadily improving, and the
installation of a tailings thickener - planned for H1 2026 - is expected to
enable the plant to reach full capacity during that period. The thickener will
improve solids content ahead of filtration. Actual filtration capacity is
currently being reassessed to determine whether additional work is required.
These remedial actions have been communicated to the local environmental
authorities.
Gold production for H1 2025 totalled 28,416 ounces (H1 2024: 14,354 ounces),
with the increase due to the mine being in the commissioning and ramp-up phase
in H1 2024. Full-year 2025 output is forecast between 35,000 and 45,000 ounces
(previously 94,000-104,000 ounces).
In parallel, the Company has also implemented a full reorganisation of its
Brazil operations, including the previously announced appointment of a new
Brazil General Manager as well as a new Operations Manager, alongside a
revamped management structure.
Costs
Due to the reduced production versus expectations as well as lower grades, as
explained above, AISC was elevated at $2,627 per gold equivalent ounce (H1
2024: $1,495 per ounce) with the expectation that high costs will continue in
the second half with most of the third quarter taken up with the plant
stoppage and testing followed by a ramp-up in processing.
ADVANCED PROJECT: MONTE DO CARMO
Work has continued on the Monte Do Carmo project in the first half and
included:
§ Detailed engineering
§ Completion of metallurgical testwork
§ Meetings with the Governor of the state of Tocantins
§ Meeting with Tocantins state agency to discuss workforce development plans
§ Award of the installation licence
§ Signing of contract for transmission line and power distribution network to
support water intake and construction infrastructure
§ Evaluation of the use of water harvesting for the project
§ Review of proposed filtration system
§ Validation of pit engineering study
BROWNFIELD EXPLORATION
Inmaculada
During the first half of the year, the team carried out a further 8,392m of
potential drilling in the Anomalia 1, Anomalia 4, Martha, Mariana and San
Martin structures and 2,024m of resource drilling in the Mariana vein.
Vein Results (potential)
Anomalia 1 IMM25-422: 1.6m @ 2.2g/t Au & 94g/t Ag
Anomalia 4 IMM25-422: 1.1m @ 1.5g/t Au & 210g/t Ag
Martha IMM25-423A: 0.9m @ 2.3g/t Au & 53g/t Ag
Mariana IMM25-282: 1.2m @ 0.9g/t Au & 100g/t Ag
San Martin IMS25-281A: 0.9m @ 0.3g/t Au & 99g/t Ag
IMS25-290: 1.4m @ 0.5g/t Au & 15g/t Ag
Vein Results (resources)
Mariana IMM25-286: 1.7m @ 1.4g/t Au & 55g/t Ag
IMM25-288: 1.6m @ 2.2g/t Au & 113g/t Ag
IMM25-293: 0.9m @ 0.7g/t Au & 89g/t Ag
During the third quarter, the Company expects to carry out 1,800m of potential
drill holes as well as 5,200m of resource drilling in the Melisa vein and
drilling deeper into the Angela vein.
San Jose
During the first half, the team carried out 2,827m of potential drilling in
the Escondida, Agostina, Isabel, Isabel 2, Isabel North, Pilar SE, Emilia,
Luli, and Tonga veins
Vein Results (potential)
Escondida SJD-2979: 1.7m @ 1.1g/t Au & 30g/t Ag
SJD-3003: 0.9m @ 30.5g/t Au & 153g/t Ag
Agostina SJD-2469: 2.5m @ 3.8g/t Au & 182g/t Ag
Isabel SJD-2969: 1.7m @ 2.1g/t Au & 181g/t Ag
SJD-2972: 0.5m @ 0.2g/t Au & 18g/t Ag
Isabel I SJD-2970: 0.6m @ 2.1g/t Au & 112g/t Ag
SJD-2972: 2.4m @ 1.1g/t Au & 46g/t Ag
SJD-2973: 0.9m @ 0.8g/t Au & 70g/t Ag
Isabel II SJD-2973: 0.6m @ 2.2g/t Au & 205g/t Ag
Isabel N SJD-2972: 1.5m @ 2.5g/t Au & 109g/t Ag
SJD-2972: 4.2m @ 1.3g/t Au & 121g/t Ag
During the third quarter, the Company will finish potential drilling in the
Isabel and Escondida veins and start work on drilling for potential in
Saavedra West and in the Betania and Florencia breccias.
Mara Rosa
Within the district, the team drilled 3,009m of potential in Pastinho North,
Grid A and the Jatoba areas intercepting low grade narrow structures.
Vein Results (resources)
Posse 25POSP_019A: 43.3m @ 0.5g/t Au
25POSP_020: 40.3m @ 0.5g/t Au
25POSP_022: 15.7m @ 0.4g/t Au
25POSP_023: 5.8m @ 0.4g/t Au
25POSP_024: 22.2m @ 0.3g/t Au
Posse-Passo 25POSP_030: 40.3m @ 0.5g/t Au
25POSP_030: 0.4m @ 1.9g/t Au
25POSP_020: 0.6m @ 6.7g/t Au
25POSP_032: 55.3m @ 0.3g/t Au
25POSP_031: 46.6m @ 0.3g/t Au
25POSP_033: 30.2m @ 0.3g/t Au
During the third quarter, the team at Mara Rosa will continue resource
drilling in Posse and also potential drilling in Morro Redondo.
Monte Do Carmo
During the period, 3,099m of potential drilling was executed in the Dourado,
Cigando, Adebaldo, Serra Alta and Gogo targets, along with 1,007m of resource
drilling in Serra Alta and Gogo.
Vein Results (potential)
Serra Alta 25SAP_002: 0.8m @ 0.6g/t Au
Gogo 25GO_002: 2.2m @ 1.4g/t Au
25GO_002: 6.5m @ 0.3g/t Au
25GO_002: 2.1m @ 5.0g/t Au
25GO_002: 0.6m @ 0.9g/t Au
25GO_002: 0.7m @ 0.5g/t Au
Dourado 25DOU_001: 0.8m @ 10.4g/t Au
Cigano 25CIG_001: 0.6m @ 0.7g/t Au
25CIG_001: 0.4m @ 0.7g/t Au
25CIG_001: 0.4m @ 1.2g/t Au
Adebaldo 25ADE_001: 6.7m @ 0.2g/t Au
25ADE_001: 3.6m @ 0.2g/t Au
25ADE_001: 0.7m @ 1.2g/t Au
25ADE_001: 1.1m @ 0.7g/t Au
Vein Results (resources)
Gogo 25GO_004: 1.9m @ 0.5g/t Au
25GO_004: 1.4m @ 0.5g/t Au
25GO_004: 1.0m @ 0.3g/t Au
During the third quarter, the team will continue work in Serra Alta and
inferred drilling in the Boqueirao target.
FINANCIAL REVIEW
The reporting currency of Hochschild Mining PLC is US dollars. In discussions
of financial performance, the Group removes the effect of exceptional items,
unless otherwise indicated, and in the income statement results are shown both
pre and post such exceptional items. Exceptional items are those items, which
due to their nature or the expected infrequency of the events giving rise to
them, need to be disclosed separately on the face of the income statement to
enable a better understanding of the financial performance of the Group and to
facilitate comparison with prior periods.
Revenue
Gross revenue 9 (#_ftn9)
Gross revenue increased by 32% to $527.5 million in H1 2025 (H1 2024: $399.8
million) due to higher average realised precious metal prices and higher gold
production, partially offset by lower silver production. Gold output increased
in Mara Rosa, where commercial production commenced in May 2024.
Gold
Gross revenue from gold increased to $371.2 million (H1 2024: $261.3 million)
due to the 28% increase in the average realised gold price and higher gold
production in Mara Rosa.
Silver
Gross revenue from silver increased to $156.2 million (H1 2024: $138.2
million) due to the 25% increase in the average realised silver price,
partially offset by lower silver production in San Jose and Inmaculada.
Gross average realised sales prices
The following table provides figures for average realised prices (before the
deduction of commercial discounts) and ounces sold for H1 2025 and H1 2024:
Ounces sold and average realised prices Six months to Six months to 30 June 2024
30 June 2025
Gold ounces sold (koz) 131.06 118.25
Avg. realized gold price ($/oz) 2,832 2,210
Silver ounces sold (koz) 4,618 5,114
Avg. realized silver price ($/oz) 33.8 27.0
Hedges
H1 2025 realised prices and revenue include the effect of the following
hedges: forwards for 50,000 gold ounces of 2025 at a price of $2,117 per
ounce, and zero cost collars for 60,000 gold ounces of 2025 production at a
strike put of $2,000 per ounce and a strike call of $2,485 per ounce, the
impact of which was a realised loss of $41.5 million in H1 2025. H1 2024
realised prices and revenue include the effect of the following hedges:
forwards for 27,600 gold ounces of 2024 production at a price of $2,100 per
ounce, and zero cost collars for 100,000 gold ounces of 2024 production at a
strike put of $2,000 per ounce and a strike call of $2,252 per ounce, the
impact of which was a realised loss of $4.3 million in H1 2024.
Commercial discounts
Commercial discounts refer to refinery treatment charges, refining fees and
payable deductions for processing concentrate, and are deducted from gross
revenue on a per tonne basis (treatment charge), per ounce basis (refining
fees) or as a percentage of gross revenue (payable deductions). In H1 2025,
the Group recorded commercial discounts of $7.5 million (H1 2024: $8.0
million). The ratio of commercial discounts to gross revenue in H1 2025 was
1.4% (H1 2024: 2.0%).
Revenue
Revenue was $520.0 million (H1 2024: $391.7 million), comprising net gold
revenue of $366.9 million (H1 2024: $256.6 million) and net silver revenue of
$153.0 million (H1 2024: $134.8 million). In H1 2025, gold accounted for 71%
and silver for 29% of the Company's consolidated net revenue (H1 2024: gold
66% and silver 34%).
Reconciliation of gross revenue by mine to Group net revenue
$000 Six months to Six months to % change
30 June 2025 30 June 2024
Gold revenue
Inmaculada 201,736 154,364 31
San Jose 107,305 81,671 31
Mara Rosa 62,152 25,430 144
Pallancata - (185) (100)
Commercial discounts from concentrates (4,319) (4,635) (7)
Net gold revenue 366,874 256,645 43
Silver revenue
Inmaculada 96,644 79,715 21
San Jose 59,341 58,521 1
Mara Rosa 197 59 234
Pallancata - (59) (100)
Commercial discounts from concentrates (3,215) (3,394) (5)
Net silver revenue 152,967 134,842 13
Other revenue 169 253 (33)
Revenue 520,010 391,740 33
Costs
Total cost of sales was $327.7 million in H1 2025 (H1 2024: $248.1 million).
The direct production cost excluding depreciation and amortisation was higher
at $255.0 million (H1 2024: $194.9 million) mainly due to higher production
volume across all operations, production cost inflation in Argentina and
rising precious metal prices resulting in increased royalties. Depreciation
and amortisation in production cost increased to $80.0 million (H1 2024: $68.6
million) mainly due to higher production volume, including new production in
Mara Rosa, and incremental depreciation from future capex in Inmaculada. Fixed
costs at the operation during reduced capacity and stoppages in Mara Rosa of
$1.9 million in H1 2025 (H1 2024: San Jose of $1.1 million due to bad
weather). Increase in inventories was $14.5 million in H1 2025 (H1 2024: $17.2
million) mainly due to higher products in process of $14.1 million in Mara
Rosa.
$000 Six months to Six months to % change
30 June 2025 30 June 2024
Direct production cost excluding depreciation and amortisation 255,007 194,850 31
Depreciation and amortisation in production cost 80,015 68,612 17
Workers' profit sharing 5,396 853 533
Fixed costs during operational stoppages and reduced capacity 1,864 1,062 76
Change in inventories (14,538) (17,237) (16)
Cost of sales 327,744 248,140 32
Fixed costs during operational stoppages and reduced capacity:
$000 Six months to Six months to % change
30 June 2025 30 June 2024
Personnel 347 703 (51)
Third party services 702 301 133
Supplies 153 33 364
Depreciation and amortisation 40 - 100
Others 622 25 2,388
Cost of sales 1,864 1,062 76
Unit cost per tonne
The Company reported unit cost per tonne at its operations of $125.4 per tonne
in H1 2025, a slight decrease versus H1 2024 ($128.8 per tonne).
Unit cost per tonne by operation (including royalties) 10 (#_ftn10) :
Operating unit ($/tonne) Six months to Six months to % change
30 June 2025 30 June 2024
Peru 138.2 144.6 (4)
Inmaculada 138.2 144.6 (4)
Argentina
San Jose 307.5 268.4 15
Brazil 66.6 (10)
Mara Rosa 59.7
Total 125.4 128.8 (3)
Cash costs
Cash costs include cost of sales, commercial deductions and selling expenses
before exceptional items, less depreciation and amortisation included in cost
of sales.
Cash cost reconciliation 11 (#_ftn11)
Six months to 30 June 2025
$000 unless otherwise indicated Inmaculada Pallancata San Jose Mara Rosa Total
(+) Cost of sales 12 (#_ftn12) 148,233 - 120,019 57,628 325,880
(-) Depreciation and amortisation in cost of sales (51,442) - (20,149) (5,831) (77,422)
(+) Selling expenses 355 - 7,381 607 8,343
(+) Commercial deductions 13 (#_ftn13) 1,683 - 7,745 305 9,733
Gold 1,182 - 4,444 302 5,928
Silver 501 - 3,301 3 3,805
Group cash cost 98,829 - 114,996 52,709 266,534
Gold 201,736 - 103,022 62,116 366,874
Silver 96,644 - 56,128 195 152,967
Revenue 298,380 - 159,150 62,311 519,841
Ounces sold
Gold 71.2 - 31.7 28.2 131.1
Silver 2,951 - 1,661 6 4,618
Group cash cost ($/oz)
Co product Au 939 - 2,348 1,866 1,435
Co product Ag 10.85 - 24.41 27.02 16.98
By product Au 24 - 1,753 1,865 837
By product Ag (35.27) - 4.53 (1,590.16) (23.01)
Six months to 30 June 2024
$000 unless otherwise indicated Inmaculada Pallancata San Jose Mara Rosa Total
(+) Cost of sales 14 (#_ftn14) 122,593 - 92,217 32,268 247,078
(-) Depreciation and amortisation in cost of sales (44,704) - (22,225) (1,498) (68,427)
(+) Selling expenses 286 14 7,042 273 7,615
(+) Commercial deductions 15 (#_ftn15) 1,614 11 8,302 73 10,000
Gold 1,167 1 4,807 73 6,048
Silver 447 10 3,495 - 3,952
Group cash cost 79,789 25 85,336 31,116 196,266
Gold 154,364 (186) 77,037 25,430 256,645
Silver 79,715 (69) 55,137 59 134,842
Revenue 234,079 (255) 132,174 25,489 391,487
Ounces sold
Gold 71.2 (0.1) 35.3 11.8 118.3
Silver 3,032 1 2,079 2 5,114
Group cash cost ($/oz)
Co product Au 739 (230) 1,409 2,622 1,088
Co product Ag 8.96 14.94 17.12 35.67 13.22
By product Au (5) (1,058) 757 2,623 486
By product Ag (24.98) 463.91 1.68 2,779.59 (12.99)
Co-product cash cost per ounce is the cash cost allocated to the primary metal
(allocation based on proportion of revenue), divided by the ounces sold of the
primary metal. By-product cash cost per ounce is the total cash cost minus
revenue and commercial discounts of the by-product divided by the ounces sold
of the primary metal.
