REG - Hochschild MiningPLC - Preliminary Results
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RNS Number : 1286W Hochschild Mining PLC 11 March 2026
11 March 2026
Hochschild Mining PLC
Preliminary Results
Year ended 31 December 2025
Record financial performance, key strategic progress across the portfolio and
production in-line with revised guidance
Eduardo Landin, Chief Executive Officer of Hochschild, commented:
"This year marks a key moment for Hochschild, delivering our strongest ever
financial performance, driven by disciplined execution at Inmaculada and
precious metal price tailwinds. We added 1.7 million ounces to our resource
base, advanced our two exciting growth projects in Peru and Brazil, and
significantly increased the dividend, reflecting the strength of our balance
sheet. At Mara Rosa, we are close to completing our turnaround plan,
positioning the operation for a stronger and more sustainable future."
2025 Strong financial performance
§ Revenue up 25% at $1,182.1 million (2024: $947.7 million)(( 1 (#_ftn1) ))
§ Revenue (pre-exceptional) up 28% at $1,208.6 million (2024: $947.7
million)(( 2 (#_ftn2) ))
§ Adjusted EBITDA up 39% at $583.7 million (2024: $421.4 million)(( 3
(#_ftn3) ))
§ Profit before income tax (pre-exceptional) up 66% at $330.4 million (2024:
$199.1 million)
§ Profit before income tax (post-exceptional) up 110% at $372.8 million
(2024: $177.2 million)
§ Basic earnings per share (pre-exceptional) at $0.31 (2024: $0.23)
§ Basic earnings per share (post-exceptional) at $0.39 (2024: $0.19)
§ Cash and cash equivalents balance of $317.0 million as at 31 December 2025
(2024: $97.0 million)
§ Net debt(2) of $22.7 million as at 31 December 2025 (2024: $215.6 million)
§ Recommended final dividend of 5.00 US cents per share ($25.7 million)(( 4
(#_ftn4) ))
2025 Operational Performance(( 5 (#_ftn5) ))
§ Strong 2025 safety performance
§ Full year attributable production of 311,509 gold equivalent ounces (2024:
347,374 ounces)
§ Attributable all-in sustaining costs (AISC) (2) from operations of $2,138
per gold equivalent ounce (2024: $1,558)
§ Strong performance at Inmaculada producing 209,921 gold equivalent ounces
§ Turnaround plan at Mara Rosa progressing in-line with expectations,
positioning the asset for stronger and sustainable long-term production
§ San Jose performance in line with expectations producing 120,639 gold
equivalent ounces
§ Senior management team strengthened with key appointments including Cassio
Diedrich as Chief Operating Officer
2025 Exploration and Project Highlights
§ Total resource additions of 1.7 million gold equivalent ounces
§ Monte do Carmo project progressing towards updated economics and a final
investment decision by mid-2026
§ Royropata silver project permitting process on track
§ Strong progression on monetisation of non-core assets: Tiernan Gold Corp
now trading on the TSX Venture Exchange
2025 ESG KPIs(( 6 (#_ftn6) ))
§ Lost Time Injury Frequency Rate of 0.97 (2024: 1.25)(( 7 (#_ftn7) ))
§ Fresh water used per tonne of ore processed: 0.26 m(3)/tonne (2024: 0.31
m(3)/tonne)
§ Recycled waste of 81.4% (2024: 57.3%)
§ Local workforce vs total workforce of 65.9% (2024: 59.3%)
§ Women in the workforce of 10.6% (2024: 10.0%)
§ ECO score of 5.61 out of 6 (2024: 5.58) 8 (#_ftn8)
2026 Outlook 9 (#_ftn9)
§ Overall attributable production target: 300,000-328,000 gold equivalent
ounces
§ Attributable all-in sustaining cost target: $2,157-$2,320 per gold
equivalent ounce
§ Total sustaining capital expenditure at operating mines expected to be
approximately $210-225 million
§ Brownfield exploration budget of $45 million
$000 unless stated Year ended Year ended % change
31 Dec 2025 31 Dec 2024
Attributable silver production (koz) 7,475 8,496 (12)
Attributable gold production (koz) 221 245 (10)
Revenue 1,182,148 947,696 25
Adjusted EBITDA 583,729 421,354 39
Profit from continuing operations (pre-exceptional) 200,727 133,511 50
Profit from continuing operations (post-exceptional) 247,402 113,749 117
Basic earnings per share (pre-exceptional) $ 0.31 0.23 35
Basic earnings per share (post-exceptional) $ 0.39 0.19 105
________________________________________________________________________________________
A presentation will be held for analysts and investors at 9.30am (UK time) on
Wednesday 11 March 2026 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_25
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 FY25
________________________________________________________________________________________
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.
These are detailed as follows.
Adjusted EBITDA
Adjusted EBITDA is a useful approximation of the operating cash flow
generation of the business by eliminating depreciation and amortisation.
Adjusted EBITDA is not a direct measure of liquidity which is shown by the
cash flow statement.
AISC
The Company believes the AISC measure provides further transparency into costs
associated with the production of gold and silver and will assist investors,
analysts and other stakeholders of the Company in assessing its operating
performance, its ability to generate free cash flow from current operations
and its overall value.
Basic earnings per share (pre-exceptional)
Basic earnings per share (pre-exceptional) represents the Group's underlying
operating performance from core activities, excluding the impact of one-off
transactions outside the normal course of business of the Group.
Net debt
Net debt is a measure of the Group's financial position. The Group uses net
debt to monitor the sources and uses of financial resources, the availability
of capital to invest or return to shareholders, and the resilience of the
balance sheet.
Gross Revenue
Gross revenue represents the revenue generated from the Group's core business,
excluding the impact of commercial discounts, and non-cash hedged items.
Unit cost per tonne
Unit cost per tonne represents the direct cash cost including direct cash
support costs in producing one tonne of saleable product. This is a standard
industry measure applied by most major mining companies and therefore,
comparable for the users of the Financial Statements.
