REG - Hochschild MiningPLC - Preliminary Results
12/03/2025 07:15
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250312:nRSL3437Aa&default-theme=true
RNS Number : 3437A Hochschild Mining PLC 12 March 2025
12 March 2025
Preliminary Results
Year ended 31 December 2024
Eduardo Landin, Chief Executive Officer of Hochschild, commented:
"We are pleased to announce our best financial performance for 13 years, a
testament to our exceptional team and high-quality assets. Our growth strategy
continues to deliver, with the addition of a record 2.8 million
gold-equivalent ounces of mineable resources, extending the life of all our
current operations and two major growth projects are now being developed that
could boost annual production by over 200,000 ounces. In line with our
commitment to shareholder value, we are restoring our dividend and introducing
a clear dividend policy, underscoring our focus on sustainable returns. Our
team remains dedicated to maximising value, optimising costs, and ensuring
long-term growth."
2024 Strong financial performance
§ Revenue up 37% at $947.7 million (2023: $693.7 million)(( 1 (#_ftn1) ))
§ Adjusted EBITDA up 54% at $421.4 million (2023: $274.4 million)(( 2
(#_ftn2) ))
§ Profit before income tax (pre-exceptional) up 272% at $199.1 million (2023:
$53.5 million)
§ Profit before income tax (post-exceptional) up 507% at $177.2 million
(2023: $43.5 million loss)
§ Basic earnings per share (pre-exceptional) at $0.23 (2023: $0.02)
§ Basic earnings per share (post-exceptional) at $0.19 (2023: loss per share
of $0.10)
§ Cash and cash equivalents balance of $97.0 million as at 31 December 2024
(2023: $89.1 million)
§ Net debt(2) of $215.6 million as at 31 December 2024 (2023: $257.9 million)
Dividend restored
§ Final proposed dividend of $1.94 cents per share ($10.0 million)(( 3
(#_ftn3) ))
§ Dividend policy introduced: payout based on 20-30% of attributable free
cashflow(( 4 (#_ftn4) ))
o Minimum annual dividend of $10.0 million: to be distributed in two
instalments
o Subject to leverage being lower than 1.5x Net debt/Adjusted EBITDA
(current Net Debt/Adjusted EBITDA of 0.51x as at 31 December 2024)
2024 Operational Performance(( 5 (#_ftn5) ))
§ Full year attributable production of 347,374 gold equivalent ounces
§ All-in sustaining costs (AISC) (2) from operations of $1,638 per gold
equivalent ounce (2023: $1,454)
2024 Exploration and Project Highlights
§ Record resource additions of 2.8 million gold equivalent ounces
o 1.0 million gold equivalent ounces added at Inmaculada
o 1.3 million gold equivalent ounces added at Royropata
o 0.3 million gold equivalent ounces added at San Jose
o 0.2 million gold ounces added at Mara Rosa
§ Acquisition completed of the Monte Do Carmo project for total phased
payments of $60.0 million ($45.0 million already paid)
2024 ESG KPIs
§ Lost Time Injury Frequency Rate of 1.25 (2023: 0.99) 6 (#_ftn6)
§ Water consumption of 138lt/person/day (2023: 163lt/person/day) 7 (#_ftn7)
§ Domestic waste generation of 0.93 kg/person/day (2023:
0.93kg/person/day)(8)
§ ECO score of 5.58 out of 6 (2023: 5.76)(8), 8 (#_ftn8)
2025 Outlook
§ Overall production target:
o 350,000-378,000 gold equivalent ounces
o New Mara Rosa mine set to produce 94,000-104,000 ounces of gold
§ All-in sustaining cost target:
o $1,587-$1,687 per gold equivalent ounce
§ Total sustaining capital expenditure at operating mines expected to be
approximately $169-180 million
§ Brownfield exploration budget of $36 million
$000 unless stated Year ended Year ended % change
31 Dec 2024 31 Dec 2023
Attributable silver production (koz) 8,496 9,517 (11)
Attributable gold production (koz) 245 186 32
Revenue 947,696 693,716 37
Adjusted EBITDA 421,354 274,370 54
Profit from continuing operations (pre-exceptional) 133,511 9,505 1,305
Profit (loss) from continuing operations (post-exceptional) 113,749 (60,033) (289)
Basic earnings per share (pre-exceptional) $ 0.23 0.02 1,050
Basic earnings (loss) per share (post-exceptional) $ 0.19 (0.10) (290)
________________________________________________________________________________________
A presentation will be held for analysts and investors at 9.30am (UK time) on
Wednesday 12 March 2025 at the offices of Hudson Sandler,
25 Charterhouse Square, London, EC1M 6AE
The presentation and a link to the live audio webcast of the presentation
can be found at the Hochschild website:
www.hochschildmining.com
or:
https://brrmedia.news/HOC_FY_24
To join the event via conference call, please see dial in details below:
International Dial in: +44 (0)330 551 0200
US Toll-Free Number: 866 580 3963
Canada Toll Free: 1 866 378 3566
Password: Hochschild Mining FY24
________________________________________________________________________________________
Enquiries:
Hochschild Mining PLC
Charles Gordon
+44 (0)20 3709 3264
Head of Investor Relations
Hudson Sandler
Charlie Jack
+44 (0)20 7796 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.
Forward looking statements
This announcement may contain forward looking statements. 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, for
various reasons, be materially different from any future results, performance
or achievements expressed or implied by such forward looking statements.
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, the Board of 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.
Note
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
(Regulation (EU) No.596/2014). Upon the publication of this announcement via a
Regulatory Information Service, this inside information is now considered to
be in the public domain.
LEI: 549300JK10TVQ3CCJQ89
CHAIR'S STATEMENT
I am very pleased to report that we have made good progress across the entire
business during the year. Precious metal prices have continued to reach new
highs, and our management has been able to advance our strategy and key
objectives, particularly in Brazil, where we reached major milestones with
both commercial production at our Mara Rosa mine and strategic growth with the
addition of the new Monte do Carmo project. Furthermore, our brownfield team
has also added significant high-quality resources at all our operating mines,
especially in Peru. These achievements not only reflect our ability to grow
and deliver value but also align with our drive for excellence in all aspects
of our business-development, operational performance and sustainability.
With regards to our people, we have continued to prioritise the safety of our
employees, through the use of Safety 2.0, a framework of training programmes
and initiatives that seek to reinforce Hochschild's safety-first approach in
all that we do. The fruits of this work are reflected in the accident
frequency rate which is, yet again, industry-leading and a testament to the
work of our operations teams.
We cannot, and do not, measure our success solely with reference to our
operational and financial results, as the impact of our operations on our
wider stakeholders are equally important. We actively engage with our local
communities and seek to meet their needs by creating positive social impacts
and promoting economic development in the areas where we operate. Our
collective efforts are reflected in the year-on-year increase in the
proportion of local procurement and the wide-ranging social investment
programme implemented for the benefit of our local communities in Peru,
Argentina, and Brazil.
As a company committed to sustainable growth, we recognise that responsible
environmental management is crucial to our long-term success. In 2024, our
environmental performance was excellent, as measured by our unique and
industry-leading ECO Score tool. Our green credentials were further reinforced
by our ability to reduce, to all-time lows, the amount of water consumed in
our operations. The year also saw the renewal of our ESG-linked debt facility
which will see the interest rate adjusted in line with specific aspects of our
environmental and safety performance.
Looking at Hochschild as an employer, turnover of personnel continues to be
very low. The Board was also pleased to note the outcome of the working
climate survey which saw a significant improvement in the satisfaction of our
colleagues in Peru and Argentina over a five-year period. This year, we will
work to implement the actions that have been identified to build on this
strong foundation.
It is with great pride that Hochschild's collective efforts on all of these
fronts have been the subject of external validation, with a number of ESG
organisations upgrading their ratings on the Company as well as our inclusion
in the FTSE4Good Index. Details of the wide-ranging programmes undertaken in
our countries of operation can be found in the Sustainability section of the
Annual Report and our standalone Sustainability Report to be published during
Q2 2025.
In Brazil, we achieved significant milestones, notably reaching commercial
production at our Mara Rosa mine in May 2024 after a successful construction
phase which was completed on time and on budget. In addition, we further
strengthened our position by optioning and subsequently acquiring the Monte do
Carmo project for a total cost of $60 million. This highly promising asset in
the business-friendly neighbouring state of Tocantins has all the potential to
become our next major low-cost construction project in Brazil, complementing
the growth trajectory we have established in this key region and utilising our
team's proven expertise.
One of the standout highlights has been the performance of our brownfield
exploration team. With their relentless dedication and innovative approach, we
have achieved remarkable results in 2024, including a record addition of 2.8
million gold equivalent ounces to our resource base. As we have consistently
emphasised, we believe strongly in the untapped potential of our assets and
the successes we've seen this year validate that belief and underline the
vital role that brownfield exploration plays in our strategy. These resource
additions are not only a testament to the hard work of our team but also
confirm our confidence that our existing operations will remain at the heart
of our Company for many years to come.
Our operations once again delivered reliable performance, underscored by the
achievement of first production from the Mara Rosa mine, a significant
milestone, which further solidified our operational foundation as we continue
to expand our footprint. Although costs were moderately above our initial
guidance, this was largely due to persistent inflationary pressures in
Argentina and a slower-than-expected ramp-up in Brazil. As with any major mine
development, a certain degree of fine-tuning is often necessary in the final
stages, but we remain confident that these challenges have been overcome and
the operation will deliver a full year of output in 2025. Furthermore, the
combination of a record gold price and our continued operational efficiency
enabled us to generate strong cashflow, which allowed us to reduce a portion
of our debt and continue to invest in our project pipeline.
I would like to express my gratitude and that of the Board to Michael
Rawlinson, who will be retiring at the conclusion of the forthcoming AGM, for
his dedicated service as a Board member, Senior Independent Director and Chair
of the Remuneration Committee. We will all miss his insight and valued
contributions in our discussions and wish him all the best for the future. I
am delighted that Michael will be succeeded by Tracey Kerr as Senior
Independent Director and by Jill Gardiner as Remuneration Committee Chair.
Outlook
2024 was a year marked by exceptional performance in the precious metals
market, with both gold and silver reaching notable price milestones. Gold
surged to a new high of $2,800 per ounce, while silver experienced a solid 21%
increase in the year-end spot price, although still well below its record high
from 2011. This robust market environment has significantly benefited us, and
we are pleased to report that this price strength has continued into 2025,
providing us with a strong foundation as we move forward.
2024 was a year of solid financial discipline and progress, as we made
significant strides in achieving our medium-term financial targets. A key
focus for us has been the reduction of our existing debt, and I'm pleased to
report that we successfully reduced our net debt position by just over $40
million during the year. This was achieved while simultaneously making
strategic investments in the final stages of development at Mara Rosa and the
acquisition of Monte do Carmo, which will contribute to our growth and
long-term success.
As part of our comprehensive capital allocation strategy, we also recognise
the importance of capital return to our shareholders. With this in mind, the
Board is pleased to announce that our strong balance sheet has allowed us to
reinstate our dividend payout and to recommend a final dividend of $1.94 cents
per share ($10.0 million). Furthermore, the Board has approved a new dividend
policy aimed at providing greater predictability and consistency for our
investors in the years ahead. This move underscores our commitment to
maintaining a balance between reinvesting in our business for future growth
and delivering tangible returns to our shareholders and could also include
future share buybacks, if considered appropriate by the Directors.
As we look back on a successful 2024, I would like to take this opportunity to
express my gratitude to our leadership team, as well as the several thousand
Hochschild employees, contractors, and partners who have played a pivotal role
in our achievements. Their dedication and hard work have been instrumental in
delivering for our Company and our stakeholders, and I am incredibly proud of
what we have accomplished together.
Eduardo Hochschild, Chairman
11 March 2025
CHIEF EXECUTIVE OFFICER'S STATEMENT
I am proud to say that we have made significant strides in executing the
strategy we outlined in November 2023 which focused on four key pillars:
brownfield exploration, operational efficiency, ESG and disciplined capital
allocation.
Our new Mara Rosa mine was completed on time and on budget and is now
operating as planned. This achievement marks another key step forward for the
Company whilst at the same time, our other operations, particularly
Inmaculada, have consistently exceeded expectations, showcasing the strength
and resilience of our existing portfolio. Additionally, we have made great
progress in expanding our growth pipeline by adding an exciting new project in
Brazil and have also continued to advance the development of our Royropata
project in Peru. These efforts position us well for the next phase of growth
and lay the foundation for future value creation.
ESG
Our corporate purpose places responsibility at the core of how we conduct our
business. As outlined by Eduardo Hochschild, our commitment to this
responsibility is reflected through a wide range of programmes, initiatives,
and actions that continue to drive positive change. I am proud to highlight
that our principle-led approach has translated into real, impactful
developments across our operations. In 2024, we took a significant step by
forming a multi-disciplinary team dedicated to coordinating our ESG efforts,
further emphasizing its critical role in our corporate strategy.
Through our community engagement initiatives, we successfully completed the
first phase of work necessary to advance the Royropata project. Additionally,
in the area of safety, our operating units in Peru and Argentina achieved
Level 8 certification from Det Norske Veritas for their risk management
information systems, making Hochschild the first mining company to secure this
prestigious level of accreditation. We continue to maintain excellent
environmental performance, reinforcing our dedication to sustainability and
responsible resource management across all aspects of our operations.
Operations
Hochschild Mining's operational performance in 2024 continued to demonstrate
the strength of our assets and our ability to meet our Company production
target. We delivered 347,374 attributable gold equivalent ounces, marking a
16% increase compared to the prior year's output of 300,749 ounces mostly due
to a first contribution from the new Mara Rosa mine. The all-in sustaining
cost (AISC) for the year was slightly higher than expected, reflecting
persistent inflationary pressures in Argentina and a slower-than-expected
initial ramp-up in Brazil.
The Inmaculada mine delivered a strong performance in 2024, with an 8%
increase in production, totalling 220,501 gold equivalent ounces (up from
203,849 ounces in 2023). This was largely driven by a series of successful
operational efficiency initiatives aimed at increasing overall mined tonnage.
The AISC for Inmaculada was $1,512 per gold equivalent ounce. Over at San
Jose, production was in line with expectations at 123,732 million gold
equivalent ounces in 2024 (2023: 134,264 million ounces), primarily reflecting
scheduled lower grades. In addition, a $9 million project to expand plant
capacity by approximately 20% was successfully completed by the end of the
year, enabling the future treatment of existing lower-grade ores. AISC for San
Jose was higher than anticipated at $1,973 per gold equivalent ounce, due to
continued inflationary pressures in Argentina, without the benefit of currency
devaluation to offset cost increases.
The Mara Rosa mine achieved a major milestone in 2024, with construction being
completed early in the year. After commissioning, the mine reached commercial
production in mid-May and eventually delivered 63,770 gold equivalent ounces
at an all-in sustaining cost of $1,408 per gold equivalent ounce. Although the
ramp-up process took slightly longer than expected, the team at Mara Rosa did
a good job in overcoming the start-up challenges associated with a new mine.
We are optimistic about the future, as 2025 will mark the first full year of
production from this new asset, and we anticipate strong contributions to our
overall performance moving forward.
Projects
With the project completed at Mara Rosa, the business development team turned
its attention to the next stage of growth in Brazil. In March, we secured an
option to acquire the Monte do Carmo project in the neighbouring Tocantins
state from Cerrado Gold and following a period of extensive exploration and a
twin drilling programme, which returned encouraging results, we exercised the
option and closed the purchase in November for a total cost of $60 million.
This high-quality addition to our pipeline added a low-cost, long-life asset
located in a mining-friendly jurisdiction within close proximity to Mara Rosa.
With permitting substantially de-risked and strong exploration upside, we
believe that we have the right team in place to deliver another exciting
opportunity for all stakeholders. In 2025, we look forward to advancing the
project through additional drilling and detailed engineering with the aim of a
decision on construction later in the year.
In Peru, we have made good progress at our Royropata project close to the
former Pallancata mine. We achieved the key milestone of securing the
community easements with our neighbouring communities on all the required land
during the year and are aiming to submit the Modified Environmental Impact
Assessment ("MEIA") to the government in 2026. We are also confident that our
recent success at adding to the project's resource base will boost the project
economics as we advance through the permitting process.
Exploration
Brownfield exploration remains one of the cornerstones of our strategy, and I
am proud of the work accomplished by Oscar Garcia and his dedicated brownfield
team. Their efforts have resulted in a record year of resource additions, with
2.8 million gold equivalent ounces added across all our operations and
projects. A standout achievement was at Inmaculada, where over 1 million
ounces were discovered, primarily in the northern part of the known deposit.
In the Royropata area, we made significant strides towards the end of the
year, discovering an important amount of resources that increases its initial
life-of-mine. Additionally, we successfully replaced resources at San Jose and
uncovered new mineralisation below the main pit at Mara Rosa, further
highlighting the substantial potential to extend the life-of-mine at this new
mine. These milestones underscore the strength and resilience of our
exploration efforts, positioning us for continued success in the future.
Financial position
With the increased production from Mara Rosa and record gold prices during the
year, the Company generated significant cashflow with the result that the
Company's liquidity remains strong. Cash and cash equivalents of $97.0 million
at the end of December (2023: $89.1 million) reflected strong operational cash
flow during the year offset by the remaining project capital expenditure of
just over $16 million at Mara Rosa in the first half of the year as well as
the payment of a total of $45.0 million to Cerrado Gold Inc. for the Monte Do
Carmo project in Brazil, and expenditure on the Royropata MEIA process of
$32.9 million. Total debt of $312.6 million (31 December 2023: $347.1 million)
was composed of $200.0 million from the existing ESG-linked loan facility with
repayments between 2025 and 2027, $30.0 million from a recently negotiated
$300.0 million ESG-linked loan facility with repayments between 2028 and 2029,
and short-term borrowings. Net debt was reduced to $215.6 million (31 December
2023: $257.9 million).
Financial results
Total Group production was 11% higher than 2023 and this was boosted by a 19%
rise in the gold price received and a 22% rise in the silver price.
Consequently, revenue increased by 37% to $947.7 million (2023: $693.7
million). All-in sustaining costs were at $1,638 per gold equivalent ounce or
$19.7 per silver equivalent ounce (2023: $1,454 per ounce/$17.5 per ounce).
Adjusted EBITDA of $421.4 million (2023: $274.4 million) increased by 54%
versus 2023 reflecting the production and price rises partially offset by an
increase in cost of sales. Pre-exceptional earnings per share increased to
$0.23 (2023: $0.02 per share) mainly due to the higher profitability, net of
taxes. Post-exceptional earnings per share was higher at $0.19 (2023: $0.10
loss per share) and includes the impairment charges at the Azuca and Arcata
projects of $13.7 million, the impairment of the investment in Aclara
Resources Inc. of $5.1 million, and the write-off of work in progress of $3.1
million in Peru. The net after-tax effect of exceptional items is a loss of
$19.8 million.
Outlook
We expect attributable production in 2025 of between 350,000-378,000 gold
equivalent ounces. This will be driven by: 199,000-209,000 gold equivalent
ounces from Inmaculada; an attributable contribution of 57,000 to 65,000 gold
equivalent ounces from San Jose; and first full year of production from the
Mara Rosa mine of between 94,000 and 104,000 gold ounces. All-in sustaining
costs for operations are expected at between $1,587 and $1,687 per gold
equivalent ounce. This forecast reflects some carry over capex at Inmaculada
resulting from the 2022/2023 MEIA delay which mostly consists of the expansion
of the tailings dam and the construction of a reverse osmosis plant. The
forecast also includes project capex at Inmaculada, mainly an additional
increase in tailings dam capacity as well as mine development capex to access
new mine areas and ongoing net inflation in Argentina as well as, to a lesser
extent, in Brazil and Peru.
A project capex budget of $19 million has been assigned to the new Monte Do
Carmo project along with $9 million for Royropata and the exploration budget
is approximately $36 million.
The prospects for the Company remain exciting as we continue to advance our
two key growth projects in Brazil and Peru, which are set to significantly
increase production in the next three years. We are actively pursuing
efficiency improvements to mitigate cost inflation, inspired by the success at
Inmaculada. Our strong financial position and continuing high precious metal
prices gives us confidence and this is reflected by the reinstatement of the
dividend and the introduction of a new policy, as outlined by our Chair. I
remain optimistic that, in the year ahead, we will continue to deliver
increased value for all our stakeholders in a responsible and sustainable
manner.
Eduardo Landin, Chief Executive Officer
11 March 2025
OPERATING REVIEW
OPERATIONS
Note: 2025, 2024 and 2023 equivalent figures calculated assume a gold/silver
ratio of 83x.
Production
In 2024, Hochschild delivered attributable production of 347,374 gold
equivalent ounces or 28.8 million silver equivalent ounces, in line with the
Company's guidance and an increase versus the 2023 result (300,749 gold
equivalent ounces). Higher production from Inmaculada and a first contribution
from the new Mara Rosa mine in Brazil was partially offset by lower production
in San Jose and no production from Pallancata.
The overall attributable production target for 2025 is 350,000-378,000 gold
equivalent ounces.
Total 2024 group production
Year ended Year ended
31 Dec 2024 31 Dec 2023
Silver production (koz) 10,530 11,683
Gold production (koz) 281.14 225.77
Total silver equivalent (koz) 33,864 30,423
Total gold equivalent (koz) 408.00 366.54
Silver sold (koz) 10,643 11,547
Gold sold (koz) 281.46 221.40
Total production includes 100% of all production, including production
attributable to Hochschild's minority shareholder at San Jose.
Attributable 2024 group production
Year ended Year ended
31 Dec 2024 31 Dec 2023
Silver production (koz) 8,496 9,517
Gold production (koz) 245.01 186.09
Silver equivalent (koz) 28,832 24,962
Gold equivalent (koz) 347.37 300.75
Attributable production includes 100% of all production from Inmaculada, Mara
Rosa and 51% from San Jose.
Attributable 2025 Production forecast split
Operation Oz Au Eq
Inmaculada 199,000-209,000
Mara Rosa 94,000-104,000
San Jose 57,000-65,000
Total 350,000-378,000
Costs
All-in sustaining cost from operations in 2024 was $1,638 per gold equivalent
ounce or $19.7 per silver equivalent ounce (2023: $1,454 per gold equivalent
ounce or $17.5 per silver equivalent ounce), higher than guidance as
anticipated, mainly as a result of: ongoing high net inflation in Argentina; a
slower-than-expected ramp-up at the new Mara Rosa mine resulting in lower
production for the year; higher costs resulting from rising precious metal
prices including increased royalties, commercial deductions, legal workers
profit sharing in Peru, export tax in Argentina and industry inflation. These
effects were partially offset by lower costs at Inmaculada as a result of
higher-than-forecast production resulting from cost efficiency initiatives
during the year and the delay of some planned capex.
The all-in sustaining cost from operations in 2025 is expected to be between
$1,587 and $1,687 per gold equivalent ounce.
2025 AISC forecast split
Operation $/oz Au Eq
Inmaculada 1,605-1,705
Mara Rosa 1,287-1,370
San Jose 2,007-2,135
Total from operations 1,587-1,687
PERU
Inmaculada
The 100% owned Inmaculada gold/silver underground operation is located in the
Department of Ayacucho in southern Peru. It commenced operations in June 2015.
Inmaculada summary Year ended Year ended % change
31 Dec 2024 31 Dec 2023
Ore production (tonnes) 1,197,965 1,137,109 5
Average silver grade (g/t) 179 177 1
Average gold grade (g/t) 3.90 4.09 (5)
Silver produced (koz) 6,368 5,515 15
Gold produced (koz) 143.78 137.40 5
Silver equivalent produced (koz) 18,302 16,919 8
Gold equivalent produced (koz) 220.50 203.85 8
Silver sold (koz) 6,342 5,488 16
Gold sold (koz) 143.64 136.66 5
Unit cost ($/t) 143.2 142.3 1
Total cash cost ($/oz Au co-product) 809 803 -
All-in sustaining cost ($/oz Ag Eq) 18.2 15.5 17
All-in sustaining cost ($/oz Au Eq) 1,512 1,287 18
Production
The Inmaculada mine delivered gold equivalent production of 220,501 ounces
(2023: 203,849 ounces), which is an 8% improvement on 2023 when the mine was
impacted by permit delays. There was also a rise in tonnage from the
implementation of continuous improvement initiatives at site.
Costs
All-in sustaining cost was $1,512 per gold equivalent ounce (2023: $1,287 per
ounce) with the increase versus 2023 mainly explained by the capex catch-up
versus 2023 when a significant portion was deferred to 2024/2025 due the MEIA
approval delay although a portion of this capex was delayed to 2025 which
explains the result being lower than guidance.
Royropata
The 100% owned Royropata project is located in the Department of Ayacucho in
southern Peru and is close to the Pallancata mine which was placed on
temporary care and maintenance in December 2023.
In 2024, work continued on the MEIA process. All feasibility study engineering
was completed whilst baseline studies continued throughout the year. Easements
with communities were all successfully received by the end of the year. The
aim is complete all field work in 2025 with the preparation of the MEIA
documents expected to last into 2026 with submission to SENACE targeted for
the middle of 2026.
ARGENTINA
San Jose
The San Jose silver/gold mine is located in Argentina, in the province of
Santa Cruz, 1,750 kilometres south west of Buenos Aires. San Jose commenced
production in 2007. Hochschild holds a controlling interest of 51% and is the
mine operator. The remaining 49% is owned by McEwen Mining Inc.
San Jose summary Year ended Year ended % change
31 Dec 2024 31 Dec 2023
Ore production (tonnes) 581,303 579,100 -
Average silver grade (g/t) 253 270 (6)
Average gold grade (g/t) 4.55 5.03 (10)
Silver produced (koz) 4,150 4,422 (6)
Gold produced (koz) 73.73 80.99 (9)
Silver equivalent produced (koz) 10,270 11,144 (8)
Gold equivalent produced (koz) 123.73 134.26 (8)
Silver sold (koz) 4,290 4,274 -
Gold sold (koz) 74.37 77.23 (4)
Unit cost ($/t) 287.2 264.0 9
Total cash cost ($/oz Ag co-product) 19.5 15.9 23
All-in sustaining cost ($/oz Ag Eq) 23.8 18.9 26
All-in sustaining cost ($/oz Au Eq) 1,973 1,570 26
Production
San Jose's production in 2024 totalled 123,732 gold equivalent ounces (2023:
134,264 ounces) with the decrease versus 2023 reflecting lower grades although
the operation ended the year moderately above guidance.
In April 2024, the Board approved a $9 million project to increase the plant
throughout capacity from 1,650 tonnes per day to 2,000 tonnes per day. This
project was completed by the year end.
Costs
All-in sustaining costs were at $1,973 per gold equivalent ounce (2023: $1,570
per ounce) with the increase versus 2023 mainly due to the significant net
inflation in the country in addition to lower grades and increases in selling
expenses, commercial deductions and export taxes aligned with higher metal
prices.
BRAZIL
Mara Rosa
The 100% owned Mara Rosa open pit gold mine is located in the mining friendly
jurisdiction of Goiás State in Brazil. Mara Rosa commenced production in
mid-May 2024.
Mara Rosa summary Year ended
31 Dec 2024
Ore production (tonnes) 1,757,955
Average gold grade (g/t) 1.35
Silver produced (koz) 11
Gold produced (koz) 63.64
Silver equivalent produced (koz) 5,293
Gold equivalent produced (koz) 63.77
Silver sold (koz) 11
Gold sold (koz) 63.54
Unit cost ($/t) 48.3
Total cash cost ($/oz Au co-product) 1,034
All-in sustaining cost ($/oz Au Eq) 1,408
Production
The new Mara Rosa mine reached commercial production in mid-May 2024 and after
a slower-than-expected ramp-up during the second and third quarters. Issues
with the mining contractor and underperforming mechanical filters in the plant
were solved with the result that output was steady state in Q4 with 25,530
ounces of gold delivered. Overall production in 2024 was 63,770 gold
equivalent ounces.
Costs
All-in sustaining costs were at $1,408 per gold equivalent ounce with the
increase versus the guided range of $1,090-$1,120 per ounce mainly due to the
slower-than-expected ramp-up of the mine (mentioned above), local inflation
and the dry stacking/filtration process costs.
Development project: Monte Do Carmo
In March 2024, Hochschild announced that it had entered into an option
agreement for $15 million to acquire a 100% interest in Cerrado Gold Inc's
Monte Do Carmo Project located in the mining-friendly state of Tocantins,
Brazil. The option was exercised in November 2024 and, after making $45
million in phased payments in 2024, the Company was able to complete the
acquisition of 100% of the project with $30 million paid in the fourth
quarter.
Monte Do Carmo comprises 21 mineral concessions encompassing 82,542 hectares,
hosts multiple identified gold targets along a 30km mineralised trend,
including the principal Serra Alta gold deposit, which hosts a Measured and
Indicated resource of 1,012koz gold and Inferred resource of 66koz gold and
was the subject of a Feasibility Study dated 31 October 2023. The project
benefits from significant existing site infrastructure including year-round
access via a paved highway and close proximity to the Isamu Ikeda hydropower
plant. Permitting is substantially advanced, with the Environmental Impact
Assessment approved and the Preliminary Licence granted by the Tocantins state
environmental agency in May 2023.
The Company believes that the Monte Do Carmo is a compelling strategic
opportunity to enhance Hochschild's project pipeline and growth profile
through the addition of a high-quality, long-life project. The key benefits to
Hochschild, shareholders and other stakeholders, include:
· High quality project: Adds a low-cost, long-life asset located in a
mining-friendly jurisdiction of Brazil, within close proximity to the Mara
Rosa mine
· Significant exploration upside: Offers compelling near-mine
exploration opportunities underpinned by a large land package which remains
relatively underexplored
· De-risked permitting: Project permitting significantly advanced
with the installation license recently granted
· Leverages Hochschild's expertise and presence in Brazil: Aligned with
Hochschild's core strengths and long-term strategy of acquiring and optimising
development stage projects in Latin America, specifically in Brazil, a country
where the Company has robust management and technical teams
· Enhances Hochschild's portfolio: Provides the next leg of growth
for Hochschild following the completion of the Mara Rosa mine
Following the original option agreement, the Company executed a 1,704m twin
hole drilling programme which validated the deposit's mineral resource
estimate. In addition, a 4,806m resource drilling campaign was conducted
across five prospective mineralisation zones. The campaign incorporated
additional gold resources (both Measured and Indicated and Inferred)
which confirmed the strong geological potential of the project.
The Company also devised an exploration plan across seven new targets that
commenced in November 2024. Furthermore, it is currently anticipated that,
with the twin hole exploration results, further upside from additional
drilling and several engineering optimisations already identified, the Company
will be in a strong position to reach an eventual construction decision by the
end of 2025.
Hochschild's programme in 2025 includes:
· Ongoing drilling programs to expand the resource base
· Advance installation license for the main project
· Conduct any additional environmental analyses as identified during
due diligence
· Develop the detailed engineering studies
BROWNFIELD EXPLORATION
Inmaculada
During the year, the team carried out 34,477m of drilling for both potential
and resources. A number of structures were drilled (see below) and by the end
of the year 1.0 million gold equivalent ounces of inferred resources had been
added at a grade of approximately 4.72 grams per tonne of gold equivalent.