All-in sustaining cost reconciliation 16 (#_ftn16)
All-in sustaining cash costs per silver and gold equivalent ounce
The Company has calculated its all-in sustaining cost per gold and silver
equivalent ounce on an attributable basis and excludes Peruvian royalties
which are recognised in the income tax line. Management believes that the
updated methodology better aligns with prevailing industry practices and
enhances comparability with peers. All previous periods have been restated to
reflect this change.
Six months to 30 June 2025
$000 unless otherwise indicated Inmaculada San Jose Mara Rosa Main Corporate & others Total
operations
(+) Direct production cost excluding depreciation and amortisation 93,207 98,176 63,624 255,007 - 255,007
(+) Other items and workers profit sharing in cost of sales 17 (#_ftn17) 5,822 (2,142) 770 4,450 - 4,450
(+) Operating and exploration capex for units 18 (#_ftn18) 57,455 20,900 7,679 86,034 670 86,704
(+) Brownfield exploration expenses 19 (#_ftn19) 2,036 4,356 473 6,865 2,239 9,104
(+) Administrative expenses (excl depreciation and amortisation) 2,506 3,649 1,372 7,527 14,971 22,498
Sub-total 161,026 124,939 73,918 359,883 17,880 377,763
Sub-total attributable 161,026 63,719 73,918 298,663 17,880 316,543
Attributable Au ounces produced 70,520 16,730 28,416 115,666 - 115,666
Attributable Ag ounces produced (000s) 2,961 845 6 3,812 - 3,812
Attributable Ounces produced (Au Eq oz) 106,197 26,912 28,488 161,597 - 161,597
Attributable Ounces produced (Ag Eq 000s oz) 8,814 2,234 2,365 13,413 - 13,413
Attributable all-in sustaining costs per oz produced ($/oz Au Eq) 1,516 2,368 2,595 1,848 111 1,959
Attributable all-in sustaining costs per oz produced ($/oz Ag Eq) 18.3 28.5 31.3 22.3 1.3 23.6
(+) Commercial deductions 1,683 7,745 305 9,733 - 9,733
(+) Selling expenses 355 7,381 607 8,343 - 8,343
Sub-total 2,038 15,126 912 18,076 - 18,076
Sub-total attributable 2,038 7,714 912 10,664 - 10,664
Attributable Au ounces sold 71,195 16,170 28,160 115,525 - 115,525
Attributable Ag ounces sold (000s) 2,951 847 6 3,804 - 3,804
Attributable ounces sold (Au Eq oz) 106,751 26,377 28,234 161,362 - 161,362
Attributable ounces sold (Ag Eq 000s oz) 8,860 2,189 2,343 13,392 - 13,392
Sub-total ($/oz Au Eq) attributable 19 292 32 66 - 66
Sub-total ($/oz Ag Eq) attributable 0.2 3.5 0.4 0.8 - 0.8
Attributable all-in sustaining costs per oz sold ($/oz Au Eq) 1,535 2,660 2,627 1,914 111 2,025
Attributable all-in sustaining costs per oz sold ($/oz Ag Eq) 18.5 32.0 31.7 23.1 1.3 24.4
Six months to 30 June 2024 20 (#_ftn20)
$000 unless otherwise indicated Inmaculada San Jose Mara Rosa 21 (#_ftn21) Main Corporate Total
operations & others
(+) Direct production cost excluding depreciation and amortisation 75,884 72,522 46,444 194,850 - 194,850
(+) Other items and workers profit sharing in cost of sales 22 (#_ftn22) 853 (8,399) (30,403) (37,949) - (37,949)
(+) Operating and exploration capex for units 23 (#_ftn23) 62,149 16,604 968 79,721 39 79,760
(+) Brownfield exploration expenses 24 (#_ftn24) 1,374 4,489 - 5,863 1,346 7,209
(+) Administrative expenses (excl depreciation and amortisation) 2,382 3,003 580 5,965 14,747 20,712
Sub-total 142,642 88,219 17,589 248,450 16,132 264,582
Sub-total attributable 142,642 44,992 17,589 205,223 16,132 221,355
Attributable Au ounces produced 72,317 17,080 11,937 101,334 - 101,334
Attributable Ag ounces produced (000s) 3,086 984 - 4,040 - 4,040
Attributable Ounces produced (Au Eq oz) 109,502 28,936 11,937 150,376 - 150,376
Attributable Ounces produced (Ag Eq 000s oz) 9,089 2,401 991 12,481 - 12,481
Attributable all-in sustaining costs per oz produced ($/oz Au Eq) 1,303 1,555 1,473 1,365 107 1,472
Attributable all-in sustaining costs per oz produced ($/oz Ag Eq) 15.7 18.7 17.8 16.4 1.3 17.7
(+) Commercial deductions 1,614 8,302 11 9,927 - 9,927
(+) Selling expenses 286 7,042 190 7,518 - 7,518
Sub-total 1,900 15,344 201 17,445 - 17,445
Sub-total attributable 1,900 7,825 201 9,926 - 9,926
Attributable Au ounces sold 71,194 17,999 9,464 98,657 - 98,657
Attributable Ag ounces sold (000s) 3,032 1,060 2 4,094 - 4,094
Attributable ounces sold (Au Eq oz) 107,734 30,772 9,482 147,988 - 147,988
Attributable ounces sold (Ag Eq 000s oz) 8,942 2,554 787 12,283 - 12,283
Sub-total ($/oz Au Eq) attributable 18 254 22 67 - 67
Sub-total ($/oz Ag Eq) attributable 0.2 3.1 0.3 0.8 - 0.8
Attributable all-in sustaining costs per oz sold ($/oz Au Eq) 1,321 1,809 1,495 1,432 107 1,539
Attributable all-in sustaining costs per oz sold ($/oz Ag Eq) 15.9 21.8 18.0 17.3 1.3 18.6
Administrative expenses
Administrative expenses of $23.7 million (H1 2024: $23.6 million) are in line
with the first half of 2024.
Exploration expenses
In H1 2025, exploration expenses decreased to $12.2 million (H1 2024: $13.5
million) mainly due to expenditure on exploration at Monte Do Carmo of $1.6
million recognised in the income statement in H1 2024.
In addition, the Group capitalises part of its brownfield exploration, which
mostly relates to costs incurred converting potential resources to the
Inferred or Measured and Indicated categories. In H1 2025, the Company
capitalised $2.4 million relating to brownfield exploration (H1 2024: $0.9
million), bringing the total investment in exploration for H1 2025 to $14.6
million (H1 2024: $14.4 million).
Selling expenses
Selling expenses increased to $8.3 million (H1 2024: $7.6 million) mainly due
to higher transportation costs in Mara Rosa.
Other income/expenses
Other income was lower at $6.0 million (H1 2024: $12.4 million) mainly due to
the ending in April 2025, of the Argentinian Government export programme which
entitled the Company to settle a portion of San Jose's exports at the blue
chip exchange rate ($3.0 million). (H1 2024: $8.4 million). The programme was
available from October 2023 through April 2025.
Other expenses were higher at $29.1 million (H1 2024: $14.8 million) mainly
due to the increase in provision for mine closure of $11.5 million (H1 2024:
$nil) and the provision for recovery of the ICMS credit (state tax on
circulation of merchandise and transportation & communication services in
Brazil) of $2.3 million (H1 2024: $nil).
Adjusted EBITDA
Adjusted EBITDA increased by 27% to $224.5 million (H1 2024: $177.1 million)
mainly due to the increase in revenues resulting from increased precious metal
prices and higher gold production, partially offset by higher costs of sales
and lower income from the export programme in Argentina.
Adjusted EBITDA is calculated as profit from continuing operations before
exceptional items, net finance costs, foreign exchange losses and income tax
plus non-cash items (depreciation and amortisation and changes in mine closure
provisions) and exploration expenses other than personnel and other
exploration-related fixed expenses.
$000 unless otherwise indicated Six months to Six months to % change
30 June 2025 30 June 2024
Profit from continuing operations before exceptional items, net finance 124,428 96,272 29
income/(cost), foreign exchange loss and income tax
Depreciation and amortisation in cost of sales 77,462 68,427 13
Depreciation and amortisation in administrative and other expenses 1,383 1,433 (3)
Exploration expenses 12,181 13,509 (10)
Personnel and other exploration related fixed expenses (3,073) (2,560) 20
Other non-cash income, net 25 (#_ftn25) 12,091 60 20,052
Adjusted EBITDA 224,472 177,141 27
Adjusted EBITDA margin 43% 45% (4)
Finance income
Finance income decreased to $3.9 million (H1 2024: $7.3 million), mainly due
to the lower gain on Argentinean mutual funds of $0.9 million (H1 2024: $4.6
million), partially offset by a $1.3 million gain on the execution of the
buy-down option related to the stream agreements with Sprott in H1 2025.
Finance costs
Finance costs increased from $15.2 million in H1 2024 to $16.6 million in H1
2025 principally due to: the unrealised fair value loss of the financial
liability related to the stream agreements with Sprott of $2.4 million (H1
20224: $nil), higher interest expense which totalled $10.4 million (H1 2024:
$9.6 million) resulting from the lower capitalisation of interest expenses
that are directly attributable to the Monte Do Carmo project of $2.8 million
(H1 2024: $5.9 million directly attributable to the construction of Mara Rosa)
partially offset by the impact of lower interest rates and a lower average
medium-term loan balance. These effects were partially offset by the loss from
changes in fair value of Argentinean bonds held in H1 2024 of $2.4 million.
Foreign exchange losses
Foreign exchange losses decreased from $4.6 million in H1 2024 to $1.5 million
in H1 2025 mainly due to a lower loss from the devaluation of the local
currency on monetary assets in Argentina of $2.4 million (H1 2024: $3.8
million) and the foreign exchange gain in Brazil of $0.9 million (H1 2024:
loss of $0.9 million).
Income tax
The Company's pre-exceptional income tax charge was $42.8 million (H1 2024:
$19.1 million), and includes royalties and special mining tax of $10.7 million
(H1 2024: $6.3 million) and withholding tax of $6.2 million (H1 2024: 0.2
million). The tax expense includes deferred income tax income due to the
impact of the revaluation of the local currency in Peru of $3.9 million (H1
2024: net inflation in Argentina of $8.7 million). H1 2024 includes the
recognition of a deferred tax asset of $3.7 million related to the energy
transmission line of Mara Rosa.
The total effective tax rate was 30.6% (2024: 25.8%).
Exceptional items
In H1 2025, exceptional items reflect the reversal of impairment of the Volcan
project of US$30.8 million which was driven by the impact of higher gold
prices, with no tax impact (H1 2024: includes impairment losses at the Azuca
and Arcata projects of $13.7 million, with a corresponding tax gain of $1.2
million).
Cash flow and balance sheet review
Cash flow
$000 Six months to Six months to % Change
30 June 2025 30 June 2024
Net cash generated from operating activities 153,803 100,795 53
Net cash used in investing activities (110,539) (112,141) (1)
Cash flows (used in)/from financing activities (29,825) 11,799 (353)
Foreign exchange adjustment (571) (441) 29
Net increase/(decrease) in cash and cash equivalents during the period 12,868 12 107,133
Net cash generated from operating activities increased from $100.8 million in
H1 2024 to $153.8 million in H1 2025 mainly due to higher adjusted EBITDA of
$224.5 million (H1 2024: $177.1 million).
Net cash used in investing activities decreased to $110.5 million in H1 2025
from $112.1 million in H1 2024, mainly due to: reduced capex at Mara Rosa of
$7.7 million (H1 2024: $18.3 million), lower capex at Monte Do Carmo of $5.1
million (H1 2024: first payment of the option to acquire the project,
including transaction costs, of $16.2 million). These effects were partially
offset by the consideration received for the sale of Crespo project net of
transaction costs of $13.9 million in H1 2024, and the investment in Aclara
Resources Inc. of $5.0 million in H1 2025 (H1 2024: $nil).
Cash generated from/(used in) financing activities decreased from an inflow of
$11.8 million in H1 2024 to an outflow of $29.8 million in H1 2025, primarily
due to the $140.0 million repayment of the existing $200.0 medium-term
facility (2024: $65 million withdrawal), the payment for the execution of the
buy-down option related to the Sprott stream agreements of $13.0 million in H1
2025, and payments of dividends to shareholders of $10.1 million (H1 2024:
$nil). These effects were partially offset by the draw-down of $90.0 million
from the $300.0 million medium-term loan facility (2024: $50 million
repayment), and a net increase of $50.0 million in short and medium-term bank
loans (H1 2024: $1.0 million repayment of Minera Santa Cruz stock market
promissory notes).
Working capital
$000 As at As at
30 June 2025
31 December 2024
Trade and other receivables 120,564 135,814
Inventories 94,736 87,087
Trade and other payables (182,392) (208,222)
Derivative financial assets/(liabilities) (84,525) (40,276)
Income tax receivable (payable), net (27,695) (21,019)
Provisions (21,866) (35,082)
Working capital (101,178) (81,698)
The Group's working capital position in H1 2025 decreased by $19.5 million
from $(81.7) million to $(101.2) million. The key drivers were: higher
derivative financial liabilities of $44.2 million, lower trade and other
receivables of $15.3 million; partially offset by lower trade and other
payables of $25.8 million and lower provisions of $13.2 million.
Net debt
$000 unless otherwise indicated As at As at
30 June 2025
31 December 2024
Cash and cash equivalents 109,841 96,973
Non-current borrowings (190,000) (163,333)
Current borrowings 26 (#_ftn26) (122,129) (149,249)
Net debt (202,288) (215,609)
The Group's reported net debt position was $202.3 million as at 30 June 2025
(31 December 2024: $215.6 million). Net debt to EBITDA was 0.4x (31 December
2024: 0.5x) 27 (#_ftn27) .
Capital expenditure(( 28 (#_ftn28) ))
$000 Six months to 30 June Six months to 30 June
2025 2024
Inmaculada 60,027 62,149
San Jose 22,807 18,767
Mara Rosa 7,694 24,175
Operations 90,528 105,091
Monte Do Carmo 7,866 16,200
Pallancata 3,852 6,897
Volcan 1,193 707
Corporate & Other 3,560 405
Total 106,999 129,300
Capital expenditure decreased from $129.3 million in H1 2024 to $107.0 million
in H1 2025 mainly due to reduced capex at Mara Rosa of $7.7 million (H1 2024:
$18.3 million and capitalised interest of $5.9 million), lower capex at Monte
Do Carmo of $5.1 million (H1 2024: first payment of the option to acquire the
project, including transaction costs, of $16.2 million), and capitalised
interest expenses related to the Monte Do Carmo project of $2.8 million in H1
2025.