Cash costs
Cash costs are a measure of the cost of operating production expressed in
terms of dollars per ounce of gold and this is a standard industry measure
applied by most major mining companies which reflects the direct costs
involved in producing each ounce of metal.
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
2025 was a year that provided a number of challenges, but also one that
clearly demonstrated the strength of our business and our people. Record
precious metal prices towards the end of the year provided a powerful
tailwind, delivering strong financial results and reinforcing our confidence
in the long-term fundamentals of our portfolio. At Mara Rosa in Brazil, we
responded quickly and decisively to operational challenges, executing a
comprehensive turnaround plan that is now close to completion. As we look
ahead, I am excited by the progress and potential of our two high-value
projects in Peru and Brazil, which position the Company well for the year
ahead and beyond.
Success for the Group is defined by achieving operational efficiency while
delivering transformative change. We engage proactively with our communities,
creating a meaningful and lasting positive social legacy. Through sustained
effort, we achieved record proportions of local employment across our
workforce and local procurement. We also implemented a comprehensive social
investment programme benefiting communities across all our operations.
Environmental management is integral to our approach to sustainable growth. In
2025, we delivered excellent environmental performance, reflected in our
best-in-class ECO Score tool. This was further demonstrated by year-on-year
reductions in freshwater consumption per tonne of ore processed, alongside
continued improvements in waste management. In addition, our two ESG-linked
loans delivered interest rate reductions linked to defined environmental and
safety performance indicators. We also made significant progress in addressing
climate-related risks, with our operations in Brazil and Argentina meeting
100% of their energy requirements from renewable sources.
Safety excellence remained a defining feature of the Group's operational
performance in 2025. This was reflected in an all-time low injury frequency
rate, and the achievement of 2 million man-hours worked in San Jose without
incidents. Together, these outcomes are a clear testament to the dedication,
discipline, and professionalism of our operational teams.
Our people remain central to our performance. Hochschild's ability to attract
and retain talent continues to be reflected in consistently low levels of
employee turnover. We are also pleased to report that, in a traditionally
male-dominated industry, we have made good progress in workforce diversity,
reaching an all-time high level of female representation across our total
workforce.
Our performance across these areas has been independently validated through
upgrades from leading ESG rating agencies, including MSCI and Sustainalytics,
as well as our inclusion in the FTSE4Good Index. Comprehensive details of the
programmes delivered across our countries of operation are set out in the
Sustainability section of the Annual Report.
Mara Rosa had a challenging start to the year, reflecting a combination of
adverse seasonal conditions and operational issues. But I am pleased to report
that the situation was addressed decisively through a comprehensive review of
the operation, led by Eduardo Landin. The review resulted in the
implementation of a turnaround plan for our Brazilian business, strengthening
leadership including our new Chief Operating Officer, Cassio Diedrich, and
operational oversight, alongside targeted maintenance and process
improvements. Following a temporary plant shutdown in July, the mine's
performance improved steadily throughout the second half of the year as access
to higher-grade areas improved and plant stability was restored. With the
reorganisation now complete, the operation is on more stable footing, and
management remains focused on delivering consistent performance and realising
the asset's long-term value.
Our other operations again delivered a solid performance, led by Inmaculada,
which again exceeded annual production guidance and will continue to be our
flagship asset for some time, notwithstanding the elevated prices that are
enabling the processing of lower-grade material over the coming quarters.
While costs were moderately above our revised guidance, this largely reflected
the immediate impact of sharply rising prices on cyclical costs such as
royalties and export taxes. Furthermore, record precious metals prices,
together with strong operational performance in Peru and Argentina, resulted
in robust cash generation. This allowed the Group to significantly reduce net
debt while continuing to invest in brownfield exploration and the advancement
of our development projects.
The performance of our brownfield exploration team continues to be a key
strength of Hochschild. Building on the success of previous years, the team
delivered another strong result in 2025, adding 1.7 million gold equivalent
ounces to our resource base. This outcome reflects both disciplined execution
and the underlying quality of our asset portfolio and reinforces our
long-standing view that there remains significant potential within our
existing operations. These additions support the long-term sustainability of
the business and confirm the important role that brownfield exploration
continues to play in our overall strategy.
Outlook
As noted above, 2025 saw a continuation of the extraordinary uplift in the
precious metals market, with both gold and silver reaching record levels on an
almost monthly basis. Gold has recently risen to further new highs of over
$5,400 per ounce, whilst silver has climbed to over $100 per ounce, with both
metals benefiting from tight market conditions and heightened global political
and economic uncertainty. This exceptional pricing environment has materially
enhanced the Group's financial position, and we are encouraged to see this
strength continuing into 2026 although precious metal markets remain volatile.
It provides a strong foundation as we move forward to finance our project
pipeline and complete the turnaround of our operations in Brazil.
2025 was a year marked by disciplined financial management, as we made
substantial progress towards our medium-term financial objectives. A central
priority during the year was the reduction of our debt position, and I am
pleased to report that strong cash generation enabled us to reduce net debt by
almost $200 million. This was achieved whilst also strengthening the Company
through the monetisation of non-core assets. Management did an excellent job
in successfully listing Tiernan Gold on the Toronto Stock Exchange Venture
Exchange (TSXV), raising capital to advance the Volcan gold project in Chile
while retaining an approximately 70% interest. As a result, our balance sheet
is now well positioned to finance our next development project in Brazil,
Monte do Carmo, with updated project economics underway and a final investment
decision targeted for mid‑2026.
Last year, we highlighted that, as part of our capital allocation strategy, we
recognised the importance of returning capital to our shareholders.
Accordingly, we introduced a new dividend policy designed to provide greater
predictability and consistency for our investors in the years ahead. Building
on this, the Board is pleased to announce that the performance of the Company
this year and the strength of our balance sheet allows us to recommend a final
dividend of 5.00 US cents per share, representing a distribution of $25.7
million for a total of $30.9 million in 2025.