Vein Results (resources/potential)
Tesoro IMM23-361: 14.9m @ 3.4g/t Au & 203g/t Ag
IMS24-231A: 24.7m @ 4.5g/t Au & 155g/t Ag
IMS24-221: 5.6m @ 2.4g/t Au & 45g/t Ag
IMS24-222: 39.3m @ 5.1g/t Au & 303g/t Ag
IMS24-227A: 17.9m @ 1.4g/t Au & 26g/t Ag
IMS24-380: 3.7m @ 3.5g/t Au & 242g/t Ag
IMS24-231A: 20.3m @ 2.9g/t Au & 298g/t Ag
IMS24-257: 28.1.m @ 2.2g/t & 72g/t Ag
IMM24-387A: 1.7m @ 4.2g/t Au & 193g/t Ag
IMM24-393B: 10.0m @ 2.3g/t Au & 26g/t Ag
IMS24-233: 7.7m @ 6.9g/t Au & 485g/t Ag
IMS24-238A: 9.3m @ 7.5g/t & 64g/t Ag
IMS24-239: 18.4m @ 9.3g/t & 366g/t Ag
IMS24-241: 1.7m @ 1.0g/t & 44g/t Ag
IMM24-397B: 2.6m @ 14.1g/t Au & 806g/t Ag
IMM24-401A: 1.3m @ 2.0g/t Au & 117g/t Ag
Tesoro Techo IMS24-213A: 11.0m @ 1.6g/t Au & 46g/t Ag
IMS24-216: 6.9m @ 0.5g/t Au & 76g/t Ag
IMS24-218: 9.6m @ 5.8g/t Au & 384g/t Ag
IMM24-380: 4.8m @ 5.0g/t Au & 389g/t Ag
IMS24-248: 1.0m @ 0.8g/t Au & 186g/t Ag
IMM24-387A: 1.5m @ 3.2g/t Au & 59g/t Ag
IMM24-393B: 8.7m @ 5.7g/t Au & 84g/t Ag
IMS24-234: 0.4m @ 3.6g/t Au & 437g/t Ag
IMS24-250: 3.3m @ 1.4g/t Au & 79g/t Ag
IMS24-233: 1.0m @ 1.2g/t Au & 29g/t Ag
IMS24-257: 4.1m @ 3.5g/t Au & 322g/t Ag
IMS24-232: 1.4m @ 0.6g/t Au & 63g/t Ag
IMS24-246A: 2.3m @ 2.8g/t Au & 51g/t Ag
IMM24-397B: 1.6m @ 16.3g/t Au & 92g/t Ag
IMM24-401A: 1.4m @ 0.8g/t Au & 56g/t Ag
Andrea IMM24-375: 12.0m @ 13.0g/t Au & 970g/t Ag
IMS24-218: 2.8m @ 8.2g/t Au & 184g/t Ag
IMM24-380: 2.5m @ 4.0g/t Au & 249g/t Ag
IMM24-397: 1.3m @ 1.5g/t Au & 142g/t Ag
IMS24-259: 1.1m @ 3.5g/t Au & 97g/t Ag
IMS24-264: 2.2m @ 1.5g/t Au & 97g/t Ag
Carmen IMM24-375: 0.6m @ 2.8g/t Au & 19g/t Ag
Juliana NE IMM24-375: 1.3m @ 2.8g/t Au & 293g/t Ag
IMS24-218: 0.6m @ 4.7g/t Au & 165g/t Ag
Laura IMS24-215: 1.6m @ 3.3g/t Au & 3g/t Ag
Lia IMM23-212: 0.9m @ 2.9g/t Au & 4g/t Ag
IMS24-239: 2.2m @ 2.2g/t Au & 130g/t Ag
IMS24-242A: 3.6m @ 0.5g/t Au & 10g/t Ag
Nicolas IMS24-217: 1.4m @ 0.6g/t Au & 85g/t Ag
IMM24-393B: 5.0m @ 1.7g/t Au & 67g/t Ag
IMS24-239: 1.2m @ 5.0g/t Au & 17g/t Ag
IMS24-241: 4.0m @ 1.8g/t Au & 68g/t Ag
IMS24-242A: 4.2m @ 9.9g/t Au & 48g/t Ag
In the first quarter of 2025, the team is planning 7,500m of potential
drilling to conclude the exploration of the Eduardo, Kary, Tesoro, Bárbara N
and Keyla veins as well as starting drilling of the area to the south of the
Divina and Lucy veins.
San Jose
During 2024, the brownfield team carried out a further 17,431m of drilling for
potential and resources. A number of structures were drilled (see below) and
by the end of the year 19.2 million silver equivalent ounces of inferred
resources had been added at a grade of approximately 644 grams per tonne of
silver equivalent.
Vein Results (potential)
Dalia SJD-2775: 2.8m @ 1.3g/t Au & 288g/t Ag
SJD-2776: 2.8m @ 2.0g/t Au & 513g/t Ag
SJD-2777: 3.0m @ 1.3g/t Au & 86g/t Ag
SJD-2778: 1.7m @ 0.5g/t Au & 19g/t Ag
SJD-2788: 1.7m @ 4.8g/t Au & 51g/t Ag
SJD-2789: 0.8m @ 2.6g/t Au & 457g/t Ag
SJD-2795: 0.8m @ 0.6g/t Au & 90g/t Ag
SJD-2800: 1.2m @ 30.8g/t Au & 67g/t Ag
Emilia SJM-663: 0.8m @ 1.0g/t Au & 74g/t Ag
SJM-664: 0.9m @ 6.5g/t Au & 47g/t Ag
SJM-666: 0.6m @ 0.5g/t Au & 5g/t Ag
SJM-668: 0.8m @ 0.1g/t Au & 4g/t Ag
SJM-669: 0.9m @ 1.1g/t Au & 11g/t Ag
SJM-697: 0.8m @ 4.5g/t Au & 262g/t Ag
Frea SJD-2844: 2.2m @ 59.9g/t Au & 3,448g/t Ag
SJD-2846: 1.3m @ 0.4g/t Au & 6g/t Ag
SJD-2847: 1.1m @ 0.3g/t Au & 3g/t Ag
SJD-2849: 1.1m @ 0.1g/t Au & 3g/t Ag
SJM-663: 8.8m @ 12.7g/t Au & 101g/t Ag
SJM-664: 1.3m @ 0.3g/t Au & 7g/t Ag
SJM-666: 10.8m @ 5.1g/t Au & 38g/t Ag
SJM-668: 1.7m @ 0.3g/t Au & 4g/t Ag
SJM-669: 0.9m @ 1.6g/t Au & 21g/t Ag
SJM-673: 3.6m @ 3.4g/t Au & 50g/t Ag
SJD-2901: 1.0m @ 0.1g/t Au & 5g/t Ag
SJD-2903A: 0.9m @ 0.1g/t Au & 2g/t Ag
SJD-2905: 6.7m @ 4.4g/t Au & 27g/t Ag
SJD-2907: 1.3m @ 1.9g/t Au & 17g/t Ag
SJD-2910: 0.8m @ 0.0g/t Au & 1g/t Ag
SJD-2911: 1.2m @ 0.1g/t Au & 1g/t Ag
SJM-698: 0.8m @ 5.6g/t Au & 38g/t Ag
SJM-670: 0.9m @ 0.3g/t Au & 8g/t Ag
Majo SJD-2771: 1.8m @ 2.0g/t Au & 380g/t Ag
SJD-2772: 2.3m @ 2.5g/t Au & 246g/t Ag
SJD-2774: 1.0m @ 0.5g/t Au & 20g/t Ag
Maura SJD-2874A: 0.9m @ 0.3g/t Au & 2g/t Ag
SJD-2878: 0.9m @ 0.0g/t Au & 1g/t Ag
SJD-2879: 1.5m @ 13.2g/t Au & 70g/t Ag
SJD-2881: 0.9m @ 7.5g/t Au & 82g/t Ag
SJD-2885: 0.8m @ 0.6g/t Au & 81g/t Ag
SJD-2887: 4.7m @ 3.6g/t Au & 52g/t Ag
SJD-2892: 4.2m @ 2.8g/t Au & 70g/t Ag
SJD-2894: 0.8m @ 0.1g/t Au & 5g/t Ag
SJD-2897: 0.9m @ 0.7g/t Au & 17g/t Ag
SJD-2899: 1.0m @ 0.7g/t Au & 19g/t Ag
Odin SJD-2775: 0.9m @ 4.6g/t Au & 556g/t Ag
SJD-2776: 1.4m @ 0.4g/t Au & 12g/t Ag
SJD-2777: 2.2m @ 5.5g/t Au & 70g/t Ag
SJD-2778: 1.1m @ 0.3g/t Au & 48g/t Ag
SJD-2788: 2.1m @ 7.6g/t Au & 360g/t Ag
SJD-2789: 1.7m @ 4.4g/t Au & 412g/t Ag
SJD-2795: 1.3m @ 2.8g/t Au & 137g/t Ag
SJD-2801: 0.8m @ 0.5g/t Au & 32g/t Ag
SJD-2802: 0.6m @ 0.2g/t Au & 47g/t Ag
SJD-2904: 1.1m @ 2.1g/t Au & 308g/t Ag
SJD-2906: 0.8m @ 0.0g/t Au & 2g/t Ag
SJD-2909: 0.9m @ 0.1g/t Au & 3g/t Ag
Olivia SJD-2916: 1.2m @ 5.6g/t Au & 1,374g/t Ag
Ramal Frea SJD-1601: 3.7m @ 7.2g/t Au & 180g/t Ag
SIG. Odin SJD-2904: 2.0m @ 16.1g/t Au & 1,007g/t Ag
SIG. Odin Sur SJD-2775: 1.4m @ 3.0g/t Au & 299g/t Ag
SJD-2776: 0.8m @ 0.1g/t Au & 14g/t Ag
SJD-2777: 0.8m @ 0.1g/t Au & 15g/t Ag
SJD-2778: 1.9m @ 0.8g/t Au & 81g/t Ag
SJD-2788: 5.9m @ 23.3g/t Au & 314g/t Ag
SJD-2789: 3.1m @ 4.0g/t Au & 323g/t Ag
SJD-2795: 4.0m @ 2.6g/t Au & 60g/t Ag
The plan for the first quarter is to perform potential drilling at San Jose in
the Kospi West, Frea South and Odin South veins.
Royropata
Exploration was mostly in the fourth quarter in the Royropata area and was
concentrated around the Marco vein with infill drilling and also for potential
resources (2,858m). By the end of the year 95.6 million silver equivalent
ounces of inferred resources had been added at a grade of approximately 639
grams per tonne of silver equivalent.
Vein Results (potential drilling)
Marco 24 DLRY-A17: 2.0m @ 1.2g/t Au & 400g/t Ag
DLRY-A20: 16.2m @ 9.1g/t Au & 2,408g/t Ag
DLRY-A22: 2.1m @ 0.9g/t Au & 376g/t Ag
DLRY-A23: 4.8m @ 0.5g/t Au & 189g/t Ag
DLRY-A24: 2.2m @ 2.4g/t Au & 656g/t Ag
DLRY-A25: 20.2m @ 10.7g/t Au & 2,541g/t Ag
DLRY-A27: 8.1m @ 2.0g/t Au & 514g/t Ag
DLRY-A30: 1.4m @ 0.4g/t Au & 94g/t Ag
DLRY-A31: 26.1m @ 0.5g/t Au & 133g/t Ag
DLRY-A32: 7.8m @ 1.7g/t Au & 409g/t Ag
DLRY-A34: 26.9m @ 1.8g/t Au & 459g/t Ag
DLRY-A62: 3.8m @ 0.3g/t Au & 114g/t Ag
DLRY-A60: 23.5m @ 5.2g/t Au & 1,535g/t Ag
Marco W DLRY-A49: 1.2m @ 0.2g/t Au & 68g/t Ag
Hanna DLRY-A22: 1.4m @ 0.3g/t Au & 80g/t Ag
DLRY-A24: 2.8m @ 1.5g/t Au & 459g/t Ag
DLRY-A27: 0.8m @ 0.3g/t Au & 63g/t Ag
DLRY-A32: 0.8m @ 0.7g/t Au & 275g/t Ag
DLRY-A62: 1.7m @ 0.6g/t Au & 172g/t Ag
Larry DLRY-A17: 1.1m @ 1.4g/t Au & 333g/t Ag
DLRY-A25: 1.5m @ 2.3g/t Au & 506g/t Ag
DLRY-A31: 1.7m @ 0.4g/t Au & 123g/t Ag
DLRY-A34: 0.8m @ 1.4g/t Au & 386g/t Ag
DLRY-A62: 3.8m @ 0.5g/t Au & 124g/t Ag
PST-22: 1.3m @ 0.4g/t Au & 102g/t Ag
Mara Rosa
The Mara Rosa brownfield programme commenced in the second quarter of the year
with one of the key aims being to confirm economic mineralisation below the
existing Posse pit and to add resources. 5,984m of resources drilling and
3,136m of potential drilling was executed with the result that 218,000 ounces
of gold were added at a grade of 1.39 grams per tonne of gold.
Vein Results (resources/potential)
Posse 24POSP_003: 9.2m @ 1.0g/t Au
24POSP_004: 46.7m @ 1.1g/t Au
24POSP_005: 53.0m @ 1.0g/t Au
24POSP_006: 18.2m @ 1.0g/t Au
24POSP_007: 15.8m @ 1.0g/t Au
24POSP_008: 1.0m @ 0.3g/t Au
24POSP_011: 32.9m @ 1.0g/t Au
24POSP_012: 12.0m @ 1.1g/t Au
24POSP_013: 17.9m @ 1.0g/t Au
24POSP_014: 39.0m @ 1.0g/t Au
24POSP_015: 28.1m @ 1.0g/t Au
24POSP_017: 9.5m @ 0.9g/t Au
The plan for the first quarter of 2025 is to perform potential drilling
between the Posse and Pastinho zones.
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, are 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 years.
Revenue
Gross revenue 9 (#_ftn9)
Gross revenue increased by 36% to $966.1 million in 2024 (2023: $710.6
million) due to higher average realised precious metal prices and higher gold
production. Gold output increased due to the commencement of production in
Mara Rosa; and higher production in Inmaculada due to a more normalised period
versus 2023 when the operation was impacted by permit delays, and the
implementation of continuous improvement initiatives at site. These were
partially offset by the absence of revenue from the Pallancata mine, mainly
silver production, which was placed on care and maintenance towards the end of
2023.
Gold
Gross revenue from gold in 2024 increased to $660.1 million (2023: $437.0
million) due to the 19% increase in the average realised gold price and higher
gold production.
Silver
Gross revenue from silver increased in 2024 to $305.6 million (2023: $273.0
million) due to the 22% increase in the average realised silver price and
higher silver production in Inmaculada, partially offset by the absence of
silver production from the Pallancata mine.
Gross average realised sales prices
The following table provides figures for average realised prices (before the
deduction of commercial discounts) and ounces sold for 2024 and 2023:
Average realised prices Year ended Year ended % change
31 Dec 2024
31 Dec 2023
Silver ounces sold (koz) 10,643 11,547 (8)
Avg. realised silver price ($/oz) 28.7 23.6 22
Gold ounces sold (koz) 281.46 221.40 27
Avg. realised gold price ($/oz) 2,345 1,974 19
2024 realised prices and revenue include the effect of the following hedges:
forwards for 27,600 gold ounces at a price of $2,100 per ounce, and zero cost
collars for 100,000 gold ounces at a strike put of $2,000 per ounce and a
strike call of $2,252 per ounce, the impact of which was a loss of $27.9
million in 2024. 2023 includes forwards for 29,250 gold ounces at a price of
$2,047 per ounce, and for 3.3 million silver ounces at a price of $25 per
ounce, the impact of which was a gain of $7.8 million in 2023.
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 2024, the
Group recorded commercial discounts of $18.4 million (2023: $16.9 million).
The ratio of commercial discounts to gross revenue in 2024 was 2%, in line
with 2023.
Net revenue
Net revenue was $947.7 million (2023: $693.7 million), including net gold
revenue of $649.3 million (2023: $429.9 million) and net silver revenue of
$298.0 million (2023: $263.3 million). In 2024, gold accounted for 69% and
silver 31% of the Company's consolidated net revenue (2023: gold 62% and
silver 38%).
Reconciliation of gross revenue by mine to Group net revenue
$000 Year ended Year ended % change
31 Dec 2024
31 Dec 2023
Silver revenue
Inmaculada 180,285 129,456 39
Mara Rosa 343 - -
Pallancata (59) 43,380 (100)
San Jose 125,027 100,212 25
Commercial discounts (7,599) (9,779) (22)
Net silver revenue 297,997 263,269 13
Gold revenue
Inmaculada 324,129 267,188 21
Mara Rosa 150,634 - -
Pallancata (185) 14,985 (101)
San Jose 185,512 154,832 20
Commercial discounts (10,839) (7,123) 52
Net gold revenue 649,251 429,882 51
Other revenue 448 565 (21)
Net revenue 947,696 693,716 37
Cost of sales
Total cost of sales was $605.3 million in 2024 (2023: $508.2 million). The
direct production cost excluding depreciation and amortisation was higher at
$454.0 million (2023: $363.0 million) mainly due to higher production in
Inmaculada, the commencement of production in Mara Rosa, ongoing net inflation
in Argentina, and rising precious metal prices resulting in increased
royalties. These effects were partially offset by no production in Pallancata.
Depreciation and amortisation in production cost increased from $144.8 million
in 2023 to $157.2 million in 2024 mainly due to higher production in
Inmaculada and the commencement of production in Mara Rosa, partially offset
by no production in Pallancata. Fixed costs incurred during total or partial
production stoppages in San Jose (due to bad weather) were $1.1 million in
2024 (2023: $3.3 million mainly due to partial stoppages at Inmaculada and
Pallancata). Increase in inventories was $10.1 million in 2024 (2023: $4.8
million) mainly due to higher products in process of $14.8 million in Mara
Rosa, partially offset by lower products in process in Inmaculada of $4.6
million.
$000 Year ended Year ended % change
31 Dec 2024
31 Dec 2023
Direct production cost excluding depreciation and amortisation 454,006 362,980 25
Depreciation and amortisation in production cost 157,165 144,812 9
Other items and workers' profit sharing 3,145 1,862 69
Fixed costs during operational stoppages and reduced capacity 1,071 3,314 (68)
Change in inventories (10,124) (4,754) 113
Cost of sales 605,263 508,214 19
Fixed costs during operational stoppages and reduced capacity
$000 Year ended Year ended % change
31 Dec 2024
31 Dec 2023
Personnel 712 3,032 (77)
Third party services 301 865 (65)
Supplies 33 34 (3)
Others 25 (617) (104)
Fixed costs during operational stoppages and reduced capacity 1,071 3,314 (68)
Unit cost per tonne
The Company reported unit cost per tonne at its operations of $127.0 per tonne
in 2024, a 26% decrease versus 2023 ($171.1 per tonne). This was mainly due to
the commencement of production in Mara Rosa with a lower cost per tonne than
the other operations, partially offset by ongoing high net inflation in
Argentina impacting San Jose.
Unit cost per tonne by operation (including royalties) 10 (#_ftn10) :
Operating unit ($/tonne) Year ended Year ended % change
31 Dec 2024
31 Dec 2023
Peru 143.2 137.0 5
Inmaculada 143.2 142.3 1
Pallancata - 122.9 -
Brazil
Mara Rosa 48.3 - -
Argentina
San Jose 287.2 264.0 9
Total 127.0 171.1 (26)
Cash costs
Cash costs include cost of sales, commercial deductions and selling expenses,
less depreciation and amortisation included in cost of sales.
Cash cost reconciliation
Year ended 31 December 2024
$000 unless otherwise indicated Inmaculada Mara Rosa 11 (#_ftn11) San Jose Other 12 (#_ftn12) Total
(+) Cost of sales 13 (#_ftn13) 271,020 78,992 222,458 84 572,554
(-) Depreciation and amortisation in cost of sales (94,190) (15,690) (46,905) - (156,785)
(+) Selling expenses 614 931 15,847 14 17,406
(+) Commercial deductions 14 (#_ftn14) 3,436 1,590 17,620 11 22,657
Gold 2,291 1,584 9,872 1 13,748
Silver 1,145 6 7,748 10 8,909
Group cash cost 180,880 65,823 209,020 109 455,832
Gold 324,057 144,836 175,892 (114) 644,671
Silver 180,285 330 117,443 (69) 297,989
Revenue 15 (#_ftn15) 504,342 145,166 293,335 (183) 942,660
Ounces sold (000s)
Gold 143.6 61.2 74.4 - 279.1
Silver 6,342 11 4,290 - 10,643
Group cash cost ($/oz)
Co product Au 809 1,034 1,685 (230) 1,108
Co product Ag 10.2 13.1 19.5 14.9 13.5
By product Au (4) 1,031 1,127 (1,058) 529
By product Ag (22.9) (7,074.8) 5.4 463.9 (19.4)
Year ended 31 December 2023
$000 unless otherwise indicated Inmaculada Pallancata San Jose Total
(+) Cost of sales 16 (#_ftn16) 234,627 72,118 197,399 504,144
(-) Depreciation and amortisation in cost of sales (75,306) (18,964) (48,901) (143,171)
(+) Selling expenses 533 461 13,868 14,862
(+) Commercial deductions 17 (#_ftn17) 3,057 4,319 12,923 20,299
Gold 2,079 891 6,440 9,410
Silver 978 3,428 6,483 10,889
Group cash cost 162,911 57,934 175,289 396,134
Gold 267,188 14,094 148,600 429,882
Silver 129,456 39,952 93,861 263,269
Revenue(15) 396,644 54,046 242,461 693,151
Ounces sold (000s)
Gold 136.7 7.5 77.2 221.4
Silver 5,488 1,785 4,274 11,547
Group cash cost ($/oz)
Co product Au 803 2,010 1,391 1,110
Co product Ag 9.7 24.0 15.9 13.0
By product Au 238 1,936 970 551
By product Ag (19.4) 24.1 4.8 (3.7)
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 18 (#_ftn18)
All-in sustaining cash costs per silver equivalent ounce
Year ended 31 December 2024
$000 unless otherwise indicated Inmaculada Mara Rosa 19 (#_ftn19) San Jose Main Corporate & Total
operations others
(+) Direct production cost excluding depreciation and amortisation 171,372 106,185 176,365 453,922 84 454,006
(+) Other items and workers profit sharing in cost of sales 20 (#_ftn20) 3,145 (30,059) (14,468) (41,382) - (41,382)
(+) Operating and exploration capex for units 21 (#_ftn21) 138,582 5,289 33,035 176,906 2,857 179,763
(+) Brownfield exploration expenses 22 (#_ftn22) 4,423 516 9,821 14,760 3,880 18,640
(+) Administrative expenses (excl depreciation and amortisation) 4,639 1,932 6,512 13,083 33,654 46,737
(+) Royalties and special mining tax 23 (#_ftn23) 7,108 - - 7,108 7,051 14,159
Sub-total 329,269 83,863 211,265 624,397 47,526 671,923
Au ounces produced 143,775 61,219 73,730 278,724 - 278,724
Ag ounces produced (000s) 6,368 11 4,150 10,529 - 10,529
Ounces produced (Au Eq oz) 220,501 61,353 123,732 405,586 - 405,586
Ounces produced (Ag Eq 000s oz) 18,302 5,092 10,270 33,664 - 33,664
All-in sustaining costs per ounce produced ($/oz Ag Eq) 18.0 16.5 20.6 18.6 1.4 20.0
All-in sustaining costs per ounce produced ($/oz Au Eq) 1,493 1,367 1,707 1,539 117 1,656
(+) Commercial deductions 3,436 1,590 17,620 22,646 - 22,646
(+) Selling expenses 614 931 15,847 17,392 - 17,392
Sub-total 4,050 2,521 33,467 40,038 - 40,038
Au ounces sold 143,637 61,160 74,366 279,163 - 279,163
Ag ounces sold (000s) 6,342 11 4,290 10,643 - 10,643
Ounces sold (Au Eq oz) 220,041 61,294 126,052 407,387 - 407,387
Ounces sold (Ag Eq 000s oz) 18,263 5,087 10,463 33,813 - 33,813
Sub-total ($/oz Ag Eq) 0.2 0.5 3.2 1.1 - 1.1
All-in sustaining costs per ounce sold ($/oz Ag Eq) 18.2 17.0 23.8 19.7 1.4 21.1
All-in sustaining costs per ounce sold ($/oz Au Eq) 1,512 1,408 1,973 1,638 117 1,755
Year ended 31 December 2023
$000 unless otherwise indicated Inmaculada Pallancata San Jose Main Corporate & Total
operations Others
(+) Direct production cost excluding depreciation and amortisation 162,570 49,940 150,470 362,980 - 362,980
(+) Other items and workers profit sharing in cost of sales 24 (#_ftn24) 1,373 489 (21,164) (19,302) - (19,302)
(+) Operating and exploration capex for units 25 (#_ftn25) 86,031 2,458 40,834 129,323 57 129,380
(+) Brownfield exploration expenses 26 (#_ftn26) 1,371 1,070 8,233 10,674 3,171 13,845
(+) Administrative expenses (excl depreciation and amortisation) 3,498 491 5,433 9,422 36,507 45,929
(+) Royalties and special mining tax 27 (#_ftn27) 3,978 542 - 4,520 2,278 6,798
Sub-total 258,821 54,990 183,806 497,617 42,013 539,630
Au ounces produced 137,399 7,390 80,985 225,774 - 225,774
Ag ounces produced (000s) 5,515 1,746 4,422 11,683 - 11,683
Ounces produced (Au Eq oz) 203,845 28,421 134,265 366,531 - 366,531
Ounces produced (Ag Eq 000s oz) 16,919 2,359 11,144 30,422 - 30,422
All-in sustaining costs per ounce produced ($/oz Ag Eq) 15.3 23.3 16.5 16.4 1.4 17.8
All-in sustaining costs per ounce produced ($/oz Au Eq) 1,270 1,935 1,369 1,358 115 1,472
(+) Commercial deductions 3,057 4,319 12,923 20,299 - 20,299
(+) Selling expenses 533 461 13,868 14,862 - 14,862
Sub-total 3,590 4,780 26,791 35,161 - 35,161
Au ounces sold 136,661 7,516 77,227 221,404 - 221,404
Ag ounces sold (000s) 5,488 1,785 4,274 11,547 - 11,547
Ounces sold (Au Eq oz) 202,783 29,024 128,723 360,530 - 360,530
Ounces sold (Ag Eq 000s oz) 16,831 2,409 10,684 29,924 - 29,924
Sub-total ($/oz Ag Eq) 0.2 2.0 2.4 1.1 - 1.1
All-in sustaining costs per ounce sold ($/oz Ag Eq) 15.5 25.3 18.9 17.5 1.4 18.9
All-in sustaining costs per ounce sold ($/oz Au Eq) 1,287 2,099 1,570 1,454 115 1,569
Administrative expenses
Administrative expenses were higher at $50.2 million (2023: $47.2 million)
mainly due to higher personnel expenses arising from a higher performance
bonus provision, long-term incentive plan and legal workers profit sharing in
Peru.
Exploration expenses
In 2024, exploration expenses increased to $26.9 million (2023: $21.3 million)
mainly due higher exploration expenses at Inmaculada of $4.4 million (2023:
$1.4 million), higher expenses at San Jose of $9.8 million (2023: $8.2
million), expenditure on exploration at Monte do Carmo ($1.6 million), higher
expenses at Mara Rosa of $1.3 million (2023: $nil), and Pallancata of $2.1
million (2023: $1.1 million). These were partially offset by the absence of
exploration expenses in Canada from the Snip project, which was terminated in
2023 ($2.2 million).
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 2024, the Company
capitalised $7.4 million relating to brownfield exploration (2023: $nil),
bringing the total investment in exploration for 2024 to $34.3 million (2023:
$21.3 million).
Selling expenses
Selling expenses increased to $17.5 million (2023: $14.9 million) mainly due
to higher gold prices impacting Argentinean export taxes.
Other income/expenses
Other income was lower at $21.0 million (2023: $30.3 million) principally due
to: the Argentinian Government export programme to settle a portion of San
Jose exports at the blue chip exchange rate totaling $16.0 million (2023:
$21.2 million), the collection of a British Columbia, Canada tax credit of
$0.5 million (2023: $3.2 million) from the Snip project, and the insurance
reimbursement received in 2023 in connection with damage to Inmaculada's
machine belt in 2022 of $2.1 million.
Other expenses before exceptional items were lower at $43.2 million (2023:
$47.6 million) mainly due to reduced mine closure provision increases of $14.7
million (2023: $28.4 million), partially offset by higher care and maintenance
expenses at Pallancata of $8.3 million, which was placed on temporary care and
maintenance during the fourth quarter of 2023 (2023: $2.5 million).
Adjusted EBITDA
Adjusted EBITDA increased by 54% to $421.4 million (2023: $274.4 million)
mainly due to the increase in revenue resulting from increased precious metal
prices and higher gold production.
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 Year ended Year ended % change
31 Dec 2024
31 Dec 2023
Profit from continuing operations before exceptional items, net finance 224,722 82,128 174
income/(cost), foreign exchange loss and income tax
Depreciation and amortisation in cost of sales 156,785 143,171 10
Depreciation and amortisation in administrative expenses and other expenses 3,050 2,075 47
Exploration expenses 26,854 21,297 26
Personnel and other exploration related fixed expenses (5,620) (5,397) 4
Other non-cash income, net 28 (#_ftn28) 15,563 31,096 (50)
Adjusted EBITDA 421,354 274,370 54
Adjusted EBITDA margin 44% 39% 13
Finance income
Finance income of $13.1 million increased from 2023 ($7.5 million) mainly due
to the gain on Argentinian mutual funds held since September 2023 of $6.9
million (2023: $1.5 million).
Finance costs
Finance costs increased from $18.2 million in 2023 to $26.9 million in 2024,
principally due to higher interest expense which totalled $18.6 million (2023:
$12.2 million) resulting from the lower capitalisation of interest expenses
that are directly attributable to the construction of Mara Rosa of $6.0
million (2023: $18.7). This was partially offset by the impact of lower
interest rates and a lower average medium-term loan balance.
Foreign exchange (losses)/gains
The Group recognised a foreign exchange loss of $10.4 million (2023: $15.6
million) mainly due to the impact of devaluation of the local currency on
monetary assets in Argentina of $9.1 million (2023: $16.0 million).
Income tax
The Company's pre-exceptional income tax charge was $65.6 million (2023: $44.0
million). The increase in the charge is mainly explained by higher
profitability versus 2023.
The effective tax rate (pre-exceptional) for the period was 33.0% (2023:
82.2%), compared to the weighted average statutory income tax rate of 31.1%
(2023: 31.8%). The higher effective tax rate in 2024 versus the average
statutory rate is mainly explained by: the effect of Royalties and the Special
Mining Tax which increased the effective rate by 5.0%; the additions to the
mine closure provision increasing the rate by 3.1%; and the impact of
non-recognised tax losses in non-operating companies increasing the rate by
1.4%. These effects were partially offset by foreign exchange in Argentina and
Brazil decreasing the rate by 5.8%, and the recognition deferred tax assets
reducing the rate by 1.9%.
Exceptional items
Exceptional items in 2024 totalled a $19.8 million loss after tax (2023: $69.5
million loss after tax) related to impairment charges at the Azuca and Arcata
projects of $13.7 million, the impairment of the investment in Aclara
Resources Inc. of $5.1 million, and the write-off of work in progress of $3.1
million in Peru. 2023 includes impairment losses at the Azuca and Crespo
projects of $63.3 million and the San Jose mining unit of $17.4 million; the
restructuring charges in Pallancata of $9.0 million resulting from placing the
operation in care and maintenance; and the impairment of the investment in
Aclara Resources Inc. of $7.2 million.
The tax effect of these exceptional items was a $2.1 million tax gain (2023:
$27.4 million).
Cash flow and balance sheet review
Cash flow:
$000 Year ended Year ended Change
31 Dec 2024
31 Dec 2023
Net cash generated from operating activities 321,247 178,761 142,486
Net cash used in investing activities (277,000) (245,506) (31,494)
Cash flows generated generated/(used in) from financing activities (34,818) 22,769 (57,587)
Foreign exchange adjustment (1,582) (10,742) 9,160
Net increase in cash and cash equivalents during the year 7,847 (54,718) 62,565
Net cash generated from operating activities increased from $178.8 million in
2023 to $321.2 million in 2024 mainly due to higher Adjusted EBITDA of $421.4
million (2023: $274.4 million).
Net cash used in investing activities increased from $245.5 million in 2023 to
$277.0 million in 2024 mainly due to higher scheduled capex in Inmaculada
resulting from mine developments deferred in 2023 due to the MEIA permit
delays of $138.6 million (2023: $86.0 million), the consideration paid for the
acquisition of Monte do Carmo of $45.0 million, and expenditure on the
Royropata MEIA process of $32.9 million (2023: $6.4 million). These effects
were partially offset by lower capex in Mara Rosa of $29.3 million (2023:
$121.1 million).
Cash from financing activities decreased from an inflow of $22.8 million to an
outflow of $34.8 million in 2024, primarily due the $275.0 million repayment
of the existing $300.0 medium-term facility (2023: $25.0 million), partially
offset by the draw-down of $140.0 million from the $200.0 million medium-term
loan facility (2023: $60.0 million), the $30.0 million draw-down from the new
$300.0 million medium-term facility, and a net increase of $80.0 million in
short-term loans (2023: $10.2 million repayment of Minera Santa Cruz stock
market promissory notes).
Working capital
$000 As at As at
31 December 2024 31 December 2023
Trade and other receivables 135,814 80,456
Inventories 87,087 68,261
Derivative financial liabilities (40,276) (344)
Income tax (payable)/receivable, net (21,019) 1,734
Trade and other payables (208,222) (135,839)
Provisions (35,082) (26,741)
Working capital (81,698) (12,473)
The Group's working capital position decreased by $69.2 million from $(12.5)
million to $(81.7) million. The key drivers of the decrease were: higher trade
and other payables of $72.4, higher derivative financial liabilities of $39.9
million, and higher income tax payable of $22.8 million; partially offset by
higher trade and other receivables of $55.4 million, and higher inventories of
$18.8 million.
Net debt
$000 unless otherwise indicated As at As at
31 December 2024 31 December 2023
Cash and cash equivalents 96,973 89,126
Non-current borrowings (163,333) (234,999)
Current borrowings 29 (#_ftn29) (149,249) (112,064)
Net debt (215,609) (257,937)
The Group's reported net debt position was $215.6 million as at 31 December
2024 (31 December 2023: $257.9 million). The decrease is mainly explained by
the higher cash generated by the business, despite strategic investments to
complete the construction of Mara Rosa, the acquisition of Monte do Carmo and
the investments in Royropata easements. Total borrowings were reduced by $34.5
million mainly due to $275.0 million repayment of the existing $300.0
medium-term facility partially offset by the draw-down of $140.0 million from
the $200.0 million medium-term loan facility, the $30.0 million draw-down from
the new $300.0 medium-term facility, and a net increase of $80.0 million in
short-term loans.