Non-IFRS Financial Performance Measures
The Company has included certain non-IFRS measures in this news release. The
Company believes that these measures, in addition to conventional measures
prepared in accordance with IFRS, provide investors an improved ability to
evaluate the underlying performance of the Company. The non-IFRS measures are
intended to provide additional information and should not be considered in
isolation or as a substitute for measures of performance prepared in
accordance with IFRS. These measures do not have any standardised meaning
prescribed under IFRS, and therefore may not be comparable to other issuers.
Forward looking statements
This announcement contains certain forward looking statements, including such
statements within the meaning of Section 27A of the US Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. In particular, such forward looking statements may relate to matters
such as the business, strategy, investments, production, major projects and
their contribution to expected production and other plans of Hochschild Mining
PLC and its current goals, assumptions and expectations relating to its future
financial condition, performance and results.
Forward-looking statements include, without limitation, statements typically
containing words such as "intends", "expects", "anticipates", "targets",
"plans", "estimates" and words of similar import. By their nature, forward
looking statements involve risks and uncertainties because they relate to
events and depend on circumstances that will or may occur in the future.
Actual results, performance or achievements of Hochschild Mining PLC may be
materially different from any future results, performance or achievements
expressed or implied by such forward looking statements. Factors that could
cause or contribute to differences between the actual results, performance or
achievements of Hochschild Mining PLC and current expectations include, but
are not limited to, legislative, fiscal and regulatory developments,
competitive conditions, technological developments, exchange rate fluctuations
and general economic conditions. The Company cautions against undue reliance
on any forward looking statement or guidance, particularly in light of the
current economic climate. Past performance is no guide to future performance
and persons needing advice should consult an independent financial adviser.
The forward looking statements reflect knowledge and information available at
the date of preparation of this announcement. Except as required by the
Listing Rules and applicable law, Hochschild Mining PLC does not undertake any
obligation to update or change any forward looking statements to reflect
events occurring after the date of this announcement. Nothing in this
announcement should be construed as a profit forecast.
RISKS
The principal risks and uncertainties facing the Company in respect of the
year ended 31 December 2024 are set out in detail in the Risk Management
section of the 2024 Annual Report and in Note 39 to the 2024 Consolidated
Financial Statements.
The key risks disclosed in the 2024 Annual Report (available
at hochschildmining.com) are categorised as:
§ Financial risks comprising commodity price risk and, commercial
counterparty risk;
§ Operational risks including the risks associated with operational
performance, business interruption/supply chain, information security and
cybersecurity, exploration & reserve and resource replacement, personnel,
and political, legal and regulatory risks; and
§ Sustainability risks including risks associated with health and safety,
environment, climate change and community relations.
The risks referred to above continue to apply to the Company in respect of the
remaining six months of the financial year.
RELATED PARTY TRANSACTIONS
Related party transactions are disclosed in Note 33 to the 2024 Consolidated
Financial Statements. No significant transactions with related parties during
the six months period ended 30 June 2025.
GOING CONCERN
After their review, the Directors have a reasonable expectation that the Group
and the Company have adequate resources to continue in operational existence
during the Going Concern Period (as defined in Note 2 of the interim condensed
consolidated financial statements (Material Accounting Policies). Accordingly,
the Directors are satisfied the going concern basis of accounting is
appropriate in preparing the interim condensed consolidated financial
statements. For further detail, refer to the Going concern disclosure in the
aforementioned Note 2.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors confirm that, to the best of their knowledge, the interim
condensed consolidated financial statements have been prepared in accordance
with UK adopted International Accounting Standard 34 "Interim Financial
Reporting" and that the interim management report includes a fair review of
the information required by Disclosure Guidance and Transparency Rules 4.2.7R
and 4.2.8R.
A list of current Directors and their functions is maintained on the Company's
website.
For and on behalf of the Board
Eduardo Landin
Chief Executive Officer
26 August 2025
INDEPENDENT REVIEW REPORT TO HOCHSCHILD MINING PLC
Conclusion
We have been engaged by the Company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
June 2025, which comprises the interim condensed consolidated income
statement, the interim condensed consolidated statement of comprehensive
income, the interim condensed consolidated statement of financial position,
the interim condensed consolidated statement of cash flows, the interim
condensed consolidated statement of changes in equity and the related notes 1
to 26. We have read the other information contained in the half-yearly
financial report and considered whether it contains any apparent misstatements
or material inconsistencies with the information in the condensed set of
financial statements.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2025 is not prepared, in all
material respects, in accordance with UK adopted International Accounting
Standard 34 and the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements 2410 (UK) "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity" (ISRE) issued by the Financial
Reporting Council. A review of interim financial information consists of
making enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review procedures. A
review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and consequently does not enable
us to obtain assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not express an audit
opinion.
As disclosed in note 2, the annual financial statements of the Group are
prepared in accordance with UK adopted international accounting standards. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with UK adopted International
Accounting Standard 34, "Interim Financial Reporting".
Conclusions Relating to Going Concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for Conclusion section of this report,
nothing has come to our attention to suggest that management have
inappropriately adopted the going concern basis of accounting or that
management have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
this ISRE, however future events or conditions may cause the entity to cease
to continue as a going concern.
Responsibilities of the directors
The directors are responsible for preparing the half-yearly financial report
in accordance with the Disclosure Guidance and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
In preparing the half-yearly financial report, the directors are responsible
for assessing the Company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to
liquidate the Company or to cease operations, or have no realistic alternative
but to do so.
Auditor's Responsibilities for the review of the financial information
In reviewing the half-yearly report, we are responsible for expressing to the
Company a conclusion on the condensed set of financial statements in the
half-yearly financial report. Our conclusion, including our Conclusions
Relating to Going Concern, are based on procedures that are less extensive
than audit procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of our report
This report is made solely to the Company in accordance with guidance
contained in International Standard on Review Engagements 2410 (UK) "Review of
Interim Financial Information Performed by the Independent Auditor of the
Entity" issued by the Financial Reporting Council. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other
than the Company, for our work, for this report, or for the conclusions we
have formed.
Ernst & Young LLP
London
26 August 2025
Interim condensed consolidated income statement
Six months ended 30 June 2025
Six months ended Six months ended
30 June 2025 (Unaudited) 30 June 2024 (Unaudited)
Notes Before exceptional items US$000 Exceptional items Total US$000 Before exceptional items US$000 Exceptional items Total US$000
(Note 9) (Note 9)
US$000 US$000
Continuing operations
Revenue 4 520,010 - 520,010 391,740 - 391,740
Cost of sales 5 (327,744) - (327,744) (248,140) - (248,140)
Gross profit 192,266 - 192,266 143,600 - 143,600
Administrative expenses (23,716) - (23,716) (23,649) - (23,649)
Exploration expenses 6 (12,181) - (12,181) (13,509) - (13,509)
Selling expenses 7 (8,343) - (8,343) (7,615) - (7,615)
Other income 8 6,033 - 6,033 12,402 - 12,402
Other expenses 8 (29,083) - (29,083) (14,781) - (14,781)
Impairment reversal/(impairment and write-off) of non-financial assets (548) 30,779 30,231 (176) (13,732) (13,908)
Profit/(loss) from continuing operations before net finance cost, foreign 124,428 30,779 155,207 96,272 (13,732) 82,540
exchange loss and income tax
Share of loss of an associate 14 (887) - (887) (668) - (668)
Finance income 10 3,921 - 3,921 7,263 - 7,263
Finance costs 10 (16,631) - (16,631) (15,179) - (15,179)
Foreign exchange loss (1,497) - (1,497) (4,596) - (4,596)
Profit/(loss) from continuing operations before income tax 109,334 30,779 140,113 83,092 (13,732) 69,360
Income tax (expense)/benefit 11 (42,839) - (42,839) (19,066) 1,192 (17,874)
Profit/(loss) for the period from continuing operations 66,495 30,779 97,274 64,026 (12,540) 51,486
Attributable to:
Equity shareholders of the parent 60,110 30,779 90,889 52,058 (12,540) 39,518
Non-controlling interests 6,385 - 6,385 11,968 - 11,968
66,495 30,779 97,274 64,026 (12,540) 51,486
Basic and diluted earnings/(loss) per ordinary share from continuing 0.12 0.06 0.18 0.10 (0.02) 0.08
operations for the period (expressed in U.S. dollars per share)
Interim condensed consolidated statement of comprehensive income
Six months ended 30 June 2025
Six months ended 30 June
Notes 2025 (Unaudited) US$000 2024 (Unaudited) US$000
Profit for the period 97,274 51,486
Other comprehensive (loss)/income that might be reclassified to profit or loss
in subsequent periods
Change in fair value of cash flow hedges 15 (118,902) (56,743)
Recycling of the loss on cash flow hedges 15 41,471 4,285
Deferred tax benefit on cash flow hedges 11 25,808 17,218
Exchange differences on translating foreign operations(1) 9,921 (22,252)
Unrealised change in credit risk of financial liability 19(a) (153) -
Share of other comprehensive profit/(loss) of an associate 14 1,628 (1,560)
(40,227) (59,052)
Other comprehensive income that will not be reclassified to profit or loss in
subsequent periods; net of tax:
Net profit/(loss) on equity instruments at fair value through other 152 (151)
comprehensive income ("OCI")
152 (151)
Other comprehensive loss for the period, net of tax (40,075) (59,203)
Total comprehensive income/(loss) for the period 57,199 (7,717)
Total comprehensive loss attributable to:
Equity shareholders of the parent 50,814 (19,685)
Non-controlling interests 6,385 11,968
57,199 (7,717)
1 Foreign exchange effect generated in the Group´s companies when the
functional currency is the local currency, mainly generated by the decrease
(2024: increase) of the US$ exchange rate in Brazil.
Interim condensed consolidated statement of financial position
As at 30 June 2025
Notes As at 30 As at 31
June
December
2025
2024
(Unaudited) US$000 US$000
ASSETS
Non-current assets
Property, plant and equipment 12 1,092,608 1,070,758
Evaluation and exploration assets 13 171,835 132,303
Intangible assets 18 62,792 49,632
Investment in an associate 14 21,552 15,811
Financial assets at fair value through OCI 15 627 475
Other receivables 19,265 18,316
Deferred income tax assets 16 53,772 27,677
1,422,451 1,314,972
Current assets
Inventories 94,736 87,087
Trade and other receivables 120,564 135,814
Income tax receivable 611 186
Other financial assets 2,492 3,807
Cash and cash equivalents 17 109,841 96,973
Assets held for sale 18 - 12,660
328,244 336,527
Total assets 1,750,695 1,651,499
EQUITY AND LIABILITIES
Capital and reserves attributable to shareholders of the Parent
Equity share capital 22 9,068 9,068
Other reserves (369,506) (329,431)
Retained earnings 1,012,066 931,236
651,628 610,873
Non-controlling interests 80,617 76,478
Total equity 732,245 687,351
Non-current liabilities
Other payables 19 39,795 46,501
Derivative financial liabilities 15 94,372 61,343
Borrowings 20 190,000 163,333
Provisions 21 175,499 146,781
Deferred income tax liabilities 16 79,566 82,504
579,232 500,462
Current liabilities
Trade and other payables 19 182,392 208,222
Derivative financial liabilities 15 84,525 40,276
Borrowings 20 122,129 149,249
Provisions 21 21,866 35,082
Income tax payable 28,306 21,205
Liabilities directly associated with assets held for sale 18 - 9,652
439,218 463,686
Total liabilities 1,018,450 964,148
Total equity and liabilities 1,750,695 1,651,499
Interim condensed consolidated statement of cash flows
Six months ended 30 June 2025
Six months ended 30 June
Notes 2025 (Unaudited) US$000 2024 (Unaudited) US$000
Cash flows from operating activities
Cash generated from operations 25 175,198 119,336
Interest received 1,106 1,725
Interest paid 20 (9,385) (13,577)
Payment of mine closure costs 21(1) (3,686) (3,414)
Income tax, special mining tax and mining royalty paid(1) (9,430) (3,275)
Net cash generated from operating activities 153,803 100,795
Cash flows from investing activities
Purchase of property, plant and equipment (101,903) (105,930)
Purchase of evaluation and exploration assets (2,862) (18,156)
Purchase of intangibles (1,044) -
Investment in associates 14 (5,000) -
Purchase of Argentinian bonds - (5,838)
Proceeds from sale of Argentinian bonds - 3,472
Proceeds from sale of assets held for sale 18 100 13,890
Proceeds from sale of property, plant and equipment 12 170 421
Net cash used in investing activities (110,539) (112,141)
Cash flows from financing activities
Proceeds from borrowings 20 270,000 65,965
Repayment of borrowings 20 (271,486) (52,193)
Payment of lease liabilities (3,034) (1,585)
Dividends paid to shareholders 23 (10,059) -
Dividends paid to non-controlling interests 23 (2,246) (388)
Buy-down option of Stream Agreement 19a (13,000) -
Cash flows (used in)/generated from financing activities (29,825) 11,799
Net increase in cash and cash equivalents during the period 13,439 453
Impact of foreign exchange (571) (441)
Cash and cash equivalents at beginning of period 17 96,973 89,126
Cash and cash equivalents at end of period 17 109,841 89,138
(1) Taxes paid have been offset with value added tax (VAT) credits of
US$21,777,000 (2024: US$1,246,000).
Interim condensed consolidated statement of changes in equity
Six months ended 30 June 2025
Other reserves
Notes Equity Dividends expired US$000 Fair value reserve of financial assets at Cumulative translation adjustment US$000 Merger reserve US$000 Share-based payment reserve US$000 Change in fair value of Sprott agreement US$000 Total Retained earnings US$000 Capital Non-controlling interests US$000 Total equity US$000
fair value through OCI US$000
other and
share
reserves US$000 reserves
attributab
capital US$000 Share le to
shareholde
Unrealised gain/ of other compre- hensive rs
of the
(loss/gain on cash flow hedges gain of an associate US$000 Parent
US$000
US$000
Balance at 1 January 2025 9,068 - (68,633) (208) (112) (50,432) (210,046) - - (329,431) 931,236 610,873 76,478 687,351
Other comprehensive loss - - (51,623) 1,628 152 9,921 - - (153) (40,075) - (40,075) - (40,075)
Profit for the period - - - - - - - - - - 90,889 90,889 6,385 97,274
Total comprehensive (loss)/income for the - - (51,623) 1,628 152 9,921 - - (153) (40,075) 90,889 50,814 6,385 57,199
period
Dividends paid to shareholders 23 - - - - - - - - - - (10,059) (10,059) - (10,059)
Dividends paid to non-controlling interest 23 - - - - - - - - - - - - (2,246) (2,246)
Balance at 30 June 2025 (unaudited) 9,068 - (120,256) 1,420 40 (40,511) (210,046) - (153) (369,506) 1,012,066 651,628 80,617 732,245
Balance at 1 January 2024 9,068 - (11,546) 419 (127) (20,180) (210,046) 6,643 - (234,837) 834,231 608,462 60,122 668,584
Other comprehensive loss - - (35,240) (1,560) (151) (22,252) - - - (59,203) - (59,203) - (59,203)
Profit for the period - - - - - - - - - - 39,518 39,518 11,968 51,486
Total comprehensive (loss)/income for the - - (35,240) (1,560) (151) (22,252) - - - (59,203) 39,518 (19,685) 11,968 (7,717)
period
Dividends paid to non-controlling interest 23 - - - - - - - - - - - - (388) (388)
Other changes in associate's equity 14 - - - 1,865 - - - - - 1,865 - 1,865 - 1,865
Modification of share based payment awards - - - - - - - (7,415) - (7,415) 980 (6,435) - (6,435)
Accrual of share-based payment awards - - - - - - - 772 - 772 - 772 - 772
Balance at 30 June 2024 (unaudited) 9,068 - (46,786) 724 (278) (42,432) (210,046) - - (298,818) 874,729 584,979 71,702 656,681
Notes to the interim condensed consolidated financial statements
1 Corporate Information
Hochschild Mining PLC (hereinafter the "Company" and together with its
subsidiaries, the "Group") is a public limited company incorporated on 11
April 2006 under the Companies Act 1985 as a limited company and registered in
England and Wales with registered number 05777693. The Company's registered
office is located at 17 Cavendish Square, London W1G 0PH, United Kingdom. Its
ordinary shares are traded on the London Stock Exchange.