As we reflect on a successful 2025, I would like to extend my thanks to our
leadership team, as well as the thousands of Hochschild employees,
contractors, and partners whose dedication has been central to our progress
during the year. Whilst we faced challenges in Brazil during the year, the
commitment and hard work of our teams across all operations have been
instrumental in delivering value for our Company and our stakeholders. I am
truly proud of what has been accomplished and confident in our ability to
build on this progress in the year ahead as we continue to develop our
exciting portfolio.
Eduardo Hochschild, Chair
10 March 2026
CHIEF EXECUTIVE OFFICER'S STATEMENT
During 2025, Hochschild Mining made solid progress across the Company,
supported by disciplined execution of our strategy, despite operational
challenges at Mara Rosa in Brazil. Our focus remains firmly on our four
strategic pillars-brownfield exploration, operational efficiency, ESG
leadership, and disciplined capital allocation-which continue to guide our
decision making and underpin our commitment to long-term value creation. While
Mara Rosa did not meet our expectations, decisive action was taken, and with a
strengthened team including a new COO, a comprehensive operational review, and
targeted optimisation initiatives now delivering results, a robust platform is
in place to support improved performance in Brazil and reliable production in
2026.
ESG
Our corporate purpose places responsibility at the core of how we operate. As
highlighted by the Chair, this commitment is reflected in a comprehensive
range of initiatives that underpin our long-term value creation targets. In
2025, our ESG programme made strong progress, delivering year-on-year
improvements across 10 of our 16 key ESG performance indicators and
reinforcing its central role in the execution of our corporate strategy.
Through active community engagement, we reinforced our social licence to
operate across all our sites. We delivered an excellent Lost Time Injury
Frequency Rate of 0.97 (2024: 1.25), while our operations in Peru and
Argentina continued to maintain Level 8 safety management system certification
from Det Norske Veritas. Environmental performance remained robust, reflecting
the effective integration of sustainability principles and responsible
resource stewardship throughout our operations.
Operations
Our operational performance in 2025 highlighted the resilience of our
diversified asset base. Attributable gold equivalent production totalled
311,509 ounces, a 10% reduction compared with 347,374 ounces in the prior
year, largely attributable to challenges at the Mara Rosa operation. All-in
sustaining costs for the year were higher than initially anticipated,
reflecting lower production in Brazil, additional capital investment to
support the operational reset at Mara Rosa, the mining of lower-grade border
areas of the veins at San Jose, and the impact of higher precious metal prices
in royalties, selling expenses and workers' profit sharing.
In 2025, the Inmaculada mine delivered another solid performance in line with
plan, producing 209,921 gold equivalent ounces, 5% lower than 2024 (220,501
ounces), reflecting a scheduled reduction in grade. All-in sustaining costs
were $1,732 per gold equivalent ounce (2024: $1,479 per ounce), with the
increase year on year driven by the planned grade profile, partially offset by
higher throughput. Over at San Jose in Argentina, production of 120,639 gold
equivalent ounces was modestly below 2024 (123,732 ounces), primarily due to
scheduled lower grades, although this was mitigated by higher-than-anticipated
tonnage processed. All-in sustaining cost of $2,520 per gold equivalent ounce
was higher than expected, reflecting the mining of lower-grade border areas,
higher royalties and export taxes driven by increased precious metal prices,
and the removal in April 2025 of the export benefit allowing partial
settlement of exports at the blue dollar rate.
Mara Rosa faced a challenging 2025, with early-year rainfall and operational
constraints affecting access to higher-grade zones and delaying recovery from
2024 backlogs. Following the resignation of our COO in May, I led a
comprehensive operational review covering mining, processing, and permitting,
including a temporary suspension of the plant at the end of June for essential
maintenance and repairs. Production resumed in July 2025 and steadily ramped
up through the remainder of the year, with mining movement and throughput
improving as operational stability strengthened.
A reorganised Brazil management team, including the appointment of our new
General Manager, Ediney Drummond, has strengthened oversight and execution.
Operational improvements in the latter part of the year enhanced access to
ore, increased productivity, and laid the groundwork for sustainable
performance. Key focus areas - mining development, water management,
filtration, and plant reliability-were addressed through improved maintenance
and infrastructure readiness. These actions have established a solid platform
for consistent operations and workforce stability as we have moved into 2026.
Gold production for the year at Mara Rosa totalled 40,062 gold equivalent
ounces (2024: 63,538 ounces). Throughout the review process, we remained
closely engaged with all stakeholders, including local authorities and
communities, and are focused on unlocking the full potential of this asset in
the next few quarters.
Projects
In terms of strategic delivery, we continued to make strong progress across
our high-potential growth projects. In Brazil, detailed engineering studies at
our Monte Do Carmo project in Tocantins are nearing completion. With the
permitting pathway now substantially de-risked and lessons learned from our
Mara Rosa experience being applied, we are preparing the project for a
potential construction decision around mid-year. In Peru, the exciting
Royropata silver project has advanced following the securing of all necessary
land easements in 2024. The team is now preparing the documentation required
to submit the Modified Environmental Impact Assessment application to the
Peruvian government later this year, following the national elections and the
installation of the new administration in the third quarter.
In the second half of the year, I was pleased to see our management team make
further progress in adding value to our non-core project portfolio through the
listing of Tiernan Gold Corp ("Tiernan") on the TSXV and concurrent capital
raise. This transaction represented an important step for Tiernan and
reflected the significant work completed over the past few years on the Volcan
gold deposit in Chile. Tiernan now provides a dedicated platform to advance
the project and realise its full potential under experienced leadership.
Tiernan raised approximately $30 million, and Hochschild received
approximately $12 million in proceeds from the secondary offering, while
retaining a 69.8% stake of Tiernan. With gold prices remaining strong, we
believe this structure offers the best path to maximise long-term value for
all stakeholders.