Capital expenditure
$000 Year ended Year ended
31 Dec 2024
31 Dec 2023
Inmaculada 138,582 86,031
Mara Rosa 30 (#_ftn30) 35,318 145,804
San Jose 46,143 47,682
Operations 220,043 279,517
Monte do Carmo 90,602 -
Pallancata 32,908 6,428
Other 4,529 2,447
Total 348,082 288,392
2024 capital expenditure increased from $288.4 million in 2023 to $348.1
million in 2024 mainly due to the acquisition of Monte do Carmo on 7 November
2024 for a total consideration of $86.6 million, which includes cash
consideration of $60.0 million of which $45.0 million has been paid and $15.0
million has been deferred, and $26.2 million liabilities assumed representing
the fair value of the loan and streaming agreement with Sprott which were
transferred to the Group on completion. Also, higher scheduled capex in
Inmaculada resulting from mine developments deferred in 2023 due to the MEIA
permit delays. These effects were partially offset by reduced capex at Mara
Rosa of $29.3 million (2023: $121.1 million), and lower capitalised interest
expenses that are directly attributable to the construction of Mara Rosa of
$6.0 million (2023: $18.7 million).
Final proposed dividends
$000 Year ended
31 Dec 2024
Net cash generated from operating activities 321,247
Less: non-attributable net cash generated from operating activities (36,566)
Attributable net cash generated from operating activities 284,681
Net cash used in investing activities (277,000)
Less: non-attributable net cash used in investing activities 22,610
Attributable net cash used in investing activitiies (254,390)
Attributable free cash flow 30,291
Net Debt / Adjusted EBITDA 0.51x
Dividend payout of 20-30% 6,058 - 9,087
Minimum annual dividend 10,000
Final proposed dividend 10,000
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The responsibility statement below has been prepared in connection with the
Company´s Annual Report and Accounts for the year ended 31 December 2024.
The Directors confirm that to the best of their knowledge:
o the financial statements, prepared in accordance with the applicable set
of accounting standards, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Company and the undertakings
included in the consolidation taken as a whole; and
o the Management Report (as defined in the Director's Report) includes a
fair review of the development and performance of the business and the
position of the Company and the undertakings included in the consolidation
taken as a whole, together with a description of the principal risks and
uncertainties that they face.
Consolidated income statement
For the year ended 31 December 2024
Year ended 31 December 2024 Year ended 31 December 2023
Notes Before exceptional items US$000 Exceptional items Total Before exceptional items US$000 Exceptional items Total
(note 11) US$000 (note 11) US$000
US$000 US$000
Revenue 5 947,696 - 947,696 693,716 - 693,716
Cost of sales 6 (605,263) - (605,263) (508,214) - (508,214)
Gross profit 342,433 - 342,433 185,502 - 185,502
Administrative expenses 7 (50,232) - (50,232) (47,192) - (47,192)
Exploration expenses 8 (26,854) - (26,854) (21,297) - (21,297)
Selling expenses 9 (17,489) - (17,489) (14,862) - (14,862)
Other income 12 20,955 - 20,955 30,261 - 30,261
Other expenses 12 (43,245) - (43,245) (47,553) (8,960) (56,513)
Impairment and write-off of non-current assets, net 16, 17 and 18 (846) (16,769) (17,615) (2,731) (80,843) (83,574)
Profit/(loss) before net finance income/(cost), foreign 224,722 (16,769) 207,953 82,128 (89,803) (7,675)
exchange loss and income tax
Share of loss of an associate 19 (1,408) (5,081) (6,489) (2,277) (7,183) (9,460)
Finance income 13 13,097 - 13,097 7,473 - 7,473
Finance costs 13 (26,928) - (26,928) (18,199) - (18,199)
Foreign exchange loss, net 13 (10,416) - (10,416) (15,620) - (15,620)
Profit/(loss) before income tax 199,067 (21,850) 177,217 53,505 (96,986) (43,481)
Income tax (expense)/benefit 14 (65,556) 2,088 (63,468) (44,000) 27,448 (16,552)
Profit/(loss) for the year 133,511 (19,762) 113,749 9,505 (69,538) (60,033)
Attributable to:
Equity shareholders of the Parent 116,767 (19,762) 97,005 8,991 (63,997) (55,006)
Non-controlling interests 16,744 - 16,744 514 (5,541) (5,027)
133,511 (19,762) 113,749 9,505 (69,538) (60,033)
Basic earnings/(loss) per ordinary share for the year (expressed in US dollars 15 0.23 (0.04) 0.19 0.02 (0.12) (0.10)
per share)
Diluted earnings/(loss) per ordinary share for the year (expressed in US 15 0.23 (0.04) 0.19 0.02 (0.12) (0.10)
dollars per share)
Consolidated statement of comprehensive income
For the year ended 31 December 2024
Year ended 31 December
Notes 2024 2023
US$000 US$000
Profit/(loss) for the year 113,749 (60,033)
Other comprehensive income that might be reclassified to profit or loss in
subsequent periods:
Loss on cash flow hedges 39(a) (85,560) (19,704)
Deferred tax benefit on cash flow hedges 39(e) 28,473 6,617
Exchange differences on translating foreign operations(1) (30,252) 17,722
Share of other comprehensive loss of an associate 19 (2,492) (855)
(89,831) 3,780
Other comprehensive income that will not be reclassified to profit or loss in
subsequent periods:
Gain/(loss) on equity instruments at fair value through other comprehensive 20 15 (49)
income (OCI)
15 (49)
Other comprehensive (loss)/income for the year, net of tax (89,816) 3,731
Total comprehensive profit/(loss) for the year 23,933 (56,302)
Total comprehensive loss attributable to:
Equity shareholders of the Parent 7,189 (51,275)
Non-controlling interests 16,744 (5,027)
23,933 (56,302)
1 Foreign exchange effect generated in the Group´s companies when the
functional currency is the local currency, mainly generated by the increase
(2023: decrease) of the US$ exchange rate in Brazil.
Consolidated statement of financial position
As at 31 December 2024
Notes As at As at
31 December 2024 31 December 2023
US$000 US$000
ASSETS
Non-current assets
Property, plant and equipment 16 1,070,758 1,018,853
Evaluation and exploration assets 17 132,303 67,322
Intangible assets 18 49,632 29,983
Investment in an associate 19 15,811 22,927
Financial assets at fair value through OCI 20 475 460
Other receivables 22 18,316 12,438
Deferred income tax assets 31 27,677 763
1,314,972 1,152,746
Current assets
Inventories 23 87,087 68,261
Trade and other receivables 22 135,814 80,456
Derivative financial assets 39(a) - 846
Income tax receivable 14 186 4,713
Other financial assets 3,807 2,264
Cash and cash equivalents 24 96,973 89,126
Assets held for sale 25 12,660 17,398
336,527 263,064
Total assets 1,651,499 1,415,810
EQUITY AND LIABILITIES
Capital and reserves attributable to shareholders of the Parent
Equity share capital 30 9,068 9,068
Other reserves (329,431) (234,837)
Retained earnings 931,236 834,231
610,873 608,462
Non-controlling interests 76,478 60,122
Total equity 687,351 668,584
Non-current liabilities
Other payables 26 46,501 1,711
Derivative financial liabilities 39(a) 61,343 16,581
Borrowings 28 163,333 234,999
Provisions 29 146,781 147,372
Deferred income tax liabilities 31 82,504 67,039
500,462 467,702
Current liabilities
Trade and other payables 26 208,222 135,839
Derivative financial liabilities 39(a) 40,276 1,190
Borrowings 28 149,249 112,064
Provisions 29 35,082 26,741
Income tax payable 14 21,205 2,979
Liabilities directly associated with assets held for sale 25 9,652 711
463,686 279,524
Total liabilities 964,148 747,226
Total equity and liabilities 1,651,499 1,415,810
These financial statements were approved by the Board of Directors on 11 March
2025 and signed on its behalf by:
Eduardo Landin
Chief Executive Officer
11 March 2025
Consolidated statement of cash flows
For the year ended 31 December 2024
Year ended 31 December
Notes A 2024 2023
US$000 US$000
Cash flows from operating activities
Cash generated from operations 35 365,040 217,016
Interest received 3,272 5,508
Interest paid 28 (27,074) (24,839)
Payment of mine closure costs 29 (11,833) (13,325)
Income tax, special mining tax and mining royalty paid(1) (8,158) (5,599)
Net cash generated from operating activities 321,247 178,761
Cash flows from investing activities
Purchase of property, plant and equipment (213,513) (259,730)
Purchase of evaluation and exploration assets 17(2) (55,629) (2,523)
Purchase of intangibles 18 (19,534) (124)
Purchase of Argentinian bonds 13(5) (5,838) -
Proceeds from sale of Argentinian bonds 13(5) 2,865 -
Proceeds from sale of financial assets at fair value though profit and loss 21 - 723
Proceeds from sale of property, plant and equipment 759 1,148
Proceeds from sale of assets held for sale 25 13,890 -
Sale of royalty related to Volcan project - 15,000
Net cash used in investing activities (277,000) (245,506)
Cash flows from financing activities
Proceeds from borrowings 28 311,607 137,413
Repayment of borrowings 28 (340,991) (111,980)
Payment of lease liabilities 27 (5,046) (2,338)
Dividends paid to non-controlling interests 32 (388) (326)
Net cash flows (used in)/generated from financing activities (34,818) 22,769
Net increase/(decrease) in cash and cash equivalents during the year 9,429 (43,976)
Exchange difference (1,582) (10,742)
Cash and cash equivalents at beginning of year 89,126 143,844
Cash and cash equivalents at end of year 24 96,973 89,126
(1) Taxes paid have been offset with value added tax (VAT) credits of
US$6,732,000 (2023: US$10,175,000).
Consolidated statement of changes in equity
For the year 31 December 2024
Other reserves
Notes Equity share capital US$000 Fair value reserve of financial assets at fair value through Share of other comprehensive loss of an associate US$000 Dividends expired US$000 Cumulative translation adjustment US$000 Unrealised gain/(loss) on cash flow hedges Merger reserve US$000 Share- based payment reserve US$000 Total other reserves US$000 Retained earnings US$000 Capital and reserves attributable to shareholders of the Parent Non-controlling interests US$000 Total
OCI
US$000 US$000 equity
US$000
Balance at 1 January 2023 9,061 (78) 1,274 99 (37,902) 1,541 (210,046) 6,312 (238,800) 886,980 657,241 65,475 722,716
Other comprehensive income/(expense) - (49) (855) - 17,722 (13,087) - - 3,731 - 3,731 - 3,731
Loss for the year - - - - - - - - - (55,006) (55,006) (5,027) (60,033)
Total comprehensive income/(expense) for the year - (49) (855) - 17,722 (13,087) - - 3,731 (55,006) (51,275) (5,027) (56,302)
Cancellation of dividends expired - - - (99) - - - - (99) 152 53 - 53
Dividends to non- controlling interests 32 - - - - - - - - - - - (326) (326)
Exercise of share-based payments 7 - - - - - - (584) (584) 577 - - -
Accrual of share-based payments - - - - - - - 2,443 2,443 - 2,443 - 2,443
Forfeiture of share-based payments - - - - - - - (1,528) (1,528) 1,528 - - -
Balance at 31 December 2023 9,068 (127) 419 - (20,180) (11,546) (210,046) 6,643 (234,837) 834,231 608,462 60,122 668,584
Other comprehensive income/(expense) - 15 (2,492) - (30,252) (57,087) - - (89,816) - (89,816) - (89,816)
Profit for the year - - - - - - - - - 97,005 97,005 16,744 113,749
Total comprehensive income/(expense) for the year - 15 (2,492) - (30,252) (57,087) - - (89,816) 97,005 7,189 16,744 23,933
Dividends to non- controlling interests 32 - - - - - - - - - - - (388) (388)
Other changes in associate's equity 19 - - 1,865 - - - - - 1,865 - 1,865 - 1,865
Modification of share- based payment awards 29 - - - - - - - (7,954) (7,954) - (7,954) - (7,954)
Accrual of share-based payments - - - - - - - 1,311 1,311 - 1,311 - 1,311
Balance at 31 December 2024 9,068 (112) (208) - (50,432) (68,633) (210,046) - (329,431) 931,236 610,873 76,478 687,351
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
The financial information for the year ended 31 December 2024 does not
constitute statutory accounts as defined in sections 435 (1) and (2) of the
Companies Act 2006. Statutory accounts for the year ended 31 December 2023
have been delivered to the Registrar of Companies and those for 2024 will be
delivered following the Company's annual general meeting. The auditor has
reported on these accounts; their reports were unqualified. Their report did
not include a reference to any other matters to which the auditor drew
attention by way of emphasis of matter and did not contain a statement under
section 498 (2) or (3) of the Companies Act 2006.
1 Corporate information
Hochschild Mining PLC (hereinafter "the Company") is a public limited company
incorporated on 11 April 2006 under the Companies Act 2006 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.
The ultimate controlling party of the Company is Mr Eduardo Hochschild whose
beneficial interest in the Company and its subsidiaries (together "the Group"
or "Hochschild Mining Group") is 38.27% and it is held through Pelham
Investment Corporation ("Pelham"), a Cayman Islands company.
On 8 November 2006, the Company's shares were admitted to the Official List of
the UKLA (United Kingdom Listing Authority) and to trading on the London Stock
Exchange.
The Group's principal business is the mining, processing and sale of silver
and gold. At 31 December 2024, 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's previously
operating Pallancata mine went into care and maintenance in November 2023. The
Group also has a portfolio of projects located across Peru, Argentina, Brazil,
and Chile, at various stages of development.
These consolidated financial statements were approved for issue by the Board
of Directors on 11 March 2025.
The Group's subsidiaries, all held indirectly, except for Hochschild Mining
Holdings Limited, are as follows:
Equity interest at
31 December
Company Principal activity Country of incorporation 2024 2023
% %
Hochschild Mining (Argentina) Corporation S.A.(1) Holding company Argentina 100 100
MH Argentina S.A.(2) Exploration office Argentina 100 100
Minera Santa Cruz S.A.(1 and 13) Production of gold and silver Argentina 51 51
Minera Hochschild Chile S.C.M. (3) Exploration Chile 100 100
Andina Minerals Chile SpA (formerly Andina Minerals Chile Ltd.) (3) Exploration Chile 100 100
Southwest Minerals (Yunnan) Inc. (4) Exploration China 100 100
Hochschild Mining Holdings Limited(5) Holding company England and Wales 100 100
Hochschild Mining Ares (UK) Limited(5) Administrative office England and Wales 100 100
Hochschild Mining Brazil Holdings Corp. (formerly 1334940 BC) (5) Holding company England and Wales 100 100
Southwest Mining Inc. (4) Exploration Mauritius 100 100
Southwest Minerals Inc. (4) Exploration Mauritius 100 100
Minera Hochschild Mexico, S.A. de C.V. (6) Exploration Mexico 100 100
Hochschild Mining (Peru) S.A. (4) Holding company Peru 100 100
Compañía Minera Ares S.A.C. (4) Production of gold and silver Peru 100 100
Compañía Minera Arcata S.A. (4) Production of gold and silver Peru 99.1 99.1
Empresa de Transmisión Aymaraes S.A.C. (4) Power transmission Peru 100 100
Compañía Minera Crespo S.A.C. (4 and 10) Exploration Peru - 100
Cúspide Copper S.A.C. (4 and 11) Exploration Peru 100 -
Compañía Minera Cerro Salto S.A.C. (4 and 12) Exploration Peru 100 -
Hochschild Mining (US) Inc. (7) Holding company USA 100 100
Hochschild Mining Canada Corp(8) Exploration Canada 100 100
Tiernan Gold Corp. (8) Holding company Canada 100 100
Amarillo Mineracao do Brasil Ltda. (9) Production of gold and silver Brazil 100 100
Serra Alta Mineracao Ltda. (9 and note 4) Exploration Brazil 100 -
Serra Alta Participacoes Inmobiliarias S.A. (9 and note 4) Exploration Brazil 100 -
(1) Registered address: Av. Santa Fe 2755, floor 9, Buenos Aires, Argentina.
(2) Registered address: Sargento Cabral 124, Comodoro Rivadavia, Provincia
de Chubut, Argentina.
(3) Registered address: Av. Apoquindo 4775 of 1002, Comuna Las Condes,
Santiago de Chile, Chile.
(4) Registered address: La Colonia 180, Santiago de Surco, Lima, Peru.
(5) Registered address: 17 Cavendish Square, London, W1G0PH, United Kingdom.
(6) Registered address: Calle Aguila Real No 122, Colonia Carolco,
Monterrey, Nuevo Leon, CP 64996, Mexico.
(7) Registered address: 1025 Ridgeview Dr. 300, Reno, Nevada 89519, USA.
(8) Registered address: Suite 1700, Park Place, 666 Burrard Street,
Vancouver BC, V6C 2X8.
(9) Registered address: Fazenda Invernada s/n, Zona Rural, Mara Rosa -
Goiás - Brazil, CEP: 76.490-000.
(10) The Company was sold on March 2024 to a third party.
(11) The Company was incorporated on 8 July 2024.
(12)The Company was incorporated on 20 July 2024.
(13) The Group has a 51% interest in Minera Santa Cruz S.A. (Minera Santa
Cruz), while the remaining 49% is held by a non-controlling interest. The
significant financial information in respect of this subsidiary before
intercompany eliminations as at and for the years ended 31 December 2024 and
2032 is as follows:
As at 31 December
2024 2023
US$000 US$000
Non-current assets 133,371 136,098
Current assets 144,568 100,511
Non-current liabilities (66,806) (71,813)
Current liabilities (57,922) (44,965)
Equity (153,211) (119,831)
Cash and cash equivalents 45,454 22,182
Revenue 293,335 242,461
Depreciation and amortisation (48,899) (52,829)
Interest income 1,071 1,251
Interest expense (3,043) (4,090)
Income tax (632) (4,480)
Profit/(loss) for the year and total comprehensive income 34,170 (10,269)
Net cash generated from operating activities 74,625 66,034
Net cash used in investing activities (46,143) (48,227)
Net cash used in financing activities (5,210) (11,098)
Profit/(loss) attributable to non-controlling interests in the consolidated
income statement, non-controlling interest in the consolidated statement of
financial position, and dividends declared to non-controlling interests in the
consolidated statement of changes in equity are solely related to Minera Santa
Cruz.
2 Material accounting policies
(a) Basis of preparation
The consolidated financial statements of the Group have been prepared in
accordance with UK adopted International Accounting Standards.
The basis of preparation and accounting policies used in preparing the
consolidated financial statements for the years ended 31 December 2024 and
2023 are set out below. The consolidated financial statements have been
prepared on a historical cost basis except for the revaluation of certain
financial instruments that are measured at fair value at the end of each
reporting period, as explained below. These accounting policies have been
consistently applied, except for the effects of the adoption of new and
amended accounting standard.
The financial statements are presented in US dollars (US$) and all monetary
amounts are rounded to the nearest thousand ($000) except when otherwise
indicated.
Changes in accounting policy and disclosures
The accounting policies adopted in the preparation of the 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 2023. Amendments and interpretations apply for the first time in
2024, but do not have an impact on the consolidated financial statements of
the Group. The Group has not early adopted any other standard, interpretation
or amendment that has been issued but is not yet effective.
Supplier Finance Arrangements - Amendments to IAS 7 and IFRS 7
Amendments to IFRS 16: Lease Liability in a Sale and Leaseback
Amendments to IAS 1: Classification of Liabilities as Current or Non-current
Standards, interpretations and amendments to existing standards that are not
yet effective and have not been previously adopted by the Group
Certain new standards, amendments and interpretations to existing standards
have been published and are mandatory for the Group's accounting periods
beginning on or after 1 January 2025 or later periods but which the Group has
not previously adopted. These have not been listed as they are not expected to
impact the Group.
(b) Judgements in applying accounting policies and key sources of
estimation uncertainty
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.
Significant areas of estimation uncertainty and critical judgements made by
management in preparing the consolidated financial statements include:
Significant estimates:
Useful lives of assets for depreciation and amortisation purposes - note 2(f).
Estimates are required to be made by management as to the useful lives of
assets. For depreciation calculated under the unit of-production method,
estimated recoverable reserves and resources are used in determining the
depreciation and/or amortisation of mine-specific assets. This results in a
depreciation/amortisation charge proportional to the depletion of the
anticipated remaining life-of-mine production. Each item's life, which is
assessed annually, has regard to both its physical life limitations and to
present assessments of economically recoverable reserves and resources of the
mine property at which the asset is located. These calculations require the
use of estimates and assumptions, including the amount of recoverable reserves
and resources. Changes are accounted for prospectively.
Ore reserves and resources - note 2(h).
There are numerous uncertainties inherent in estimating ore reserves and
resources. Assumptions that are valid at the time of estimation may change
significantly when new information becomes available. Changes in the forecast
prices of commodities, exchange rates, production costs or recovery rates may
change the economic status of reserves and resources and may, ultimately,
result in the reserves and resources being updated.
Recoverable values of mining assets - notes 2(k), 16, 17 and 18.
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. (notes 16, 17 and 18).
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.
Mine closure costs - notes 2(o) and 29(1).
The Group assesses its mine closure cost provision annually. Significant
estimates and assumptions are made in determining the provision for mine
closure cost as there are numerous factors that will affect the ultimate
liability. These factors include estimates of the extent and costs of
rehabilitation activities, technological changes, regulatory changes, cost
increases, mine life and changes in discount rates. Those uncertainties may
result in future actual expenditure differing from the amounts currently
provided. The provision at the balance sheet date represents management's best
estimate of the present value of the future closure costs required. In July
2021, the mine closure law for the province of Santa Cruz in Argentina was
published, establishing a period of 180 business days to present the Mine
Closure Plan. The plan presented to the provincial authority, in December
2022, accomplishes law regulations and it has not been approved at the date of
the financial statements. The Group considers the mine closure provision in
San Jose to be largely aligned with Argentina's new law and regulations.
Valuation of financial instruments - note 39.
The valuation of certain Group assets and liabilities reflects the changes to
certain assumptions used in the determination of their value, such as future
gold and silver prices, discount rates, and resources and reserves estimates.
Non market performance conditions on LTIP 2022, LTIP 2023 and LTIP 2024 - note
29.
There are two parts to the performance conditions attached to LTIP awards: 50%
is subject to the Company's TSR ranking relative to a tailored peer group of
mining companies, 50% is subject to internal KPIs split equally between: (i)
three-year growth of the Company's Measured and Indicated Resources (MIR) per
share (calculated on an enterprise value basis), and (ii) average outcome of
the annual bonus scorecard in respect of 2022, 2023 and 2024, regarding LTIP
2022; 2023, 2024 and 2025, regarding LTIP 2023; and 2024, 2025 and 2026,
regarding LTIP 2024, calculated as the simple mean of the three scorecard
outcomes. At each reporting date the Group has to estimate the value of the
shares and the possible outcome regarding the scorecard and Resources. The
balance of the awards is disclosed in note 29.
Critical judgements:
Income tax - notes 2(t), 2(u), 14, 31 and 37(a).
Judgement is required in determining whether deferred tax assets are
recognised on the statement of financial position. Deferred tax assets,
including those arising from un-utilised tax losses require management to
assess the likelihood that the Group will generate taxable earnings in future
periods, in order to utilise recognised deferred tax assets. Estimates of
future taxable income are based on forecast cash flows from operations and the
application of existing tax laws in each jurisdiction. To the extent that
future cash flows and taxable income differ significantly from estimates, the
ability of the Group to realise the net deferred tax assets recorded at the
balance sheet date could be impacted. The Group analyses the possibility of
generating profit in all the companies and determines the recognition of
deferred tax. No deferred tax asset is recognised in the holding and
exploration entities as they are not expected to generate any profit to settle
the temporary difference (refer to note 31).
Judgement is also required when determining the recognition of tax liabilities
as the tax treatment of some transactions cannot be finally determined until a
formal resolution has been reached by the tax authorities. Tax liabilities are
also recorded for uncertain exposures which can have an impact on both
deferred and current tax. Tax benefits are not recognised unless it is
probable that the benefit will be obtained and tax liabilities are recognised
if it is probable that a liability will arise (refer to note 37(a)). The final
resolution of these transactions may give rise to material adjustments to the
income statement and/or cash flow in future periods. The Group reviews each
significant tax liability or benefit each period to assess the appropriate
accounting treatment.
Life of mine (LOM).
There are several aspects which are determined by the life of mine, such as
ore reserves and resources, recoverable values of mining assets, mine
rehabilitation provision and depreciation. The life of mine for an operation
is specified in the relevant Environmental Impact Assessment (EIA) which is
amended from time to time as more resources at the mine are identified. EIAs
are permits which are granted in the ordinary course of business to the mining
industry. While the processing of such permits may be subject to delays, the
Group has never had an EIA denied. A crucial element of Peru's legal framework
is the principle of predictability which, in essence, means that if the legal
requirements for any given permit have been satisfied, the State cannot
unlawfully deny the granting of the permit. Taking this into consideration, as
well as the Group's operational experience, the Group believes that permits
will be secured such that operations can continue without interruption. In the
unlikely scenario that this does not occur, there could be material changes to
those items in the financial statements that are determined by the life of
mine.
Determination of functional currencies - note 2(e).
The determination of functional currency requires management judgement,
particularly where there may be several currencies in which transactions are
undertaken and which impact the economic environment in which the entity
operates. In Argentina, the exchange control restrictions limit the companies
to hold US dollars but do not restrict carrying out transactions in US dollar.
Recognition of evaluation and exploration assets and transfer to development
costs - notes 2(g), 16 and 17.
Judgement is required in determining when there is sufficient evidence that
there is a future economic benefit of an exploration project, at which point
the exploration costs are capitalised. This includes an assessment of whether
there is a high degree of confidence of the existence of economically
recoverable minerals, mine-site exploration is being conducted to convert
resources to reserves, or mine-site exploration is being conducted to confirm
resources. The stage, timeline and associated risks of the project are also
considered. The exploration and evaluation assets are then assessed for
impairment when facts and circumstances suggest that the carrying amount is
not recoverable.
Climate change
General
The Group completed a climate-related scenario analysis and a detailed
transition assessment for the transition risk and opportunity identified most
relevant to the business. The risk assessed is the impact of carbon pricing
on operational and capital expenditure and the opportunity assessed is the
reduction of land transport emissions.
This year the Group will conduct a financial quantification assessment of
climate-related risks. Once this assessment is completed the Group will be
able to estimate the future economic impact of the climate-related risks and
incorporate it into the projections used for impairment testing purposes and
financial statements, as applicable.
In the future, the adoption of the Group's climate change strategy and the
introduction of unexpected climate-change regulations in the countries where
the Group operates may affect the financial quantification estimates and could
result in changes to financial results and the carrying values of certain
assets and liabilities in forthcoming reporting periods.
Physical risks
As previously stated, the Group completed a climate-related scenario analysis,
identifying five 5 physical risks rated as "high": water stress and drought,
extreme rainfall flooding, wildfires, extreme winds and storms, and extreme
heat. The costs associated with managing these risks are incorporated into
the Group´s operational and capital expenditure when they are anticipated to
materialise.
As the Group progresses its adaptation strategy, the identification of
additional risks or the development of the Group's response may result in
changes to financial results and the carrying values of assets and liabilities
in future reporting periods.
Acquiring a subsidiary or a group of assets - note 4(a).
In identifying a business combination (note 2(c)) or acquisition of assets the
Group applies the concentration test in accordance with IFRS 3 to determine
whether an acquisition is a business combination or an asset acquisition. The
concentration test is met if substantially all of the fair value of the gross
assets acquired is concentrated in a single identifiable assets or a group of
similar assets. If the concentration test is met, the acquisition is accounted
for as an asset acquisition. If the concentration test is not met, the Group
considers the underlying inputs, processes and outputs acquired as a part of
the transaction. For an acquired set of activities and assets to be considered
a business there must be at least some inputs and processes that have the
capability to achieve the purposes of the Group. Where significant inputs and
processes have not been acquired, a transaction is considered to be the
purchase of assets.
For the assets and assumed liabilities acquired the Group allocates the total
consideration paid (including directly attributable transaction costs) based
on the relative fair values of the underlying items. On 7 November 2024 the
Group acquired a 100% interest in the Monte do Carmo gold project in Brazil,
through the acquisition of Serra Alta Mineração Ltda. (note 4(a)). The
transaction was accounted as a purchase of assets as it met the concentration
test, with the main asset acquired being the Monte do Carmo project which is
in a development stage.
Stream Agreements - note 26(a).
Judgement was required in determining the accounting treatment for the initial
recognition and subsequent measurement of the obligations included in the
Secured Note and Stream Agreement with Sprott Private Resource Streaming and
Royalty Corp. ("Sprott"), assigned to the Group upon the acquisition of the
Monte do Carmo project. Refer to notes 4 and 26(a) for details on the Monte do
Carmo´s acquisition and Stream Agreements, respectively.
Management determined that the Secured Note and Stream Agreement are closely
connected, with the option by Sprott to set off the $20,000,000 stream payment
against the Secured Note upon commencement of production. Therefore,
management has considered the two contracts as a single unit of account The
Stream Agreement, including the Buy-down option meet the definition of a
derivative and is accounted for at fair value through profit and loss
("FVTPL"). The key assumptions on which management has based its determination
of fair value are disclosed in note 26(a).
Investment in an associate - note 19.
Judgement is required in determining the recoverable amount of the investment
in Aclara Resources Inc. ('Aclara'). Management determined that the value
derived from the US$25,000,000 private placement, announced by Aclara
Resources Inc. in December 2024 and completed in February 2025, approximates
the recoverable amount of Aclara. Therefore, the Group adjusted the carrying
amount of the investment to reflect the value of the shares issued in the
private placement. As a result, the Group has determined an impairment charge
of US$5,081,000 as at 31 December 2024.
(c) Basis of consolidation
The consolidated financial statements set out the Group's financial position,
performance and cash flows as at 31 December 2024 and 31 December 2023 and for
the years then ended, respectively.
Subsidiaries are those entities controlled by the Group regardless of the
amount of shares owned by the Group. Control is achieved when the Group is
exposed, or has rights, to variable returns from its involvement with the
investee and has the ability to affect those returns through its power over
the investee. Non-controlling interests' rights to safeguard their interest
are fully considered in assessing whether the Group controls a subsidiary.
Specifically, the Group controls an investee if, and only if, the Group has:
power over the investee (i.e. existing rights that give it the current ability
to direct the relevant activities of the investee);
exposure, or rights, to variable returns from its involvement with the
investee; and
the ability to use its power over the investee to affect its returns.
Generally, there is a presumption that a majority of voting rights result in
control. To support this presumption and when the Group has less than a
majority of the voting or similar rights of an investee, the Group considers
all relevant facts and circumstances in assessing whether it has power over an
investee, including:
the contractual arrangement with the other vote holders of the investee;
rights arising from other contractual arrangements; and
the Group's voting rights and potential voting rights.
The Group re-assesses whether or not it controls an investee if facts and
circumstances indicate that there are changes to one or more of the three
elements of control.
Basis of consolidation
Subsidiaries are consolidated from the date of their acquisition, being the
date on which the Group obtains control, and continue to be consolidated until
the date that such control ceases.
Assets, liabilities, income and expenses of a subsidiary acquired or disposed
of during the year are included in the consolidated financial statements from
the date the Group gains control until the date the Group ceases to control
the subsidiary.
Profit or loss and each component of OCI are attributed to the equity holders
of the parent of the Group and to the non-controlling interests, even if this
results in the non-controlling interests having a deficit balance. When
necessary, adjustments are made to the financial statements of subsidiaries to
bring their accounting policies in line with the Group's accounting policies.
All intra-group assets and liabilities, equity, income, expenses and cash
flows relating to transactions between members of the Group are eliminated in
full on consolidation.
A change in the ownership interest of a subsidiary, without loss of control,
is accounted for as an equity transaction, affecting retained earnings. If the
Group loses control over a subsidiary, it (i) derecognises the assets
(including goodwill) and liabilities of the subsidiary; (ii) derecognises the
carrying amount of any non-controlling interest (NCI); (iii) derecognises the
cumulative translation differences, recorded in equity; (iv) recognises the
fair value of the consideration received; (v) recognises the fair value of any
investment retained; (vi) recognises any surplus or deficit in profit or loss;
and (vii) reclassifies the parent's share of components previously recognised
in other comprehensive income to profit or loss or retained earnings, as
appropriate.
An NCI represents the equity in a subsidiary not attributable, directly and
indirectly, to the parent company and is presented separately within equity in
the consolidated statement of financial position, separately from equity
attributable to owners of the parent.
Business combinations
Business combinations are accounted for using the acquisition method. The cost
of an acquisition is measured as the aggregate of the consideration
transferred, measured at acquisition date fair value and the amount of any NCI
in the acquiree. The choice of measurement of NCI, either at fair value or at
the proportionate share of the acquiree's identifiable net assets, is
determined on a transaction by transaction basis. Acquisition costs incurred
are expensed and included in administrative expenses.