The Group's principal business is the mining, processing and sale of gold and
silver. The Group has one operating mine (Inmaculada) located in southern
Peru, one operating mine (San Jose) located in Argentina, and one operating
mine (Mara Rosa) located in Brazil. The Group also has a portfolio of projects
located across Peru, Argentina, Brazil and Chile at various stages of
development.
These interim condensed consolidated financial statements were approved for
issue on behalf of the Board of Directors on 26 August 2025.
2 Material Accounting Policies
Basis of preparation
These interim condensed consolidated financial statements set out the Group's
financial position as at 30 June 2025 and 31 December 2024 and its financial
performance and cash flows for the six months ended 30 June 2025 and 30 June
2024.
These interim condensed consolidated financial statements have been prepared
in accordance with the Disclosure and Transparency Rules of the Financial
Conduct Authority and UK adopted International Accounting Standard 34,
"Interim Financial Reporting". Accordingly, the interim condensed consolidated
financial statements do not include all the information required for full
annual financial statements and therefore, should be read in conjunction with
the Group's 2024 annual consolidated financial statements as published in the
2024 Annual Report. The annual financial statements of the Group will be
prepared in accordance with UK adopted IFRS.
The interim condensed consolidated financial statements do not constitute
statutory accounts as defined in the Companies Act 2006. The financial
information for the full year is based on the statutory accounts for the
financial year ended 31 December 2024. A copy of the statutory accounts for
that year, which were prepared in accordance with UK adopted International
Accounting Standards has been delivered to the Registrar of Companies. The
auditor's report under section 495 of the Companies Act 2006 in relation to
those accounts was unmodified and did not include a reference to any matters
to which the auditor drew attention by way of emphasis without qualifying the
report and did not contain a statement under s498(2) or s498(3) of the
Companies Act 2006.
The impact of the seasonality or cyclicality of operations is not regarded as
significant on the interim condensed consolidated financial statements.
The financial statements are presented in US dollars (US$) and all monetary
amounts are rounded to the nearest thousand ($000) except when otherwise
indicated.
Critical accounting estimates and judgements
Many of the amounts included in the financial statements involve the use of
judgement and/or estimation. These judgements and estimates are based on
management's best knowledge of the relevant facts and circumstances, having
regard to prior experience, but actual results may differ from the amounts
included in the financial statements. Information about such judgements and
estimates is contained in the accounting policies and/or the notes to the
financial statements.
The significant accounting judgements, estimates and assumptions remain
consistent with those disclosed in the consolidated financial statements for
the year ended 31 December 2024. The most significant are:
Critical judgements:
· Assessment of impairment indicators for the Group's CGUs -
notes 12 and 13
Assessment of impairment indicators are performed during the period and they
were identified in certain of the CGUs - refer to notes 12 and 13 for details
Significant estimates:
· Recoverable values of mining assets - notes 12 and 13
The values of the Group's mining assets are sensitive to a range of
characteristics unique to each mine unit. Key sources of estimation for all
assets include uncertainty around ore reserve estimates and cash flow
projections. In performing impairment reviews, the Group assesses the
recoverable amount of its operating assets principally with reference to fair
value less costs of disposal ("FVLCD").
The recoverable values of the CGUs and advanced exploration projects are
determined using a FVLCD methodology. FVLCD for CGUs is determined using a
combination of level 2 and level 3 inputs. The FVLCD of producing mine assets
is determined using a discounted cash flow model and for developing stage mine
assets or advanced exploration projects is determined using a discounted cash
flow model or the value-in-situ methodology. When using a value-in-situ
methodology, the in-situ value is based on a comparable company analysis and
applies a realisable 'enterprise value' to unprocessed mineral resources per
ounce of resources, to estimate the amount that would be paid by a willing
third party in an arm's length transaction.
There is judgement involved in determining the assumptions that are considered
to be reasonable and consistent with those that would be applied by market
participants. Significant estimates used in a discounted cash flow model
include future gold and silver prices, future capital requirements, reserves
and resources volumes, production costs and the application of discount rates
which reflect the macro-economic risk, as applicable. When using a
value-in-situ methodology, the in-situ value is based on a comparable company
analysis. Changes in these assumptions will affect the recoverable amount of
the property, plant and equipment, evaluation and exploration assets, and
intangibles.
Changes in accounting policies and disclosures
The accounting policies adopted in the preparation of the interim condensed
consolidated financial statements are consistent with those followed in the
preparation of the Group's annual consolidated financial statements for the
year ended 31 December 2024, except for the adoption of new standards
effective as of 1 January 2025. The Group has not early adopted any standard,
interpretation or amendment that has been issued but is not yet effective.
Amendments apply for the first time in 2025, but do not have an impact on the
interim condensed consolidated financial statements of the Group.
· Lack of exchangeability - Amendments to IAS 21
Going concern
The Directors have reviewed Group liquidity, including cash resources and
borrowings (refer to note 20 for details of the US$300 million and US$200
million medium-term loans) and related covenant forecasts to assess whether
the Group is able to continue in operation for the period to 31 August 2026
(the "Going Concern Period") which is at least 12 months from the date of
these interim condensed consolidated financial statements. The Directors also
considered the impact of a downside scenario on the Group's future cash flows
and liquidity position as well as debt covenant compliance.
Scenarios Analysed
For the purposes of the going concern review, the base case scenario reviewed
by the Directors (the "Base Scenario") reflects, among other things, budgeted
production for 2025 and 2026 life-of-mine plans for Inmaculada and San Jose.
For Mara Rosa, the Base Scenario includes adjustments to its budgeted
production and life-of-mine plan to reflect the estimated impact of the
ongoing operational challenges. The Base Scenario also assumes average
precious metal prices of US$3,174/oz for gold and US$34.2/oz for silver (the
"Assumed Prices"), being the average analysts' consensus prices for the Going
Concern Period.
The Directors also considered a severe but plausible downside scenario ("the
Severe Scenario") which takes into account the combined impact of a three-week
stoppage of all operations, unforeseen social-related costs and lower precious
metal prices which are lower than the Assumed Prices (a 10% lower gold price
and 15% lower silver price) ("the Downside Assumptions").
Even in the Severe Scenario it has been assumed that all employees remain on
full pay and that mitigating actions, such as the deferral of discretionary
exploration capital expenditure, which are under the Group's control, while
available, would not be necessary.
Under the Base and the Severe scenarios, the Group's liquid resources, which
as at the date of this report include an undrawn amount of US$180 million
remain more than adequate for the Group's forecast expenditure and scheduled
repayments of the amounts owed under the Group´s borrowings, with sufficient
headroom maintained to comply with debt covenants.
Reverse Stress Tests
Management also performed reverse stress tests which were considered in the
Directors´ assessment. Under these tests, the Directors concluded that:
• prices of US$2,254/oz for gold and
US$24.3/oz for silver for the duration of the Going Concern Period would
result in sufficient headroom to comply with the Group´s minimum level of
liquidity; and
• 9 weeks of concurrent stoppages at each of
Inmaculada, San Jose and Mara Rosa would result in sufficient headroom to
comply with the Group´s minimum level of liquidity.
In its application of the above reverse stress tests, no mitigation actions
were applied.
Conclusion
After their review, the Directors have a reasonable expectation that the Group
and the Company have adequate resources to continue in operational existence
during the Going Concern Period. Accordingly, the Directors are satisfied the
going concern basis of accounting is appropriate in preparing the interim
condensed consolidated financial statements.
3 Segment reporting
The following tables present revenue and profit/(loss) information for the
Group's operating segments for the six months ended 30 June 2025 and 30 June
2024 and asset information as at 30 June 2025 and 31 December 2024,
respectively:
Six months ended 30 June 2025 Inmaculada US$000 San Jose Mara Rosa Pallancata Exploration US$000 Other((4)) Adjustments and eliminations US$000 Total
(Unaudited) US$000 US$000 US$000 US$000 US$000
Revenue from external customers 315,945 151,295 86,144 - - 169 - 5
53
,5
53
Inter segment revenue - - - - - 2,314 (2,314) -
Total revenue from customers 315,945 151,295 86,144 - - 2,483 (2,314) 55
3,
55
3
Provisional pricing adjustments 11 7,855 62 - - - - 7,928
Realised loss on hedges (17,576) - (23,895) - - - - (4
1,
47
1)
Total revenue 298,380 159,150 62,311 - - 2,483 (2,314) 52
0,
01
0
Segment profit/(loss) 148,367 31,750 3,712 - (12,275) 1,716 (1,528) 17
1,
74
2
Others((1)) (31,629)
Profit from continuing operations before income tax 140,113
Other segment information
Depreciation((2)) (51,610) (20,272) (8,438) (260) (4) (1,221) - (8
1,
80
5)
Amortisation (322) (128) (328) (229) - (47) - (1
,0
54
)
Reversal of impairment/(impairment and write-off of assets), net (355) - - 30,753 (167) - 30
,2
31
-
As at 30 June 2025 (Unaudited)
Assets
Capital expenditure 60,027 22,807 7,694 3,852 9,059 3,560 - 106,999
Current assets 19,343 63,967 44,251 1,629 - 2,598 - 13
1,
78
8
Other non-current assets 581,965 138,112 347,747 44,569 175,137 39,705 - 1,327,235
Total segment assets 601,308 202,079 391,998 46,198 175,137 42,303 - 1,
45
9,
02
3
Not reportable assets((3)) - - - - - 291,672 - 29
1,
67
2
Total assets 601,308 202,079 391,998 46,198 175,137 333,975 - 1,
75
0,
69
5
1 Comprised of reversal of impairment of US$30,779,000, administrative
expenses of US$23,716,000, other income of US$6,033,000, other expenses of
US$29,083,000, write off of non-financial assets of US$548,000, share of
losses of an associate of US$887,000, finance income of US$3,921,000, finance
costs of US$16,631,000 and foreign exchange loss of US$1,497,000.
2 Includes depreciation capitalised in the Pallancata unit (US$229,00),
Inmaculada unit (US$285,000), San Jose unit (US$1,126,000), and Mara Rosa unit
(US$309,000).
3 Not reportable assets are comprised of financial assets at fair value
through OCI of US$627,000, other receivables of US$102,777,000, income tax
receivable of US$611,000, deferred income tax asset of US$53,772,000,
investment in associate of US$21,552,000, other financial assets of
US$2,492,000 and cash and cash equivalents of US$109,841,000.
4 "Other" revenue relates to revenues earned by Empresa de Transmisión
Aymaraes S.A.C. for energy transmission services.
Six months ended 30 June 2024 (Unaudited) Inmaculada US$000 San Jose Mara Rosa Pallancata Exploration US$000 Other((4)) Adjustments and eliminations US$000 Total
US$000 US$000 US$000 US$000 US$000
Revenue from external customers 236,231 125,909 27,691 (255) - 192 - 38
9,
76
8
Inter segment revenue - - - - - 1,843 (1,843) -
Total revenue from customers 236,231 125,909 27,691 (255) - 2,035 (1843) 38
9,
76
8
Provisional pricing adjustments (2) 6,265 (5) - - - - 6,258
Realised loss on hedges (2,150) - (2,136) - - - - (4
,2
86
)
Total revenue 234,079 132,174 25,550 - - 1,780 (1,843) 39
1,
74
0
Segment profit/(loss) 110,297 31,853 (7,354) (269) (13,622) 1,248 323 12
2,
47
6
Others((1)) (53,116)
Profit from continuing operations before income tax 69,360
Other segment information
Depreciation((2)) (41,710) (23,411) (2,413) (297) (1) (1,426) - (69,258)
Amortisation (35) (252) (115) - - (22) - (424)
Impairment and write-off of assets, net (176) - - - (13,732) - - (13,908)
As at 31 December 2024
Assets
Capital expenditure 138,582 46,143 35,318 32,908 92,041 3,090 - 348,082
Current assets 17,028 67,866 35,210 1,758 5,327 6,387 - 13
3,
57
6
Other non-current assets 572,513 132,716 347,235 41,622 125,325 33,282 - 1,252,693
Total segment assets 589,541 200,582 382,445 43,380 130,652 39,669 - 1,
38
6,
26
9
Not reportable assets((3)) - - - - - 265,230 - 26
5,
23
0
Total assets 589,541 200,582 382,445 43,380 130,652 304,899 - 1,
65
1,
49
9
1 Comprised of administrative expenses of US$23,649,000, other income of
US$12,402,000, other expenses of US$14,781,000, impairment and write off of
non-financial assets of US$13,908,000, share of losses of an associate of
US$668,000, finance income of US$7,263,000, finance costs of US$15,179,000 and
foreign exchange loss of US$4,596,000.
2 Includes depreciation capitalised in the San Jose unit (US$1,164,000),
and Mara Rosa unit (US$130,000).
3 Not reportable assets are comprised of financial assets at fair value
through OCI of US$475,000, other receivables of US$116,892,000, income tax
receivable of US$186,000, deferred income tax asset of US$27,677,000,
investment in associates US$15,811,000, other financial assets of
US$3,807,000, assets held for sale of US$3,409,000, and cash and cash
equivalents of US$96,973,000.
4 "Other" revenue relates to revenues earned by Empresa de Transmisión
Aymaraes S.A.C. for energy transmission services.