Exploration
Exploration continues to be a core pillar of the Group's growth strategy, and
during 2025 we built on our strong track record by adding a total of 1.7
million ounces of resources across the portfolio, with, in particular,
significant further additions at Inmaculada and Royropata. The brownfield
exploration team remains focused on identifying new opportunities for resource
expansion within 10 kilometres of our existing operations, including drill
testing at one of three deposits identified within the Inmaculada-Pallancata
district in Peru. Over the longer term, the strategy also includes the
selective acquisition of additional mining properties to further support
sustainable growth and replace resources.
Financial position
Record precious metal prices during the year drove the Company to generate
significant cashflow with the result that the Company's balance sheet is the
strongest it has been for several years. Cash and cash equivalents was $317.0
million at the end of December (2024: $97.0 million) reflecting strong
operational cash flow during the year along with the consolidation of
Tiernan's cash balance following its listing and capital raise on the TSXV in
the second half of the year. Total debt was $339.6 million (2024: $312.6
million) and therefore net debt was reduced to $22.7 million (2024: $215.6
million).
Financial results
Total attributable Group production was 9% lower than 2024 but this was offset
by a 37% rise in the gold price received and a 54% rise in the silver price.
Consequently, revenue increased by 25% to $1,182.1 (2024: $947.7 million) and
pre-exceptional revenue increased by 28% to $1,208.6 million (2024: $947.7
million). Attributable all-in sustaining costs were at $2,138 per gold
equivalent ounce or $25.7 per silver equivalent ounce (2024: $1,558 per
ounce/$18.8 per ounce). Adjusted EBITDA of $583.7 million (2024: $421.4
million) increased by 39% versus 2024 reflecting the significant price rises
partially offset by a fall in production and an increase in cost of sales.
Pre-exceptional profit for the year was $200.7 million (2024: $133.5 million)
and basic earnings per share (pre-exceptional) increased to $0.31 (2024: $0.23
per share) mainly due to the higher profitability, net of taxes. On a
post-exceptional basis, profit for the year was $247.4 million (2024: $113.7
million) and basic earnings per share (post-exceptional) was higher at $0.39
(2024: $0.19) and includes the non-cash recycling of $26.4 million of
accumulated losses related to the roll-forward of gold hedges, the reversal of
impairment at the Volcan project of $43.2 million, the reversal of impairment
of the investment in Aclara Resources Inc. of $22.2 million, the reversal of
impairment of $13.6 million of the San Jose mine, and the listing and
transaction expenses in connection with Tiernan's transaction of $10.2
million. The tax effect of exceptional items was a gain of $4.2 million.
Outlook 10 (#_ftn10)
We expect attributable production in 2026 to be between 300,000 and 328,000
gold equivalent ounces. This will be driven by: 174,000-185,000 gold
equivalent ounces from Inmaculada; an attributable contribution of 59,000 to
63,000 gold equivalent ounces from San Jose; and an increased level of
production from the Mara Rosa mine of between 67,000 and 80,000 gold ounces.
All-in sustaining costs for operations are expected at between $2,157 and
$2,320 per gold equivalent ounce. This forecast which is an increase versus
2025 reflects the lower production in Inmaculada driven by lower grade
expectations as well as additional capex on expansion of Inmaculada's tailings
dam. This will be partially offset by increased production at Mara Rosa and
higher expected currency devaluation in Argentina.
The outlook for the Company remains compelling as we complete the turnaround
at Mara Rosa, advance our two high-quality growth projects in Brazil and Peru,
and continue to generate strong cash flows in a highly supportive precious
metals price environment. This financial strength has enabled us to strengthen
the balance sheet, increase returns to shareholders and position the business
to support sustainable growth. Alongside our focus on operational excellence
and disciplined capital allocation, we will continue to assess opportunities
to optimise our portfolio, whether through value-accretive acquisitions or the
monetisation of our non-core assets, with the clear objective of delivering
sustained value creation.
Eduardo Landin, Chief Executive Officer
10 March 2026
OPERATING REVIEW
OPERATIONS
Note: 2025 and 2024 equivalent figures assume a gold/silver ratio of 83x. 2026
forecasts assume a ratio of 77x.
Production
In 2025, Hochschild delivered attributable production of 311,509 gold
equivalent ounces or 25.9 million silver equivalent ounces, in line with the
Company's revised guidance but lower than the 2024 result (347,374 gold
equivalent ounces) mainly due to the challenges at Mara Rosa and lower
scheduled production at Inmaculada.
The overall attributable production target for 2026 is 300,000-328,000 gold
equivalent ounces.
Total 2025 group production
Year ended Year ended
31 Dec 2025 31 Dec 2024
Silver production (koz) 9,251 10,530
Gold production (koz) 259.16 281.14
Total silver equivalent (koz) 30,762 33,864
Total gold equivalent (koz) 370.62 408.00
Silver sold (koz) 9,145 10,643
Gold sold (koz) 255.56 281.46
Total production includes 100% of all production, including production
attributable to Hochschild's minority shareholder at San Jose.
Attributable 2025 group production
Year ended Year ended
31 Dec 2025 31 Dec 2024
Silver production (koz) 7,475 8,496
Gold production (koz) 221.44 245.01
Silver equivalent (koz) 25,855 28,832
Gold equivalent (koz) 311.51 347.37
Attributable production includes 100% of all production from Inmaculada, Mara
Rosa and 51% from San Jose.
Attributable 2026 Production forecast split
Operation Oz Au Eq
Inmaculada 174,000-185,000
Mara Rosa 67,000-80,000
San Jose (51%) 59,000-63,000
Total 300,000-328,000
Costs
Attributable all-in sustaining cost from operations in 2025 was $2,138 per
gold equivalent ounce (2024: $1,558 per gold equivalent ounce), higher than
original guidance of $1,587 - $1,687 mainly as a result of: the significantly
higher costs and reduced production related to the challenges at Mara Rosa;
lower grades in Argentina; and higher precious metal prices resulting in
increased royalties, selling expenses in Argentina, and increased workers'
profit sharing in Peru.