Goodwill is initially measured at cost, being the excess of the aggregate of
the consideration transferred and the amount recognised for the NCI, and any
interest previously held, over the net identifiable assets acquired and the
liabilities assumed. Assets acquired and liabilities assumed in transactions
separate to the business combinations, such as the settlement of pre-existing
relationships or post-acquisition remuneration arrangements, are accounted for
separately from the business combination in accordance with their nature and
applicable IFRSs. Identifiable intangible assets meeting either the
contractual-legal or the separability criteria are recognised separately from
goodwill. Contingent liabilities representing a present obligation are
recognised if the acquisition date fair value can be measured reliably.
(d) Going concern
Directors' assessment
The Directors have reviewed Group liquidity, including cash resources and
borrowings (refer to note 28 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 March 2026
(the "Going Concern Period") which is at least 12 months from the approval
date of these 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, San Jose and
Mara Rosa, and assumes average precious metal prices of US$2,616/oz for gold
and US$32.2/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$270 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$1,544/oz for gold and
US$19.0/oz for silver for the duration of the Going Concern Period would
result in the minimum levels of compliance with the debt covenants of the
medium-term loan facilities; and
• 21 weeks of concurrent stoppages at each of
Inmaculada, San Jose and Mara Rosa would result in the minimum levels of
compliance with the debt covenants.
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 financial
statements.
(e) Currency translation
The functional currency for each entity in the Group is determined by the
currency of the primary economic environment in which it operates. For the
holding companies and operating entities this currency is US dollars and for
the other entities it is the local currency of the country in which it
operates. The Group's financial information is presented in US dollars, which
is the Company's functional currency. Transactions denominated in currencies
other than the functional currency of the entity are initially recorded in the
functional currency using the exchange rate prevailing at the date of the
transaction. Monetary assets and liabilities denominated in foreign currencies
are remeasured at the exchange rate prevailing at the statement of financial
position date. Exchange gains and losses on settlement of foreign currency
transactions which are translated at the rate prevailing at the date of the
transactions, or on the translation of monetary assets and liabilities which
are translated at period-end exchange rates, are taken to the income
statement. Non-monetary assets and liabilities denominated in foreign
currencies that are stated at historical cost are translated to the functional
currency at the foreign exchange rate prevailing at the date of the
transaction. Exchange differences arising from monetary items that are part of
a net investment in a foreign operation are recognised in equity and
transferred to income on disposal of such net investment.
Subsidiary financial statements expressed in their corresponding functional
currencies are translated into US dollars by applying the exchange rate at
period-end for assets and liabilities and the transaction date exchange rate
for income statement items. The resulting difference on consolidation is
included as a cumulative translation adjustment in equity. On disposal of a
foreign operation, the component of OCI relating to that particular foreign
operation is reclassified to profit or loss.
(f) Property, plant and equipment
Property, plant and equipment is stated at cost or deemed cost less
accumulated depreciation and impairment losses. Cost comprises its purchase
price and directly attributable costs of acquisition or construction required
to bring the asset to the condition necessary for the asset to be capable of
operating in the manner intended by management. Economical and physical
conditions of assets have not changed substantially over this period.
The cost less residual value of each item of property, plant and equipment is
depreciated over its useful life. Each item's estimated useful life has been
assessed with regard to both its own physical life limitations and the present
assessment of economically recoverable reserves and resources of the mine
property at which the item is located. Estimates of remaining useful lives are
made on a regular basis for all mine buildings, machinery and equipment, with
annual reassessments for major items. Depreciation is charged to cost of
production on a units of production basis for mine buildings and installations
and plant and equipment used in the mining production process, or charged
directly to the income statement over the estimated useful life of the
individual asset on a straight-line basis when not related to the mining
production process. Changes in estimates, which mainly affect units of
production calculations, are accounted for prospectively. Depreciation
commences when assets are available for use. Land is not depreciated.
An asset's carrying amount is written-down immediately to its recoverable
amount if the asset's carrying amount is greater than its estimated
recoverable amount.
Gains and losses on disposals are determined by comparing the net proceeds
with the carrying amount and are recognised within other income/expenses, in
the income statement.
The expected useful lives under the straight-line method are as follows:
Years
Buildings 3 to 33
Plant and equipment 5 to 10
Vehicles 5
Borrowing costs directly attributable to the acquisition or construction of an
asset that necessarily takes a substantial period of time to be ready for its
intended use are capitalised as part of the cost of the asset. All other
borrowing costs are expensed where incurred. For borrowings associated with a
specific asset, the actual rate on that borrowing is used. Otherwise, a
weighted average cost of borrowing is used. The Group capitalises the
borrowing costs related to qualifying assets with a value of US$1,000,000 or
more, considering that the substantial period of time to be ready is six or
more months.
Mining properties and development costs
Purchased mining properties are recognised as assets at their cost of
acquisition or at fair value if purchased as part of a business combination.
Costs associated with developments of mining properties are capitalised.
Mine development costs are, upon commencement of commercial production,
depreciated using the units of production method based on the estimated
economically recoverable reserves and resources to which they relate.
When a mine construction project moves into the production stage, the
capitalisation of certain mine construction costs ceases and costs are either
regarded as part of the cost of inventory or expensed, except for costs which
qualify for capitalisation relating to mining asset additions or improvements,
underground mine development or mineable reserve development.
Construction in progress and capital advances
Assets in the course of construction are capitalised as a separate component
of property, plant and equipment. Once the asset moves into the production
phase, the cost of construction is transferred to the appropriate category.
Construction in progress is not depreciated. Capital advances to suppliers
related to the purchase of property, plant and equipment are disclosed in
construction in progress.
Subsequent expenditure
Expenditure incurred to replace a component of an item of property, plant and
equipment is capitalised separately with the carrying amount of the component
being written-off. Other subsequent expenditure is capitalised if future
economic benefits will arise from the expenditure. All other expenditure
including repairs and maintenance expenditures are recognised in the income
statement as incurred.
(g) Evaluation and exploration assets
Exploration and evaluation expenses are capitalised when there is sufficient
evidence that there is a future economic benefit to the Group. All other
exploration and evaluation expenses are expensed as incurred. Exploration and
evaluation expenses are considered to have a future benefit to the Group when
there is a high degree of confidence of the existence of economically
recoverable minerals, mine-site exploration is being conducted to convert
resources to reserves, or mine-site exploration is being conducted to confirm
resources. The stage, timeline and associated risks of the project are also
considered. For exploration and evaluation conducted near operating mine
sites, exploration and evaluation expenses are capitalised upon the
confirmation of resources.
Payments or option payments made by the Group to acquire licenses for
exploration and evaluation assets, or to acquire an underlying mineral
project, are capitalised in exploration and evaluation expenses or expensed as
incurred, following the same criteria described above.
The Group's exploration and evaluation assets are carried at acquired costs
until such time as the technical feasibility and commercial viability of the
extraction of resources in an area of interest are demonstrable, usually after
a pre-feasibility study has been completed, at which time they are classified
as mine development costs and are tested for impairment, and are then
reclassified to mining properties and development costs. For exploration and
evaluation conducted near operating mine sites, exploration and evaluation
expenses are classified as development costs upon the conversion of resources
to reserves.
(h) Determination of ore reserves and resources
The Group estimates its ore reserves and mineral resources based on
information compiled by internal competent persons. Reports to support these
estimates are prepared each year and are stated in conformity with the 2012
Joint Ore Reserves Committee (JORC) code.
It is the Group's policy to have the report audited every two years by a
Competent Person. Reserves and resources are used in the units of production
calculation for depreciation and amortisation as well as the determination of
the timing of mine closure cost and impairment analysis.
(i) Investment in associates
An associate is an entity over which the Group has significant influence.
Significant influence is the power to participate in the financial and
operating policy decisions of the investee, but is not control or joint
control over those policies.
The considerations made in determining significant influence are similar to
those necessary to determine control over subsidiaries. The Group's investment
in its associate are accounted for using the equity method.
Under the equity method, the investment in an associate is initially
recognised at cost. The carrying amount of the investment is adjusted to
recognise changes in the Group's share of net assets of the associate since
the acquisition date. Goodwill relating to the associate is included in the
carrying amount of the investment and is not tested for impairment separately.
The statement of profit or loss reflects the Group's share of the results of
operations of the associate. Any change in OCI of those investees is presented
as part of the Group's OCI. In addition, when there has been a change
recognised directly in the equity of the associate, the Group recognises its
share of any changes, when applicable, in the statement of changes in equity.
Unrealised gains and losses resulting from transactions between the Group and
the associate are eliminated to the extent of the interest in the associate.
The aggregate of the Group's share of profit or loss of an associate is shown
on the face of the statement of profit or loss outside operating profit and
represents profit or loss after tax and non-controlling interests in the
subsidiaries of the associate.
The financial statements of the associate are prepared for the same reporting
period as the Group. When necessary, adjustments are made to bring the
accounting policies in line with those of the Group.
After application of the equity method, the Group determines whether it is
necessary to recognise an impairment loss on its investment in its associate.
At each reporting date, the Group determines whether there is objective
evidence that the investment in the associate is impaired. If there is such
evidence, the Group calculates the amount of impairment as the difference
between the recoverable amount of the investment and its carrying value, and
then recognises the loss within "Share of profit of an associate" in the
statement of profit or loss.
Upon loss of significant influence over the associate, the Group measures and
recognises any retained investment at its fair value. Any difference between
the carrying amount of the associate upon loss of significant influence and
the fair value of the retained investment and proceeds from disposal is
recognised in profit or loss.
(j) Intangible assets
Right to use energy of transmission line
Transmission line costs represent the investment made by the Group to
construct the transmission line on behalf of the government to be granted the
right to use it. This is an asset with a finite useful life equal to that of
the mine to which it relates and that is amortised applying the units of
production method for that mine.
Water permits
Water permits are recorded at cost and allow the Group to withdraw a specified
amount of water from the ground for reasonable, beneficial uses. This is an
asset with an indefinite useful life (note 18(2)).
Legal rights
Legal rights correspond to expenditures required to give the Group the right
to use a property for the surface exploration work, development and
production. This is an asset with a finite useful life equal to that of the
mine to which it relates and that is amortised applying the units of
production method for that mine.
Other intangible assets
Other intangible assets are primarily computer software which are capitalised
at cost and are amortised on a straight-line basis over their useful life of
three years.
(k) Impairment of non-financial assets
Assets that have an indefinite useful life are not subject to amortisation and
are tested annually for impairment.
The carrying amounts of property, plant and equipment and evaluation and
exploration assets are reviewed for impairment if events or changes in
circumstances indicate that the carrying value may not be recoverable. If
there are indicators of impairment, an exercise is undertaken to determine
whether the carrying values are in excess of their recoverable amount. Such
review is undertaken on an asset by asset basis, except where such assets do
not generate cash flows independent of other assets, and then the review is
undertaken at the cash-generating unit (CGU) level.
The assessment requires the use of estimates and assumptions such as long-term
commodity prices, discount rates, future capital requirements, reserves and
resources volumes (reflected in the production volume) and production costs.
Changes in these assumptions will affect the recoverable amount of the
property, plant and equipment and evaluation and exploration assets.
If the carrying amount of an asset or its cash-generating unit (CGU) exceeds
the recoverable amount, an impairment provision is recorded to reflect the
asset at the lower amount. Impairment losses are recognised in the income
statement.
Calculation of recoverable amount
The recoverable values of the CGUs and advanced exploration projects are
determined using a FVLCD methodology. FVLCD for CGUs was determined using a
combination of level 2 and level 3 inputs. The FVLCD of the producing mine
assets is determined using a discounted cash flow model and for the developing
stage mine assets or advanced exploration projects is determined using a
discounted cash flow model or the value-in-situ methodology, which 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. (notes 16, 17 and 18).
Reversal of impairment
An impairment loss is reversed if there has been a change in the estimates
used to determine the recoverable amount. An impairment loss is reversed only
to the extent that the asset's carrying amount does not exceed the carrying
amount that would have been determined, net of depreciation or amortisation,
if no impairment loss had been recognised.
(l) Inventories
Inventories are valued at the lower of cost or net realisable value. Cost is
determined using the weighted average method.
The cost of work in progress and finished goods (ore inventories) is based on
the cost of production. For this purpose, the costs of production include:
costs, materials and contractor expenses which are directly attributable to
the extraction and processing of ore;
depreciation of property, plant and equipment used in the extraction and
processing of ore; and
related production overheads (based on normal operating capacity).
Net realisable value is the estimated selling price in the ordinary course of
business, less applicable variable selling expenses.
(m) Trade and other receivables
Current trade receivables are carried at the original invoice amount and then
subsequently measured at amortised cost less provision made for impairment of
these receivables. Non current receivables are stated at amortised cost. A
provision for impairment of trade receivables is established using the
expected credit loss impairment model according IFRS 9. The amount of the
provision is the difference between the carrying amount and the recoverable
amount and this difference is recognised in the income statement. The
revaluation of provisionally priced contracts stated in 2(q) is recorded as
trade receivables.
(n) Share capital
Ordinary shares are classified as equity. Any excess above the par value of
shares received upon issuance of those shares is classified as share premium.
In the case the excess above par value is available for distribution, it is
classified as merger reserve and then transferred to retained earnings. The
Group had the merger reserve available for distribution within retained
earnings.
(o) Provisions
Provisions are recognised when the Group has a present obligation (legal or
constructive) as a result of a past event, it is probable that an outflow of
resources will be required to settle the obligation and a reliable estimate
can be made of the amount of the obligation (note 29). If the effect of the
time value of money is material, provisions are determined by discounting the
expected future cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and, where appropriate, the risks
specific to the liability. Where discounting is used, the increase in the
provision due to the passage of time is recognised as a finance cost.
Mine closure cost
Provisions for mine closure costs are made in respect of the estimated future
costs of closure and restoration and for environmental rehabilitation costs
(which include the dismantling and demolition of infrastructure, removal of
residual materials and remediation of disturbed areas) in the accounting
period when the related environmental disturbance occurs. The provision is
discounted and the unwinding of the discount is included in finance costs. At
the time of establishing the provision, a corresponding asset is capitalised
and is depreciated over future production from the mine to which it relates.
The provision is reviewed on an annual basis for changes in cost estimates,
discount rates and operating lives of the mines.
Changes to estimated future costs are recognised in the statement of financial
position by adjusting the mine closure cost liability and the related asset
originally recognised. If, for mature mines, the related mine assets net of
mine closure cost provisions exceed the recoverable value, that portion of the
increase is charged directly to the income statement. Similarly, if reductions
to the estimated costs exceed the carrying value of the mine asset, that
portion of the decrease is credited directly to the income statement. For
closed sites, changes to estimated costs are recognised immediately in the
income statement.
Workers' profit sharing and other employee benefits
In accordance with Peruvian legislation, companies in Peru must provide for
workers' profit sharing equivalent to 8% of taxable income in each year. This
amount is charged to the income statement within personnel expenses (note 10)
and is considered deductible for income tax purposes. The Group has no pension
or retirement benefit schemes.
Other
Other provisions are accounted for when the Group has a legal or constructive
obligation for which it is probable there will be an outflow of resources for
which the amount can be reliably estimated.
(p) Share-based payments
Cash-settled transactions
A liability is recognised for the fair value of cash-settled transactions. The
fair value is measured initially and at each reporting date up to and
including the settlement date, with changes in fair value recognised in
personnel expenses. The fair value is expensed over the period until the
vesting date with recognition of a corresponding liability.
The fair value of the awards is taken to be the market value of the shares at
the date of award adjusted by a factor for anticipated relative Total
Shareholder Return (TSR) performance. Fair values are subsequently remeasured
at each reporting date to reflect the number of awards expected to vest based
on the current and anticipated TSR performance. The approach used to account
for vesting conditions when measuring equity-settled transactions also applies
to cash-settled transactions.
Equity-settled transactions
The cost of equity-settled transactions is determined by the fair value at the
date when the grant is made using an appropriate valuation model and is
recognised, together with a corresponding increase in other reserves in
equity, over the period in which the performance and/or service conditions are
fulfilled. The cumulative expense recognised for equity-settled transactions
at each reporting date until the vesting date reflects the extent to which the
vesting period has expired and the Group's best estimate of the number of
equity instruments that vest. The income statement expense for a period
represents the movement in cumulative expense recognised as at the beginning
and end of that period and is recognised in personnel expenses (note 10).
Service and non-market performance conditions are not taken into account when
determining the grant date fair value of awards, but the likelihood of the
conditions being met is assessed as part of the Group's best estimate of the
number of equity instruments that will ultimately vest. Market performance
conditions are reflected within the grant date fair value. Any other
conditions attached to an award, but without an associated service
requirement, are considered to be non-vesting conditions. Non-vesting
conditions are reflected in the fair value of an award and lead to an
immediate expensing of an award unless there are also service and/or
performance conditions. No expense is recognised for awards that do not
ultimately vest because non-market performance and/or service conditions have
not been met. Where awards include a market or non-vesting condition, the
transactions are treated as vested irrespective of whether the market or
non-vesting condition is satisfied, provided that all other performance and/or
service conditions are satisfied. When the terms of an equity-settled award
are modified, the minimum expense recognised is the grant date fair value of
the unmodified award, provided the original vesting terms of the award are
met. An additional expense, measured as at the date of modification, is
recognised for any modification that increases the total fair value of the
share-based payment transaction, or is otherwise beneficial to the employee.
Where an award is cancelled by the entity or by the counterparty, any
remaining element of the fair value of the award is expensed immediately
through profit or loss.
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. This resulted in a recognition of
liability based on the fair valuation of the cash settled LTIPs as at the date
of modification and reversal of the share-based payment reserves, the
incremental fair value of the cash-settled award over that of the
equity-settled award as at the modification date amounting to US$405,000 is
expensed to the profit and loss. The liability is remeasured at each reporting
date.
(q) Revenue recognition
The Group is involved in the production and sale of gold and silver from dore
and concentrate containing both gold and silver. Dore bars are either sold
directly to customers or are sent to a third party for further refining into
gold and silver before they are sold. Concentrate is sold directly to
customers.
Revenue from contracts with customers is recognised when control of the goods
or services are transferred to the customer at an amount that reflects the
consideration to which the Group expects to be entitled in exchange for those
goods or services. Revenue excludes any applicable sales taxes.
The revenue is subject to adjustment based on inspection of the product by the
customer. Revenue is initially recognised on a provisional basis using the
Group's best estimate of contained gold and silver. Any subsequent adjustments
to the initial estimate of metal content are recorded in revenue once they
have been determined.
In addition, certain sales are "provisionally priced" where the selling price
is subject to final adjustment at the end of a period, normally ranging from
15 to 120 days after the start of the delivery process to the customer, based
on the market price at the relevant quotation point stipulated in the
contract. Revenue is initially recognised when the conditions set out above
have been met, using market prices at that date. The price exposure is
considered to be an adjustment and hence separated from the sales contract at
each reporting date. The provisionally priced metal is revalued based on the
forward selling price for the quotational period stipulated in the contract
until the quotational period ends. The selling price of gold and silver can be
measured reliably as these metals are actively traded on international
exchanges. The revaluation of provisionally priced contracts is recorded as
revenue.
Commercial discounts related to the refining, recovery and treatment of
minerals are presented netted from sales.
A proportion of the Group's sales are sold under CIF Incoterms, whereby the
Group is responsible for providing freight/shipping services (as principal)
after the date that the Group transfers control of the metal in concentrate to
its customers. The Group, therefore, has separate performance obligations for
freight/shipping services which are provided solely to facilitate sale of the
commodities it produces.
Other Incoterms commonly used by the Group are FOB, where the Group has no
responsibility for freight or insurance once control of the products has
passed at the loading port, and Delivered at Place (DAP) where control of the
goods passes when the product is delivered to the agreed destination. For
arrangements which have these Incoterms, the only performance obligations are
the provision of the product at the point where control passes.
For CIF arrangements, the transaction price (as determined above) is allocated
to the metal in concentrate and freight/shipping services using the relative
stand-alone selling price method. Under these arrangements, a portion of
consideration may be received from the customer in cash at, or around, the
date of shipment under a provisional invoice. Therefore, some of the upfront
consideration that relates to the freight/shipping services yet to be
provided, is deferred. It is then recognised as revenue over time using an
output method (being days of shipping/transportation elapsed) to measure
progress towards complete satisfaction of the service as this best represents
the Group's performance. This is on the basis that the customer simultaneously
receives and consumes the benefits provided by the Group as the services are
being provided. The costs associated with these freight/shipping services are
also recognised over the same period of time as incurred.
Income from services provided to related parties (note 33 (a)) is recognised
in revenue when services are provided.
Deferred revenue results when cash is received in advance of revenue being
earned. Deferred revenue is recorded as a liability until it is earned. Once
earned, the liability is reduced and revenue is recorded. The Group analyses
when revenue is earned or deferred.
(r) Contingencies
A contingent liability is a possible obligation depending on whether some
uncertain future event occurs, or a present obligation where payment is not
probable or the amount cannot be measured reliably. Contingent liabilities are
not recognised in the financial statements and are disclosed in notes to the
financial statements unless their occurrence is remote (note 37).
A contingent asset is a possible asset that arises from past events, and whose
existence will be confirmed only by the occurrence or non-occurrence of one or
more uncertain future events not wholly within the control of the entity.
Contingent assets are not recognised in the financial statements, but are
disclosed in the notes if their recovery is deemed probable (note 37).
(s) Finance income and costs
Finance income and costs comprise interest expense on borrowings, the
accumulation of interest on provisions, interest income on funds invested,
unwinding of discount, and gains and losses from the change in fair value of
derivative instruments.
Interest income is recognised as it accrues, taking into account the effective
yield on the asset.
(t) Income tax
Income tax for the year comprises current and deferred tax. Income tax is
recognised in the income statement except to the extent that it relates to
items charged or credited directly to equity, in which case it is recognised
in equity.
Current tax expense is the expected tax payable on the taxable income for the
year, using tax rates enacted at the statement of financial position date, and
any adjustment to tax payable in respect of previous years.
Deferred tax is provided using the balance sheet liability method, providing
for temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for taxation
purposes, with the following exceptions:
where the temporary difference arises from the initial recognition of goodwill
or of an asset or liability in a transaction that is not a business
combination that at the time of the transaction affects neither accounting nor
taxable profit or loss; and
in respect of taxable temporary differences associated with investments in
subsidiaries and associates, where the timing of the reversal of the temporary
differences can be controlled and it is probable that the temporary
differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are measured at the tax rates that are
expected to apply to the period when the asset is realised or the liability is
settled based on the tax rates (and tax laws) that have been enacted or
substantively enacted at the statement of financial position date.
A deferred tax asset is recognised only to the extent that it is probable that
future taxable profits will be available against which the asset can be
utilised. Deferred tax assets are reduced to the extent that it is no longer
probable that the related tax benefit will be realised.
(u) Uncertain tax positions
An estimated tax liability is recognised when the Group has a present
obligation as a result of a past event, it is probable that the Group will be
required to settle that obligation and a reliable estimate can be made of the
amount of the obligation. The liability is the best estimate of the
consideration required to settle the present obligation at the balance sheet
date, taking into account risks and uncertainties surrounding the obligation.
Separate liabilities for interest and penalties are also recorded if
appropriate.
Movements in interest and penalty amounts in respect of tax liability are not
included in the tax charge, but are disclosed in the income statement. Tax
liabilities are based on management's interpretation of country-specific tax
law and the likelihood of settlement. This involves a significant amount of
judgement as tax legislation can be complex and open to different
interpretation. Management uses in-house tax experts, professional firms and
previous experience when assessing tax risks. Where actual tax liabilities
differ from the liabilities, adjustments are made which can have a material
impact on the Group's profits for the year. Refer to note 37(a) for specific
tax contingencies.
(v) Leases
Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease
(i.e., the date the underlying asset is available for use). Right-of-use
assets are measured at cost, less any accumulated depreciation and impairment
losses, and adjusted for any remeasurement of lease liabilities. The cost of
right-of-use assets includes the amount of lease liabilities recognised,
initial direct costs incurred, and lease payments made at or before the
commencement date less any lease incentives received. The right-of-use asset
is depreciated over the shorter of the asset's useful life and the lease term
on a straight-line basis. Right-of-use assets are subject to impairment.
Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities
measured at the present value of lease payments to be made over the lease
term. The lease payments include fixed payments (including in-substance fixed
payments) less any lease incentives receivable, and amounts expected to be
paid under residual value guarantees. The lease payments also include the
exercise price of a purchase option reasonably certain to be exercised by the
Group and payments of penalties for terminating a lease, if the lease term
reflects the Group exercising the option to terminate. The variable lease
payments are recognised as expense in the period in which the event or
condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses the
incremental borrowing rate at the lease commencement date if the interest rate
implicit in the lease is not readily determinable. After the commencement
date, the amount of lease liabilities is increased to reflect the accretion of
interest, and reduced for the lease payments made. In addition, the carrying
amount of lease liabilities is remeasured if there is a modification, a change
in the lease term, a change in the in-substance fixed lease payments or a
change in the assessment to purchase the underlying asset.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term
leases of machinery and equipment (i.e., those leases that have a lease term
of 12 months or less from the commencement date and do not contain a purchase
option). It also applies the lease of low-value assets recognition exemption
to leases of office equipment that are considered of low value (i.e., below
US$5,000). Lease payments on short-term leases and leases of low-value assets
are recognised as expense on a straight-line basis over the lease term.
(w) Financial instruments
A financial instrument is any contract that gives rise to a financial asset of
one entity and a financial liability or equity instrument of another entity.
Financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently
measured at amortised cost, fair value through other comprehensive income
(OCI), and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the
financial asset's contractual cash flow characteristics and the Group's
business model for managing them.
The Group's business model for managing financial assets refers to how it
manages its financial assets in order to generate cash flows. The business
model determines whether cash flows will result from collecting contractual
cash flows, selling the financial assets, or both.
Purchases or sales of financial assets that require delivery of assets within
a time frame established by regulation or convention in the market place
(regular way trades) are recognised on the trade date, i.e., the date that the
Group commits to purchase or sell the asset.
On July 2023, the Group purchased AL41 bonds, which are sovereign bonds issued
by the Republic of Argentina, denominated in U.S. dollars that were paid with
Argentine pesos and that pay income in U.S. dollars in local accounts. They
are national public securities issued in dollars with a fixed step-up rate of
3.50% per year from (and including) 9 July 2022 until (and including) 8 July
2029 and 4,875% from (and including) 9 July 2029 until maturity (9 July 2041).
Its technical value is US$100.21 with a residual value of 100.00%. They are
measured at fair value through profit and loss.
On October 2024, the Group purchased BPJ25 bonds, which are public bonds
issued by the Central Bank of Argentina denominated in U.S. dollars that were
paid with Argentine pesos and that pay principal in U.S. dollars in local
accounts (no interest is paid under the BPJ25). The BPJ25 have been issued in
U.S. dollars with a maturity date of 30 June 2025. Its technical value is
US$41.69 with a residual value of 41.69%. They are measured at amortised cost.
Subsequent measurement
For purposes of subsequent measurement, the Group's financial assets are
classified in the following categories:
Financial assets at amortised cost (debt instruments)
The Group measures financial assets at amortised cost if both of the following
conditions are met:
− The financial asset is held within a business model with the
objective to hold financial assets in order to collect contractual cash flows
− The contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding
Financial assets at amortised cost are subsequently measured using the
effective interest (EIR) method and are subject to impairment. Gains and
losses are recognised in profit or loss when the asset is derecognised,
modified or impaired.
The Group's financial assets at amortised cost includes trade and other
receivables and the BPJ25 bonds..
Financial assets designated at fair value through OCI (equity instruments)
Upon initial recognition, the Group can elect to classify irrevocably its
equity investments as equity instruments designated at fair value through OCI
when they meet the definition of equity under IAS 32 Financial Instruments:
Presentation and are not held for trading. The classification is determined on
an instrument-by-instrument basis.
Financial assets designated at fair value through OCI are carried in the
statement of financial position at fair value with net changes in fair value
recognised in the OCI. Gains and losses on these financial assets are never
recycled to profit or loss. Dividends are recognised as other income in the
statement of profit or loss when the right of payment has been established,
except when the Group benefits from such proceeds as a recovery of part of the
cost of the financial asset, in which case, such gains are recorded in OCI.
Equity instruments designated at fair value through OCI are not subject to
impairment assessment.
The Group has listed and non-listed equity investments under this category.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets
held for trading, financial assets designated upon initial recognition at fair
value through profit or loss, or financial assets mandatorily required to be
measured at fair value. Financial assets are classified as held for trading if
they are acquired for the purpose of selling or repurchasing in the near term.
Derivatives, including separated embedded derivatives, are also classified as
held for trading unless they are designated as effective hedging instruments.
Financial assets with cash flows that are not solely payments of principal and
interest are classified and measured at fair value through profit or loss,
irrespective of the business model. Notwithstanding the criteria for debt
instruments to be classified at amortised cost or at fair value through OCI,
as described above, debt instruments may be designated at fair value through
profit or loss on initial recognition if doing so eliminates, or significantly
reduces, an accounting mismatch.
Financial assets at fair value through profit or loss are carried in the
statement of financial position at fair value with net changes in fair value
recognised in the statement of profit or loss.
The Group has listed equity investments and embedded derivatives under this
category. Dividends on listed equity investments are also recognised as other
income in the statement of profit or loss when the right of payment has been
established.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part
of a group of similar financial assets) is primarily derecognised (i.e.,
removed from the Group's consolidated statement of financial position) when:
− The rights to receive cash flows from the asset have expired
− The Group has transferred its rights to receive cash flows from
the asset or has assumed an obligation to pay the received cash flows in full
without material delay to a third party under a "pass-through" arrangement;
and either (a) the Group has transferred substantially all the risks and
rewards of the asset, or (b) the Group has neither transferred nor retained
substantially all the risks and rewards of the asset, but has transferred
control of the asset.
Impairment of financial assets
The Group recognises an allowance for expected credit losses (ECLs) for all
debt instruments not held at fair value through profit or loss. ECLs are based
on the difference between the contractual cash flows due in accordance with
the contract and all the cash flows that the Group expects to receive,
discounted at an approximation of the original effective interest rate.
For trade receivables, the Group applies a simplified approach in calculating
ECLs. Therefore, the Group does not track changes in credit risk, but instead
recognises a loss allowance based on lifetime ECLs at each reporting date.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial
liabilities at fair value through profit or loss, and financial liabilities
measured at amortised cost, or as derivatives designated as hedging
instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the
case of loans and borrowings and payables, net of directly attributable
transaction costs.
The Group's financial liabilities include trade and other payables, loans and
borrowings including bank overdrafts, and derivative financial instruments.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as
described below:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial
liabilities held for trading and financial liabilities designated upon initial
recognition as at fair value through profit or loss.
Financial liabilities measured at amortised cost
This is the category most relevant to the Group. After initial recognition,
interest-bearing loans and borrowings are subsequently measured at amortised
cost using the EIR method. Gains and losses are recognised in profit or loss
when the liabilities are derecognised as well as through the EIR amortisation
process.
Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the EIR. The EIR
amortisation is included in finance costs in the statement of profit or loss.
This category generally applies to interest-bearing loans and borrowings.
Derecognition
A financial liability is derecognised when the obligation under the liability
is discharged or cancelled or expires. When an existing financial liability is
replaced by another from the same lender on substantially different terms, or
the terms of an existing liability are substantially modified, such an
exchange or modification is treated as the derecognition of the original
liability and the recognition of a new liability. The difference in the
respective carrying amounts is recognised in the statement of profit or loss.
Derivative financial instruments and hedge accounting
The silver and gold forward and zero cost collar agreements signed by the
Group are being used to hedge the exposure to changes in the cash flows of the
silver and gold commodity prices. Consequently, the Group has opted to apply
hedge accounting under the requirements of IFRS 9 Financial Instruments.
Initial recognition and subsequent measurement
These derivative financial instruments were initially recognised at fair value
on the date on which the derivative contract was entered into and were
subsequently remeasured at fair value. Derivatives are carried as financial
assets when the fair value is positive and as financial liabilities when the
fair value is negative.
For the purpose of hedge accounting, hedges are classified as cash flow hedges
when hedging the exposure to variability in cash flows that is either
attributable to a particular risk associated with a recognised asset or
liability or a highly probable forecast transaction or the foreign currency
risk in an unrecognised firm commitment.
At the inception of a hedge relationship, the Group formally designates and
documents the hedge relationship to which it wishes to apply hedge accounting
and the risk management objective and strategy for undertaking the hedge.
The documentation includes identification of the hedging instrument, the
hedged item, the nature of the risk being hedged and how the Group will assess
whether the hedging relationship meets the hedge effectiveness requirements
(including the analysis of sources of hedge ineffectiveness and how the hedge
ratio is determined). A hedging relationship qualifies for hedge accounting if
it meets all of the following effectiveness requirements:
There is "an economic relationship" between the hedged item and the hedging
instrument
The effect of credit risk does not "dominate the value changes" that result
from that economic relationship
The hedge ratio of the hedging relationship is the same as that resulting from
the quantity of the hedged item that the Group actually hedges and the
quantity of the hedging instrument that the Group actually uses to hedge that
quantity of hedged item
Changes in the fair value of derivatives designated as cash flow hedges are
recognised in other comprehensive income and accumulated under the heading of
cash flow hedging reserve until changes in the fair value of the hedged item
are recognised in profit or loss. However, the ineffective portion of the
changes in the fair value of such derivatives is recognised in profit or loss.