4 Revenue
Six months ended 30 June 2025 (unaudited) (1) Six months ended 30 June 2024 (unaudited) (1)
Goods sold US$000 Shipping services US$000 Total US$000 Goods sold US$000 Shipping services US$000 Total US$000
Gold (from dore bars) 334,473 312 334,785 210,510 371 210,881
Silver (from dore bars) 112,287 167 112,454 98,072 257 98,329
Gold (from concentrates) 66,958 1,880 68,838 46,159 1,290 47,449
Silver (from concentrates) 36,496 1,033 37,529 31,916 939 32,855
Gold (from precipitates) (222) - (222) - - -
Services 169 - 169 253 - 253
Total revenue from customers 550,161 3,392 553,553 386,910 2,857 389,767
Provisional pricing adjustments 7,928 - 7,928 6,258 - 6,258
Realised loss on hedges (41,471) - (41,471) (4,285) - (4,285)
Total 516,618 3,392 520,010 388,883 2,857 391,740
1 Includes commercial discounts (refinery treatment charges, refining fees
and payable deductions for processing concentrate), and are deducted from
gross revenue on a per tonne basis (treatment charge), per ounce basis
(refining fees) or as a percentage of gross revenue (payable deductions). In
2025, the Group recorded commercial discounts of US$7,534,000 (2024:
US$8,029,000).
5 Cost of sales
Cost of sales comprises:
Six months ended 30 June
2025 (Unaudited) 2024 (Unaudited)
US$000
US$000
Direct production costs excluding depreciation and amortisation 255,007 194,850
Depreciation and amortisation in production costs 80,015 68,612
Workers profit sharing 5,396 853
Fixed costs during operational stoppages and reduced capacity1 1,864 1,062
Change in inventories (14,538) (17,237)
Cost of sales 327,744 248,140
1 Corresponds to the fixed cost at the operation during reduced capacity
and stoppages in Mara Rosa of US$1,864,000 (2024: Corresponds to the fixed
cost at the operation during stoppages in San Jose of US$1,062,000).
The main components included in cost of sales are:
Six months ended 30 June
2025 (Unaudited) US$000 2024 (Unaudited) US$000
Depreciation and amortisation in cost of sales1 77,422 68,427
Personnel expenses2 84,532 58,119
Mining royalty 5,142 3,481
Change in products in process and finished goods (14,538) (17,237)
Fixed costs during operational stoppages and reduced capacity(3) 1,864 1,062
1 The depreciation and amortisation in production cost is US$80,015,000
(2024: US$68,612,000). The difference with the depreciation and amortisation
in cost of sales is considered in inventory.
2 Includes workers' profit sharing of US$5,396,000 (2024: US$853,000) and
excludes personnel expenses of US$347,000 (2024: US$703,000) included within
unallocated fixed costs at the operations (see below).
3 Corresponds to the unallocated fixed cost accumulated as a result of idle
capacity during stoppages. These costs mainly include third party services of
US$702,000 (2024: US$301,000), personnel expenses of US$347,000 (2024:
US$703,000), supplies of US$153,000 (2024: US$33,000), depreciation and
amortisation of US$40,000 (2024:US$nil) and other costs of US$622,000 (2024:
US$25,000).
6 Exploration expenses
Six months ended 30 June
2025 2024
(Unaudited) (Unaudited)
US$000
US$000
Mine site exploration1
San Jose 4,356 4,489
Inmaculada 2,036 1,374
Pallancata 1,445 1,261
Mara Rosa 473 -
Ares 35 241
Arcata - 42
8,345 7,407
Prospects2
Peru 246 27
Chile (55) (14)
Brazil - 1,581
191 1,594
Generative3
Peru 528 717
Brazil 4 1,209
532 1,926
Personnel 2,975 2,510
Depreciation right-of-use 40 22
Others 98 50
Total 12,181 13,509
1 Mine-site exploration is performed with the purpose of identifying
potential minerals within an existing mine-site, with the goal of maintaining
or extending the mine's life.
2 Prospects expenditure relates to detailed geological evaluations in order
to determine zones which have mineralisation potential that is economically
viable for exploration. Exploration expenses are generally incurred in the
following areas: mapping, sampling, geophysics, identification of local
targets and reconnaissance drilling.
3 Generative expenditure is early stage exploration expenditure related to the
basic evaluation of the region to identify prospects areas that have the
geological conditions necessary to contain mineral deposits. Related
activities include regional and field reconnaissance, satellite images,
compilation of public information and identification of exploration targets.
7 Selling expenses
Six months ended 30 June
2025 (Unaudited) 2024 (Unaudited) US$000
US$000
Taxes1 5,786 5,837
Warehouse services 892 669
Transportation costs 433 26
Personnel expenses 102 96
Other2 1,130 987
Total 8,343 7,615
1 Corresponds to the export duties in Argentina calculated as a fixed
amount in pesos per US$ of export.
2 Mainly corresponds to analysis services of US$314,000 (2024: US$179,000),
other professional fees of US$286,000 (2024: US$233,000), insurance expenses
of US$195,000 (2024: US$105,000), and consumption of supplies of US$176,000
(2024: US$162,000).
8 Other income and expenses Six months ended 30 June
2025 (Unaudited) 2024 (Unaudited) US$000
US$000
Other income
Income from export programme in Argentina1 2,979 8,399
Logistic services 998 616
Decrease in provision for mine closure - 116
Others2 2,056 3,271
Total 6,033 12,402
Other expenses
Increase in provision for mine closure (refer to note 21(1)) (11,543) -
Care and maintenance expenses of Pallancata mine unit (3,965) (3,662)
Provision for recovery of tax credits3 (2,338) -
Corporate social responsibility contribution in Argentina (2,241) (1,907)
Care and maintenance expenses of Ares mine unit (1,740) (1,166)
Provision of obsolescence of supplies4 (1,652) (282)
Termination benefits (853) (1,460)
Cost of recovery of expenses (528) (1,234)
Care and maintenance expenses of Arcata mine unit (507) (1,774)
Others(5) (3,716) (3,296)
Total (29,083) (14,781)
1 Benefit arising from being able to access the Argentina government's
Export Incentive Programme, allowing certain companies to translate a certain
proportion of US dollar sales at a preferential market exchange rate. The
programme was in force from October 2023 through April 2025.
2 Mainly includes the effect for sale of Azuca and Arcata of US$416,000
(2024: US$nil), gain on sale of property, plant and equipment and supplies of
US$373,000 (2024: US$563,000), and lease rentals of US$204,000 (2024:
US$165,000).
3 Provision for recovery of ICMS (state tax on circulation of merchandise
and transportation and communication services) credit in Brazil.
4 In 2025, this mainly includes the provision for obsolescence of supplies
related to the review of low-turnover supplies and spare parts in San Jose,
amounting to US$1,293,000. In 2024, it includes the provision for obsolescence
of supplies in the Inmaculada mine unit of US$282,000.
5 This is primarily the contingency of ISS in Brazil of US$1,560,000 (2024:
US$nil), , contingencies of US$188,000 mainly explained by labour claims in
Argentina (2024: US$924,000), and depreciation of right-of-use assets of
US$166,000 (2024: US$156,000).
9 Exceptional items
Exceptional items are those significant items which, due to their nature or
the expected infrequency of the events giving rise to them, need to be
disclosed separately on the face of the income statement to enable a better
understanding of the financial performance of the Group and facilitate
comparison with prior years. Unless stated, exceptional items do not
correspond to a reporting segment of the Group.
Six months ended 30 June
2025 (Unaudited) US$000 2024 (Unaudited) US$000
Impairment and write-off of non-financial assets
Reversal of impairment/(impairment) of non-current assets (1) 30,779 (13,732)
Total 30,779 (13,732)
Income tax expense
Income tax credit - 1,192
Total - 1,192
1 In 2025, corresponds to the reversal of impairment of the Volcan
project of US$30,779,000 (refer to note 13) (2024: impairment charge related
to Azuca project and Arcata mine of US$13,732,000 (refer to note 18)).
10 Finance income and finance cost
The Group recognised the following finance income and finance costs before
exceptional items:
Six months ended 30 June
2025 (Unaudited) US$000 2024 (Unaudited) US$000
Finance income:
Gain on execution of buy-down option(1) 1,250 -
Changes in the fair value of financial instruments through profit or loss(2) 931 4,611
Interest on deposits and liquidity funds 841 1,427
Interest on loans 240 100
Others(3) 659 1,125
Total finance income 3,921 7,263
Finance cost:
Interest on bank loans (7,977) (7,065)
Other interest (2,458) (2,530)
Total interest expense (10,435) (9,595)
Unrealised change in fair value of financial liability through profit or loss (2,422) -
(note 19(a))
Unwind of discount on mine rehabilitation (1,637) (1,494)
Loss on discount of other receivables(4) (264) (623)
Loss from changes in the fair value of financial assets at fair value through - (2,366)
profit and loss(5)
Others (1,873) (1,101)
Total finance costs (16,631) (15,179)
1 Corresponds to the gain on the execution of the buy-down option related
to the Stream Agreements with Sprott, refer to note 19(a).
2 Gain on Argentinian mutual funds.
3 Mainly due to the unwind of discount of the value added tax of US$203,000
(2024: US$10,000), the debit valuation adjustment of the hedges of US$154,000
(2024: US$465,000) and other finance income related to taxes in Argentina of
US$nil (2024: US$303,000).
4 Mainly corresponds to the loss on discount of tax credits in Argentina.
5 Foreign exchange effect related to the bonds in Argentina.
11 Income tax expense
Six months ended 30 June 2025 Six months ended 30 June 2024
Before Exceptional Total Before Exceptional Total
exceptional Items (note 9) US$000 exceptional Items (note 9) US$000
items US$000 items US$000
US$000 US$000
Current corporate income tax
Current income tax expense 30,346 - 30,346 11,359 - 11,359
Withholding tax 6,162 - 6,162 (157) - (157)
36,508 - 36,508 11,202 - 11,202
Deferred taxation
Origination and reversal of temporary differences (4,375) - (4,375) 1,535 (1,192) 343
Corporate income tax 32,133 - 32,133 12,737 (1,192) 11,545
Current mining royalties
Current mining royalty charge 5,494 - 5,494 3,178 - 3,178
Current special mining tax charge 5,212 - 5,212 3,151 - 3,151
Total current mining royalties 10,706 - 10,706 6,329 - 6,329
Total taxation expense/(benefit) in the income statement 42,839 - 42,839 19,066 (1,192) 17,874
Deferred taxation in Other comprehensive income
Origination and reversal of temporary differences (25,808) - (25,808) (17,218) - (17,218)
Total taxation expense in Other comprehensive income 17,031 - 17,031 1,848 - 656
The pre-exceptional tax charge for the period was US$42,839,000 (2024:
US$19,066,000).
The weighted average statutory income tax rate was 31.2% for 2025 and 33.0%
for 2024. This is calculated as the average of the statutory tax rates
applicable in the countries in which the Group operates, weighted by the
profit or loss before tax of the Group companies in their respective countries
as included in the interim condensed consolidated financial statements. The
interim income tax rate calculation is based on the estimated average annual
effective tax rate of the Group.
The change in the weighted average statutory income tax rate is due to a
change in the weighting of profit or loss before tax in the various
jurisdictions in which the Group operates.
The profit before income tax (pre-exceptional) excluding the exchange
difference of US$1,497,000 was US$110,831,000 (2024: US$87,688,000). The
weighted average effective annual income tax rate expected for the full
financial year is 41.0% (2024: 38.6%) generating an income tax expense of
US$45,396,000 (2024: US$33,880,000). The lower tax recognised in H1 2025
versus US$45,396,000 is due to: (i) the one-time effect that occurred in the
half year related to the impact of revaluation and exchange rate fluctuations
on deferred taxes of US$4,123,000 (local currency revaluation in Peru of
US$3,944,000 and Brazil of US$2,349,000, net devaluation of the local currency
in Argentina of US$2,170,000), (ii) the tax loss of the sale of Arcata and
Azuca of US$3,336,000, (iii) the withholding tax of US$6,162,000 with respect
to dividends received in the UK from a Peruvian subsidiary, and (iv) the
adjustment of 2024 current income tax of Minera Santa Cruz of US$1,261,000. H1
2024 includes the following: local currency inflation of US$8,657,000, the
recognition of a deferred tax asset related to the energy transmission line of
Mara Rosa of US$3,708,000, the tax loss of the sale of the Crespo project of
US$1,915,000 and the adjustment of 2023 current income tax of Minera Santa
Cruz of US$534,000.
12 Property, plant and equipment
During the six months ended 30 June 2025, the Group acquired and developed
assets with a cost of US$99,567,000 (2024: US$111,106,000). The additions for
the six months ended 30 June 2025 relate to:
Mining properties and development (Unaudited) Other property plant and equipment (Unaudited) Total additions of property plant and equipment (Unaudited)
US$000 US$000 US$000
San Jose 17,634 5,173 22,807
Pallancata 3,111 741 3,852
Inmaculada 44,533 14,072 58,605
Mara Rosa 178 6,886 7,064
Monte do Carmo 2,574 1,105 3,679
Others - 3,560 3,560
Total 68,030 31,537 99,567
Assets with a net book value of US$nil were disposed of by the Group during the six month period ended 30 June 2025 (30 June 2024: US$4,000) resulting in a net gain on disposal of US$170,000 (30 June 2024: gain of US$417,000).
For the six months ended 30 June 2025, the depreciation charge on property, plant and equipment was US$81,805,000 (30 June 2024: US$69,197,000).
There were borrowing costs capitalised in property, plant and equipment amounting to US$179,000 (31 December 2024: US$6,105,000).
In June 2025, management determined that there was a trigger of reversal of
impairment in the San Jose mine unit due to the increase in gold and silver
prices. The impairment test resulted in no impairment, or impairment reversal,
being recognised as at 30 June 2025 as the positive effect of the increased
long term gold and silver prices was mainly offset by higher costs. The
recoverable value of San Jose was determined using a FVLCD methodology.
In June 2025, management determined that there was a trigger of impairment in
the Mara Rosa mine unit due to the operational challenges presented during the
first half of the year, including heavier-than-usual rainfall and contractor
performance issues. These conditions limited access to ore, particularly
high-grade zones, and further compounded challenges with the filtering
process. The Group suspended the processing plant for four weeks, and the
measures being taken are expected to result in a reduction to the expected
production, ramping up through H1 2026 when the plant is expected to achieve
full capacity. The corresponding impact on the operations´ costs was
considered. The impairment test resulted in no impairment recognised as the
negative impact of the operational challenges described above are offset by
strong gold prices. The recoverable value of Mara Rosa was determined using a
FVLCD methodology.
The key assumptions on which management has based its determination of FVLCD
and the associated recoverable values calculated for the San Jose and Mara
Rosa CGUs are gold and silver prices, future capital requirements, production
costs, reserves and resources volumes (reflected in the production volume),
and the discount rate.
Real prices US$ per oz. 2025 2026 2027 2028 2029 Long-term
Gold 2,984 2,941 2,691 2,544 2,390 2,242
Silver 33.0 32.5 31.7 29.2 28.6 26.4
San Jose Mara Rosa
Discount rate (post-tax) 15.4% 9.3%
Discount rate (pre-tax) 15.9% 9.7%
The period of 5 and 14 years was used to prepare the cash flow projections of
San Jose and Mara Rosa, respectively, which was in line with its respective
life of mines.
No indicators of impairment or reversal of impairment were identified in the
other CGUs which includes other exploration projects, with the exception of
the Volcan project (refer to note 13).