The attributable all-in sustaining cost from operations in 2026 is expected to
be between $2,157 and $2,320 per gold equivalent ounce.
2026 Attributable AISC forecast split
Operation $/oz Au Eq
Inmaculada 2,047-2,175
Mara Rosa 2,296-2,520
San Jose 2,304-2,495
Total from operations 2,157-2,320
PERU
Inmaculada
The 100% owned Inmaculada gold/silver underground operation is located in the
Department of Ayacucho in southern Peru. It commenced operations in June 2015.
Inmaculada summary Year ended Year ended % change
31 Dec 2025 31 Dec 2024
Ore production (tonnes) 1,372,800 1,197,965 15
Average silver grade (g/t) 143 179 (20)
Average gold grade (g/t) 3.42 3.90 (12)
Silver produced (koz) 5,618 6,368 (12)
Gold produced (koz) 142.23 143.78 (1)
Silver equivalent produced (koz) 17,423 18,302 (5)
Gold equivalent produced (koz) 209.92 220.50 (5)
Silver sold (koz) 5,601 6,342 (12)
Gold sold (koz) 143.67 143.64 -
Unit cost ($/t) 142.5 143.2 -
Total cash cost ($/oz Au co-product) 982 809 21
All-in sustaining cost ($/oz Ag Eq) 20.9 17.8 17
All-in sustaining cost ($/oz Au Eq) 11 (#_ftn11) 1,732 1,479 17
Production
The Inmaculada mine delivered gold equivalent production of 209,921 ounces
(2024: 220,501 ounces), which although a 5% reduction versus 2024 was
according to the mine plan and was due to reduced gold and silver grades
partially offset by increased tonnage arising from a number of efficiency
initiatives executed since the first half of 2024.
The Company is currently focused on managing grade variability inherent to
sequencing, maintaining access to higher-grade zones, and sustaining stope
inventory through continued geomechanical discipline and flexibility in
development work.
Costs
All-in sustaining cost was $1,732 per gold equivalent ounce (2024: $1,479 per
ounce). The increase compared with 2024 was primarily driven by forecasted
lower gold and silver grades and higher production volumes, which increased
production costs, as well as other cost components directly affected by
significantly higher precious metal prices, including workers' profit sharing
and commercial deductions.
Development project: Royropata
The 100% owned Royropata project is located in the Department of Ayacucho in
southern Peru and is close to the Pallancata mine which was placed on
temporary care and maintenance in December 2023.
In 2025, work continued on the Modified Environmental Impact Assessment for
Royropata, which is progressing on schedule and is expected to be completed in
early Q2, with submission to the Peruvian government planned following the
national elections in July 2026. A public workshop in the Pallancata community
to present the environmental and social baseline results was successfully held
in December 2025, and a corresponding workshop for the Iscahuaca community in
February 2026.
ARGENTINA
San Jose
The San Jose silver/gold mine is located in Argentina, in the province of
Santa Cruz, 1,750 kilometres south west of Buenos Aires. San Jose commenced
production in 2007. Hochschild holds a controlling interest of 51% and is the
mine operator. The remaining 49% is owned by McEwen Mining Inc.
San Jose summary Year ended Year ended % change
31 Dec 2025 31 Dec 2024
Ore production (tonnes) 705,426 581,303 21
Average silver grade (g/t) 190 253 (25)
Average gold grade (g/t) 4.02 4.55 (12)
Silver produced (koz) 3,625 4,150 (13)
Gold produced (koz) 76.97 73.73 4
Silver equivalent produced (koz) 10,013 10,270 (3)
Gold equivalent produced (koz) 120.64 123.73 (2)
Silver sold (koz) 3,534 4,290 (18)
Gold sold (koz) 72.31 74.37 (3)
Unit cost ($/t) 293.0 287.2 2
Total cash cost ($/oz Ag co-product) 26.4 19.5 35
All-in sustaining cost ($/oz Ag Eq) 30.4 23.8 28
All-in sustaining cost ($/oz Au Eq) 2,520 1,973 28
Production
San Jose's production in 2025 totalled 120,639 gold equivalent ounces (2024:
123,732 ounces) with the decrease versus 2024 reflecting scheduled declining
grades although this has been partially offset by increased tonnage due to the
expansion of the processing plant which was completed at the end of 2024.
Costs
All-in sustaining costs were at $2,520 per gold equivalent ounce (2024: $1,973
per ounce) with the significant increase versus 2024 mostly due to: the mining
of lower-grade border areas of the veins at San Jose; the impact of higher
precious metal prices on royalties and export taxes; and the impact of the
removal of the export benefit in April 2025 which had allowed the Company to
settle a portion of exports at the blue dollar rate. These were partially
offset by higher treated tonnage.
BRAZIL
Mara Rosa
The 100% owned Mara Rosa open pit gold mine is located in the mining friendly
jurisdiction of Goiás State in Brazil. Mara Rosa commenced production in
mid-May 2024.
Mara Rosa summary Year ended Year ended % change
31 Dec 2025 31 Dec 2024
Ore production (tonnes) 1,424,031 1,757,955 (19)
Average silver grade (g/t) 0.30 0.13 131
Average gold grade (g/t) 0.96 1.35 (29)
Silver produced (koz) 9 11 (18)
Gold produced (koz) 39.96 63.64 (37)
Silver equivalent produced (koz) 3,325 5,293 (37)
Gold equivalent produced (koz) 40.06 63.77 (37)
Silver sold (koz) 9 11 (18)
Gold sold (koz) 39.58 63.54 (38)
Unit cost ($/t) 63.3 48.3 31
Total cash cost ($/oz Au co-product) 2,103 1,034 103
All-in sustaining cost ($/oz Ag Eq) 44.5 17.0 162
All-in sustaining cost ($/oz Au Eq) 3,697 1,408 163
Production
Following Q1 2025, the Company reported that operations at Mara Rosa were
adversely affected by heavier-than-usual seasonal rainfall and contractor
performance issues. These challenges restricted access to ore-particularly
higher-grade zones-and compounded persistent problems with the filtering
processes. Consequently, efforts to recover from mine waste removal delays,
carried over from the previous year, were further hampered.