The Group uses cash flow hedges for hedging the exposure to variability in
silver and gold prices.
The amounts that have been recognised in other components of equity relating
to such hedging instruments are reclassified to profit or loss when the hedged
transaction affects profit or loss.
(x) Dividend distribution
Dividends on the Company's ordinary shares are recognised when they have been
appropriately authorised and are no longer at the Company's discretion.
Accordingly, interim dividends are recognised when they are paid and final
dividends are recognised when they are declared following approval by
shareholders at the Company's Annual General Meeting.
(y) Cash and cash equivalents
Cash and cash equivalents are carried in the statement of financial position
at cost. For the purposes of the statement of financial position, 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. For the purposes of the cash flow
statement, cash and cash equivalents, as defined above, are shown net of
outstanding bank overdrafts.
Liquidity funds are classified as cash equivalents if the amount of cash that
will be received is known at the time of the initial investment and the risk
of changes in value is considered insignificant.
(z) 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.
Exceptional items mainly include:
Impairments and reversal of impairments or write-offs of assets, property,
plant and equipment and evaluation and exploration assets;
incremental cost due to pandemics which are not expected to be recurring;
gains or losses arising on the disposal of subsidiaries, investments or
property, plant and equipment;
any gain or loss resulting from restructuring within the Group;
the impact of infrequent labour action related to work stoppages in mine
units;
the penalties generated by the early termination of agreements with providers
or lenders of the Group;
the reversal of an accumulation of prior year's tax expenses that resulted
from an agreement with the government; and
the related tax impact of the above items.
(aa) Fair value measurement
The Group measures financial instruments, such as derivatives, at each
statement of financial position date.
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date. The fair value measurement is based on the presumption
that the transaction to sell the asset or transfer the liability takes place
either:
In the principal market for the asset or liability, or
In the absence of a principal market, in the most advantageous market for the
asset or liability
The principal or the most advantageous market must be accessible by the Group.
The fair value of an asset or a liability is measured using the assumptions
that market participants would use when pricing the asset or liability,
assuming that market participants act in their best economic interest.
A fair value measurement of a non-financial asset takes into account a market
participant's ability to generate economic benefits by using the asset in its
highest and best use or by selling it to another market participant that would
use the asset in its highest and best use. The Group uses valuation techniques
that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, maximising the use of relevant observable
inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in
the financial statements are categorised within the fair value hierarchy, as
described in note 39(e).
For assets and liabilities that are recognised in the financial statements on
a recurring basis at fair value, the Group determines whether transfers have
occurred between levels in the hierarchy by re-assessing categorisation (based
on the lowest level input that is significant to the fair value measurement as
a whole) at the end of each reporting period.
The Group determines the policies and procedures for both recurring fair value
measurement and unquoted financial assets, and for non-recurring measurement.
At each reporting date, the Group analyses the movements in the values of
assets and liabilities, which are required to be re-measured or re-assessed as
per the Group's accounting policies. For this analysis, the Group verifies the
major inputs applied in the latest valuation by agreeing the information in
the valuation computation to contracts and other relevant documents.
The Group, in conjunction with its external valuers where applicable, also
compares the changes in the fair value of each asset and liability with
relevant external sources to determine whether the change is reasonable.
For the purpose of fair value disclosures, the Group has determined classes of
assets and liabilities on the basis of the nature, characteristics and risks
of the asset or liability and the level of the fair value hierarchy as
explained above.
(ab) Export incentive programme
On 3 October 2023, the Argentinian Government approved that exporters of crude
oil, gas and derivatives, who meet certain conditions, may receive 25% of the
funds received from exports through negotiable securities acquired in foreign
currency and settled in local currency.
On 23 October 2023, the export incentive programme was approved increasing the
percentage to 30%. On 20 November 2023 the percentage increased to 50% and
since 13 December 2023 changed to 20%. As at 31 December 2024 the Group
recognised a benefit from the programme of US$15,996,000 (2023:
US$21,164,000), disclosed as other income (refer to note 12).
(ac) Stripping costs
In an open-pit operation, it is necessary to remove overburden or waste
material to access the ore bodies (stripping activity). During the mine
development and pre-production phases, the stripping related costs are
capitalised as part of the cost of development and subsequently recognised as
depreciation in the cost of sales, on a units of production basis, once
commercial production starts.
The removal of waste material usually continues throughout the life of mine.
Upon commencement of commercial production, the activity is referred to as
production stripping. Production stripping costs are capitalised only when it
is probable that future economic benefits associated with the stripping
activity will flow to the Group, and costs can be reliably measured.
Otherwise, the production stripping costs are charged to the income statement
as operating costs as they are incurred. Stripping activity costs associated
with such development activities are capitalised as development costs using an
average stripping ratio. The average stripping ratio is calculated by dividing
the estimated number of tonnes of waste material to be removed by the
estimated ore to be mined over the life of the mine, and is reviewed annually.
The amount capitalised is subsequently depreciated using the units of
production method.
3 Segment reporting
The Group's activities are principally related to mining operations, which
involve the exploration, production and sale of gold and silver. Products are
subject to the same risks and returns and are sold through similar
distribution channels. The Group undertakes a number of activities solely to
support mining operations including power generation and services. Transfer
prices between segments are set at an arm's length basis in a manner similar
to that used for third parties. Segment revenue, segment expense and segment
results include transfers between segments at market prices. Those transfers
are eliminated on consolidation.
For internal reporting purposes, management takes decisions and assesses the
performance of the Group through consideration of the following reporting
segments:
Operating unit - San Jose, which generates revenue from the sale of gold and
silver (dore and concentrate)
Operating unit - Mara Rosa, which generates revenue from the sale of gold and
silver (dore)
Operating unit - Inmaculada, which generates revenue from the sale of gold and
silver (dore)
Former operating unit - Pallancata, which generated revenue from the sale of
gold and silver (concentrate) until 2023, and it is involved in the
development of the Royropata area.
Exploration, which explores and evaluates areas of interest in brownfield and
greenfield sites with the aim of extending the life of mine of existing
operations and to assess the feasibility of new mines.
Other - includes the profit or loss generated by Empresa de Transmisión
Aymaraes S.A.C.
The Group's administration, financing, other activities (including other
income and expense), and income taxes are managed at a corporate level and are
not allocated to operating segments.
Segment information is consistent with the accounting policies adopted by the
Group. Management evaluates the financial information based on the adopted
IFRS accounting policies in the financial statements.
The Group measures the performance of its operating units by the segment
profit or loss that comprises gross profit, selling expenses and exploration
expenses.
Segment assets include items that could be allocated directly to the segment.
(a) Reportable segment information
Inmaculada US$000 San Jose US$000 Mara Rosa US$000 Exploration US$000 Other(1) Adjustment Total
US$000 and US$000
Pallancata US$000 eliminations
US$000
Year ended 31 December 2024
Revenue from external customers 522,406 285,142 159,646 - 452 - 967,391
(255)
Inter-segment revenue - - - - 3,975 (3,975) -
Total revenue from customers 522,406 285,142 159,646 (255) - 4,427 (3,975) 967,391
Provisional pricing adjustment (54) 8,193 70 - - - - 8,209
Realised loss on hedges (18,010) - (9,894) - - - - (27,904)
Total revenue 504,342 293,335 149,822 (255) - 4,427 (3,975) 947,696
Segment profit/(loss) 231,141 54,094 40,830 (269) (28,379) 2,472 (1,799) 298,090
Others(2) (120,873)
Profit from operations before income tax 177,217
Other segment information
Depreciation(3) (91,251) (48,368) (17,383) (560) (8) (2,584) - (160,154)
Amortisation (80) (531) (761) (102) - (105) - (1,579)
Impairment and write-off of assets, net (730) (15) - (53) (13,732) (3,085) - (17,615)
Assets
Capital expenditure 138,582 46,143 35,318 32,908 92,041(5) 3,090 - 348,082
Current assets 17,028 67,866 35,210 1,758 5,327 6,387 - 133,576
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 - 1,386,269
Not reportable assets(4) - - - - 265,230 - 265,230
Total assets 589,541 200,582 382,445 43,380 130,652 304,899 - 1,651,499
(1) "Other" revenue relates to revenues earned by Empresa de Transmisión
Aymaraes S.A.C. for energy transmission services.
(2) Comprised of administrative expenses of US$50,232,000, other income of
US$20,955,000, other expenses of US$43,245,000, write-off of assets (net) of
US$3,883,000, impairment of non-current assets of US$13,732,000, share of
losses of an associate of US$6,489,000, finance income of US$13,097,000,
finance expense of US$26,928,000, and foreign exchange loss of US$10,416,000.
(3) Includes depreciation capitalised in the Pallancata unit (US$102,000),
San Jose unit (US$2,367,000), Mara Rosa project (US$146,000), and products in
process (-US$1,110,000).
(4) 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.
5 Includes Monte do Carmo capital expenditure of US$90,602,000.
Inmaculada US$000 San Jose US$000 Mara Rosa Exploration US$000 Other(1 and 5) Adjustment Total
US$000 Pallancata US$000 US$000 and US$000
eliminations
US$000
Year ended 31 December 2023
Revenue from external customers 391,782 241,301 - 51,048 - 565 684,696
Inter-segment revenue - - - - 9,609 (9,609) -
Total revenue from customers 391,782 241,301 - 51,048 - 10,174 (9,609) 684,696
Provisional pricing adjustment 145 1,160 - (131) - - - 1,174
Realised gain on hedges 4,717 - - 3,129 - - - 7,846
Total revenue 396,644 242,461 - 54,046 - 10,174 (9,609) 693,716
Segment profit/(loss) 152,208 30,340 - (19,484) (21,485) 8,026 (262) 149,343
Others(2) (192,824)
Loss from operations before income tax (43,481)
Other segment information
Depreciation(3) (74,955) (52,241) (211) (19,477) (342) (5,492) - (152,718)
Amortisation (72) (588) - (7) (135) - (802)
Impairment and write-off of assets, net (1,738) (17,398) (1) (859) (63,494) (84) - (83,574)
Assets
Capital expenditure 86,031 47,682 145,804 6,428 2,320 127 - 288,392
Current assets 23,703 63,795 1,734 4,125 14,980 4,325 - 112,662
Other non-current assets 524,504 135,680 349,920 10,325 60,150 35,579 - 1,116,158
Total segment assets 548,207 199,475 351,654 14,450 75,130 39,904 - 1,228,820
Not reportable assets(4) - - - - 186,990 - 186,990
Total assets 548,207 199,475 351,654 14,450 75,130 226,894 - 1,415,810
(1) "Other" revenue relates to revenues earned by Empresa de Transmisión
Aymaraes S.A.C. for energy transmission services.
(2) Comprised of administrative expenses of US$47,192,000, other income of
US$30,261,000, other expenses of US$56,513,000, write-off of assets (net) of
US$2,731,000, impairment of non-current assets of US$80,843,000, share of
losses of an associate of US$9,460,000, finance income of US$7,473,000,
finance expense of US$18,199,000, and foreign exchange loss of US$15,620,000.
(3) Includes depreciation capitalised in the Crespo project (US$334,000),
San Jose unit (US$3,025,000), Mara Rosa project (US$194,000), products in
process (US$316,000) and recognised against the mine rehabilitation provision
(US$2,712,000).
(4) Not reportable assets are comprised of financial assets at fair value
through OCI of US$460,000, other receivables of US$63,473,000, income tax
receivable of US$4,713,000, deferred income tax asset of US$763,000,
investment in associates US$22,927,000, derivative financial assets of
US$846,000, other financial assets of US$2,264,000, assets held for sale of
US$2,418,000, and cash and cash equivalents of US$89,126,000.
(b) Geographical information
The revenue for the period based on the country in which the customer is
located is as follows:
Year ended 31 December
2024 2023
US$000 US$000
Switzerland 246,763 278,076
Canada 363,922 157,131
South Korea 53,527 101,331
Germany 20,754 74,220
Japan 4,364 8
Chile 30,696 -
Finland 18,527 3,128
USA 172,082 50,036
Luxembourg 2,486 -
Bulgaria 8,369 -
Peru 54,110 21,940
Total revenue(1) 975,600 685,870
Inter-segment
Peru 3,975 9,609
Total 979,575 695,479
(Loss)/gain on realised hedges
United Kingdom (18,010) 7,846
Brazil (9,894) -
Total 951,671 703,325
(1) Includes revenue from customers and provisional pricing adjustments of
US$8,209,000 (2023: US$1,174,000).
In the periods set out below, certain customers accounted for greater than 10%
of the Group's total revenues as detailed in the following table:
Year ended 31 December 2024 Year ended 31 December 2023
US$000 % Revenue Segment US$000 % Revenue Segment
Asahi Refining Canada Ltd. 363,922 38% Inmaculada, Mara Rosa and San Jose 157,149 23% Inmaculada and San Jose
Auramet International Inc. 132,284 14% Inmaculada 40,470 6% Inmaculada
Argor Heraus S.A. 125,655 13% Inmaculada and San Jose 157,580 23% Inmaculada and San Jose
MKS Switzerland S.A. 121,108 13% Inmaculada 120,496 17% Inmaculada
LS MnM (formerly LS Nikko) 53,680 6% Pallancata and San Jose 97,020 14% Pallancata and San Jose
Aurubis AG 20,754 2% Pallancata, San Jose and Mara Rosa 74,220 11% Pallancata and San Jose
Non-current assets, excluding financial instruments, investment in associates,
other receivables and deferred income tax assets, were allocated to the
geographical areas in which the assets are located as follows:
As at 31 December
2024 2023
US$000 US$000
Peru 647,416 589,133
Brazil 435,195 349,920
Argentina 132,716 135,680
Chile 37,366 41,425
Total non-current segment assets 1,252,693 1,116,158
Financial assets at fair value through OCI 475 460
Investment in associates 15,811 22,927
Other receivables 18,316 12,438
Deferred income tax assets 27,677 763
Total non-current assets 1,314,972 1,152,746
4 Acquisition of Monte do Carmo ("MdC")
In March 2024, the Group, through its wholly-owned subsidiary Amarillo
Mineração do Brasil Ltda. ("Amarillo"), entered into an option agreement
with Cerrado Gold Inc. ("Cerrado") to acquire a 100% interest in Cerrado's
Monte Do Carmo Project (the "Project") located in the mining-friendly state of
Tocantins, Brazil.
The payment for the option amounted to US$15,000,000 by way of 10%
interest-bearing secured loan. Upon obtaining the Cerrado Shareholder Approval
("Cerrado´s Shareholder Approval"), on 27 June 2024, the loan of
US$15,000,000 was deemed to be repaid in full by Cerrado by the concurrent set
off of an amount equal to the loan due by Amarillo as part of the purchase
price. Through US$30,000,000 in additional phased payments (the "Exercise
Consideration"), the Company was able to complete the acquisition of 100% of
the project on 7 November, 2024 ("Closing"). The Exercise Consideration is in
addition to the US$15,000,000 which has been deemed paid, and a further
US$15,000,000 payable at certain milestones following Closing, giving a total
consideration of US$60,000,000:
• US$10,000,000 payable within 14 days of the second anniversary of the date
of the Cerrado´s Shareholder Approval (27 June 2024); and
• US$5,000,000 within 14 days of the earlier of (i) the commencement of
commercial production from the Project, and (ii) 31 March 2027.
At Closing, Amarillo acquired all of the outstanding equity interests in Serra
Alta Mineração Ltda. ("Serra Alta"), Cerrado´s subsidiary in Brazil which
holds the Monte do Carmo project. In connection with the option agreement, the
Group committed to incur a minimum of US$5,000,000 in exploration expenditures
for Monte do Carmo, which was achieved by the acquisition date.
The Group applied the concentration test in accordance with IFRS 3 to
determine whether the acquisition is a business combination or an asset
acquisition, concluding that substantially all of the fair value of the gross
assets acquired is concentrated in a single identifiable asset or a group of
similar assets, being the Monte do Carmo project which is in a development
stage. Since the concentration test was met, the transaction was accounted as
a purchase of assets.
The total consideration amounted to US$86,556,000 and is comprised of: (i)
cash consideration paid of US$45,000,000, (ii) deferred consideration of
US$13,365,000, representing the present value of the US$15,000,000 remaining
payables, (iii) liabilities assumed by Amarillo in connection with the Sprott
Private Resource Streaming and Royalty Corp. ("Sprott") secured note and
stream agreements ("Stream Agreements) of US$26,159,000 (note 26(a)), net of
its deferred income tax asset of US$899,000 (iv) additional expenditure
assumed by Amarillo pre-closing of the acquisition of US$1,180,000, and (v)
transaction costs of US$1,751,000.
In addition, Serra Alta Participações Imobiliárias S.A. ("SAPI") - entity
owned by Amarillo and Serra Alta, has a contractual obligation to make payment
of royalties in favour of the former landowners of the Bortolotti Property
corresponding to 50% of the amount due to the Brazilian authorities as
statutory tax (Compensação Financeira pela Exploração Mineral ("CFEM")).
According to the most recent estimates available to the Company, approximately
25% of the gold reserves of the Project are located within the area comprised
by the Bortolotti Property and would accordingly be subject to the payment of
such royalties.
Monte do Carmo consolidates its financial information with the Group from 7
November 2024, being the date on which the Group obtained control.
The fair value of assets acquired and liabilities assumed as at 7 November
2024 comprise the following:
US$000
Cash and cash equivalents 8
Other receivables 10
Evaluation and exploration assets (note 17) 82,725
Property, plant and equipment (note 16) 3,988
Deferred income tax asset 1,918
Total assets 88,649
Accounts payable and other liabilities (2,093)
Total liabilities (2,093)
Net assets acquired 86,556
Consideration for the acquisition of Serra Alta Mineracao Ltda shares
Cash consideration 45,000
Deferred consideration 13,365
Secured note and stream contracts transferred to Amarillo, net of deferred tax 25,260
asset
Expenditure assumed by Amarillo 1,180
Transaction costs 1,751
Total consideration 86,556
Cash paid 47,931
Less cash acquired with the subsidiary (8)
Net cash flow on acquisition 47,923
The Group recognises individual identifiable assets (and liabilities) by
allocating the cost of acquisition on the basis of the relative fair values at
the date of purchase:
Step 1: Identify assets and liabilities acquired, adjusting them to the
Group's accounting policies and presentation
Step 2: Determine the purchase consideration
Step 3: Purchase Price Allocation: The consideration paid is allocated to the
fair value of the identifiable assets and liabilities assumed with the
remainder allocated to the mineral property acquired
The fair value at the time of acquisition is the amount for which an asset
could be exchanged, or a liability settled, between knowledgeable, willing
parties in an arm's length transaction.
5 Revenue
Year ended 31 December 2024 Year ended 31 December 2023
Revenue(1) Revenue(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) 556,551 731 557,282 317,257 738 317,995
Silver (from dore bars) 221,776 485 222,261 166,596 499 167,095
Gold (from concentrates) 105,192 2,610 107,802 102,200 3,697 105,897
Silver (from concentrates) 71,046 1,749 72,795 90,224 2,920 93,144
Gold (from precipitates) 6,801 - 6,801 - - -
Silver (from precipitates) 2 - 2 - - -
Services 448 - 448 565 - 565
Total revenue from customers 961,816 5,575 967,391 676,842 7,854 684,696
Provisional pricing adjustments 8,209 - 8,209 1,174 - 1,174
Realised (loss)/gain on hedges (27,904) - (27,904) 7,846 - 7,846
Total 942,121 5,575 947,696 685,862 7,854 693,716
(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
2024, the Group recorded commercial discounts of US$22,720,000 (2023:
US$20,299,000).
6 Cost of sales
Cost of sales comprises:
Year ended 31 December
2024 2023
US$000 US$000
Direct production costs excluding depreciation and amortisation 454,006 362,980
Depreciation and amortisation in production costs 157,165 144,812
Workers profit sharing 3,145 1,862
Fixed costs during operational stoppages and reduced capacity 1,071 3,314
Change in inventories (10,124) (4,754)
Cost of sales 605,263 508,214
(1) Included in production cost there are stripping costs amounting to
US$7,449,000 in Mara Rosa and US$2,653,000 in San Jose (2023: US$Nil).
The main components included in cost of sales are:
Year ended 31 December
2024 2023
US$000 US$000
Depreciation and amortisation in cost of sales(1) 156,785 143,171
Personnel expenses (note 10)(2) 132,412 121,938
Mining royalty (note 38) 9,694 6,267
Change in products in process and finished goods (10,124) (4,754)
Fixed costs at the operations during stoppages and reduced capacity(3) 1,071 3,314
(1) The depreciation and amortisation in production cost is US$157,165,000
(2023: US$144,812,000). The difference with the depreciation and amortisation
in cost of sales is considered in inventory.
(2) Includes workers profit sharing of US$3,145,000 (2023: US$1,862,000) and
excludes personnel expenses of US$712,000 (2023: US$3,032,000) included within
unallocated fixed cost 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 personnel expenses
of US$712,000 (2023: US$3,032,000), third party services of US$301,000 (2023:
US$865,000), supplies of US$33,000 (2023: US$34,000), depreciation and
amortisation of US$Nil (2022: US$Nil) and other costs of US$25,000 (2023:
income of US$617,000).
7 Administrative expenses
Year ended 31 December
2024 2023
US$000 US$000
Personnel expenses (note 10) 28,586 25,633
Professional fees(1) 7,088 7,946
Donations 1,235 1,075
Lease rentals 1,583 1,399
Third party services 522 948
Communications 153 128
Indirect taxes 1,986 2,085
Depreciation and amortisation 2,588 1,716
Depreciation of right-of-use assets 147 167
Technology and systems 1,156 822
Security 830 858
Other(2) 4,358 4,415
Total 50,232 47,192
(1) Corresponds to audit fees of US$1,934,000 (2023: US$1,768,000), legal
fees of US$1,030,000 (2023: US$914,000), tax and advisory fees of US$2,670,000
(2023: US$2,507,000), and other professional fees of US$1,454,000 (2023:
US$2,757,000).
(2) Predominantly relates to advertising costs of US$245,000 (2023:
US$289,000), insurance fees of US$1,066,000 (2023: US$548,000), repair and
maintenance of US$328,000 (2023: US$344,000), supplies costs of US$135,000
(2023: US$109,000), travel expenses of US$932,000 (2023: US$1,065,000) and
personnel transportation of US$204,000 (2023: US$127,000).
8 Exploration expenses
Year ended 31 December
2024 2023
US$000 US$000
Mine site exploration(1)
Arcata 93 63
Ares 300 407
Inmaculada 4,423 1,371
Pallancata 2,106 1,070
San Jose 9,821 8,233
Mara Rosa 1,278 5
18,021 11,149
Prospects(2)
Peru 193 143
USA - 63
Chile 40 (62)
Canada(4) - 2,176
Brazil 1,581 -
1,814 2,320
Generative(3)
Peru 1,317 456
USA - 1
Mexico - 7
Brazil - 1,916
Chile - (1)
1,317 2,379
Personnel (note 10) 5,550 4,759
Others 70 638
Depreciation right-of-use assets 82 52
Total 26,854 21,297
(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.
(4) Corresponds to the SNIP project which was managed by Hochschild Mining
Canada Corp.
9 Selling expenses
Year ended 31 December
2024 2023
US$000 US$000
Personnel expenses (note 10) 200 165
Warehouse services 1,569 1,614
Taxes(1) 13,034 11,227
Other(2) 2,686 1,856
Total 17,489 14,862
(1) Corresponds to the export duties in Argentina.
(2) Mainly corresponds to insurance expenses of US$293,000 (2023: US$250,000),
other professional fees of US$512,000 (2023: US$514,000), analysis services of
US$461,000 (2023: US$457,000), and consumption of supplies of US$330,000
(2023: US$293,000).
10 Personnel expenses
Year ended 31 December
2024 2023
US$000 US$000
Salaries and wages 124,828 119,621
Workers' profit sharing (note 29) 6,590 3,207
Other legal contributions 30,056 27,808
Statutory holiday payments 10,317 8,832
Long-Term Incentive Plan 3,562 2,675
Termination benefits(1) 4,861 10,991
Other(2) 1,017 1,074
Total 181,231 174,208
(1) Includes exceptional personnel expenses amounting to US$Nil (2023:
US$8,960,000) (refer to note 11(1)). The Group's previously operating
Pallancata mine went into care and maintenance in November 2023 and
consequently 463 employees were terminated in 2023.
(2) Mainly includes training expenses of US$780,000 (2023: US$725,000).
Personnel expenses are distributed as follows:
Year ended 31 December
2024 2023
US$000 US$000
Cost of sales(1) 133,124 124,970
Administrative expenses 28,586 25,633
Exploration expenses 5,550 4,759
Selling expenses 200 165
Other expenses(2) 9,492 13,194
Capitalised as property, plant and equipment 4,279 5,487
Total 181,231 174,208
(1) Personnel expenses related to unallocated fixed cost accumulated as a
result of excess absenteeism and idle capacity included in cost of sales
amount to US$712,000 (2023: US$3,032,000).
(2) Exceptional personnel expenses included in other expenses amount to US$Nil
(2023: US$8,960,000).
The average number of employees for 2024 and 2023 were as follows:
Year ended 31 December
2024 2023
US$000 US$000
Peru 1,492 1,915
Argentina 1,444 1,432
Chile 5 3
Brazil 343 127
Canada - 2
United Kingdom 11 12
Total 3,295 3,491
11 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.
Year ended 31 December
2024 2023
US$000 US$000
Restructuring of the Pallancata mine unit (1) - (8,960)
Sub total - (8,960)
Impairment and write-off of non-current assets, net
Impairment of non-current assets(2) (13,732) (80,843)
Write-off of non-current assets(3) (3,037) -
Sub total (16,769) (80,843)
Share of loss on an associate
Impairment of Aclara Resources Inc. (4) (5,081) (7,183)
Sub total (5,081) (7,183)
Income tax benefit(5) 2,088 27,448
Sub total 2,088 27,448
Total (19,762) (69,538)
(1) Corresponds to the restructuring charges in Pallancata mine unit
resulting from placing the operation in care and maintenance in 2023.
(2) Corresponds to the impairment related to the Azuca project of
US$13,732,000 (2023: corresponds to the impairment related to the Azuca
project of US$16,673,000, the impairment of the Crespo project of
US$46,772,000 and the San Jose mine unit of US$17,398,000) (refer to notes 16,
17, 18 and 25).
(3) Corresponds to the write-off of construction in progress stopped as the
assets would be used by Azuca and Arcata units and they were sold (refer to
note 16 and 25).
(4) Corresponds to the impairment charge of US$5,081,000 (2023:
US$7,183,000) based on the valuation of the investment in Aclara Resources
Inc. as at 31 December 2024 (refer to note 19).
(5) Corresponds to the current tax credit generated by the impairment of
Azuca of US$1,192,000 and the deferred tax credit generated by the write-off
of constructions in progress of US$896,000 (2023: the current tax credit
generated by the restructuring of the Pallancata mine unit of US$2,643,000 and
the deferred tax credit generated by the impairment of the Azuca project of
US$4,918,000, the impairment of the Crespo project of US$13,798,000, and the
impairment of the San Jose mine unit of US$6,089,000).
12 Other income and other expenses before exceptional items
Year ended Year ended
31 December 2024 31 December 2023
Before Before
exceptional exceptional
items items
US$000 US$000
Other income
Gain on sale of property, plant and equipment 656 142
Logistic services 1,704 1,704
Income on recovery of expenses - 2,064
Sale of mine concessions - 1,150
Tax benefit in Canada(1) 548 3,190
Income from export programme in Argentina(2) 15,996 21,164
Other(3) 2,051 847
Total 20,955 30,261
Other expenses
Increase in provision for mine closure (note 29(1)) (14,717) (28,365)
Provision of obsolescence of supplies (note 23) (864) (1,586)
Write-off of value added tax (113) (184)
Corporate social responsibility contribution in Argentina(4) (4,396) (3,637)
Care and maintenance expenses of Pallancata mine unit (8,320) (2,463)
Care and maintenance expenses of Arcata mine unit (3,033) (3,178)
Care and maintenance expenses of Ares mine unit (2,365) (2,788)
Care and maintenance expenses of Selene mine unit (350) (202)
Termination benefits in Minera Santa Cruz (2,704) -
Contingencies(5) (1,332) (817)
Depreciation right-of-use assets (315) (192)
Other(6) (4,736) (4,141)
Total (43,245) (47,553)
(1) British Columbia exploration tax credit generated in Hochschild Mining
Canada, a Canadian subsidiary of the Group.
(2) Benefit arising from being able to access the Argentina government's
Export Incentive Programme, allowing certain companies to exchange a certain
proportion of US dollar sales at a preferential market exchange rate.
(3) Includes the gain on sale of supplies of US$229,000 (2023:
US$201,000), lease rentals of US$165,000 (2023:US$6000), and sale of
concentrate of copper of US$493,000 (2023: US$Nil)
(4) Relates to a contribution in Argentina to the Santa Cruz province
calculated as a proportion of sales.
(5) Mainly related to contingencies in Minera Santa Cruz related to labour
lawsuits.
(6) Includes the cost of recovery of expenses of US$1,860,000 mainly due to
transactions with contractors (2023: US$Nil), and expenses due to penalties in
CMA of US$Nil (2023: US$2,428,000).
13 Finance income, finance costs and foreign exchange loss
Year ended Year ended
31 December 2024 31 December 2023
US$000 US$000
Finance income
Interest on deposits and liquidity funds(1) 2,382 4,580
Interest on loans 590 312
Total interest income 2,972 4,892
Changes in the fair value of financial instruments through profit or loss(2) 6,887 1,541
Debit valuation adjustment (DVA) of hedges 866 593
Unrealised change in fair value of financial liability through profit or loss 233 -
(note 26(a))
Other(3) 2,139 447
Total 13,097 7,473
Finance costs
Interest on secured bank loans (note 28) (15,425) (9,520)
Other interest (3,123) (2,701)
Total interest expense (18,548) (12,221)
Loss on discount of other receivables(4) - (893)
Loss from changes in the fair value of financial instruments(5) (2,973) (1,821)
Unwinding of discount on mine rehabilitation (note 29) (3,110) (1,703)
Other (2,297) (1,561)
Total (26,928) (18,199)
Foreign exchange loss, net
Argentina (9,133) (16,020)
Peru 187 81
Brazil(6) (2,272) -
Others 802 319
Total (10,416) (15,620)
(1) Interest on deposits and liquidity funds of US$296,000 (2023: US$471,000)
that is directly attributable to the construction of Mara Rosa has been
recognised in property, plant and equipment as a reduction to construction in
progress and capital advances and mining properties and development costs, and
evaluation and exploration assets.
(2 ) Gain on Argentinian mutual funds held since September 2023.
(3 ) Mainly includes interest income related to tax claims resolved in
favour of Compania Minera Ares (Minera Ares) of US$1,142,000 (2023:$Nil).
(4) Mainly related to the effect of the discount of tax credits in Argentina
and Peru.
(5) Corresponds to the foreign exchange effect of US$2,973,000 related to the
bonds in San Jose (2023: Represents the loss on sale of the C3 Metals Inc
shares of US$292,000 (note 21) and the foreign exchange effect of US$1,529,000
related to the bonds in San Jose).
(6) Recognition of the foreign exchange loss in Brazil from date that Amarillo
Mineracao do Brasil started commercial production and its functional currency
changed to US$ dollars..
14 Income tax expense
Year ended 31 December 2024 Year ended 31 December 2023
Before Exceptional Total Before Exceptional Total
exceptional items US$000 exceptional items US$000
items US$000 items US$000
US$000 US$000
Current corporate income tax
Corporate income tax expense 35,735 - 35,735 16,319 (2,643) 13,676
Withholding tax (835) - (835) 609 - 609
34,900 - 34,900 16,928 (2,643) 14,285
Deferred taxation
Origination and reversal of temporary differences (note 31) 16,497 (2,088) 14,409 20,245 (24,805) (4,560)
Corporate income tax 51,397 (2,088) 49,309 37,173 (27,448) 9,725
Current mining royalties
Mining royalty charge (note 38) 7,108 - 7,108 4,520 - 4,520
Special mining tax charge (note 38) 7,051 - 7,051 2,307 - 2,307
Total current mining royalties 14,159 - 14,159 6,827 - 6,827
Total taxation expense/(benefit) in the income statement 65,556 (2,088) 63,468 44,000 (27,448) 16,552
The weighted average statutory income tax rate was 33.1% for 2024 and 27.2%
for 2023. This is calculated as the average of the statutory tax rates
applicable in the countries in which the Group operates, weighted by the
profit/(loss) before tax of the Group companies in their respective countries
as included in the consolidated financial statements. The statutory tax rate
in Argentina is 35%, in Peru 29.5%, in Brazil 34% and in the UK 25%.
The change in the weighted average statutory income tax rate is due to a
change in the weighting of profit/(loss) before tax in the various
jurisdictions in which the Group operates.
There were tax credits in relation to the cash flow hedge losses (2023:
charges) recognised in equity during the year ended 31 December 2024 of
US$28,473,000 (2023: US$6,617,000).