Sensitivity analysis
Other than as disclosed below, management believes that no reasonably possible
change in any of the key assumptions above would cause the carrying value of
the San Jose and Mara Rosa CGUs to exceed its recoverable amount. A change in
any of the key assumptions would have the following impact:
US$000 San Jose Mara Rosa(2)
Gold and silver prices (decrease by 10% and 15%, respectively) (84,488) (89,799)
Gold and silver prices (increase by 10% and 15%, respectively)(1) 26,979 -
Production costs (increase by 10%) (42,372) (69,810)
Production costs (decrease by 10%)(1) 26,979 -
Production volume (decrease by 10%) (14,838) (13,445)
Production volume (increase by 10%)(1) 12,590 -
Post tax discount rate (increase by 3% and 1%, respectively) (2,267) (17,448)
Post tax discount rate (decrease by 3% and 1%, respectively) 2,330 -
Capital expenditure (increase by 10%) (8,525) (10,270)
Capital expenditure (decrease by 10%) 8,525 -
1. This represents the maximum impairment loss that could be reversed in the
San Jose mine unit, as it represents the carrying amount that would have been
determined, net of depreciation or amortisation, if no impairment loss had
been recognised.
2. represents the accumulated impairment that would be recognised in San
Jose mine unit as at 30 June 2025, net of the accumulated depreciation that
the impaired assets would have generated as at 30 June 2025.
3. Mara Rosa does not have accumulated impairment as of 30 June 2025.
2024
In June 2024, management determined that there was a trigger of reversal of
impairment in the San Jose mine unit due to the increase in gold and silver
prices. The impairment test resulted in no impairment, or impairment reversal,
being recognised as at 30 June 2024 as the positive effect of the increased
long term gold and silver prices was mainly offset by lower estimated mineral
grades. The recoverable value of San Jose was determined using a FVLCD
methodology.
The key assumptions on which management has based its determination of FVLCD
and the associated recoverable values calculated for the San Jose CGU are gold
and silver prices, future capital requirements, production costs, reserves and
resources volumes (reflected in the production volume), and the discount rate.
Real prices US$ per oz. 2024 2025 2026 2027 Long-term
Gold 2,226 2,198 2,002 1,959 1,875
Silver 26.6 26.9 25.5 25.1 24.0
San Jose
Discount rate (post-tax) 22.1%
Discount rate (pre-tax) 23.1%
The period of 5 years was used to prepare the cash flow projections of San
Jose mine unit which was in line with its respective life of mine.
No indicators of impairment or reversal of impairment were identified in the
other CGUs, which includes other exploration projects, except as noted below.
The estimated recoverable values of the Group's CGUs are equal to, or not
materially different than, their carrying values.
13 Evaluation and exploration assets
During the six months ended 30 June 2025, the Group capitalised evaluation and
exploration costs of US$6,387,000 (30 June 2024: US$18,194,000). The additions
correspond to the following mine units:
Unaudited
US$000
Monte do Carmo 4,141
Inmaculada 423
Volcan 1,193
Mara Rosa 630
Total 6,387
There were no transfers from evaluation and exploration assets to property,
plant and equipment during the period (30 June 2024: US$nil, 31 December 2024:
US$2,112,000).
There were borrowing costs capitalised in evaluation and exploration assets of
US$2,788,000 (31 December 2024: US$38,000).
In June 2025, management determined that there was a trigger of reversal of
impairment in the Volcan project due to the increase in long-term gold prices.
The recoverable value of the Volcan project was determined using a FVLCD
methodology. As of 30 June 2025, the Group used a value in-situ methodology,
which applies a realisable 'enterprise value' to unprocessed mineral resources
per ounce of resources.
The enterprise value used in the calculation performed as at 30 June 2025 was
a risk adjusted value per in-situ gold equivalent ounce of US$6.72 (2024:
US$3.72). The impairment test resulted in a reversal of impairment of
$30,779,000 (US$22,985,000 in evaluation and exploration assets and
US$7,794,000 in intangible assets). The remaining accumulated impairment loss
that could be reversed in the Volcan project amounts to $12,125,000.
The carrying amount of the Volcan CGU, which includes the water permits, is
reviewed annually, or where there are indicators, to determine whether it is
in excess of its recoverable amount.
US$000 As at 30 June As at 31 December 2024
2025
Current carrying value Volcan CGU 72,032 37,366
Sensitivity Analysis
Other than as disclosed below, management believes that no reasonably possible
change in any of the key assumptions above would cause the carrying value to
exceed its recoverable amount. A change in the value in situ assumption could
cause an impairment loss or reversal of impairment to be recognised as
follows:
US$000
Value in situ per gold equivalent ounce (10% decrease) (12,287)
Value in situ per gold equivalent ounce (10% increase) 12,125
Risk factor (increase by 5%) (6,143)
Risk factor (decrease by 5%) 6,143
In 2024, management determined that there was a trigger of reversal of
impairment in Volcan project due to the increase in gold prices. The
impairment test resulted in no impairment, or impairment reversal being
recognised.
14 Investment in an associate
As at 30 June 2025 the Group retains a 19.45% (31 December 2024: 19.5%)
interest in Aclara Resources Inc. ("Aclara"), a Toronto Stock Exchange listed
company, involved in the development of two rare-earth metals projects: the
Penco Module in the Bio-Bio Region of Chile and the Carina Project in the
State of Goiás, Brazil.
Upon Aclara´s Initial Public Offering ('IPO') on 10 December 2021, HM
Holdings retained 20% of Aclara shares. The investment was recorded at initial
recognition at fair value, based on the IPO offering price, and is accounted
for using the equity method in the interim condensed consolidated financial
statements.
The following table summarises the financial information of the Group's
investment in Aclara Resources Inc:
As at 30 As at 31
June
December
2025
2024
(Unaudited) US$000
US$000
Current assets 49,943 29,821
Non-current assets 134,682 123,980
Current liabilities (7,656) (6,231)
Non-current liabilities (1,604) (1,415)
Equity 175,365 146,155
Non-controlling interests(1) 19,633 18,603
Equity attributable to shareholders 155,732 127,552
Group's share in equity 19.45% (2024: 19.5%) 30,290 24,873
Fair value adjustment on initial recognition and accumulated adjustments for 13,449 13,125
non‐attributable changes to equity(2)
Accumulated impairment (22,187) (22,187)
Group´s carrying amount of the investment 19.45% (2024: 19.5%) 21,552 15,811
Summarised consolidated statement of profit and loss Period ended Year ended
30 June 31 December 2024
US$000
2025
(Unaudited)
US$000
Revenue - -
Administrative expenses (3,963) (8,239)
Exploration expenses (980) (459)
Share of loss in joint venture (190) (115)
Finance income 475 1,657
Finance cost (90) (64)
Foreign exchange (loss)/gain 111 (193)
Loss from continuing operations for the period (4,637) (7,413)
Loss from continuing operations attributable to shareholders (4,559) (7,223)
Group's share of loss for the period (887) (1,408)
Other comprehensive profit that may be reclassified to profit or loss in
subsequent periods, net of tax
Exchange differences on translating foreign operations 8,375 (12,780)
Total comprehensive loss for the period 8,375 (12,780)
Group´s share of comprehensive loss for the period 1,628 (2,492)
1. On April 17, 2024 Aclara closed a strategic financing of US$29,027,000 by
the company CAP S.A. in Aclara´s Chilean subsidiary which owns the Penco
Module and all of Aclara´s mining concessions in Chile in exchange for 20%
equity participation in REE UNO Spa which had a corresponding impact on the
Group's NCI.
2. Includes the 20% of the fair value adjustment, estimated by the Group, of
Aclara´s exploration and evaluation asset on initial recognition of
US$12,307,000, and other non‐attributable changes to equity of US$1,142,000
(31 December 2024: US$12,307,000 and US$818,000 respectively).
The movement of investment in associate is as follows:
Period ended 30 June As at 31 December 2024
US$000
2025 (Unaudited)
US$000
Beginning balance 15,811 22,927
Impairment - (5,081)
Share of loss for the period (887) (1,408)
Share of comprehensive loss for the period 1,628 (2,492)
Capital contribution through private placement 5,000 -
Equity gain in Aclara from CAP strategic financing - 1,865
Ending balance 21,552 15,811
No indicators of impairment or reversal of impairment were identified in
Aclara as of 30 June 2025.
On 23 December 2024, Aclara announced a US$25,000,000 private placement of
common shares at C$0.7 (US$0.5) per share with new and existing strategic
investors: New Hartsdale Capital Inc., CAP S.A. and the Group. The
subscription price represented a 41% premium over the closing price of the
Common Shares on the Toronto Stock Exchange ("TSX") on the last trading day
prior to the date of the announcement of the Private Placement. The private
placement was completed on 20 February 2025, and the Group paid US$5,000,000.
Aclara intends to use the net proceeds from the Private Placement to fund the
continued development of its Carina Project in Brazil, to advance its
integrated supply chain strategy, and for general corporate purposes.
The Group reassessed the recoverable value of its investment in Aclara,
adjusting the carrying amount of the investment to reflect the value of the
shares issued in the private placement. As a result, the Group determined an
impairment charge of US$5,081,000 as at 31 December 2024.
The carrying amount of the investment recognised the changes in the Group's
share of net assets of the associate since the acquisition date. The balance
as at 30 June 2025, after the capital contribution through private placement
and recognising the changes in the Group´s share of net assets of the
associate is US$21,552,000 (31 December 2024: US$15,811,000).
Aclara´s fair value based on share price as of 30 June 2025 was US$30,832,000
(31 December 2024: US$10,173,000).
No dividends were received from the associate during 2025 and 2024.
The associate had no contingent liabilities or capital commitments as at 30
June 2025 and 31 December 2024.
15 Financial instruments
Fair value hierarchy
The Group uses the following hierarchy for determining and disclosing the fair
value of financial instruments by valuation technique:
Level 1: quoted (unadjusted) prices in active markets for identical assets or
liabilities.
Level 2: other techniques for which all inputs which have a significant effect
on the recorded fair value are observable, either directly or indirectly.
Level 3: techniques which use inputs which have a significant effect on the
recorded fair value that are not based on observable market data.
At 30 June 2025, the Group held the following financial instruments measured
at fair value:
As at 30 June Level 1 Level 2 Level 3
2025 (Unaudited)
US$000 US$000 US$000
US$000
Assets measured at fair value
Equity shares(1) 627 627 - -
Trade receivables 37,052 - - 37,052
Mutual funds 8,687 8,687 - -
Bonds in Minera Santa Cruz S.A 2,492 2,492 - -
Liabilities measured at fair value
Stream Agreements (note 19(a)) (14,251) - - (14,251)
Derivative financial liabilities(2) (178,897) - (178,897) -
(144,290) 11,806 (178,897) 22,801
1 These investments were classified as financial assets at fair value
through OCI.
2 Derivative financial liabilities - Gold forward and zero cost collars.
The increase in the price of gold over the prices agreed in the contracts
determined the significant increase of the derivative financial liabilities.
Derivative financial liabilities - Gold forwards and zero cost collars
On 12 April 2023, the Group signed agreements with Citibank to hedge the sale
of 27,600 ounces of gold at US$2,100 per ounce for 2024. The result was a
realised loss of US$2,136,000 recognised as revenue in H1 2024.
On 19 June 2023, the Group signed agreements with Citibank to hedge the sale
of 150,000 ounces of gold (50,000 ounces per year) at US$2,117, US$2,167 and
US$2,206 per ounce in 2025, 2026 and 2027 respectively. As at 30 June 2025
the result was a realised loss of US$23,895,000 recognised in revenues.
On 14 December 2023, the Group signed a gold collar agreement with JP Morgan
of 99,999.96 ounces of gold at strike put of US$2,000 and strike call of
US$2,252 per ounce for 2024. The result was a realised loss of US$2,150,000
recognised as revenue in H1 2024.
On 14 February 2024, the Group signed a gold collar agreement with JP Morgan
of 60,000 ounces of gold at strike put of US$2,000 and strike call of US$2,485
per ounce for 2025. As at 30 June 2025 the result is a loss of US$17,576,000
recognised in revenues.
The forwards and zero cost collars are being used to hedge exposure to changes
in cash flows from gold commodity prices. There is an economic relationship
between the hedged item and the hedging instruments due to a common
underlying. In accordance with IFRS 9, the derivative instruments are
categorised as cash flow hedges at the inception of the hedging relationship
and, on an ongoing basis, the Group assesses whether a hedging relationship
meets the hedge effectiveness requirements. The Group has established a hedge
ratio of 1:1 for the hedging relationships as the underlying risk of the
silver and gold forwards and zero cost collars is identical to the hedged risk
components. To test the hedge effectiveness, the Group uses the hypothetical
derivative method and compares the changes in the fair value of the gold and
silver forwards against the changes in fair value of the hedged item
attributable to the hedged risk. That said, it is observed that the
effectiveness tests comply with the requirements of IFRS 9 and that the
hedging strategy is highly effective.
The fair values of the gold forwards and zero cost collars were calculated
using a discounted cash flow model applying a combination of level 1 (USD
quoted market commodity prices) and level 2 inputs. The models used to value
the commodity forward contracts are standard models that calculate the present
value of the fixed-legs (the fixed gold and silver leg) and compare them with
the present value of the expected cash flows of the flowing legs (the London
metal exchange "LME" gold and silver fixing). In the case of the commodity
forward contracts, the models use the LME AU and AG forward curve and the US
LIBOR swap curve for discounting.
This approach results in the fair value measurement categorised in its
entirety as level 2 in the fair value hierarchy. The fair values of the gold
forwards and collars as at 30 June 2025 are as follows:
US$000
Current liabilities (84,525)
Non-current liabilities (94,372)
Total (178,897)
The effect recorded is as follows:
US$000
Income statement - revenue (41,471)
Equity - Unrealised loss on hedges (77,431)
The fair values of the gold forwards and collars as at 31 December 2024 are as
follows:
US$000
Current liabilities (40,276)
Non-current liabilities (61,343)
Total (101,619)
The effect recorded for the period ending 30 June 2024 is as follows:
US$000
Income statement - revenue (4,285)
Equity - Unrealised loss on hedges (52,458)
The sensitivity to a reasonable movement in the commodity prices, with all
other variables held constant, determined as a +/-10% change in prices
-US$48,935,000 /US$48,856,000 effect on OCI.
As at 31 Level 1 Level 2 Level 3
December 2024
US$000 US$000 US$000
US$000
Assets measured at fair value
Equity shares(1) 475 475 - -
Trade receivables 37,238 - - 37,238
Mutual funds 5 5 - -
Bonds in Minera Santa Cruz S.A. 2,474 2,474 - -
Liabilities measured at fair value
Stream Agreements (note 19(a)) (25,926) - - (25,926)
Derivative financial liabilities(2) (101,619) - (101,619) -
(87,353) 2,954 (101,619) 11,312
1 These investments were classified as financial assets at fair value
through OCI.
2 Derivative financial liabilities - Gold forward and zero cost collars.
During the six months ended 30 June 2025 and the year, ended 31 December 2024
there were no transfers between these levels.