In response, CEO Eduardo Landin temporarily assumed direct operational
oversight and led a comprehensive review of mining, processing, permitting,
and waste management activities. The processing plant was suspended for
approximately one month to allow for critical maintenance and upgrades across
the crushing, milling, and filtering circuits, whilst mining activities
continued uninterrupted. Processing subsequently resumed using two of the four
tailings' filters, with the remaining units brought back online following
maintenance and testing. Operational performance has since shown steady
improvement. A tailings thickener, planned for installation in the first half
of 2026, is expected to further enhance waste filtration and support the
plant's ability to operate at full capacity.
Mining performance improved over the second half of the year, with increasing
material movement rates reflecting enhanced fleet efficiency and improved
haulage conditions. This progress was supported by pushback development that
improved access to future higher-grade ore zones, as well as stabilisation of
the processing plant through stronger maintenance routines. Focus areas
included rainy-season water management, strengthening filtration and
detoxification availability, and improving moisture control through better
maintenance planning and spares readiness. Reliable equipment availability and
infrastructure performance further supported gains in productivity and
operational stability.
In parallel, the Company completed a reorganisation of its Brazil operations,
including the appointment of a new Brazil General Manager, Ediney Drummond,
and a new Mine Manager, alongside the implementation of a revised management
structure. With the operational ramp-up progressing in line with expectations,
management remains focused on sustaining consistent performance through
reliable mining and plant operations, effective rainy-season management,
completion of the tailings thickener installation, and maintaining workforce
stability.
For the year, Mara Rosa produced a total of 40,062 gold equivalent ounces
including minor silver by-product (2024: 63,770 ounces). Production in the
latter part of the year reflected a strong improvement following the
implementation of the turnaround strategy.
Costs
As a result of the challenges outlined above, including production falling
short of expectations and lower grades, AISC increased sharply to $3,697 per
gold-equivalent ounce, compared with $1,408 per ounce in 2024. Higher capex
also contributed to the increase, as the cost of the remediation activities
increased the spend from the original budget of $11-12 million to just over
$34 million.
Development project: Monte Do Carmo
Work has continued on the Monte Do Carmo project in 2025 and included:
§ Project Manager recruitment
§ Engineering studies ongoing (Ausenco) and including GAP analysis from Mara
Rosa experience
§ Review of process optimisation options underway, including potential for
100% Carbon-in-Leach configuration, utilisation of a SAG mill and plant and
mine capacity expansion opportunities
§ Completion of metallurgical testwork
§ Meeting with Tocantins state agency to discuss workforce development plans
§ Award of the installation licence
§ Signing of contract for transmission line and power distribution network to
support water intake and construction infrastructure
§ Evaluation of the use of water harvesting for the project
§ Review of proposed filtration system
§ Validation of pit engineering study
§ Geotechnical studies almost complete
The Company currently expects updated economics and a final investment
decision in mid-2026.
BROWNFIELD EXPLORATION
Inmaculada
During the year, the team carried out a further 13,142m of potential drilling
and 17,363m of resource drilling. By the end of the year 0.5 million gold
equivalent ounces of resources had been added at a grade of approximately 2.8
grams per tonne of gold equivalent (38.5 million silver equivalent ounces at a
grade of approximately 239 grams per tonne of silver equivalent).
Vein Results (potential)
Anomalia 1 IMM25-422: 1.6m @ 2.2g/t Au & 94g/t Ag
Anomalia 4 IMM25-422: 1.1m @ 1.5g/t Au & 210g/t Ag
Martha IMM25-423A: 0.9m @ 2.3g/t Au & 53g/t Ag
Mariana IMM25-282: 1.2m @ 0.9g/t Au & 100g/t Ag
San Martin IMS25-281A: 0.9m @ 0.3g/t Au & 99g/t Ag
IMS25-290: 1.4m @ 0.5g/t Au & 15g/t Ag
Melisa IMM25-475: 0.8m @ 1.0g/t Au & 22g/t Ag
IMM25-482: 2.1m @ 106.6g/t Au & 546g/t Ag
IMS25-316: 2.0m @ 8.2g/t Au & 57g/t Ag