The total taxation charge on the Group's profit before tax differs from the
theoretical amount that would arise using the weighted average tax rate
applicable to the consolidated profits of the Group companies as follows:
Year ended 31 December
2024 2023
US$000
US$000
Profit/(loss) from operations before income tax 177,217 (43,481)
At average statutory income tax rate of 33.1% (2023: 27.2%) 58,618 (11,818)
Expenses not deductible for tax purposes 1,888 2,987
Taxable income on local currency (pesos) related to AL41 Bond Argentina - 961
Permanent differences arising on special investment regime(1) (3,669) (1,567)
Movement in previously unrecognised deferred tax(2) 10,666 10,249
Special mining tax and mining royalty deductible for corporate income tax (4,177) (2,014)
Other (2,353) 1,252
Corporate income tax at average effective income tax rate of 34.4% (2023: 60,973 50
-0.1%) before foreign exchange effect and withholding tax
Foreign exchange rate effect(4) (10,829) 9,066
Corporate income tax at average effective income tax rate of 28.3% (2023: 50,144 9,116
-21.0%) before withholding tax
Special mining tax and mining royalty(3) 14,159 6,827
Corporate income tax and mining royalties at average effective income tax rate 64,303 15,943
of 36.3% (2023: -36.7%) before withholding tax
Withholding tax (835) 609
Total taxation charge in the income statement at average effective tax rate 63,468 16,552
35.8% (2023: -38.1%) from operations
(1 ) Argentina benefits from a special investment regime that allows for a
super (double) deduction in calculating its taxable profits for all costs
relating to prospecting, exploration and metallurgical analysis, pilot plants
and other expenses incurred in the preparation of feasibility studies for
mining projects.
(2 ) Includes the income tax charge on mine closure provision of
US$5,981,000 (2023: US$5,742,000), the tax charge related to the Inmaculada
mine unit depreciation of US$748,000 (2023: US$2,667,000), and the effect of
not recognised tax losses of US$3,937,000 (2023: US$2,146,000).
(3 ) Corresponds to the mining royalty and special mining tax in Peru
(note 38).
(4 ) The foreign exchange effect is composed of US$7,359,000 profit (2023:
US$7,107,000 loss) from Argentina and a loss of US$676,000 (2023: US$948,000
profit) from Peru and a profit of US$4,151,000 (2023: US$2,914,000 loss) from
Brazil. This mainly corresponds to the foreign exchange effect of converting
tax bases and monetary items from local currency to the corresponding
functional currency. The main contributor of the foreign exchange effect on
the tax charge in 2024 is the inflation of the Argentinian pesos (2023:
Argentinian pesos).
( )
The amounts after offset, as presented on the face of the statement of
financial position, are as follows:
As at 31 December
2024 2023
US$000
US$000
Income tax receivable(1) 186 4,713
Income tax payable(2) (21,205) (2,979)
Total (21,019) 1,734
(1) Mainly corresponds to the tax credit of Empresa de Transmision Aymaraes
of US$103,000 (2023: Mainly corresponds to the tax credit of Compañia Minera
Ares of US$4,280,000 and Minera Santa Cruz of US$118,000).
(2) Mainly corresponds to the corporate income tax payables of Compañia
Minera Ares of US$10,664,000, Minera Santa Cruz of US$5,353,000 and Amarillo
Mineracao do Brasil of US$1,688,000 and mining royalties payables of
Compañia Minera Ares of US$3,459,000 (2023: Mainly corresponds to the mining
royalties payables of Compañia Minera Ares of US$2,479,000).
15 Basic and diluted earnings per share
Earnings per share (EPS) is calculated by dividing profit for the year
attributable to equity shareholders of the Parent by the weighted average
number of ordinary shares issued during the year.
The Company does not have dilutive potential ordinary shares as at 31 December
2024. The Company had antidilutive potential ordinary shares as at 31 December
2023.
As at 31 December 2024 and 2023, EPS has been calculated as follows:
Year ended 31 December
2024 2023
Basic earnings per share
Before exceptional items (US$) 0.23 0.02
Exceptional items (US$) (0.04) (0.12)
Total for the year (US$) 0.19 (0.10)
Diluted earnings per share
Before exceptional items (US$) 0.23 0.02
Exceptional items (US$) (0.04) (0.12)
Total for the year (US$) 0.19 (0.10)
Profit before exceptional items and attributable to equity holders of the
Parent is derived as follows:
Year ended 31 December
2024 2023
Profit attributable to equity holders of the Parent (US$000) 97,005 (55,006)
Exceptional items after tax - attributable to equity holders of the Parent 19,762 63,997
(US$000)
Profit before exceptional items attributable to equity holders of the Parent 116,767 8,991
(US$000)
Profit before exceptional items attributable to equity holders of the Parent 116,767 8,991
for the purpose of diluted earnings per share (US$000)
The following reflects the share data used in the basic and diluted earnings
per share computations:
Year ended 31 December
2024 2023
Basic weighted average number of ordinary shares in issue (thousands) 514,458 514,264
Effect of dilutive potential ordinary shares related to contingently issuable - -
shares (thousands)
Weighted average number of ordinary shares in issue for the purpose of diluted 514,458 514,264
earnings per share (thousands)
16 Property, plant and equipment
Mining properties and development Land and buildings US$000 Plant and equipment Vehicles(4) Mine Construction in progress and capital advances US$000 (3 and 5) Total
costs(3) US$000 (1 and 7) US$000 closure US$000
US$000 asset
US$000
Year ended 31 December 2024
Cost
At 1 January 2024 1,935,106 560,135 646,582 12,240 116,887 167,295 3,438,245
Additions 132,126 620 24,065 7,068 - 68,931 232,810
Acquisition of assets (note 4) - 3,927 34 27 - - 3,988
Change in discount rate (note 29(1)) - - - - (3,736) - (3,736)
Change in mine closure estimate (note 29(1)) - - - - 4,097 - 4,097
Return of disposal - - 845 90 935
Disposals - - (968) - - - (968)
Write-offs(6) - - (5,546) (507) - (3,037) (9,090)
Foreign exchange effect (9,518) (628) (271) (9) (528) (9,101) (20,055)
Transfer to assets held for sale (251,992) (31,556) (52,702) (341) (15,792) - (352,383)
Transfers and other movements(2) 13,793 49,740 149,133 311 - (210,865) 2,112
At 31 December 2024 1,819,515 582,238 761,172 18,789 100,928 13,313 3,295,955
Accumulated depreciation and impairment
At 1 January 2024 1,454,537 416,785 455,040 9,307 83,703 20 2,419,392
Depreciation for the year 95,136 23,865 33,825 3,512 3,403 - 159,741
Disposals - - (865) - - - (865)
Write-offs(6) - - (4,728) (479) - - (5,207)
Foreign exchange effect - (3) (101) (1) - - (105)
Transfer to assets held for sale (251,992) (31,375) (49,212) (330) (15,306) - (348,215)
Transfers and other movements(2) 443 21 (4) 16 - (20) 456
At 31 December 2024 1,298,124 409,293 433,955 12,025 71,800 - 2,225,197
Net book value at 31 December 2024 521,391 172,945 327,217 6,764 29,128 13,313 1,070,758
(1) Within plant and equipment, costs of US$557,684,000 are subject to
depreciation on a unit of production basis in line with accounting policy on
note 2(f) for which the accumulated depreciation is US$291,305,000 and
depreciation charge for the year is US$19,897,000.
(2) Mainly includes the transfer of US$1,656,000 from evaluation and
exploration assets (Inmaculada of US$519,000, Pallancata US$30,000, Mara Rosa
of US$867,000 and San Jose of US$240,000) (note 17) as they are related to
conversion of resources in to reserves.
(3) There were borrowing costs capitalised in property, plant and equipment
amounting to US$6,678,000 (2023: US$18,790,000).
(4) Vehicles include US$5,194,000 of right-of-use assets (note 27).
(5) Within construction in progress and capital advances there are capital
advances amounting to US$2,027,000, mainly related to Compania Minera Ares of
US$999,000 (2023: US$8,825,000, mainly related to Mara Rosa project of
US$8,080,000.)
(6) Mainly corresponds to the write-off of construction in progress stopped
as the assets would be used by Azuca and Arcata units and they were sold
(refer to notes 16 and 25).
(7) Plant and equipment include US$1,564,000 of right-of-use assets (note
27).
(8) Additions of right-of-use assets amounting to US$7,092,000 (2023:
US$3,493,000) (note 27).
(9) Lien granted to RG Royalties LLC. over certain Mara Rosa assets such as
mineral interests and surface rights, in respect of the 1,75% NSR royalty
granted over Mara Rosa´s production. The royalty obligation and the
associated lien were acquired following the Group´s acquisition of Amarillo
in April 2022.
Mining properties and development Land and buildings US$000 Plant and equipment Vehicles(4) Mine Construction in progress and capital advances US$000 (3 and 5) Total
costs US$000 (1 and 7) US$000 closure US$000
US$000(3) asset
US$000
Year ended 31 December 2023
Cost
At 1 January 2023 1,823,207 563,782 651,098 12,302 104,860 76,854 3,232,103
Additions 162,569 962 16,422 (330) - 106,122 285,745
Change in discount rate (note 29(1)) - - - - (1,535) - (1,535)
Change in mine closure estimate (note 29(1)) - - - - 13,931 - 13,931
Disposals (91) - (1,218) (302) - - (1,611)
Write-offs(6) (518) - (14,849) (131) - (958) (16,456)
Foreign exchange effect 9,273 498 125 8 323 4,672 14,899
Transfer to assets held for sale (note 25) (61,996) (7,151) (7,423) - (692) (2,463) (79,725)
Transfers and other movements(2) 2,662 2,044 2,427 693 (16,932) (9,106)
At 31 December 2023 1,935,106 560,135 646,582 12,240 116,887 167,295 3,438,245
Accumulated depreciation and impairment
At 1 January 2023 1,383,600 397,531 433,720 7,460 81,722 1,157 2,305,190
Depreciation for the year 97,821 22,594 28,032 2,038 2,233 - 152,718
Disposals - - (128) (321) - - (449)
Write-offs(6) - - (13,673) (52) - - (13,725)
Impairment/(reversal of impairment) net 28,119 3,669 12,941 129 258 775 45,891
Foreign exchange effect - 8 (4) 1 - - 5
Transfer to assets held for sale (note 25) (55,075) (7,017) (5,796) - (510) (1,912) (70,310)
Transfers and other movements(2) 72 - (52) 52 - - 72
At 31 December 2023 1,454,537 416,785 455,040 9,307 83,703 20 2,419,392
Net book value at 31 December 2023 480,569 143,350 191,542 2,933 33,184 167,275 1,018,853
1 Within plant and equipment, costs of US$442,677,000 are subject to
depreciation on a unit of production basis in line with accounting policy on
note 2(f) for which the accumulated depreciation is US$309,409,000 and
depreciation charge for the year is US$11,021,000.
2 Mainly includes the transfer of US$2,499,000 from evaluation and
exploration assets (Inmaculada of US$2,092,000 and San José of US$407,000)
(note 17) as they are related to conversion of resources in to reserves, , and
the transfer to intangibles of the transmission line of Amarillo of
US$11,801,000.
3 There were borrowing costs capitalised in property, plant and equipment
amounting to US$18,790,000
4 Vehicles include US$1,091,000 of right of use assets (note 27).
5 Within construction in progress and capital advances there are capital
advances amounting to US$8,825,000, mainly related to Mara Rosa project of
US$8,080,000.
6 Corresponds to the write-off of property, plant and equipment as they will
no longer be used in the Group due to obsolescence.
7 Plant and equipment include US$3,093,000 of right-of-use assets (note 27).
2024
In December 2024, management determined that there was a trigger of reversal
of impairment in the San Jose mine unit due to the increase in gold and silver
prices and the increased reserves and resources estimate. The impairment test
resulted in no impairment, or impairment reversal, being recognised as the
positive effect of the increased prices and additional reserves and resources
was mainly offset by higher costs due to ongoing inflation in Argentina.
The recoverable value of San Jose was determined using a FVLCD methodology.
The key assumptions on which management has based its determination of FVLCD
and the associated recoverable values calculated for the San Jose CGU are gold
and silver prices, future capital requirements, production costs, reserves and
resources (reflected in the production volume), and the discount rate.
Real prices US$ per oz. 2025 2026 2027 2028 2029 Long-term
Gold 2,663 2,466 2,438 2,248 1,894 2,100
Silver 32.3 32.0 32.1 28.2 23.7 25.0
San Jose
Discount rate (post-tax) 18.3%
Discount rate (pre.tax) 18.8%
The period of seven years was used to prepare the cash flow projections of San
Jose mine which is in line with its life of mine.
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 18).
The estimated recoverable values of the Group's CGUs are equal to, or not
materially different than, their carrying values.
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 CGUs to exceed its recoverable amount. A change in any of the key
assumptions would have the following impact:
US$000 San Jose
Gold and silver prices (decrease by 10% and 15%, respectively) (100,684)
Gold and silver prices (increase by 10% and 15%, respectively)(1) 28,631
Production costs (increase by 10%) (55,827)
Production costs (decrease by 10%)(1) 28,631
Production volume (decrease by 10%) (74,178)
Production volume (increase by 10%)(1) 28,631
Post-tax discount rate (increase by 3%) (3,084)
Post-tax discount rate (decrease by 3%) 3,193
Capital expenditure (increase by 10%) (10,746)
Capital expenditure (decrease by 10%) 10,746
1. Represents the accumulated impairment that would be recognised in
San Jose mine unit as at 31 December 2024, net of the accumulated depreciation
that the impaired assets would have generated as at 31 December 2024.
Prior to classifying Arcata and Azuca disposal group as assets and liabilities
related to asset held for sale (refer to note 25), the Group recognised an
impairment of US$13,732,000 in evaluation and exploration assets. The
recoverable value of the Azuca and Arcata project was determined using a FVLCD
methodology, based on the economic terms of the sale.
2023
In June 2023, management determined that there was a trigger of impairment in
the San Jose mine unit due to the increase in the discount rate from 19.8% to
21.7% mainly explained by the rise in country risk premium in Argentina, and
higher costs than expected due to local inflation. The impairment test
performed over the San Jose CGU resulted in an impairment recognised as at 30
June 2023 of US$17,398,000 (US$16,588,000 in property, plant and equipment,
US$376,000 in evaluation and exploration assets and US$434,000 in
intangibles).
As at 30 June 2023, the Group was conducting a sales process for its Azuca and
Crespo projects. This decision to evaluate the sale of these assets is part of
the Group´s strategy to focus its capital on larger-scale projects. Based on
preliminary discussions with interested parties on the investment and costs
required for these projects, given their operational capabilities, management
determined that there were triggers of impairment in both the Azuca and Crespo
projects. An impairment test was carried out, adjusting the key inputs used to
determine the projects recoverable value, resulting in an impairment charge of
US$42,321,000 (US$15,898,000 in property, plant and equipment, US$26,420,000
in evaluation and exploration assets and US$3,000 in intangibles) for Azuca,
and Crespo.
The recoverable value of the San Jose, CGU, and the Crespo and Azuca assets
was determined using a fair value less costs of disposal (FVLCD) methodology.
The key assumptions on which management has based its determination of FVLCD
and the associated recoverable values calculated for the San Jose CGU and
Crespo assets are gold and silver prices, future capital requirements,
production costs, reserves and resources volumes (reflected in the production
volume), and the discount rate.
Real prices US$ per oz. 2024 2025 2026 2027 Long-term
Gold 1,850 1,735 1,582 1,557 1,600
Silver 24.3 22.6 21.4 21.8 22.0
San Jose Crespo
Discount rate (post-tax) 21.7% 6.0%
Discount rate (pre-tax) 24.2% 7.6%
The period of five years and nine years was used to prepare the cash flow
projections of San Jose mine unit and Crespo, respectively, which were in line
with their respective life of mines.
With respect to Azuca, given its early stage, the Group applied a
value-in-situ methodology, which applies a realisable ´enterprise value´ to
unprocessed mineral resources. The methodology is used to determine the FVLCD
of the Azuca assets. The enterprise value used in the calculation performed as
at 30 June 2023 was US$0.095 per silver equivalent ounce of resources. The
enterprise value figure is based on observable external market information.
On 28 December 2023, the Group entered into an agreement with a third party
whereby the third party acquired the assets and liabilities of the Crespo
project from Compañia Minera Ares (refer to note 18). The closing of the
transaction occurred in March 2024, the assets and liabilities were classified
at 31 December 2023 as assets and liabilities related to assets held for sale,
respectively. The Group recognised an additional impairment of US$21,124,000
(US$13,405,000 in property, plant and equipment, US$7,718,000 in evaluation
and exploration assets and US$1,000 in intangibles) as at 31 December 2023.
The recoverable amount of the Crespo project was determined using a FVLCD
methodology, based on the economic terms of the sale agreement.
As at 31 December 2023, no indicators of impairment or reversal of impairment
were identified in the other CGUs. The estimated recoverable values of the
Group's CGUs are equal to, or not materially different than, their carrying
values.
17 Evaluation and exploration assets
Azuca US$000 Crespo US$000 Mara Rosa US$000 Monte do Carmo Volcan US$000 Other Total
US$000 US$000 US$000
Cost
Balance at 1 January 2023 84,350 32,433 779 - 81,866 25,478 224,906
Additions 367 594 566 - 996 - 2,523
Foreign exchange effect - - 77 - (2,043) - (1,966)
Transfers to property, plant and equipment (note 16) - - - - - (2,571) (2,571)
Transfers to asset held for sale (note 25) - (33,027) - - - - (33,027)
Other transfers and adjustments(1) - - - - (15,000) - (15,000)
Balance at 31 December 2023 84,717 - 1,422 - 65,819 22,907 174,865
Additions(2) 366 - 1,351 2,891 1,073 3,344 9,025
Acquisition of assets(2) - - 82,725 - - 82,725
Foreign exchange effect - - (83) (2,362) (8,054) - (10,499)
Transfers to property, plant and equipment (note 16) - - (1,280)- - - (832) (2,112)
Transfers to asset held for sale (note 25) (85,083) - - - - (4,011) (89,094)
Balance at 31 December 2024 - - 1,410 83,254 58,838 21,408 164,910
Accumulated impairment
Balance at 1 January 2023 50,075 9,878 - - 36,392 5,099 101,444
Impairment/(reversal of impairment) net 16,554 17,584 - - - 376 34,514
Foreign exchange effect - - - - (881) - (881)
Transfers to property, plant and equipment (note 16) - - - - - (72) (72)
Transfers to assets held for sale (note 25) - (27,462) - - - - (27,462)
Balance at 31 December 2023 66,629 - - - 35,511 5,403 107,543
Impairment (note 25) 13,732 - - - - - 13,732
Foreign exchange effect - - - - (4,253) - (4,253)
Amortisation - - 413 - - - 413
Transfers to property, plant and equipment (note 16) - (413) (43) (456)
Transfers to assets held for sale (note 25) (80,361) (4,011) (84,372)
Balance at 31 December 2024 - - - - 31,258 1,349 32,607
Net book value as at 31 December 2023 18,088 - 1,422 30,308 17,504 67,322
Net book value as at 31 December 2024 - - 1,410 83,254 27,580 20,059 132,303
(1) Corresponds to the adjustment of the cost of US$15,000,000 related to
the Volcan project due to the royalty agreement with Franco Nevada).
(2) From the total additions, the payment in cash amounted to
US$55,629,000..
At 31 December 2024 the Group has recorded an impairment with respect to
evaluation and exploration assets of the Azuca project of US$13,732,000 (2023:
the Group has recorded an impairment with respect to evaluation and
exploration assets of the San Jose mine unit of US$376,000, the Crespo project
of US$17,584,000 and the Azuca project of US$16,554,000) (refer to note 25).
There were borrowing costs capitalised in evaluation and exploration assets of
US$38,000 (2023: US$95,000).
18 Intangible assets
Transmission Water Software Legal rights(3) Royalty intangible assets Total
line(1) permits(2) licences US$000 US$000 US$000
US$000 US$000 US$000
Cost
Balance at 1 January 2023 22,157 21,795 2,248 10,578 - 56,778
Foreign exchange effect 984 (528) - 156 - 612
Additions 124 - - - - 124
Transfers 10,907 - - (5,507) - 5,400
Balance at 31 December 2023 34,172 21,267 2,248 5,227 - 62,914
Foreign exchange effect (798) (2,547) - (144) - (3,489)
Additions - - - 19,534 - 19,534
Addition of royalty intangible asset (note 25) - - - - 3,967 3,967
Balance at 31 December 2024 33,374 18,720 2,248 24,617 3,967 82,926
Accumulated amortisation and impairment
Balance at 1 January 2023 18,270 10,402 2,046 6,732 - 37,450
Amortisation for the year(4) 584 - 109 109 - 802
Transfers - - - (5,507) - (5,507)
Impairment 434 - - 4 - 438
Foreign exchange effect - (252) - - - (252)
Balance at 31 December 2023 19,288 10,150 2,155 1,338 - 32,931
Amortisation for the year(4) 1,175 - 12 392 - 1,579
Foreign exchange effect - (1,216) - - - (1,216)
Balance at 31 December 2024 20,463 8,934 2,167 1,730 - 33,294
Net book value as at 31 December 2023 14,884 11,117 93 3,889 - 29,983
Net book value as at 31 December 2024 12,911 9,786 81 22,887 3,697 49,632
(1) The transmission line in San Jose is amortised using the units of
production method. At 31 December 2024 the remaining amortisation period is
approximately 7 years (2023: 6 years) in line with the life of the mine. The
transmission line in Mara Rosa is amortised using the units of production
method.
(2) Corresponds to the acquisition of water permits of Andina Minerals Group
("Andina"). These permits have an indefinite life according to Chilean law.
(3) Legal rights correspond to expenditures required to give the Group the
right to use a property for the surface exploration work, development and
production.
(4) The amortisation for the period is included in cost of sales and
administrative expenses in the income statement.
(5) Corresponds to the transfer to assets held for sale of the Crespo mine
unit.
In December 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.
The recoverable value of the Volcan project was determined using a FVLCD
methodology. As of 31 December 2024, the Group used a value in-situ
methodology, which applies a realisable 'enterprise value' to unprocessed
mineral resources per ounce of resources. The FVLCD had been previously
assessed using a discounted cash flow model. The Group has classified project
Volcan as a non-core asset, and is developing strategic alternatives for the
project. The Group determined that a change in methodology to a market-based
approach was appropriate to better reflect market conditions and investors´
assessment of risk.
The enterprise value used in the calculation performed as at 31 December 2024
was a risk adjusted value per in-situ gold equivalent ounce of US$3.72.
The carrying amount of the Volcan CGU, which includes the water permits, is
reviewed annually to determine whether it is in excess of its recoverable
amount. No impairments were recognised in 2024 and 2023. The estimated
recoverable amount is not materially different than its carrying value.
US$000 As at 31 December 2024 As at 31 December 2023
Current carrying value Volcan CGU 37,366 41,425
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
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) (3,987)
Value in situ per gold equivalent ounce (10% increase) 3,987
Risk factor (increase by 5%) (4,536)
Risk factor (decrease by 5%) 4,536
19 Investment in an associate
The Group retains a 19.5% interest in Aclara Resources Inc. ("Aclara") (2023:
20%), 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, Hochschild
Mining Holdings Limited ("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
consolidated financial statements.
The following table summarises the financial information of the Group's
investment in Aclara Resources Inc:
As at As at
31 December 31 December
2024 2023
US$000 US$000
Current assets 29,821 34,945
Non-current assets 123,980 112,064
Current liabilities (6,231) (6,048)
Non-current liabilities (1,415) (2,600)
Equity 146,155 138,361
Non-controlling interest(1) 18,603 -
Equity attributable to shareholders 127,552 138,361
Group's share in equity 19.5% (2023: 20%) 24,873 27,672
Fair value adjustment on initial recognition and accumulated adjustments for 13,125 12,361
non-attributable changes to equity(2)
Accumulated impairment (22,187) (17,106)
Group's carrying amount of the investment 19.5% (2023: 20%) 15,811 22,927
Summarised consolidated statement of profit and loss
Revenue -
Administrative expenses (8,239) (6,815)
Exploration expenses (459) (6,991)
Other income - 59
Share of loss of joint venture (115) -
Finance income 1,657 2,338
Finance cost (64) (59)
Foreign exchange gain/(loss) (193) 85
Loss from operations for the year (7,413) (11,383)
Loss from continuing operations attributable to shareholders (7,223) (2,277)
Group's share of loss for the year (1,408) (2,277)
Other comprehensive profit that may be reclassified to profit or loss in
subsequent periods, net of tax
Exchange differences on translating foreign operations (12,780) (4,273)
Total comprehensive loss for the year (12,780) (4,273)
Group's share of comprehensive profit/(loss) for the year (2,492) (855)
(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$818,000 (31
December 2023: US$54,000).
The movement of investment in associate is as follows:
Year ended 31 December
2024 2023
US$000 US$000
Beginning balance 22,927 33,242
Impairment (5,081) (7,183)
Share of loss for the period (1,408) (2,277)
Share of comprehensive loss for the period (2,492) (855)
Equity gain in Aclara from CAP strategic financing 1,865 -
Ending balance 15,811 22,927
2024
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 represents 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.
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 has 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 has determined
an impairment charge of US$5,081,000 as at 31 December 2024.
2023
In July 2023, Aclara announced the receipt of a notice from the Environmental
Service Assessment in Chile of its decision to terminate the review of
Aclara´s application for an environmental impact assessment of the Penco
Module due to the finding of trees considered as ´vulnerable species´ in the
area of the project.
Aclara´s announcement and the impact that it could have in the first
production date of Penco project, were considered as indicators of impairment.
Therefore, in compliance with IAS 36, the Group performed a valuation on
Aclara, and determined an impairment charge of US$7,183,000.
The recoverable value of Aclara was determined using a value-in-use
methodology. The key assumptions on which management has based its valuation
of Aclara´s shares are the independent technical report of Penco module
issued in September 2021, adjusted by: a 3-year delay in the first production
date, local inflation and additional risk impacting costs; latest forecast
prices; and a discount rate of 9.6%.
Sensitivity analysis
An increase of 1% in the discount rate and a delay of one additional year in
the first production date would have the following impact in the Group´s
investment:
US$000
Discount rate (increase by 1%) (3,578)
Delay in first production date (1 additional year) (2,551)
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 31 December 2024, after recognising the changes in the Group's share of
net assets of the associate and the impairment charge is US$15,811,000 (31
December 2023: US$22,927,000).
The fair value of Aclara shares, based on the market price per share, as at 31
December 2024 amounted to US$10,173,000 (31 December 2023: US$12,296,000).
No dividends were received from the associate during 2024 and 2023.
The associate had no contingent liabilities or capital commitments as at 31
December 2024 and 31 December 2023.
20 Financial assets at fair value through OCI
Year ended 31 December
2024 2023
US$000 US$000
Beginning balance 460 509
Fair value change recorded in OCI 15 (49)
Ending balance 475 460
The Group made the election at initial recognition to measure the below equity
investments at fair value through OCI as they are not held for trading.
Fair value of the listed shares is determined by reference to published price
quotations in an active market and they are categorised as level 1. The fair
value of non-listed equity investments is determined based on financial
information available of the companies and they are categorised as level 3.
21 Financial assets at fair value through profit and loss
Year ended 31 December
2024 2023
US$000 US$000
Beginning balance - 1,015
Fair value change recorded in profit and loss (note 13(3)) - (292)
Disposals(1) - (723)
Ending balance - -
1 During 2023, the Group sold 25,001,540 shares of C3 Metals Inc.,
classified as financial assets at fair value through profit and loss, with a
fair value at the date of the sale of US$723,000, generating a loss on
disposal of US$292,000 which was recognised within finance costs.
22 Trade and other receivables
As at 31 December
2024 2023
Non-current Current Non-current Current
US$000 US$000 US$00 US$000
Trade receivables(1) - 37,238 - 28,051
Advances to suppliers (2) - 13,324 - 2,577
Funds in escrow (2) - 14,278 - -
Duties recoverable from exports of Minera Santa Cruz(3) 272 - 234 -
Receivables from related parties (note 33(a)) - 121 - 127
Loans to employees 333 220 358 194
Interest receivable - 89 - 93
Tax claims 8,060 7,826 1 10,399
Other(4) 2,674 11,310 452 12,791
Total assets classified as receivables 11,339 84,406 1,045 54,232
Prepaid expenses 2,764 11,083 1,210 6,569
Value Added Tax (VAT)(5) 4,213 40,325 10,183 19,655
Total 18,316 135,814 12,438 80,456
The fair values of trade and other receivables approximate their book value.
(1) Net of a provision for impairment of trade receivables from customers in
Peru of US$Nil (2023: US$1,370,000).
(2) Represents funds held in escrow in connection with Royropata easements
(3) Relates to export benefits through the Patagonian Port and silver refunds
in Minera Santa Cruz.
(4) Includes account receivables from contractors for the sale of supplies
of US$1,773,000 (2023: US$1,973,000), loan to third parties of US$1,381,000
(2023: US$719,000), and claim receivable of US$Nil (2023: US$345,000), net of
a provision for impairment of receivables of US$1,016,000 (2023:
US$1,033,000).
(5) Primarily relates to US$18,277,000 (2023: US$7,607,000) of VAT
receivable related to the San Jose project that will be recovered through
future sales of gold and silver and also through the sale of these credits to
third parties by Minera Santa Cruz. It also includes the VAT of Compania
Minera Ares of US$6,978,000 (2023: US$5,672,000), and Amarillo Mineracao do
Brasil of US$18,514,000 (2023: US$15,814,000). The VAT is valued at its
recoverable amount.
Movements in the provision for impairment of receivables:
Individually impaired
US$000
At 1 January 2023 2,513
Change for the year 3
Foreign exchange effect 73
At 31 December 2023 2,589
Write off (1,632)
Foreign exchange effect (3)
Change for the year 245
At 31 December 2024 1,199
As at 31 December 2024 and 2023, none of the financial assets classified as
receivables (net of impairment) were past due.
23 Inventories
As at 31 December
2024 2023
US$000 US$000
Finished goods valued at cost 1,874 4,203
Products in process valued at cost 23,623 10,998
Products in process accrual valued at cost(1) 8,152 5,930
Supplies and spare parts(2) 58,476 51,305
92,125 72,436
Provision for obsolescence of supplies (5,038) (4,175)
Ending balance 87,087 68,261
(1) Corresponds to the estimated production costs from 26 to 31 December
2024 (2023: 26 to 31 December 2023).
2 Includes in transit inventory of US$689,000 (2023: US$1,485,000).
Finished goods include concentrate, dore and aggregates. Products in process
include stockpile and precipitates (2023: stockpile and precipitates).
The Group either sells dore bars as a finished product or if it is
commercially advantageous to do so, delivers the bars for refining into gold
and silver ounces which are then sold. In the latter scenario, the dore bars
are classified as products in process. At 31 December 2024 and 2023, the Group
had no dore on hand included in products in process.
Concentrate is sold to smelters, but in addition could be used as a product in
process to produce dore.
Products in process accrual valued at cost include stockpile (2023:
stockpile).
As part of the Group's short-term financing policies, it acquires pre-shipment
loans which are guaranteed by the sales contracts. The Group has contracts as
at 31 December 2024 of US$Nil (2023: US$3,977,000) (refer to note 28).
The amount of expense recognised in profit and loss related to the consumption
of inventory of supplies, spare parts and raw materials in 2024 is
US$140,623,000 (2023: US$110,752,000).
Movements in the provision for obsolescence comprise an increase in the
provision of US$864,000 (2023: US$1,586,000) and the reversal of US$Nil
related to supplies and spare parts, that had been provided for (2023:
US$Nil).
24 Cash and cash equivalents
As at 31 December
Cash and cash equivalents 2024 2023
US$000 US$000
Cash in hand 679 782
Current demand deposit accounts(1) 94,167 40,311
Time deposits(2) 2,122 37,184
Mutual funds(3) 5 10,849
Cash and cash equivalents considered for the statement of cash flows (note 96,973 89,126
2(y))
1 Relates to bank accounts which are freely available and bear interest. The
balance has checks in transit. Includes $11,837,000 current demand deposit
accounts restricted to be utilised for advancing the Volcan project and its
related business expenses.2 These deposits
have an average maturity of 4 days (2023: average of 9 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 31 December 2023 the balance
of US$10,849,000 are deposited in 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.
25 Assets held for 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. The closing
of the transaction occurred in February 2025.
Prior to classifying Arcata and Azuca disposal group as assets and liabilities
related to asset held for sale, 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 economic terms of the sale.