The reconciliation of the trade receivables categorised as Level 3 is as
follows:
Trade receivables subject to price adjustments US$000
Balance at 1 January 2024 29,421
Net change in trade receivables from goods sold 11,892
Changes in fair value of price adjustments 8,209
Realised price adjustments during the year (12,284)
Balance at 31 December 2024 37,238
Net change in trade receivables from goods sold (5,568)
Changes in fair value of price adjustments 7,928
Realised price adjustments during the period (2,546)
Balance at 30 June 2025 (Unaudited) 37,052
16 Deferred tax assets and liabilities
The changes in the net deferred income tax assets/(liabilities) are as
follows:
As at 30 June 2025 As at 31 December 2024
(Unaudited) US$000 US$000
Beginning of the period (54,827) (66,276)
Income statement benefit/(expense) 4,375 (14,409)
Deferred tax recognised on items in other comprehensive income 26,048 27,620
Deferred tax recognised related to Monte Do Carmo acquisition - 2,817
Reclassification of deferred tax to assets held for sale - (3,409)
Deferred tax recognised on disposal of Azuca and Arcata projects (1,390) -
Deferred tax recognised on disposal of Crespo project - (1,170)
End of the period (25,794) (54,827)
Deferred income tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets against current tax liabilities
and when the deferred income tax assets and liabilities relate to the same
fiscal authority.
The amounts after offset, as presented on the face of the consolidated
statement of financial position, are as follows:
As at As at
31 December 2024
30 June 2025
US$000
(Unaudited) US$000
Deferred income tax assets 53,772 27,677
Deferred income tax liabilities (79,566) (82,504)
Net deferred income tax liabilities(1) (25,794) (54,827)
1 The decrease of the net liability is driven principally by temporary
difference generated by the recognition of the market value of the hedge of
the period (US$25,808,000).
17 Cash and cash equivalents
As at 30 June 2025 As at
31 December 2024
(Unaudited)
US$000
US$000
Cash in hand 731 679
Current demand deposit accounts(1) 26,033 94,167
Time deposits(2) 74,390 2,122
Mutual funds3 8,687 5
Cash and cash equivalents 109,841 96,973
1 Relates to bank accounts, which are readily accessible to the Group and
bear interest.
2 These deposits have an average maturity of 5 days (as at 31 December
2024: 4 days).
3 Corresponds to common investment funds that are assets that are formed
with the contributions made by the Group, consequently, becoming beneficiary
of the fund in which they decide to invest. As at 30 June 2025 the balance of
US$8,687,000 (31 December 2024: US$5,000) are deposited in FCI FIMA, Banco
Santander and BBVA in Argentina.
Cash and cash equivalents comprise cash on hand and deposits held with banks
that are readily convertible into known amounts of cash and which are subject
to insignificant risk of changes in value.
The fair value of cash and cash equivalents approximates their book value.
18 Assets held for sale
Azuca and Arcata projects
Prior to classifying Arcata and Azuca disposal group as assets and liabilities
related to asset held for sale, as at 30 June 2024, the Group recognised an
impairment of US$13,732,000. The recoverable value of the Azuca and Arcata
project was determined using a FVLCD methodology, based on the proposed
economic terms of sale.
In November 2024, the Group entered into an agreement whereby the third party
acquired the assets and liabilities of Arcata and Azuca from Compañia Minera
Ares for US$1,000,000 as a non-refundable cash payment at closing, and a 1.0%
and 1.5% Royalty Net Smelter Return (NSR) for Arcata and Azuca, respectively.
The buyer also took over the environmental liabilities amounting to
US$9,652,000. The Group has provided a guarantee for the mine closure
obligations for up to US$5,778,623 with maturity in January 2026. Upon
completion of the transaction on 27 February 2025, the Group derecognised the
assets and liabilities directly associated with assets held for sale which
amounted to US$12,660,000 and US$9,652,000, respectively as at 31 December
2024.
The cash received for the sale of Azuca and Arcata projects was US$1,000,000
net of transaction costs of US$900,000.
The gain on sale amounted to US$416,000 and is recognised in other income. The
1.0% and 1.5% Royalty Net Smelter Return (NSR) for Arcata and Azuca,
respectively was recognised as a contingent consideration within other rights
as an intangible with a fair value of US$4,715,000 at initial recognition and
a deferred tax liability of US$1,391,000 was recognised in connection with the
deferred consideration.
Crespo project
In 2023, the Group entered into an agreement with a third party whereby the
third party would acquire the assets and liabilities of the Crespo project
from Compañia Minera Ares which resulted in the assets and liabilities of
project Crespo being classified as held for sale at 31 December 2023. In
March 2024, the Group received US$15,000,000 as a non-refundable cash payment
at closing, and a 1.5% Royalty Net Smelter Return (NSR) over the Crespo
project, recognised as a contingent consideration within other rights as an
intangible with a fair value of US$3,967,000 at initial recognition and a
deferred tax liability of US$1,170,000 was recognised in connection with the
deferred consideration. The buyer also took over the environmental liabilities
of the project amounting to US$711,000. Upon completion of sale, the Group
derecognised the asset held for sales amounting to US$17,398,000 and the
liabilities directly associated with assets held for sale amounting to
US$711,000. No profit or loss was generated on the sale. The cash received for
the sale of Crespo project was US$15,000,000 net of transaction costs of
US$1,110,000.
19 Trade and other payables
As at 30 June 2025 (Unaudited) As at 31 December 2024
Non-current Current Non-current Current
US$000 US$000 US$000 US$000
Trade payables(1) - 97,415 - 126,357
Salaries and wages payable(2) - 31,622 - 37,059
Taxes and contributions 26 15,420 33 10,718
Guarantee deposits(3) - 8,737 - 7,896
Accounts payable - hedges - 9,481 - 6,943
Mining royalties - 2,618 - 1,470
Accounts payable to related parties - 145 - 209
Stream Agreements (note (a)) 14,251 - 25,926 -
Deferred consideration 13,913 - 13,500 -
Lease liabilities 7,354 4,368 3,477 3,246
Other(4) 4,251 12,586 3,565 14,324
Total 39,795 182,392 46,501 208,222
(1) Trade payables relate mainly to the acquisition of materials, supplies
and contractors' services. These payables do not accrue interest and no
guarantees have been granted.
(2) Salaries and wages payable relates to remuneration payable. At 30 June
2025, there was Board members' remuneration payable of US$Nil (2024: US$Nil)
and Long-Term Incentive Plan payable of US$Nil (2024: US$3,764,000).
(3) Guarantee deposits made by the contractors of the Group to guarantee the
fulfilment of their tasks. The guarantee will be returned to the contractor at
the end of the service and when it is verified that it has been completed
correctly.
(4) At 31 December 2024, current balance includes the accrual of the
production costs corresponding to six days of production from 26 to 31
December 2024.
a. Stream Agreements
On 7 November, 2024, the Company completed the acquisition of 100% of the
Monte Do Carmo Project ("MdC") from Cerrado Gold Inc. ("Cerrado"). At Closing,
the Company assumed all liabilities in connection with the Sprott Private
Resource Streaming and Royalty Corp. ("Sprott") secured note and stream
agreements (collectively "Stream Agreements") that Cerrado had entered into
with Sprott.
The US$20,000,000 metals purchase and sale agreement ("Stream Agreement")
provided for the sale and physical delivery to Sprott of 2.25% of metals
produced from MdC, for the duration of the project. The price payable for the
metals is calculated by reference to the London Bullion Market Association
(LBMA) price for gold or silver as applicable, and amounts to 10% of the
reference price. In connection with the Stream Agreement, Cerrado issued a
US$20,000,000 secured Note to Sprott that bears interest at a rate of 10% per
annum, calculated and payable quarterly which will mature on the earlier of
the achievement of commercial production or 14 March 2031 ("Secured Note").
Under the Stream Agreement, if the Board of Directors approves the
construction of a mining operation with a life-of-mine production of less than
1,049,000 ounces of payable gold, the stream percentage on Monte Do Carmo
would increase linearly from its base value of 2.25% following a formula in
the Stream Agreement.
Management determined that the Secured Note and Stream Agreement with Sprott
are closely connected, with the option of Sprott to set off the stream payment
against the Secured Note, on the commencement of production of Monte Do Carmo.
On 30 June 2025, under the terms of the Stream Agreement, the Company executed
the buy down for 50% of the Stream Agreement by paying US$13,000,000 to
Sprott. As a result, the Secured Note is reduced to US$10,000,000 and the
stream percentage is reduced by 50%. The definitive stream percentage will be
determined upon the Board of Directors' approval of the construction of the
mining operation and will be based on the then available payable gold ounces
in the construction mine plan.
The Group has elected to account for the obligations arising from these
agreements at FVTPL. The Secured Note represents a financial liability for the
contractual obligation to repay the remaining principal of US$10,000,000 and
quarterly interest payments in cash. The Stream Agreement meets the definition
of a derivative and is accounted at FVTPL.
The fair value of the Stream Agreements was determined using the expected cash
flow approach, which uses multiple, probability-weighted cash flow projections
discounted to present value.
The changes in the liabilities of the Stream Agreements as at 30 June 2025 are
shown below:
US$000
At 31 December 2024 25,926
Cash payment for the exercise of the buy-down option (13,000)
Gain on execution of the buy-down option (note 10) (1,250)
Unrealised change in fair value (note 10) 2,422
Change in credit risk recognised in other comprehensive income 153
At 30 June 2025 14,251
The key assumptions on which management has based its determination of fair
value are gold prices, reserves and resources (reflected in the production
volume), discount rates for the Secured Note of 7.0% and 7.4% and the Stream
Agreement of 9.6% and 9.7% as at 30 June 2025 and 31 December 2024,
respectively, (calculated under the WACC methodology).
2028 2029 Long-term
Real prices US$ per oz.
Gold 2,544 2,390 2,242
The Group's exposure to reasonably possible changes in gold prices, discount
rates and the reserves and resources volume (assuming all other variables
remain constant) are not material to the fair value of the Stream Agreements.
20 Borrowings
As at 30 June 2025 (Unaudited) As at 31 December 2024
Effective Non-current Current Effective Non-current Current
interest rate
US$000
US$000
interest rate
US$000
US$000
(a) Secured bank loans
· Pre-shipment and other loans in Minera Santa Cruz - - - 8.45% to 13% - 1,558
· Short- term Bank loans 4.19% and 5.39% - 121,511 4.58% and 4.88% - 80,210
· Medium- term Bank loans 7.00% to 9.67% 190,000 618 6.82% to 10.04% 163,333 67,481
Total 190,000 122,129 163,333 149,249
Effective interest rate includes the amortisation of the capitalised
transaction costs.
The movement in borrowings during the six-month period to 30 June 2025 is as
follows:
As at 1 Additions US$000 Repayments US$000 As at 30
January 2025 US$000 June 2025 (Unaudited) US$000
Reclassifications US$000
Current
Pre-shipment and other loans in Minera Santa Cruz(1) 1,486 - (1,486) - -
Short- term Bank loans(2) 80,000 170,000 (130,000) - 120,000
Medium-term Bank loans(3) 66,667 - (66,667) - -
Accrued interest 1,096 7,977 (9,385) 2,441 2,129
149,249 177,977 (207,538) 2,441 122,129
Non-current
Medium-term Bank loans (3) 163,333 100,000 (73,333) - 190,000
163,333 100,000 (73,333) - 190,000
Total current and non-current borrowings 312,582 277,977 (280,871) 2,441 312,129
1 Pre-shipment and other loans in Minera Santa Cruz:
‒ As at 30 June 2025, Minera Santa Cruz has loans
of US$Nil (2024: US$1,486,000) plus interests of US$Nil (2024: US$72,000). The
balance as at 31 December 2024 was repaid between January and March 2025.
2 Short-term bank loans:
- As at 30 June 2025, Minera Ares has one loan with Banco de Credito del Peru
amounting to US$60,000,000 plus interests of US$1,009,000 (maturity January
2026), and Amarillo has one loan with Citibank amounting to US$60,000,000 plus
interests of US$502,000 (maturity February 2026). As at 31 December 2024,
Minera Ares had two loans with Interbank amounting to US$45,000,000 plus
interests of U$119,000 (maturity in November 2025) and one loan with BBVA
amounting to US$35,000,000 plus interests of US$91,000 (maturity in February
2025). These loans were repaid during the first half of 2025.
3 Medium-term bank loans:
‒ In December 2019, a five-year credit agreement
was signed between Minera Ares and Scotiabank Peru S.A.A., The Bank of Nova
Scotia and BBVA Securities Inc, with Hochschild Mining PLC as guarantor
amounting to US$200,000,000. In September 2021, the Group negotiated with the
same counterpart a US$200,000,000 loan to replace the original loan, plus an
additional US$100,000,000 optional loan. The Group repaid US$25,000,000 of the
loan in December 2023, and repaid the remaining balance of US$275,000,000
during 2024, of which US$50,000,000 was repaid during the first half of 2024
and the Credit Agreement was terminated. Financial covenants under the
agreement were: (i) Consolidated Leverage Ratio <= 3 and (ii) Consolidated
Interest Coverage Ratio ≥ 4.00.
‒ In December 2022, a credit agreement for up to
US$200,000,000 was signed between Amarillo Mineracao do Brasil Ltda. and
Compania Minera Ares SAC, and The Bank of Nova Scotia and BBVA Securities Inc,
with Hochschild Mining PLC as guarantor. The medium-term facility can be
withdrawn until December 2024, and is payable in equal quarterly instalments
from February 2025 through November 2027, with an interest rate of three-month
SOFR plus a spread of 2.05%. US$60,000,000 was withdrawn in August 2023,
US$65,000,000 during the first half of 2024, and the remaining balance of
US$75,000,000 was withdrawn during the last quarter of 2024. The Group repaid
US$140,000,000 from February to June 2025. The remaining US$60,000,000 will be
repaid between November 2026 and November 2027. Financial covenants under the
agreement are: (i) Consolidated Leverage Ratio <= 3 and (ii) Consolidated
Interest Coverage Ratio ≥ 4.00.
‒ In October 2024, a credit agreement for up to
US$300,000,000 was signed between Amarillo Mineracao do Brasil Ltda. and
Compania Minera Ares SAC, and The Bank of Nova Scotia and BBVA Securities Inc,
with Hochschild Mining PLC as guarantor (the New Credit Agreement). The
medium-term facility can be withdrawn until October 2026, and is payable in
equal quarterly instalments from January 2028 through October 2029, with an
interest rate of three-month SOFR plus a spread of 1.95%. A structuring fee of
US$1,950,000 was paid to the lenders and additional US$225,000 was incurred as
transaction costs. In addition, a commitment fee of US$999,000 was paid for
the period that the loan remained undrawn. US$30,000,000 was withdrawn in
December 2024 to repay the remaining amount outstanding of the Credit
Agreement US$300,000,000 loan, and the remaining balance of US$270,000,000 was
undrawn as at 31 December 2024. US$90,000,000 was withdrawn in June 2025.