Melisa NE IMS25-312: 1.1m @ 0.5g/t Au & 12g/t Ag
IMS25-316: 3.5m @ 2.1g/t Au & 32g/t Ag
IMS25-328: 0.8m @ 2.7g/t Au & 47g/t Ag
IMS25-336: 1.0m @ 1.1g/t Au & 16g/t Ag
Vein Results (resources)
Mariana IMM25-286: 1.7m @ 1.4g/t Au & 55g/t Ag
IMM25-288: 1.6m @ 2.2g/t Au & 113g/t Ag
IMM25-293: 0.9m @ 0.7g/t Au & 89g/t Ag
Angela IMM25-455: 3.6m @ 2.4g/t Au & 231g/t Ag
IMM25-471: 2.6m @ 0.9g/t Au & 227g/t Ag
IMM25-473: 3.4m @ 1.8g/t Au & 194g/t Ag
IMS25-304: 1.0m @ 4.5g/t Au & 334g/t Ag
IMM25-454: 1.1m @ 4.9g/t Au & 232g/t Ag
IMS25-315: 1.0m @ 3.0g/t Au & 167g/t Ag
Martha Techo IMS25-299: 1.6m @ 2.6g/t Au & 53g/t Ag
IMS25-302: 2.9m @ 2.9g/t Au & 154g/t Ag
IMS25-307: 1.1m @ 3.8g/t Au & 24g/t Ag
IMS25-310: 3.8m @ 3.7g/t Au & 96g/t Ag
IMS25-313: 1.1m @ 8.1g/t Au & 121g/t Ag
IMS25-311: 0.8m @ 1.9g/t Au & 12g/t Ag
IMS25-325: 1.0m @ 0.3g/t Au & 21g/t Ag
Dayona IMM24-385: 2.4m @ 5.0g/t Au & 21g/t Ag
IMS25-322: 1.3m @ 1.3g/t Au & 106g/t Ag
IMS25-331: 2.2m @ 2.8g/t Au & 20g/t Ag
IMS25-335: 0.8m @ 0.7g/t Au & 53g/t Ag
IMS25-337: 1.0m @ 0.3g/t Au & 50g/t Ag
IMS25-344: 2.5m @ 0.2g/t Au & 246g/t Ag
Lady IMS25-306: 2.6m @ 3.6g/t Au & 26g/t Ag
IMS25-306: 0.9m @ 2.9g/t Au & 46g/t Ag
Melisa N.E. IMS25-314: 1.2m @ 3.4g/t Au & 17g/t Ag
Angela Sur IMM25-418: 0.9m @ 6.2g/t Au & 189g/t Ag
IMM25-419: 0.9m @ 2.7g/t Au & 110g/t Ag
Mirella IMM25-454: 0.8m @ 7.8g/t Au & 215g/t Ag
IMM25-455: 0.8m @ 0.2g/t Au & 130g/t Ag
IMM25-471: 2.2m @ 1.1g/t Au & 551g/t Ag
Liz IMM25-454: 0.8m @ 4.4g/t Au & 393g/t Ag
IMM25-455: 1.1m @ 2.4g/t Au & 150g/t Ag
IMM25-471: 1.3m @ 2.2g/t Au & 137g/t Ag
IMM25-467: 1.1m @ 1.6g/t Au & 42g/t Ag
Ann IMM25-427: 0.8m @ 0.9g/t Au & 147g/t Ag
Gera IMS25-314: 0.9m @ 3.0g/t Au & 46g/t Ag
Ramal Y IMM25-476: 0.8m @ 10.1g/t Au & 132g/t Ag
IMM25-471: 0.9m @ 4.0g/t Au & 453g/t Ag
IMM25-473: 0.8m @ 3.5g/t Au & 151g/t Ag
Angela Tesoro IMS25-318: 2.3m @ 2.3g/t Au & 185g/t Ag
IMS25-323: 0.8m @ 1.4g/t Au & 87g/t Ag
Isabella IMS25-320: 2.8m @ 1.9g/t Au & 57g/t Ag
IMS25-326: 2.1m @ 5.2g/t Au & 101g/t Ag
IMS25-330: 1.9m @ 4.7g/t Au & 101g/t Ag
IMS25-334: 3.2m @ 2.5g/t Au & 64g/t Ag
IMS25-338: 0.9m @ 2.3g/t Au & 50g/t Ag
IMS25-341: 1.3m @ 2.8g/t Au & 36g/t Ag
IMS25-345: 4.5m @ 3.7g/t Au & 81g/t Ag
Martha IMS25-311: 1.0m @ 1.4g/t Au & 45g/t Ag
Split NS IMS25-319A: 0.8m @ 1.2g/t Au & 12g/t Ag
IMS25-325: 1.0m @ 0.2g/t Au & 8g/t Ag
In the first quarter of 2026, the team is planning 3,600m of potential
drilling in Inmaculada Central and Southern zones.
San Jose
During the year, the team carried out 11,458m of potential drilling in the
region. By the end of the year 168,000 gold equivalent ounces of inferred
resources had been added at a grade of approximately 7.65 grams per tonne of
gold equivalent (13.9 million silver equivalent ounces at a grade of
approximately 635 grams per tonne of silver equivalent).
Vein Results (potential)
Escondida SJD-2979: 1.7m @ 1.1g/t Au & 30g/t Ag
SJD-3003: 0.9m @ 30.5g/t Au & 153g/t Ag
Escondida EW SJD-3071A: 0.9m @ 5.9g/t Au & 94g/t Ag
Agostina SJD-2469: 2.5m @ 3.8g/t Au & 182g/t Ag
Isabel SJD-2969: 1.7m @ 2.1g/t Au & 181g/t Ag
SJD-2972: 0.5m @ 0.2g/t Au & 18g/t Ag
Isabel I SJD-2970: 0.6m @ 2.1g/t Au & 112g/t Ag
SJD-2972: 2.4m @ 1.1g/t Au & 46g/t Ag
SJD-2973: 0.9m @ 0.8g/t Au & 70g/t Ag
Isabel II SJD-2973: 0.6m @ 2.2g/t Au & 205g/t Ag
Isabel N SJD-2972: 1.5m @ 2.5g/t Au & 109g/t Ag
SJD-2972: 4.2m @ 1.3g/t Au & 121g/t Ag
Angelica SJD-3069: 1.7m @ 9.0g/t Au & 783g/t Ag
SJD-3003: 0.9m @ 30.5g/t Au & 153g/t Ag
SJD-3012: 0.8m @ 2.7g/t Au & 71g/t Ag
SJM-732: 1.0m @ 1.3g/t Au & 25g/t Ag
SJD-3059: 0.8m @ 0.4g/t Au & 28g/t Ag
Piso Pilar SJM-729: 0.9m @ 7.5g/t Au & 714g/t Ag
SJM-733-A: 0.8m @ 12.7g/t Au & 114g/t Ag
SJM-734: 1.1m @ 5.6g/t Au & 269g/t Ag
SJD-3066: 0.9m @ 5.7g/t Au & 90g/t Ag
SJM-735: 0.8m @ 53.8g/t Au & 347g/t Ag
SJM-740: 0.8m @ 4.4g/t Au & 107g/t Ag
Ramal Pilar SJD-3066: 1.9m @ 3.2g/t Au & 259g/t Ag
SJM-733-A: 1.0m @ 3.1g/t Au & 54g/t Ag
SJM-740: 0.8m @ 5.4g/t Au & 45g/t Ag
Betania SJD-3017: 2.4m @ 7.9g/t Au & 15g/t Ag
Piso Betania SJD-3026: 1.7m @ 16.0g/t Au & 26g/t Ag
SJD-3017: 2.0m @ 5.0g/t Au & 12g/t Ag
Micaela N.E. SJD-3066: 1.2m @ 0.8g/t Au & 441g/t Ag
Pilar SJM-729-A: 1.2m @ 3.7g/t Au & 296g/t Ag
HVC SJD-3097: 1.9m @ 14.6g/t Au & 1,907g/t Ag
SJD-3112: 5.1m @ 9.0g/t Au & 885g/t Ag
Pepa SJM-738: 1.2m @ 22.6g/t Au & 1,133g/t Ag
SJM-739: 0.9m @ 13.5g/t Au & 115g/t Ag
Pierina SJD-3115: 1.8m @ 0.02g/t Au & 314g/t Ag
The plan for the first quarter of 2026 is to perform potential drilling in the
HV-W area and in the northern zone.