The major classes of assets and liabilities classified as assets held for sale
as at 31 December 2024 are as follows:
US$000
Assets
Transfer from evaluation and exploration assets, net of impairment 4,722
Transfer from property, plant and equipment 4,168
Transfer from deferred tax asset 3,409
Total non-current assets 12,299
Transfer from inventory-supplies 361
Total current assets 361
Total assets 12,660
Liabilities
Transfer from provision for mine closure (note 29) (9,652)
Total liabilities directly associated with assets held for sale (9,652)
Net assets directly associated with assets held for sale 3,008
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% NSR over the Crespo project, recognised as an
intangible asset with a fair value of US$3,967,000 at initial recognition net
of a deferred tax liability of US$1,170,000. 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 major classes of assets and liabilities classified as assets held for sale
as at 31 December 2023 were as follows:
US$000
Assets
Transfer from evaluation and exploration assets, net of impairment 5,565
Transfer from property, plant and equipment 9,415
Transfer from deferred tax asset 2,418
Total non-current assets 17,398
Liabilities
Transfer from provision for mine closure (note 29) (711)
Total liabilities directly associated with assets held for sale (711)
Net assets directly associated with assets held for sale 16,687
The net cash received for the sale of Crespo is as follows:
US$000
Cash received 15,000
Transaction costs (1,110)
Net cash received 13,890
Contingent consideration net of deferred tax 2,797
Total 16,687
26 Trade and other payables
As at 31 December
2024 2023
Non-current Current Non-current Current
US$000 US$000 US$000 US$000
Trade payables(1) - 126,357 - 83,418
Salaries and wages payable(2) - 37,059 - 23,476
Taxes and contributions 33 10,718 55 9,295
Guarantee deposits(3) - 7,896 - 7,842
Accounts payable - hedges - 6,943 - 348
Mining royalties (note 38) - 1,470 - 788
Accounts payable to related parties (note 33(a)) - 209 - 397
Stream Agreements (note (a)) 25,926 - - -
Deferred consideration (note 4) 13,500 - - -
Lease liabilities (note 27) 3,477 3,246 1,379 2,714
Other(4) 3,565 14,324 277 7,561
Total 46,501 208,222 1,711 135,839
(1) Trade payables relate mainly to the acquisition of materials, supplies
and contractors' services. These payables do not accrue interest and no
guarantees have been granted.
(2) Salaries and wages payable relates to remuneration payable. At 31
December 2024, there was Board members' remuneration payable of US$Nil (2023:
US$67,000) and Long-Term Incentive Plan payable of US$3,764,000 (2023:
US$Nil).
(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) Current balance includes the accrual of the production costs
corresponding to six days of production from 26 to 31 December of US$7,583,000
(2023: US$4,251,000).
a. Stream Agreements
On 14 March , 2022, Cerrado, entered into a US$20,000,000 metals purchase and
sale agreement with Sprott in respect of Monte do Carmo ("Stream Agreement").
The Stream Agreement provides for the sale and physical delivery to Sprott of
2.25% of metals produced from the project, for the duration of the project.
The price payable for the metals is calculated by reference to the 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"). The
Stream Agreement and Secured Note (collectively, the Stream Agreements) were
assigned to and assumed by Amarillo at the acquisition date, and accordingly,
any future production will be subject to the Stream Agreement and the Secured
Note.
Under the Stream Agreement, Sprott will pay Amarillo the US$20,000,000 deposit
either in cash or by issuance of a promissory note, with the option by Sprott
to set off such promissory note against the Secured Note, on the commencement
of production of Monte do Carmo. The security in respect of the Sprott Note is
the assets of Serra Alta, and the shares of SAPI.
Amarillo has the ability to buy down up to 50% of the Stream Agreement by
exercising its option and paying the applicable amount below ("Buy-down
Option"):
• From 1 July 2024 - June 30, 2025: US$13,000,000, or
• From 1 July 2025 - June 30, 2026: US$13,500,000
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 will
increase linearly from its base value of 2.25% following a formula in the
Stream Agreement. If the Feasibility Study Technical Report filed in December
2023 were used for a construction decision the stream percentage would
increase to 2.75%. 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.
Management determined that the Secured Note and Stream Agreement with Sprott
are closely connected, with the option due to the option of Sprott to set off
the $20,000,000 stream payment against the Secured Note, on the commencement
of production of Monte do Carmo.
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 principal of US$20,000,000 and quarterly
interest payments in cash. The Stream Agreement, including the Buy-down
Option, meet 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 initial recognition as at 7 November 2024, and subsequent changes in the
fair value of the Stream Agreements as at 31 December 2024 are shown below:
US$000
At 7 November 2024 26,159
Unrealised change in fair value (note 13) (233)
At 31 December 2024 25,926
The key assumptions on which management has based its determination of fair
value are gold prices, reserves and resources (reflected in the production
volume), discount rates for the Secured Note of 8.0% and 7.4% as at 7 November
2024 and 31 December 2024, respectively, and the discount rate for the Stream
Agreement of 9.7% (calculated under the WACC methodology).
2028 2029 Long-term
Real prices US$ per oz.
Gold 2,248 1,894 2,100
Reasonable possible changes to any of the key assumptions above would
increase/(decrease) the fair value of the Stream Agreements:
US$000 US$000
Gold price (decrease by 10%) (1,819)
Gold price (increase by 10%) 1,820
Discount rate (increase by 1%) (783)
Discount rate (decrease by 1%) 875
Reserves and resources volume (decrease by 10%) (818)
Reserves and resources volume (increase by 10%) 818
The fair value of trade and other payables approximate their book values.
27 Lease liabilities
The Group has lease contracts for vehicles and equipment used in its
operations and administrative offices. Leases of motor vehicles generally have
lease terms of three years. The Group's obligations under its leases are
secured by the lessor's title to the leased assets.
The Group also has certain leases of assets with lease terms of 12 months or
less and leases of office equipment with low value. The Group applies the
short-term lease and lease of low-value assets recognition exemptions for
these leases.
The following are the amounts recognised in profit or loss related to the
leases according IFRS 16 and the other leases that the Group has not
capitalised:
As at 31 December
2024 2023
US$000 US$000
Depreciation expense for right-of-use assets (included in cost of sales, (4,514) (2,199)
administrative, exploration and other expenses)
Interest expense on lease liabilities (included in finance expenses) (582) (62)
Expense relating to short-term leases (included in cost of sales, (959) (866)
administrative, exploration and other expenses)
Expense relating to leases of low-value assets (included in cost of sales, (769) (743)
administrative, exploration and other expenses)
Variable lease payments (included in cost of sales and exploration expenses) (18,942) (11,422)
Total amount recognised in profit or loss (25,766) (15,292)
The Group had total cash outflows for leases of US$25,714,000 in 2024 (2023:
US$15,369,000). There were additions to right-of-use assets and lease
liabilities during the year of US$7,094,000 (2023: US$3,493,000l). The future
cash outflows relating to leases that have not yet commenced are US$7,716,000
(2023: US$4,777,000). Short-term leases, leases of low-value assets and
variable lease payments are included in the operating cash flows.
The movement in IFRS 16 lease liabilities in the years 2024 and 2023 is as
follows:
As at Additions US$000 Repayments US$000 Interest As at
1 January expense US$000 31 December 2024
2024 US$000
US$000
Lease liabilities 4,093 7,094 (5,046) 582 6,723
Less: current balance (2,714) (3,246)
Non-current balance 1,379 3,477
As at Additions US$000 Repayments US$000 Interest As at
1 January expense US$000 31 December 2023
2023 US$000
US$000
Lease liabilities 2,876 3,493 (2,338) 62 4,093
Less: current balance (1,637) (2,714)
Non-current balance 1,239 1,379
28 Borrowings
As at 31 December
2024 2023
Effective Non-current Current Effective Non-current Current
interest rate US$000 US$000 interest rate US$000 US$000
Secured bank loans (a)
Pre-shipment and other loans in Minera Santa Cruz (note 23) 8.45% to 13% - 1,558 12% to 15% - 3,977
Short-term bank loans 4.58% and 4.88% - 80,210 - - -
Medium-term bank loans 6.82% to 10.04% 163,333 67,481 8.91% and 9.09% 234,999 106,087
Other loans (b)
Stock market promissory note in Minera Santa Cruz - - - - - 2,000
Total 163,333 149,249 234,999 112,064
(a) Secured bank loans:
Pre-shipment and other loans in Minera Santa Cruz:
As at 31 December 2024, Minera Santa Cruz has loans of US$1,486,000 (2023:
US$3,870,000) plus interests of US$72,000 (2023: US$107,000) with a maturity
between January and March 2025.
Short-term bank loans:
- As at 31 December 2024, Minera Ares has 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).
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. The US$200,000,000 medium-term loan
was payable in equal quarterly instalments from the second anniversary of the
loan with an interest rate of three-month USD Libor plus 1.15% payable
quarterly until maturity on 13 December 2024. 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. US$200,000,000
was withdrawn on 21 September 2021, and the optional US$100,000,000 loan was
withdrawn on 1 December 2021 (the Credit Agreement). The maturity was extended
until September 2026, and the interest rate increased to three-month USD Libor
plus a spread of 1.65%. A structuring fee of US$900,000 was paid to the lender
and additional US$193,000 was incurred as transaction costs. In addition, a
commitment fee of US$120,000 was paid for the period that the optional
US$100,000,000 loan remained undrawn. This was considered a substantial
modification to the terms of the loan, and consequently, it was treated as an
extinguishment of the loan which resulted in the derecognition of the existing
liability and recognition of a new liability. The associated costs and fees
incurred were recognised as part of the loss on the extinguishment. From 18
September 2023 the Libor was replaced by the three-month SOFR plus a spread of
1.91%. 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, 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 Ltd. and Compania Minera Ares, 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. 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 Ltd. and Compania Minera Ares, 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.
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. Financial
covenants under the agreement are: (i) Consolidated Leverage Ratio <= 3 and
(ii) Consolidated Interest Coverage Ratio ≥ 4.00.
(b) Other loans:
Stock market promissory note:
As at 1 January 2023, Minera Santa Cruz has a balance of stock market
promissory notes of US$14,500,000. From January to May 2023 Minera Santa Cruz
signed four stock market promissory notes with Max Capital, a finance advisory
company located in Argentina, amounting to US$3,907,000. The expiration date
of the notes is from July 2023 to August 2024. During the year 2023, the Group
repaid US$16,407,000. The balance as at 31 December 2023 is US$2,000,000 that
was repaid during 2024.
(c) Capitalised borrowing costs:
Interest expense of US$7,012,000 that is directly attributable to the
construction of Mara Rosa (US$6,257,000) and Compañía Minera Ares S.A.C.
(US$755,000) has been capitalised and is included in property, plant and
equipment within construction in progress and capital advances (US$4,991,000)
and mining property and development costs (US$1,982,000), and exploration and
evaluation assets (US$39,000) (2023: Interest expense of US$19,357,000 that is
directly attributable to the construction of Mara Rosa (US$19,178,000) and
Compañía Minera Ares S.A.C. (US$179,000) has been capitalised and is
included in property, plant and equipment within construction in progress and
capital advances (US$8,267,000) and mining property and development costs
(US$10,992,000), and exploration and evaluation assets (US$98,000)).
The carrying value including accrued interest payable of the medium-term bank
loans as at 31 December 2024 is US$230,814,000 (2023: US$341,086,000). The
maturity of non-current borrowings is as follows:
As at 31 December
2024 2023
US$000 US$000
Between 1 and 2 years 66,667 120,001
Between 2 and 5 years 96,666 114,998
Over 5 years - -
Total 163,333 234,999
The carrying amount of the pre-shipment, short-term and other loans
approximates their fair value. The carrying amount and fair value of the
medium-term bank loans are as follows:
Carrying amount Fair value
as at 31 December as at 31 December
2024 2023 2024 2023
US$000 US$000 US$000 US$000
Medium-term bank loans 230,814 341,086 221,560 335,899
The movement in borrowings during the years 2024 and 2023 are as follows:
As at Additions US$000 Repayments US$000 Reclassifications As at
1 January and others US$000 31 December 2024
2024 US$000
US$000
Current
Pre-shipment and other loans in Minera Santa Cruz 3,870 1,607 (3,991) - 1,486
Short-term bank loans - 140,000 (60,000) - 80,000
Medium-term bank loans 100,001 8,333 (275,000) 233,333 66,667
Stock market promissory note 2,000 - (2,000) - -
Accrued interest 6,193 15,425 (27,074) 6,552 1,096
112,064 165,365 (368,065) 239,885 149,249
Non-current
Medium-term bank loans 234,999 161,667 - (233,333) 163,333
Total current and non-current borrowings 347,063 327,032 (368,065) 6,552 312,582
(1) Reclassification and others from non-current of US$233,333,000 includes
transfer from non-current to current borrowings of US$233,333,000.
Reclassifications and others of accrued interests includes capitalisation of
interests of US$7,012,000 (28(c)), offset by transaction costs of
US$364,000, and foreign exchange effect of US$96,000.
As at Additions US$000 Repayments US$000 Reclassifications As at
1 January and others(1) US$000 31 December 2023
2023 US$000
US$000
Current
Pre-shipment and other loans in Minera Santa Cruz 1,693 13,506 (10,573) (756) 3,870
Medium-term bank loans 25,000 60,000 (85,000) 100,001 100,001
Stock market promissory note 14,500 3,907 (16,407) - 2,000
Accrued interest 2,796 9,520 (24,839) 18,716 6,193
43,989 86,933 (136,819) 117,961 112,064
Non-current
Medium-term bank loans 275,000 60,000 - (100,001) 234,999
Total current and non-current borrowings 318,989 146,933 (136,819) 17,960 347,063
(1) Reclassification and others from non-current of US$100,001,000 includes
transfer from non-current to current borrowings of US$100,001,000. Current
reclassifications and other of US$99,245,000 includes transfer from
non-current borrowings of US$100,001,000 and foreign exchange effect of
US$756,000. Reclassifications and others of accrued interests includes
transfer of recognition of transaction costs of US$234,000, capitalisation of
interests of US$19,357,000 (28(c)), and foreign exchange effect of US$407,000.
Additional $105,000,000 short-term loans were withdrawn in February 2025 of
which US$85,000,000 were used to repay the $200,000,000 medium-term facility
and US$20,000,000 for temporary working capital changes.
29 Provisions
Provision Long-Term Incentive Workers profit sharing US$000 Contingencies Total US$000
for mine Plan US$000
closure(1) US$000
US$000
At 1 January 2023 137,000 - 4,947 5,736 147,683
Additions - - 3,207 3,655 6,862
Accretion (note 13) 1,703 - - - 1,703
Change in discount rate (2,543) - - - (2,543)
Change in estimates 43,304 - - - 43,304
Foreign exchange effect - - 77 (916) (839)
Transfers to assets held for sale (note 25) (711) - - - (711)
Utilisation (2,712) - - - (2,712)
Payments (13,325) - (4,805) (504) (18,634)
At 31 December 2023 162,716 - 3,426 7,971 174,113
Less: current portion (19,056) - (3,426) (4,259) (26,741)
Non-current portion 143,660 - - 3,712 147,372
At 1 January 2024 162,716 - 3,426 7,971 174,113
Additions - 3,231 6,590 6,153 15,974
Accretion (note 13) 3,110 (87) - - 3,023
Change in discount rate (3,727) - - - (3,727)
Change in estimates 18,805 - - - 18,805
Foreign exchange effect - - - (608) (608)
Transfers to assets held for sale (note 25) (9,652) - - - (9,652)
Transfer to other payables - (7,161) - - (7,161)
Transfer from other reserves - 7,954 - - 7,954
Payments (11,833) - (3,210) (1,815) (16,858)
At 31 December 2024 159,419 3,937 6,806 11,701 181,863
Less: current portion (22,799) - (6,806) (5,477) (35,082)
Non-current portion 136,620 3,937 - 6,224 146,781
1 Provision for mine closure
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 31 December 2024
and 2023 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, technological
changes, regulatory changes, cost increases, changes in discount rates. Those
uncertainties may result in future actual expenditure differing from the
amounts currently provided. The discount rate used was 2.00% (2023: 1.84%).
Expected cash flows will be over a period from one to 25 years (2023: over a
period from one to 21 years).
Based on the internal and external reviews of mine rehabilitation
estimates, the provision for mine closure increased by US$18,805,000 and
decreases for the change in discount rate of US$3,727,000 as follows:
Change in estimate Change in discount rate
31 December 2024 31 December 2023 31 December 2024 31
December
2023
Arcata (1) (321) (7) (109)
Ares 10,323 20,297 99 (273)
Sipan 4,242 52 25 (412)
Selene 144 9,345 (108) (214)
Recognised in the consolidated income statement 14,708 29,373 9 (1,008)
Pallancata (789) 2,465 (417) (301)
Matarani (30) 21 (10) (4)
Azuca - 1 (2) (5)
Crespo - (3) - 5
Inmaculada 3,229 7,691 (2,126) (398)
San Jose 419 (835) (613) (555)
Mara Rosa 1,268 4,591 (568) (277)
Recognised in property, plant and equipment 4,097 13,931 (3,736) (1,535)
Total 18,805 43,304 (3,727) (2,543)
The increase in the accretion from 2023 (US$1,703,000) to 2024
(US$3,110,000) is explained because the Group is closer to the budget
execution periods and the discount rates used for 2023 were lower than those
of 2024.
A change in any of the following key assumptions used to determine the
provision would have the following impact:
As at 31 December 2024
US$000
Closure costs (increase by 10%) increase of provision 16,907
Discount rate (increase by 0.5%) (decrease of provision) (12,621)
As at 31 December 2023
US$000
Closure costs (increase by 10%) increase of provision 16,300
Discount rate (increase by 0.5%) (decrease of provision) (10,051)
An element of mine closure planning can be water management, which
relates to the treatment of contact water. The cost of this water processing
could continue for a number of years after closure activities have been
completed and is therefore, potentially, exposed to long-term climate change.
Mine planning for Hochschild's operating assets takes into account
mine-closure activities. In the case of the now-closed Sipan mine, due to the
specific characteristics of the closed mine components, contact water
treatment is ongoing. According to our most recent approved Mine Closure Plan
(July 2021), Sipan will be the subject of ongoing treatment until 2030 or
until baseline water quality conditions have been met. As at the date of
approval of these financial statements, the impact of climate change on
Sipan's mine closure planning is not expected to be material.
2 Long-term incentive plan
Corresponds to the provision related to awards granted under the
Long-Term Incentive Plan (LTIP) to designated personnel of the Group, and
includes the 2023 awards, granted in April 2023, payable in April 2026 and the
2024 awards, granted in March 2024, payable in March 2027. The 2022 awards
which are payable in 2025 have a value of US$3,764,000 and are included in
trade and other payables. The effect has been recorded as administrative
expenses.
The following tables list the inputs to the last Monte Carlo model used
for the LTIPs as at 31 December 2024:
31 December 2024
LTIP 2023 LTIP 2024
US$000 US$000
Dividend yield (%) 0 0
Expected volatility (%) 2.99 2.99
Risk-free interest rate (%) 4.77 4.77
Expected life (years) 1 2
Weighted average share price (pence £) 63.9 96.51
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. This resulted in a recognition of
liability based on the fair valuation of the cash settled LTIPs as at the date
of modification and reversal of the share-based payment reserves. The effect
at the date of the modification was an additional expense of US$419,000.
3 Contingencies
The non-current balance of US$6,224,000 (2023: US$3,712,000) corresponds to
labour lawsuits in Minera Santa Cruz that the Group expect to resolve in a
period of more than one year. Current contingencies mainly represents the
balance of Ares of US$3,002,000 (2023: US$4,180,000). The main contingency in
Ares is related to the OEFA.
30 Equity
(a) Share capital and share premium
Issued share capital
The issued share capital of the Company as at 31 December 2024 is as follows:
Issued
Class of shares Number Amount
Ordinary shares (1 pence per share) 514,458,432 £5,144,584
The movement in share capital of the Company from 1 January 2023 to 31
December 2024 is as follows:
Number of ordinary shares Share capital US$000
Shares issued as at 1 January 2023 513,875,563 9,061
Issuance of shares for bonus payment on 12 May 2023 582,869 7
Shares issued as at 31 December 2023 514,458,432 9,068
Shares issued as at 31 December 2024 514,458,432 9,068
Rights attached to ordinary shares
At general meetings of the Company, on a show of hands and on a poll, every
member who is present in person or subject to the below, by proxy, has one
vote for every share of which they are the holder/proxy. However, in the case
of a vote on a show of hands where a proxy has been appointed by more than one
member, the proxy has one vote for and one vote against if the proxy has been
instructed by one or more members to vote for the resolution and by one or
more members to vote against the resolution.
(b) Other reserves
Fair value reserve of financial assets at fair value through OCI
In accordance with IFRS 9, the Group made the decision to classify its
investments in listed and unlisted companies as financial assets at fair value
through OCI. The increase/decrease in the fair value, net of the related
deferred tax liability, is taken directly to this account where it will remain
until disposal, when the cumulative unrealised gains and losses are recycled
through retained earnings.
Cumulative translation adjustment
The cumulative translation adjustment account is used to record exchange
differences arising from the translation of the financial statements of
subsidiaries with a functional currency different to the reporting currency of
the Group.
Merger reserve
The merger reserve represents the difference between the value of the net
assets of the Cayman Holding Companies (Ardsley, Garrison, Larchmont and
Hochschild Mining (Peru)) acquired under the Share Exchange Agreement and the
nominal value of the shares issued in consideration of such acquisition. In
addition, a merger reserve was generated by certain share placing transactions
made by the Group after the IPO. The merger reserve available for distribution
is disclosed within retained earnings.
Cash flow hedges
Changes in the fair value of derivatives designated as cash flow hedges, which
are held to hedge the exposure to variability in cash flows of the hedged
items, are recognised in other components of equity until changes in the fair
value of the hedged item are recognised in profit or loss. The Group uses cash
flow hedges for hedging the exposure to variability in gold and silver prices.
Share-based payment reserve
The share-based payment reserve is used to recognise the value of
equity-settled share-based payment transactions provided to employees, as a
part of their remuneration. In May 2024 the award changed from an
equity-settled benefit to a cash settled benefit, and the balance recorded in
other reserves was transferred to provisions (refer to note 29). As at 31
December 2024 the balance is US$Nil.
31 Deferred income tax
The net deferred income tax assets/(liabilities) are as follows:
As at 31 December
2024 2023
US$000 US$000
Beginning of the year (66,276) (75,832)
Income statement benefit/(expense) (note 14) (14,409) 4,560
Deferred tax recognised on items in other comprehensive income(1) 27,620 7,414
Deferred tax recognised related to Monte do Carmo acquisition (note 4) 2,817 -
Reclassification of deferred tax to assets held for sale (note 25) (3,409) (2,418)
Deferred tax recognised on disposition of Crespo(note 17) (1,170) -
End of the year (54,827) (66,276)
1 The deferred tax recovery for items that will be subsequently reclassified
to profit and loss is US$28,473,000 (2023: US$6,617,000).
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 movement in deferred income tax assets and liabilities before offset
during the year is as follows:
PP&E Mine development US$000 Provisional pricing adjustment US$000 Others Total
US$000 US$000 US$000
Deferred income tax liabilities
At 1 January 2023 47,272 89,515 303 4,779 141,869
Income statement (expense)/benefit (108) (8,248) (303) 3,673 (4,986)
Reclassification to assets held for sale (52) (2,840) - - (2,892)
At 31 December 2023 47,112 78,427 - 8,452 133,991
Income statement (expense)/benefit 7,895 14,797 19 (2,077) 20,634
At 31 December 2024 55,007 93,224 19 6,375 154,625
PP&E Provision Mine development US$000 Tax losses US$000 Others(1) Total
US$000 for mine US$000 US$000
closure
US$000
Deferred income tax assets
At 1 January 2023 14,544 31,514 721 4,338 14,920 66,037
Income statement benefit/(expense) 8,045 3,260 (8,818) 3,064 (5,977) (426)
Reclassification to assets held for sale (5,310) - - - - (5,310)
Deferred tax recognised on items in other comprehensive income - - - - 7,414 7,414
At 31 December 2023 17,279 34,774 (8,097) 7,402 16,357 67,715
Income statement benefit/(expense) (4,261) (8,306) 1,973 (2,933) 18,582 5,055
Reclassification to assets held for sale (147) - (3,262) - - (3,409)
Deferred tax recognised related to the Monte do Carmo acquisition - - 1,918 - 899 2,817
Deferred tax recognised on items in other comprehensive income - - - - 27,620 27,620
At 31 December 2024 12,871 26,468 (7,468) 4,469 63,458 99,798
(1) Credit/(charge) in the year mainly related to the balance of hedges of
US$34,445,000 (2023 hedges of US$5,908,000), exchange difference credit on
cash basis of US$13,239,000 (2023: charge of US$1,114,000, statutory holiday
provision of US$875,000 (2023: US$943,000) and Long-Term Incentive Plan of
US$2,065,000 (2023: US$1,909,000).
The amounts after offset, as presented on the face of the statement of
financial position, are as follows:
As at 31 December
2024 2023
US$000 US$000
Deferred income tax assets 27,677 763
Deferred income tax liabilities (82,504) (67,039)
Total (54,827) (66,276)
Unrecognised tax losses expire in the following years:
As at 31 December
2024 2023
US$000 US$000
Recognised
Expire after four years 13,145 19,651
13,145 19,651
Unrecognised
Expire in one year 1,040 97
Expire in two years 766 1,040
Expire in three years 1,196 766
Expire in four years 43 1,196
Expire after four years 200,155 191,764
203,200 194,863
Total 216,345 214,514
Other unrecognised deferred income tax assets comprise (gross amounts):
As at 31 December
2024 2023
US$000 US$000
Provision for mine closure(1) 16,633 10,990
(1) This relates to provision for mine closure expenditure which is expected
to be incurred in periods in which taxable profits are not expected to be
available to offset the expenditure.
Unrecognised deferred tax liability on retained earnings
At 31 December 2024 and 2023, there was no recognised deferred tax liability
for taxes that would be payable on the unremitted earnings of certain of the
Group's subsidiaries as the intention is that these amounts are permanently
reinvested.
32 Dividends
2024 2023
US$000 US$000
Dividends paid and proposed during the year
Proposed dividends on ordinary shares:
Final dividend for 2024: 1.94 US$ cents per share (2023: Nil US$ cents per 10,000 -
share)
Dividends declared to non-controlling interests: 0.002 US$ per share (2023: 388 326
0.002 US$ per share)
Total dividends declared to non-controlling interests 388 326
Dividends paid in 2024 to non-controlling interests amounted to US$388,000
(2023: US$326,000).
Dividends per share
There was no final dividend paid for 2023. And there was no interim dividend
paid during 2024. The proposed final dividend in respect of the year ending 31
December 2024 is 1.94 US$ cents per share (2023: US$Nil).
33 Related-party balances and transactions
(a) Related-party accounts receivable and payable
The Group had the following related-party balances and transactions during the
years ended 31 December 2024 and 2023. The related parties are companies owned
or controlled by the main shareholder of the Parent company or associates.
Accounts receivable Accounts payable
as at 31 December as at 31 December
2024 2023 2024 2023
US$000 US$000 US$000 US$000
Current related party balances
Cementos Pacasmayo S.A.A.(1) 73 114 60 80
Tecsup(2) 30 - 149 315
REE UNO SpA(3) 18 - - 2
Aclara Resources Inc. (3) - 13 - -
Total 121 127 209 397
(1) The account receivable relates to reimbursement of expenses paid by the
Group on behalf of Cementos Pacasmayo S.A.A, an entity controlled by Eduardo
Hochschild. The account payable relates to the rentals payments.
(2) Peruvian not-for-profit educational institutions controlled by Eduardo
Hochschild.
(3) Associated companies of the Aclara Group (refer to note 19).
As at 31 December 2024 and 2023, all accounts are, or were, non-interest
bearing.
No security has been granted or guarantees given by the Group in respect of
these related party balances.
Principal transactions between affiliates are as follows:
Year ended 31 December
2024 2023
US$000 US$000
Expenses
Expense recognised for the rental and services paid to Cementos Pacasmayo (505) (473) (1)
S.A.A.
Expense donation to UTEC scholarships (371) (931) (1)
Expense research project with UTEC(2) (19) -
Expense donation Asociacion Amanatari(3) (80) -
Expense technical services from Tecsup (159) (365) (1)
Income from reimbursement of security costs of Cementos Pacasmayo S.A.A. 676 541
Income from administrative services to REE UNO SpA 40 42
Income from administrative services to Aclara Resources Peru 11 14(1)
Revenue from sale of dore to Farragut Holdings Inc. 72 -
1 While reflected in the Consolidated Income Statement, these items were
omitted from the 2023 table of principal transactions between affiliates.
2 Peruvian non-for-profit educational institution controlled by Eduardo
Hochschild..
Peruvian non-for-profit institution controlled by Eduardo Hochschild..
Transactions between the Group and these companies are at an arm's length
basis.
(b) Compensation of key management personnel of the Group
Year ended 31 December
Compensation of key management personnel (including Directors) 2024 2023
US$000 US$000
Short-term employee benefits 6,570 6,259
Long-Term Incentive Plans 1,714 1,157
Total compensation paid to key management personnel 8,284 7,416
This amount includes the remuneration paid to the Directors of the Parent
Company of the Group of US$3,482,000 (2023: US$3,555,000).
34 Auditor's remuneration
The auditor's remuneration for services provided to the Group during the years
ended 31 December 2023 and 2022 is as follows:
Amounts paid to
Ernst & Young
in the year ended
31 December
2024 2023
US$000 US$000
Audit fees pursuant to legislation(1) 1,561 1,342
Audit related assurance services 150 133
Other assurance services 24 12
Total 1,735 1,487
(1) The total fee includes statutory audit fee of US$560,000 in respect of
local statutory audits of subsidiaries (2023: US$390,000) and additional 2023
fees amounting to US$111,000.
In 2024 and 2023, all fees are included in administrative expenses.
35 Notes to the statement of cash flows
As at 31 December
2024 2023
US$000 US$000
Reconciliation of loss for the year to net cash generated from operating
activities
Profit/(loss) for the year 113,749 (60,033)
Adjustments to reconcile Group loss to net cash inflows from operating
activities
Depreciation (note 3(a)) 158,649 146,137
Amortisation of intangibles (note 18) 1,579 802
Write-off of assets (note 16) 3,883 2,731
Provision of doubtful receivable 245 3
Impairment of assets (note 11) 13,732 80,843
Loss from changes in the fair value of financial assets at fair value through - 292
profit and loss (note 21)
Share of post-tax losses and impairment of associates (note 19) 6,489 9,460
Gain on sale of property, plant and equipment (note 12) (656) (142)
Provision for obsolescence of supplies (notes 12 and 23) 864 1,586
Increase of provision for mine closure (note 12) 14,717 28,365
Finance income (note 13) (13,097) (7,473)
Finance costs (note 13) 26,928 18,199
Income tax expense (note 14) 63,468 16,552
Other 3,351 (3,342)
Increase/(decrease) of cash flows from operations due to changes in assets and
liabilities
Trade and other receivables (79,788) (8,520)
Income tax receivable (2,813) 2,624
Other financial assets and liabilities (2,410) (2,856)
Inventories (21,161) (8,091)
Trade and other payables 70,282 1,877
Provisions 7,029 (1,998)
Cash generated from operations 365,040 217,016
36 Commitments
(a) Mining rights purchase options
During the ordinary course of business, the Group enters into agreements to
carry out exploration under concessions held by third parties. Generally,
under the terms of these agreements, the Group has the option to acquire the
concession or invest in the entity holding the concession. In order to
exercise these options the Group must satisfy certain financial and other
obligations during the term of the agreement. The options lapse in the event
that the Group does not meet its financial obligations. At any point in time,
the Group may cancel the agreements without penalty, except where specified
below. These agreements are not under non-cancellable/irrevocable clauses. The
Group has no commitments as at 31 December 2024 and 31 December 2023.
(b) Capital commitments
As at
31 December
2024 2023
US$000 US$000
Peru 26,527 25,911
Argentina 1,733 1,049
Brazil - 16,000
28,260 42,960
37 Contingencies
As at 31 December 2024 the Group is subject to various claims which arise in
the ordinary course of business. 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.
(a) Taxation
Fiscal periods remain open to review by the tax authorities for four years in
Peru, five years in Argentina and Mexico, ten years in Brazil and three years
in Chile, preceding the year of review. During this time the authorities have
the right to raise additional tax assessments including penalties and
interest. Under certain circumstances, reviews may cover longer periods.
Because a number of fiscal periods remain open to review by the tax
authorities, coupled with the complexity of the Group and the transactions
undertaken by it, there remains a risk that significant additional tax
liabilities may arise. As at 31 December 2024, the Group had exposures
totalling US$17,077,000 (2023: US$19,885,000).
When the Tax authority challenges the deductibility of certain expenses the
Group reassesses the case internally and externally, with the support of a
third party professional to determine the probability of success and,
depending on the result, makes the decision whether or not to continue with
the claim. Notwithstanding this risk, the Directors believe that management's
interpretation of the relevant legislation and assessment of taxation is
appropriate and that it is probable that the Group's tax and customs positions
will be sustained in the event of a challenge by the tax authorities.
Consequently, the Directors consider that no tax liability is required to be
recognised in respect of these claims or risks.
(b) Guarantees
The Group is required to provide guarantees in Peru in respect of
environmental restoration and decommissioning obligations. The Group has
provided for the estimated cost of these activities (see note 29(1)).
38 Mining royalties
Peru
In accordance with Peruvian legislation, owners of mining concessions must pay
a mining royalty for the exploitation of metallic and non-metallic resources.
Mining royalties have been calculated with rates ranging from 1% to 3% of the
value of mineral concentrate or equivalent sold, based on quoted market
prices.
In October 2011, changes came into effect for mining companies, with the
following features:
(a) Introduction of a Special Mining Tax (SMT), levied on mining
companies at the stage of exploiting mineral resources.