Financial covenants under the agreement are: (i) Consolidated Leverage Ratio
<= 3 and (ii) Consolidated Interest Coverage Ratio ≥ 4.00.
‒ In June 2025 Minera Ares signed one loan with
Interbank of US$10,000,000 with a maturity of December 2026.
The carrying amount of the pre-shipment and short-term loans approximates
their fair value. The carrying amount and fair value of the medium-term loans
are as follows:
Carrying amount Fair value
As at 30 June 2025 (Unaudited) As at 31 December 2024 As at 30 June 2025 (Unaudited) As at 31 December 2024
US$000 US$000
US$000 US$000
Bank loans 190,618 230,814 182,276 221,560
Total 190,618 230,814 182,276 221,560
21 Provisions
As at 30 June 2025 (Unaudited) As at 31 December 2024
Non-current Current Non-current Current
US$000
US$000
US$000
US$000
Provision for mine closure1 166,256 7,907 136,620 22,799
Workers' profit sharing2 - 7,542 - 6,806
Provision for contingencies(3) 7,262 3,277 6,224 5,477
Provision for long term incentive plan (LTIP)(4) 1,981 3,140 3,937 -
Total 175,499 21,866 146,781 35,082
1 The provision represents the discounted values of the estimated cost to
decommission and rehabilitate the mines at the expected date of closure of
each of the mines. The present value of the provision has been calculated
using a real pre-tax annual discount rate, based on a US Treasury bond of an
appropriate tenure adjusted for the impact of inflation as at 30 June 2025 and
31 December 2024 respectively, and the cash flows have been adjusted to
reflect the risk attached to these cash flows. Uncertainties on the timing for
use of this provision include changes in the future that could impact the time
of closing the mines, as new resources and reserves are discovered. The
pre-tax real discount rate used was 1.49% (December 2024: 2.00%). Movement
in the provision mainly relates to an increase resulting from the change in
estimate of US$13,160,000 (US$9,979,000 recognised through profit and loss,
and US$3,181,000 as assets) (mainly in the mine unit Selene US$6,867,000 and
Ares US$3,395,000), the change in discount rate of US$3,633,000 (US$1,564,000
recognised through profit and loss, and US$2,069,000 as assets)and the unwind
of discount on mine rehabilitation of US$1,637,000, net of payments of
US$3,686,000.
A change in any of the following key assumptions used to determine the
provision would have the following impact:
US$000
Closure costs (increase by 10%) increase of provision 17,416
Discount rate (increase by 0.5%) (decrease of provision) (7,001)
2 Corresponds to worker's profit sharing in Compania Minera Ares.
3 Mainly corresponds to a labour contingency in Minera Santa Cruz of
US$5,702,000 (2024: US$6,224,000), that the Group expect to resolve in a
period of more than one year, a contingency of ISS in Brasil of US$1,560,000
(2024: US$nil), and the contingency in Ares of US$2,757,000 (2024:
US$3,002,000), mainly generated by the OEFA. The Group is subject to various
claims which arise in the ordinary course of business. In addition, the Group
is subject to various laws and regulations which, if not observed, could give
rise to penalties. It is not practical to determine the amount of any
potential claims or penalties or the likelihood of any unfavourable outcome
arising from any future inspections that might be initiated by the regulators.
No provision has been made in the financial statements and none of these
claims are currently expected to result in any material loss to the Group.
4 Corresponds to the LTIP 2023 of US$3,140,000 (2024: US$2,550,000), LTIP 2024
of US$1,719,000 (2024: US$1,387,000) and LTIP 2025 US$262,000. On 22 May
2024, beneficiaries of LTIPs were communicated of a change in the payment
mechanism resulting in a modification of the LTIP from an equity settled to a
cash settled transaction.
22 Equity
Share capital
The movement in share capital of the Company from 31 December 2024 to 30 June
2025 is as follows:
Number of ordinary shares Share capital US$000
Shares issued as at 31 December 2024 514,458,432 9,068
Shares issued as at 30 June 2025 514,458,432 9,068
23 Dividends paid and declared
Dividends declared and paid to non-controlling interests in the six months
ended 30 June 2025 were US$2,246,000 (2024: US$388,000).
Dividends declared and paid to shareholders in the six months ended 30 June
2025 were US$10,059,000 (2024: US$nil).
The interim dividend in respect of the six months ended 30 June 2025 is
US$5,145,000, US$0.01 per share.
24 Related party transactions
There were no significant transactions with related parties during the six
months period ended 30 June 2025.
25 Notes to the statement of cash flows
Six months ended 30 June
2025 2024
(Unaudited) (Unaudited)
US$000
US$000
Reconciliation of profit for the period to net cash generated from operating
activities
Profit for the period 97,274 51,486
Adjustments to reconcile Group profit to net cash inflows from operating
activities
Depreciation 80,425 69,643
Amortisation of intangibles 1,054 424
(Reversal of impairment)/impairment of non-financial assets (30,779) 13,732
Write-off of non-financial assets, net 548 176
Share of loss of an associate 887 668
Gain on sale of property, plant and equipment (170) (417)
Increase/(decrease) of provision for mine closure 11,543 (116)
Finance income (3,921) (7,263)
Finance costs 16,631 15,179
Income tax expense 42,839 17,874
Other 3,301 (2,662)
Increase/(decrease) of cash flows from operations due to changes in assets and
liabilities
Trade and other receivables (17,428) (22,046)
Income tax receivable (2,459) (1,120)
Other financial assets and liabilities 1,162 1,680
Inventories (9,870) (23,782)
Trade and other payables (22,231) 2,166
Provisions 6,392 3,714
Cash generated from operations 175,198 119,336
26 Subsequent events
On 6 August 2025 the Group renegotiated the gold forward hedge agreement to
roll forward 20,813 ounces from August to December 2025 to the first semester
of 2028, at a gold price of US$2,150 per ounce (US$2,117 per ounce in the
original agreement). No cashflows resulted from the renegotiation of the
agreements.
Profit by operation
(Segment report reconciliation) as at 30 June 2025:
Group (US$000) Inmaculada San Jose Mara Rosa Consolidation adjustment and others Total/HOC
Revenue 298,380 159,150 62,311 169 520,010
Cost of sales (pre consolidation) (149,658) (120,019) (57,992) (75) (327,744)
Consolidation adjustment 1,425 - (1,500) 75 -
Cost of sales (post consolidation) (148,233) (120,019) (59,492) - (327,744)
Production cost excluding depreciation and amortisation (93,207) (98,176) (63,624) - (255,007)
Depreciation and amortisation in production cost (52,765) (19,127) (8,123) - (80,015)
Workers profit sharing (5,396) - - - (5,396)
Other items - - (1,864) - (1,864)
Change in inventories 3,135 (2,716) 14,119 - 14,538
Gross profit 148,722 39,131 4,319 94 192,266
Administrative expenses - - - (23,716) (23,716)
Exploration expenses - - - (12,181) (12,181)
Selling expenses (355) (7,381) (607) - (8,343)
Other expenses, net - - - (23,050) (23,050)
Operating profit/(loss) before impairment 148,367 31,750 3,712 (58,853) 124,976
Impairment reversal, net of write-off of non-financial assets - - - 30,231 30,231
Share of post-tax losses from associate - - - (887) (887) -
Finance income - - - 3,921 3,921
Finance costs - - - (16,631) (16,631)
Foreign exchange loss - - - (1,497) (1,497)
Profit/(loss) from continuing operations before 148,367 31,750 3,712 (43,716) 140,113
income tax
Income tax - - - (42,839) (42,839) -
Profit/(loss) for the period from continuing operations 148,367 31,750 3,712 (86,555) 97,274
SHAREHOLDER INFORMATION
Company website
Hochschild Mining PLC Interim and Annual Reports and results announcements are
available via the internet on our website at www.hochschildmining.com.
Shareholders can also access the latest information about the Company and
press announcements as they are released, together with details of future
events and how to obtain further information.
Registrars
The Registrars, MUFG Corporate Markets (the new name for Link Group), can be
contacted as follows for information about the AGM, shareholdings, dividends
and to report changes in personal details:
By post
MUFG Corporate Markets,
Central Square,
29 Wellington Street,
Leeds LS1 4DL.
By email
Email: shareholderenquiries@cm.mpms.mufg.com
By telephone
Telephone: (+44 (0)) 371 664 0300
(Calls are charged at the standard geographic rate and will vary by provider.
Calls outside the United Kingdom will be charged at the applicable
international rate. Lines are open between 9am - 5:30pm, Monday to Friday
excluding public holidays in England and Wales).
Currency option and dividend mandate
Shareholders wishing to receive their dividend in US dollars should contact
the Company's registrars to request a currency election form. This form should
be completed and returned to the registrars by 22 September 2025 in respect of
the 2025 interim dividend. The Company's registrars can also arrange for the
dividend to be paid directly into a shareholder's UK bank account. This
arrangement is only available in respect of dividends paid in UK pounds
sterling. To take advantage of this facility in respect of the 2025 interim
dividend, a dividend mandate form, also available from the Company's
registrars, should be completed and returned to the registrars by 22 September
2025. Alternatively, you can register your bank details via Investor Centre, a
secure online site where you can manage your shareholding quickly and easily.
To register for Investor Centre just visit uk.investorcentre.mpms.mufg.com or
use the Investor Centre app. All you need is your investor code, which can be
found on your share certificate or a previous dividend confirmation voucher.
Shareholders who have already completed one or both of these forms need take
no further action.
Dividend information
Issuer/Company Name Hochschild Mining PLC
Security/Securities Ordinary Shares of 1p each
ISIN(s) GB00B1FW5029
TIDM(s) HOC
Ex-Date 4 September 2025
Record Date 5 September 2025
Pay Date 3 October 2025
Dividend Type Interim
Dividend Amount and Currency US$0.01 per share
Currency of Dividend payment GBP
Is there a Dividend option? Yes
Type of Election Currency Election to receive dividend in USD
Last day for receipt of Elections 22 September 2025
21 Gloucester Place
London
W1U 8HR
United Kingdom
1 (#_ftnref1) Revenue is reported in the financial statements net of
commercial discounts plus services revenue.
(2)Adjusted EBITDA, Net Debt and Attributable AISC are non-IFRS measures.
Please see the Financial Review pages 11-17 for a definition and calculation
of Adjusted EBITDA, Net Debt and Attributable AISC. The Company has calculated
its all-in sustaining cost on an attributable basis and excludes Peruvian
royalties which are recognised in the income tax line. Management believes
that the updated methodology better aligns with prevailing industry practices
and enhances comparability with peers. All previous periods have been restated
to reflect this change.
(3)All equivalent figures calculated using the average gold/silver ratio of
83:1.
4 (#_ftnref4) FY 2024 environmental KPIs exclude Mara Rosa due to
construction and commissioning activities which occurred prior to May 2024.
2025 environmental KPIs include Mara Rosa.
5 (#_ftnref5) Calculated as total number of accidents per million labour
hours.
6 (#_ftnref6) The ECO Score is an internally designed Key Performance
Indicator measuring environmental performance in one number and encompassing
numerous fronts including management of wastewater, outcome of regulatory
inspections and sound environmental practices relating to water consumption
and the recycling of materials.
7 (#_ftnref7) H1 2024 AISC has been restated to reflect it on an
attributable basis and to exclude Peruvian royalties recognised in the income
tax line. The updated methodology better aligns with prevailing industry
practices and enhances comparability with peers.
8 (#_ftnref8) Excludes Peruvian royalties which are recognised in the income
tax line. Management believes that the updated methodology better aligns with
prevailing industry practices and enhances comparability with peers. All
previous periods have been restated to reflect this change.
9 (#_ftnref9) Includes revenue from services.
10 (#_ftnref10) Unit cost per tonne is a non-IFRS measure. It is calculated
by dividing mine and treatment production costs (excluding depreciation and
amortisation) of $133.8 million and $124.6 million respectively, by extracted
and treated tonnage of 2,123k and 1,998k respectively.
11 (#_ftnref11) Cash costs are calculated to include cost of sales,
commercial discounts and selling expenses items less depreciation and
amortisation included in cost of sales.
(( 12 (#_ftnref12) ))Does not include unallocated fixed costs accumulated
during operational stoppages and reduced capacity.
13 (#_ftnref13) Includes commercial discounts from the sales of concentrate
and commercial discounts from the sale of dore.
(( 14 (#_ftnref14) ))Does not include unallocated fixed costs accumulated
during operational stoppages and reduced capacity.
15 (#_ftnref15) Includes commercial discounts from the sales of concentrate
and commercial discounts from the sale of dore.
16 (#_ftnref16) Calculated using a gold/silver ratio of 83:1.
17 (#_ftnref17) Other items include the gain in San Jose resulting from the
government's export incentive programme of $3.0 million, lease expenditure of
$0.4 million, $1.0 million and $0.9 million in Inmaculada, Mara Rosa and San
Jose, respectively, and other income in Mara Rosa of $0.2 million.
18 (#_ftnref18) Operating capex excludes leased assets of $2.5m and $1.1
million in Inmaculada y San Jose, respectively, excludes capitalised
depreciation resulting from mine equipment utilised for mine developments
totalling $1.1 million in San Jose, includes other items of $0.3m in San Jose
and $15k in Mara Rosa.
19 (#_ftnref19) Corporate and others include personnel expenses related to
brownfield exploration.
20 (#_ftnref20) 2024 all-in-sustaining costs before the change in
methodology (as previously reported) were: Inmaculada $1,349 per gold
equivalent ounce, and main operations $1,510 per gold equivalent ounce.
21 (#_ftnref21) Excludes pre-commercial production capex of $17.3 million,
capitalised interest of $5.9 million, and pre-commercial: production
brownfield exploration ($0.5 million), administrative expenses ($0.8 million),
commercial discounts ($0.1 million) and selling expenses ($0.1 million).
Excludes pre-commercial ounces produced and sold (2.4k gold equivalent ounces
and 200k silver equivalent ounces).
22 (#_ftnref22) Other items include production costs incurred before the
declaration of commercial production in Mara Rosa of $30.4 million, and the
gain in San Jose resulting from the government's export incentive programme of
$8.4 million.
23 (#_ftnref23) Operating capex excludes capitalised depreciation resulting
from mine equipment utilised for mine developments in San Jose of $2.2
million.
24 (#_ftnref24) Corporate and others include personnel expenses related to
brownfield exploration.
25 (#_ftnref25) Represents significant non-cash (income)/expenses related to
changes in mine closure provisions which were $11.5 million in H1 2025 and
$nil in H1 2024, and the write-off of property, plant and equipment.
26 (#_ftnref26) Includes pre-shipment loans and short term interest
payables.
27 (#_ftnref27) Net debt to EBITDA is a non-IFRS measure and is calculated
as net debt divided by Adjusted EBITDA over the preceding 12 month period.
28 (#_ftnref28) Includes additions in property, plant and equipment and
evaluation and exploration assets (confirmation of resources) and excludes
increases in the expected closure costs of mine asset.
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. END IR XQLLLEVLBBBFRecent news on Hochschild Mining
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