(b) Modification of the mining royalty calculation, which consists of
applying a progressive scale of rates ranging from 1% to 12%, of the quarterly
operating profit. The former royalty was calculated on the basis of monthly
sales value of mineral concentrates. The SMT and modified mining royalty are
accounted for as an income tax in accordance with IAS 12 Income Taxes.
As at 31 December 2024, the amount payable as under the new mining royalty and
the SMT amounted to US$1,717,000 (2023: US$1,298,000) and US$1,742,000 (2023:
US$1,181,000) respectively. The new mining royalty and SMT are reported as
"Income tax payable" in the Statement of Financial Position. The amount
recorded in the income statement was US$7,108,000 (2023: US$4,520,000) of new
mining royalty and US$7,051,000 (2023: US$2,307,000) of SMT, both classified
as income tax.
Argentina
In accordance with Argentinian legislation, Provinces (being the legal owners
of the mineral resources) are entitled to collect royalties from mine
operators. For San Jose, the mining royalty applicable to dore and concentrate
is 3% of the pit-head value. As at 31 December 2024, the amount payable as
mining royalties amounted to US$970,000 (2023: US$788,000). The amount
recorded in the income statement as cost of sales was US$7,331,000 (2023:
US$6,267,000).
Brazil
Under Brazilian law, the Government has the right to collect royalties from
mine operators. For Mara Rosa, the mining royalty applicable to the dore is
1.5% on the sales made. As of 31 December 2024, the amount payable as mining
royalties is US$500,000 (2023: US$Nil). The amount recorded in the income
statement as cost of sales was US$2,363,000 (2023: US$Nil).
39 Financial risk management
The Group is exposed to a variety of risks and uncertainties which may have a
financial impact on the Group and which also impact the achievement of social,
economic and environmental objectives. These risks include strategic,
commercial, operational and financial risks and are further categorised into
risk areas to facilitate consolidated risk reporting across the Group.
The Group has made significant developments in the management of the Group's
risk environment which seeks to identify and, where appropriate, implement the
controls to mitigate the impact of the Group's significant risks. This effort
is supported by a Risk Committee with the participation of the CEO, the Vice
Presidents, and the head of the internal audit function. The Risk Committee is
responsible for implementing the Group's policy on risk management and
internal control in support of the Company's business objectives, and
monitoring the effectiveness of risk management within the organisation.
(a) Commodity price risk
Silver and gold prices have a material impact on the Group's results of
operations. Prices are significantly affected by changes in global economic
conditions and related industry cycles. Generally, producers of silver and
gold are unable to influence prices directly; therefore, the Group's
profitability is ensured through the control of its cost base and the
efficiency of its operations.
Management continuously monitors silver and gold prices and reserves the right
to take the necessary action, where appropriate and within Board approved
parameters, to mitigate the impact of this risk.
Derivative financial assets - Silver and gold forwards and zero cost collars
On 10 November 2021, the Group signed agreements to hedge the sale of
3,300,000 ounces of silver at US$25.0 per ounce for 2023.
On 12 April 2023, the Group signed agreements to hedge the sale of 27,600
ounces of gold at US$2,100 per ounce for 2024.
On 20 April 2023, the Group signed agreements to hedge the sale of 29,250
ounces of gold at US$2,047 per ounce for 2023.
On 19 June 2023, the Group signed agreements to hedge the sale of 150,000
ounces of gold (50,000 ounces per year) at US$2,117.05, US$2,166.65 and
US$2,205.50 per ounce in 2025, 2026 and 2027 respectively.
On 14 December 2023, the Group signed a gold collar agreement 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.
On 14 February 2024, the Group signed a gold collar agreement of 60,000 ounces
of gold at strike put of US$2,000 and strike call of US$2,485 per ounce for
2025.
The forwards and zero cost collars are being used to hedge exposure to changes
in cash flows from gold and silver 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 and silver 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 silver
and gold forwards as at 31 December 2024 and 31 December 2023 are as follows:
As at 31 December 2024 As at 31 December 2023
US$000
Current assets - 846
Current liabilities (40,276) (1,190)
Non-current liabilities (61,343) (16,581)
(101,619) (16,925)
The effect recorded is as follows:
Year ended 31 December 2024 Year ended 31 December 2023
US$000
Income statement - revenue (loss)/income (27,903) 7,846
Income statement - finance income 866 593
Equity - Unrealised loss on hedges 85,560 19,704
The sensitivity of the fair value of the current hedges outstanding at 31
December 2024 to a reasonable movement in gold prices, with all other
variables held constant, determined as a +/-10% change in gold prices
-US$50,554,000/US$46,192,000 effect on OCI.
The Group has price adjustments arising from the sale of concentrate and dore
which were provisionally priced at the time the sale was recorded (refer to
note 5). The Group's exposure to reasonably possible changes in gold and
silver prices (assuming all other variables remain constant) are not material
to the fair value of trade receivables.
The sensitivity of the fair value to an immediate 10% favourable or adverse
change in the price of gold and silver (assuming all other variables remain
constant), is as follows:
Increase/ Effect on
decrease in price of profit before tax
ounces of: US$000
2024 Gold +/-10% +/-530
Silver+/-10% +/-302
2023 Gold +/-10% +/-127
Silver+/-10% +/-45
(b) Foreign currency risk
The Group produces silver and gold which are typically priced in US$ dollars.
A proportion of the Group's costs are incurred in Peruvian nuevos soles,
Argentinian pesos, Brazilian reais, sterling pounds, Canadian dollars, Chilean
pesos, and Mexican pesos. Accordingly, the Group's financial results may be
affected by exchange rate fluctuations between the US dollar and the local
currency. The long-term relationship between commodity prices and currencies
in the countries in which the Group operates provides a certain degree of
natural protection. The Group does not use derivative instruments to manage
its foreign currency risks.
The following table demonstrates the sensitivity of financial assets and
liabilities, at the reporting date, denominated in their respective
currencies, to a reasonably possible change in the US$ dollar exchange rate,
with all other variables held constant, of the Group's profit before tax and
the Group's equity.
Year Increase/ Effect Effect
decrease in US$/other on profit on OCI
currencies' before tax US$000
rate US$000
2024
Argentinian pesos +/-10% -/+7,140 -
Mexican pesos +/-10% +/-47 -
Peruvian nuevos soles +/-10% -/+26,497 -
Reais +/-10% -/+10,035 -
Pounds sterling +/-10% -/+94 -
Canadian dollars +/-10% -/+518 +/-26
Chilean pesos +/-10% +/-862 -
2023
Argentinian pesos +/-10% -/+2,206 -
Mexican pesos +/-10% +/-1,843 -
Peruvian nuevos soles +/-10% -/+19,384 -
Reais +/-10% -/+21,718 -
Pounds sterling +/-10% -/+93 -
Canadian dollars +/-10% -/+450 +/-16
Chilean pesos +/-10% +/-70 -
(c) Credit risk
Credit risk arises from debtors' inability to make payment of their
obligations to the Group as they become due (without taking into account the
fair value of any guarantee or pledged assets). The Group is primarily exposed
to credit risk as a result of commercial activities and noncompliance, by
counterparties, in transactions in cash which are primarily limited to cash
balances deposited in banks and accounts receivable at the statement of
financial position date.
Counterparty credit exposure based on commercial activities, including trade
and other receivables, embedded derivatives, hedge instruments and cash
balances in banks as at 31 December 2024 and 31 December 2023:
Summary commercial partners As at % collected as at 11 March 2025 As at % collected as at 11 March 2024
31 December 2024 US$000 31 December 2023 US$000
US$000 US$000
Trade receivables 37,238 66% 29,421 72%
Other receivables include advances to suppliers and receivables from
contractors for the sale of supplies. There is limited credit risk on these
amounts as the Group can withhold the balances that it owes the suppliers or
contractors for their services.
Cash and cash equivalents - Credit/rating(1) As at As at
31 December 31 December
2024 2023
US$000 US$000
A+ - 40,759
A 343 -
A- 19,177 12,955
A2 - 27,205
BBB+ 71,810 -
BBB- - 5,172
Not available 5,643 3,035
Total 96,973 89,126
(1) Represents the long-term credit rating as at 3 January 2025 (2023: 3
January 2024).
As at 31 December 2024, the credit rating of the counterparties of the gold
forward hedges is A- and BBB+ (31 December 2023 is A- and A+).
To manage the credit risk associated with commercial activities, the Group
took the following steps:
Active use of prepayment/advance clauses in sales contracts
Delaying delivery of title and/or requiring advance payments to reduce
exposure timeframe (potential delay in sales recognition)
Maintaining as diversified a portfolio of clients as possible
To manage credit risk associated with cash balances deposited in banks, the
Group took the following steps:
Increasing banking relationships with large, established and well-capitalised
institutions in order to secure access to credit and to diversify credit risk
Limiting exposure to financial counterparties according to Board approved
limits
Investing cash in short-term, highly liquid and low risk instruments (term
deposits mainly)
Increase the utilisation of UK bank accounts
Receivable balances are monitored on an ongoing basis and the result of the
Group's exposure to bad debts is recognised in the consolidated income
statement. The maximum exposure is the carrying amount as disclosed in notes
22, 24 and 39(e).
The Group's risk assessment procedures includes customer analysis and
reviewing financial counterparties. For further details refer to the
Commentary section of the Commercial Counterparty risk in the Risk management
and Viability Statement.
(d) Equity risk on financial instruments
The Group acquires financial instruments in connection with strategic
alliances with third parties. The Group constantly monitors the fair value of
these instruments in order to decide whether or not it is convenient to
dispose of these investments. The disposal decision is also based on
management's intention to continue with the strategic alliance, the tax
implications and changes in the share price of the investee.
The Group is not sensitive to reasonable movements in the share price of
financial assets at fair value through OCI.
(e) 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.
As at 31 December 2024 and 2023, the Group held the following financial
instruments measured at fair value:
31 December 2024 Level 1 Level 2 Level 3
US$000 US$000 US$000 US$000
Assets and liabilities measured at fair value
Equity shares (note 20) 475 475
Trade receivables (note 22) 37,238 37,238
Mutual funds 5 5
Bonds in Minera Santa Cruz S.A. 2,474 2,474
Stream Agreements (note 26(a)) 25,926 25,926
Derivative financial liabilities (101,619) (101,619)
31 December 2023 Level 1 Level 2 Level 3
US$000 US$000 US$000 US$000
Assets and liabilities measured at fair value
Equity shares (note 20) 460 460
Trade receivables (note 22) 29,421 29,421
Derivative financial assets 846 846
Mutual funds 10,849 10,849
Other financial assets 2,264 2,264
Derivative financial liabilities (17,771) (17,771)
During the period ending 31 December 2024 and 2023, there were no transfers
between these levels.
The reconciliation of the trade receivables categorised as level 3 is as
follows:
Trade receivables/
price adjustments
US$000
Balance at 1 January 2022 42,364
Net change in trade receivables from goods sold (8,644)
Changes in fair value of price adjustments (note 5) 1,174
Realised price adjustments during the year (5,473)
Balance at 31 December 2023 29,421
Net change in trade receivables from goods sold 11,892
Changes in fair value of price adjustments (note 5) 8,209
Realised price adjustments during the year (12,284)
Balance at 31 December 2024 37,238
The impact of the hedging instrument and hedge item on the statement of
financial position is as follows:
ounces Average price US$/ounce Line item in the Carrying amount of hedging instrument Change in fair value of hedging instrument used for measuring ineffectiveness Change in fair value of hedged item used for measuring ineffectiveness for the
for the period period
statement of US$000
US$000 US$000
financial position
2024
Gold forward and zero cost collar contracts 210,000 From 2,000 to 2,485 Derivative financial liabilities (101,619) (68,633) (68,633)
2023
Gold forward and zero cost collar contracts 277,599.96 From 2,100 to 2,252 Derivative financial assets and liabilities (16,925) (11,546) (11,546)
The hedging gain recognised in OCI before tax on gold forward hedges and gold
zero cost collars is equal to the change in fair value of the hedged item
attributable to the hedged risk used for measuring effectiveness. There is no
ineffectiveness recognised in profit or loss.
Impact of hedging on equity
Set out below is the reconciliation of each component of equity and the
analysis of other comprehensive income:
Gold Silver hedges Total
hedges US$000 US$000 US$000
Balance at 1 January 2023 - 1,541 1,541
Reclassification adjustments for items included in the income statement on
realisation:
Transfer to sales (revenue) (2,522) (5,324) (7,846)
Revaluation arising on the year (14,996) 3,138 (11,858)
Movement in deferred tax 5,972 645 6,617
Balance at 31 December 2023 (11,546) - (11,546)
Reclassification adjustments for items included in the income statement on
realisation:
Transfer to sales (revenue) 27,903 - 27,903
Revaluation arising on the year (113,463) - (113,463)
Movement in deferred tax 28,473 - 28,473
Balance at 31 December 2024 (68,633) - (68,633)
(f) Liquidity risk
Liquidity risk arises from the Group's inability to obtain the funds it
requires to comply with its commitments, including the inability to sell a
financial asset quickly enough and at a price close to its fair value.
Management constantly monitors the Group's level of short- and medium-term
liquidity, and their access to credit lines, in order to ensure appropriate
financing is available for its operations.
The table below categorises the undiscounted cash flows of Group's financial
liabilities into relevant maturity groupings based on the remaining period as
at the statement of financial position to the contractual maturity date.
Interest cash flows have been calculated using the spot rate at year-end.
Less than Between Between Over Total
1 year 1 and 2 and 5 years US$000
US$000 2 years 5 years US$000
US$000 US$000
At 31 December 2024
Trade and other payables 189,608 17,043 5,000 - 211,651
Derivative financial liabilities 40,276 29,155 32,188 - 101,619
Borrowings 163,558 75,865 103,307 - 342,730
Total 393,442 122,063 140,495 - 656,000
At 31 December 2023
Trade and other payables 118,702 1,656 - - 120,358
Derivative financial liabilities 1,190 16,581 - - 17,771
Borrowings 130,946 138,875 126,303 - 396,124
Total 250,838 157,112 126,303 - 534,253
(g) Interest rate risk
The Group has financial assets and liabilities which are exposed to interest
rate risk. Changes in interest rates primarily impact loans and borrowings by
changing either their fair value (fixed rate debt) or their future cash flows
(variable rate debt). The Group does not have a formal policy of determining
how much of its exposure should be at fixed or at variable rates. However, at
the time of taking new loans or borrowings, management applies its judgement
to decide whether it believes that a fixed or variable rate borrowing would be
more favourable to the Group over the expected period until maturity.
As at 31 December 2024
Less than Between Between Over Total
1 year 1 and 2 and 5 years US$000
US$000 2 years 5 years US$000
US$000 US$000
Fixed rate
Assets 2,122 - - - 2,122
Liabilities (81,486) - - - (81,486)
Floating rate
Liabilities (66,667) (66,667) (96,666) - (230,000)
As at 31 December 2023
Less than Between Between Over Total
1 year 1 and 2 and 5 years US$000
US$000 2 years 5 years US$000
US$000 US$000
Fixed rate
Assets 37,184 - - - 37,184
Liabilities (5,870) - - - (5,870)
Floating rate
Liabilities (106,087) (120,001) (114,998) - (341,086)
Interest on financial instruments classified as floating rate is re-priced at
intervals of less than one year. Interest on financial instruments classified
as fixed rate is fixed until the maturity of the instrument. The other
financial instruments of the Group that are not included in the above tables
are non-interest bearing and are therefore not subject to interest rate risk.
The sensitivity to a reasonable movement in the interest rate, with all other
variables held constant, of the financial instruments with a floating rate,
determined as a +/-20bps change in interest rates has a -/+US$570,000 effect
on profit before tax (2023: -/+US$658,000). The Group is exposed to
fluctuations in market interest rates.
This assumes that the amount remains unchanged from that in place at 31
December 2024 and 2023 and that the change in interest rates is effective from
the beginning of the year. In reality, the floating rate will fluctuate over
the year and interest rates will change accordingly.
(h) Capital risk management
The Group's objectives when managing capital are to safeguard the Group's
ability to continue as a going concern in order to provide returns for
shareholders, benefits for other stakeholders, and to maintain an optimal
capital structure to reduce the cost of capital. Management considers as part
of its capital, the financial sources of funding from shareholders and third
parties (notes 28 and 30).
In 2024 the Group received proceeds from borrowings of US$311,607,000 (2023:
US$137,413,000) whilst US$340,991,000 (2023: US$111,980,000) was repaid. In
2024 the Group closed a US$300,000,000 medium-term committed debt facility
with Scotiabank and BBVA and used US$30,000,000 in 2024.
Management also retains the right to fund operations (fully owned and with
joint venture partners) with a mix of equity and joint venture partners' debt.
40 Subsequent events
(a) Aclara
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 represents 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
$25,000,000 private placement was completed on 20 February 2025, with
$5,000,000 invested by the Group.
(b) Disposal of Arcata and Azuca
On 27 February 2025, the Group closed the sale of Arcata and Azuca for
US$1,000,000 as a non-refundable cash payment at closing, and a 1.0% and 1.5%
NSR for Arcata and Azuca, respectively. The buyer also took over the
environmental liabilities amounting to US$9,652,000 (Refer to note 25).
PROFIT BY OPERATION(1)
(Segment report reconciliation) as at 31 December 2024
Group (US$000) Inmaculada San Jose Pallancata Consolidation adjustment and others Total/HOC
Mara Rosa
Revenue 504,342 293,335 149,822 (255) 452 947,696
Cost of sales (pre consolidation) (272,587) (223,394) (107,978) - (1,304) (605,263)
Consolidation adjustment 1,567 (135) (2,652) - 1,220
Cost of sales (post consolidation) (271,020) (223,529) (110,630) - (84) (605,263)
Production cost excluding depreciation (171,372) (176,365) (106,185) - (84) (454,006)
Depreciation in production cost (92,122) (47,624) (17,419) - - (157,165)
Workers profit sharing (3,145) - - - - (3,145)
Other items - (1,071) - - - (1,071)
Change in inventories (4,381) 1,531 12,974 - - 10,124
Gross profit 231,755 69,941 41,844 (255) (852) 342,433
Administrative expenses - - - - (50,232) (50,232)
Exploration expenses - - - - (26,854) (26,854)
Selling expenses (614) (15,847) (1,014) (14) - (17,489)
Other income/(expenses) - - - (22,290) (22,290)
Operating profit before impairment 231,141 54,094 40,830 (269) (100,228) 225,568
Impairment and write-off of non-current assets, net - - - - (17,615) (17,615)
Share of post-tax losses from associate - - - - (6,489) (6,489)
Finance income - - - - 13,097 13,097
Finance costs - - - - (26,928) (26,928)
Foreign exchange loss - - - - (10,416) (10,416)
Profit/(loss) from operations before income tax 231,141 54,094 40,830 (269) (148,579) 177,217
Income tax expense - - - (63,468) (63,468)
Profit/(loss) for the year from operations 231,141 54,094 (269) (212,047) 113,749
40,830
(1) On a post-exceptional basis.
RESERVES AND RESOURCES
Ore reserves and mineral resources estimates
Hochschild Mining PLC reports its mineral resources and reserves estimates in
accordance with the Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves 2012 edition ("the JORC Code"). This
establishes minimum standards, recommendations and guidelines for the public
reporting of exploration results and mineral resources and reserves estimates.
In doing so it emphasises the importance of principles of transparency,
materiality and confidence. The information on ore reserves and mineral
resources on 86 to 88 were prepared by or under the supervision of Competent
Persons (as defined in the JORC Code). Competent Persons are required to have
sufficient relevant experience and understanding of the style of
mineralisation, types of deposits and mining methods in the area of activity
for which they are qualified as a Competent Person under the JORC Code. The
Competent Person must sign off their respective estimates of the original
mineral resource and ore reserve statements for the various operations and
consent to the inclusion of that information in this report, as well as the
form and context in which it appears.
Hochschild Mining PLC employs a Competent Person who has audited reserves and
mineral resource estimates as at 31 December 2024 for the operating mines as
shown in this report. These audits are conducted by Competent Persons
provided by independent consultants, P&E Consulting. The frequency and
depth of an audit depends on the risks and/or uncertainties associated with
that particular ore reserve and mineral resource, the overall value thereof
and the time that has lapsed since the previous independent third-party audit.
The JORC Code requires the use of reasonable economic assumptions. These
include long-term commodity price forecasts (which, in the Group's case, are
prepared by ex-house specialists largely using estimates of future supply and
demand and long-term economic outlooks).
Ore reserve estimates are dynamic and are influenced by changing economic
conditions, technical issues, environmental regulations and any other relevant
new information and therefore these can vary from year-to-year. Mineral
resource estimates can also change and tend to be influenced mostly by new
information pertaining to the understanding of the deposit and secondly the
conversion to ore reserves.
The estimates of ore reserves and mineral resources are shown as at 31
December 2024. Mineral resources that are reported include those mineral
resources that have been modified to produce ore reserves. All tonnage and
grade information has been rounded to reflect the relative uncertainty in the
estimates; there may therefore be small differences. The prices used for the
reserves calculation were: Au Price: US$1,750 per ounce and Ag Price: US$23.0
per ounce. The prices used for resources calculation were: Au: $2,100/oz and
Ag: $26.0/oz and Ag/Au ratio of 75x.
ATTRIBUTABLE METAL RESERVES AS AT 31 DECEMBER 2024
Reserve category Proved and probable Ag Au Ag Au Ag Eq Au Eq
(t) (g/t) (g/t) (moz) (koz) (moz) (koz)
OPERATIONS(1)
Inmaculada
Proved 1,894,349 120 3.03 7.3 184.6 21.1 282
Probable 2,629,697 92 2.38 7.8 201.5 22.9 305
Total 4,524,046 104 2.65 15.1 386.1 44.0 587
San Jose
Proved 356,784 295 4.72 3.4 54.1 7.4 99
Probable 224,115 272 5.50 2.0 39.7 4.9 66
Total 580,899 286 5.02 5.3 93.8 12.4 165
Mara Rosa
Proved 5,139,599 - 1.22 - 201.8 15.1 202
Probable 18,169,492 - 1.13 - 662.7 49.7 663
Total 23,309,091 - 1.15 - 864.5 64.8 865
GROWTH PROJECTS
Monte Do Carmo
Proved 2,015,000 0 1.68 0.0 109.0 8.2 109
Probable 14,780,000 0 1.66 0.0 787.0 59.0 787
Total 16,795,000 0 1.66 0.0 896.0 67.2 896
GRAND TOTAL
Proved 9,405,732 35 1.82 10.7 549.5 51.9 692
Probable 35,803,304 8 1.47 9.7 1,690.9 136.6 1,821
TOTAL 45,209,036 14 1.54 20.4 2,240.4 188.4 2,513
Note: Where reserves are attributable to a joint venture partner, reserve
figures reflect the Company's ownership only. Includes discounts for ore loss
and dilution.
(1) Operations only were audited by P&E Consulting as at 31 December
2024.
ATTRIBUTABLE METAL RESOURCES AS AT 31 DECEMBER 2024( )(1)
Resource category Tonnes Ag Au Ag Eq Ag Au Ag Eq Au Eq
(t) (g/t) (g/t) (g/t) (moz) (koz) (moz) (koz)
OPERATIONS(2)
Inmaculada
Measured 3,367,000 141 3.45 400 15.3 373.4 43.3 578
Indicated 5,883,000 107 2.76 314 20.2 522.5 59.4 792
Total 9,250,000 119 3.01 345 35.5 895.9 102.7 1,369
Inferred 14,882,000 104 2.82 315 49.9 1,347.4 150.9 2,012
Pallancata
Measured 1,353,000 285 1.30 383 12.4 56.6 16.7 222
Indicated 1,253,000 362 1.64 485 14.6 65.9 19.5 260
Total 2,606,000 322 1.46 432 27.0 122.5 36.2 482
Inferred 7,911,000 453 1.87 593 115.2 474.7 150.8 2,011
San Jose
Measured 954,210 412 6.66 911 12.6 204.2 28.0 373
Indicated 706,860 269 5.53 684 6.1 125.7 15.5 207
Total 1,661,070 351 6.18 815 18.8 329.9 43.5 580
Inferred 1,164,840 252 4.59 596 9.5 171.8 22.3 298
Mara Rosa
Measured 5,713,000 - 1.15 86 - 211.2 15.8 211
Indicated 24,721,000 - 1.03 77 - 820.5 61.5 821
Total 30,434,000 - 1.05 79 - 1,031.8 77.4 1,032
Inferred 5,636,000 - 1.35 101 - 243.9 18.3 244
GROWTH PROJECTS
Monte Do Carmo
Measured 2,056,000 - 1.73 130 - 115.0 8.6 115
Indicated 16,302,000 - 1.71 128 - 897.0 67.3 897
Total 18,358,000 - 1.72 129 - 1,012.0 75.9 1,012
Inferred 1,053,000 - 1.95 146 - 66.0 5.0 66
Azuca
Measured 191,000 244 0.77 302 1.5 4.7 1.9 25
Indicated 6,859,000 187 0.77 244 41.2 168.8 53.8 718
Total 7,050,000 188 0.77 246 42.7 173.5 55.7 743
Inferred 6,946,000 170 0.89 237 37.9 199.5 52.9 705
Volcan
Measured 123,979,000 - 0.700 53 - 2,792.0 209.4 2,792
Indicated 339,274,000 - 0.643 48 - 7,013.0 526.0 7,013
Total 463,253,000 - 0.658 49 - 9,804.0 735.3 9,804
Inferred 75,018,000 - 0.516 39 - 1,246.0 93.5 1,246
Arcata
Measured 834,000 438 1.35 539 11.7 36.1 14.4 193
Indicated 1,304,000 411 1.36 512 17.2 56.9 21.5 286
Total 2,138,000 421 1.35 523 29.0 93.0 35.9 479
Inferred 3,533,000 371 1.26 465 42.1 142.6 52.8 704
GRAND TOTAL
Measured 138,447,210 12 0.85 76 53.6 3,793.2 338.1 4,508
Indicated 396,302,860 8 0.76 65 99.3 9,670.2 824.6 10,994
Total 534,750,070 9 0.78 68 152.9 13,462.4 1,162.6 15,501
Inferred 116,143,840 68 1.04 146 254.5 3,891.8 546.4 7,286
(1) Tables represents 100% of the Mineral Resources. Resources are inclusive
of Reserves.
( )
(2 ) Operations only were audited by P&E Consulting.
( )
CHANGE IN ATTRIBUTABLE RESERVES AND RESOURCES
Ag equivalent content (million ounces) Category Percentage attributable December December 2024 Net % change
December 2023 Att.(1) difference
2024 Att.(1)
Inmaculada Resource 100% 190.6 253.6 63.0 33.1%
Reserve 57.6 44.0 (13.5) (23.5%)
Pallancata Resource 100% 88.7 187.0 98.3 110.8%
Reserve - - - -
San Jose Resource 51% 60.3 65.8 5.6 9.2%
Reserve 12.1 12.4 0.3 2.6%
Mara Rosa Resource 100% 86.4 95.7 9.3 10.8%
Reserve 67.6 64.8 (2.8) (4.2%)
Monte Do Carmo Resource 100% - 80.9 80.9 -
Reserve - 67.2 67.2 -
Azuca Resource 100% 108.6 108.6 - -
Reserve - - - -
Volcan Resource 100% 828.8 828.8 - -
Reserve - - - -
Arcata Resource 100% 88.7 88.7 - -
Reserve - - - -
Total Resource 1,452.0 1,709.0 257.0 17.7%
Reserve 137.3 188.4 51.2 37.3%
(1) Attributable reserves and resources based on the Group's percentage
ownership of its joint venture projects.
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 23 May 2025 in respect of the
2024 final 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 2024 final
dividend, a dividend mandate form, also available from the Company's
registrars, should be completed and returned to the registrars by 23 May 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 8 May 2025
Record Date 9 May 2025
Pay Date 18 June 2025
Dividend Type Final
Dividend Amount and Currency US$0.0194 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 23 May 2025
21 Gloucester Place
London
W1U 8HR
United Kingdom
FORWARD LOOKING STATEMENTS
The Annual Report 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. 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 Annual Report. 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 Annual Report. Nothing in this Annual
Report should be construed as a profit forecast.
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.
1 (#_ftnref1) Revenue presented in the financial statements is disclosed as
net revenue and is calculated as gross revenue less commercial discounts plus
services revenue
(#_ftnref2) (2)Adjusted EBITDA, net debt and AISC are non-IFRS measures.
Please see the Financial Review pages 16-19 for a definition and calculation
of Adjusted EBITDA, net debt and AISC
(#_ftnref3) (3)Please see the Financial Review page 20 for the calculation of
the final proposed dividend
(#_ftnref4) (4)Attributable free cashflow: attributable net cashflow from
operating activities plus attributable net cashflow from investing activities
(page 20)
5 (#_ftnref5) 2024 and 2023 equivalent figures calculated using the
gold/silver ratio of 83x
6 (#_ftnref6) Calculated as total number of accidents per million labour
hours
7 (#_ftnref7) 2024 environmental KPIs exclude Mara Rosa due to construction
and commissioning activities which occurred prior to May 2024. Mara Rosa will
be reflected in 2025 environmental KPIs.
8 (#_ftnref8) The ECO Score is an internally designed Key Performance
Indicator measuring environmental performance in one number and encompassing
numerous factors including management of waste water, outcome of regulatory
inspections and sound environmental practices relating to water consumption
and the recycling of materials.
9 (#_ftnref9) Includes revenue from services. Gross revenue is the net
revenue plus commercial discounts
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 $214.4 million and $205.2 million respectively, by extracted
and treated tonnage of 3,371k and 3,236k respectively. 2024 excludes Mara
Rosa's pre-commercial production costs of $31.7 million and other adjustments
of $2.6 million
(( 11 (#_ftnref11) ))Excludes Mara Rosa's pre commercial: cost of sales of
$31.6 million, selling expenses of $0.1 million, commercial deductions of $0.1
million, and revenues of $4.6 million.
(( 12 (#_ftnref12) ))Mainly includes final adjustments to Pallancata's
shipments that occurred in the last quarter of 2023
(( 13 (#_ftnref13) ))Does not include fixed costs during operational
stoppages and reduced capacity of $1.1 million (2023: $3.3 million)
14 (#_ftnref14) Includes commercial discounts (from the sales of
concentrate) and commercial discounts from the sale of dore
15 (#_ftnref15) Excludes revenue from energy transmission services of $0.4
million (2023: $0.5 million)
(( 16 (#_ftnref16) ))Does not include fixed costs during operational
stoppages and reduced capacity of $1.1 million (2023: $3.3 million)
17 (#_ftnref17) Includes commercial discounts (from the sales of
concentrate) and commercial discounts from the sale of dore
18 (#_ftnref18) Calculated using a gold/silver ratio of 83:1
19 (#_ftnref19) Excludes non-sustaining capex and pre-commercial production
capex of $30.0 million, and pre-commercial production brownfield exploration
($0.8 million), administrative expenses ($0.8 million), commercial discounts
($0.1 million) and selling expenses ($0.1 million)
20 (#_ftnref20) Other items include production costs incurred before the
declaration of commercial production in Mara Rosa of $31.7 million, the gain
in San Jose resulting from the government's export incentive programme of
$16.0 million, and lease expenditure of $1.6 million and $1.5 million in Mara
Rosa and San Jose, respectively
21 (#_ftnref21) Operating capex from San Jose does not include
non-sustaining capex and capitalised depreciation resulting from mine
equipment utilised for mine developments totalling $13.1 million
22 (#_ftnref22) Corporate and others include personnel expenses related to
brownfield exploration
23 (#_ftnref23) Royalties arising from revised royalty tax schemes
introduced in 2011 and included in income tax line
24 (#_ftnref24) Other items include the gain in San Jose resulting from the
government's export incentive programme
25 (#_ftnref25) Operating capex from San Jose does not include
non-sustaining capex and capitalised depreciation resulting from mine
equipment utilised for mine developments totalling $6.9 million
26 (#_ftnref26) Corporate and others include personnel expenses related to
brownfield exploration
27 (#_ftnref27) Royalties arising from revised royalty tax schemes
introduced in 2011 and included in income tax line
28 (#_ftnref28) Adjusted EBITDA has been presented before the effect of
significant non-cash (income)/expenses related to changes in mine closure
provisions which were $14.7 million in 2024 (2023: $28.4 million), and the
write-off of property, plant and equipment of $0.9 million in 2024 (2023: $2.7
million)
29 (#_ftnref29) Includes pre-shipment loans and short term interest payables
30 (#_ftnref30) 2023 includes $3.5 million increase due to foreign exchange
effect, and $2.5m for the construction of the aggregates project plant
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR EAKDAFSSSEEARecent news on Hochschild Mining
See all newsREG - Hochschild MiningPLC - Director/PDMR Shareholding
AnnouncementREG - Hochschild MiningPLC - Q1 2025 Production Report
AnnouncementREG - Hochschild MiningPLC - Hochschild Engages the Smithsonian
AnnouncementREG - Hochschild MiningPLC - Annual Report and AGM Notice
AnnouncementREG - Hochschild MiningPLC - Director Declaration
Announcement