Royropata
Exploration work continued at the Royropata project in 2025 with the team
adding approximately 1.1 million gold equivalent ounces of resources at a
grade of approximately 6.4 grams per tonne of gold equivalent (89.0 million
silver equivalent ounces of inferred resources at a grade of approximately 534
grams per tonne of silver equivalent).
Mara Rosa
Within the district, the team carried out 5,805m of potential drilling and
7,903 of resource drilling during 2025.
Vein Results (potential)
Speti 24POSP_061: 3.4m @ 0.5g/t Au
Passo 24POSP_063: 21.6m @ 0.4g/t Au
Vein Results (resources)
Posse 25POSP_019A: 43.3m @ 0.5g/t Au
25POSP_020: 40.3m @ 0.5g/t Au
25POSP_022: 15.7m @ 0.4g/t Au
25POSP_023: 5.8m @ 0.4g/t Au
25POSP_024: 22.2m @ 0.3g/t Au
Posse-Passo 25POSP_030: 40.3m @ 0.5g/t Au
25POSP_030: 0.4m @ 1.9g/t Au
25POSP_020: 0.6m @ 6.7g/t Au
25POSP_032: 55.3m @ 0.3g/t Au
25POSP_031: 46.6m @ 0.3g/t Au
25POSP_033: 30.2m @ 0.3g/t Au
25POSP_035A: 24.3m @ 0.1g/t Au
25POSP_036: 40.2m @ 0.1g/t Au
25POSP_036: 5.9m @ 0.3g/t Au
25POSP_038: 21.0m @ 0.5g/t Au
Incl. 11.6m @ 0.8g/t Au
Incl. 5.8m @ 1.5g/t Au
25POSP_039A: 15.7m @ 0.3g/t Au
24POSP_041: 2.3m @ 0.3g/t Au
24POSP_048: 40.7m @ 0.3g/t Au
24POSP_050: 41.1m @ 0.3g/t Au
24POSP_051: 30.3m @ 0.9g/t Au
24POSP_052: 1.0m @ 1.0g/t Au
24POSP_054: 10.8m @ 0.5g/t Au
24POSP_058: 1.0m @ 0.9g/t Au
24POSP_059: 29.1m @ 0.3g/t Au
Posse FW 24POSP_043: 0.8m @ 1.2g/t Au
Araras 25POSP_036: 39.2m @ 0.9g/t Au
Incl. 16.2m @ 1.3g/t Au
25POSP_038: 29.1m @ 0.4g/t Au
Incl. 1.0m @ 10.9g/t Au
25POSP_039A: 6.9m @ 0.3g/t Au
24POSP_041: 11.3m @ 0.4g/t Au
24POSP_047: 1.9m @ 0.4g/t Au
24POSP_049: 0.9m @ 3.1g/t Au
Speti 25POSP_038: 3.9m @ 0.2g/t Au
24POSP_044: 2.0m @ 0.5g/t Au
24POSP_048: 2.2m @ 0.4g/t Au
24POSP_054: 11.4m @ 0.3g/t Au
24POSP_055: 19.8m @ 0.3g/t Au
Speti HW 24POSP_056: 1.5m @ 1.4g/t Au
The plan for the first quarter is to continue the potential drilling in the
Passo-Araras-Speti areas and structures parallel to Posse.
Monte Do Carmo
During the year, 4,550m of potential drilling was executed along with 6,879m
of resource drilling.
Vein Results (potential)
Serra Alta 25SAP_002: 0.8m @ 0.6g/t Au
Gogo 25GO_002: 2.2m @ 1.4g/t Au
25GO_002: 6.5m @ 0.3g/t Au
25GO_002: 2.1m @ 5.0g/t Au
25GO_002: 0.6m @ 0.9g/t Au
25GO_002: 0.7m @ 0.5g/t Au
Dourado 25DOU_001: 0.8m @ 10.4g/t Au
Cigano 25CIG_001: 0.6m @ 0.7g/t Au
25CIG_001: 0.4m @ 0.7g/t Au
25CIG_001: 0.4m @ 1.2g/t Au
Adebaldo 25ADE_001: 6.7m @ 0.2g/t Au
25ADE_001: 3.6m @ 0.2g/t Au
25ADE_001: 0.7m @ 1.2g/t Au
25ADE_001: 1.1m @ 0.7g/t Au
Vein Results (resources)
Gogo 25GO_004: 1.9m @ 0.5g/t Au
25GO_004: 1.4m @ 0.5g/t Au
25GO_004: 1.0m @ 0.3g/t Au
Sierra Alta 25SA_031: 55.1m @ 1.6g/t Au
Incl. 8.9m @ 6.5g/t Au
Incl. 5.6m @ 2.7g/t Au
Incl. 3.7m @ 1.8g/t Au
25SA_031: 0.9m @ 1.4g/t Au
25SA_032: 5.0m @ g/t Au
Incl. 0.8m @ 1.3g/t Au
25SA_032: 32.9m @ 0.4g/t Au
Incl. 8.7m @ 1.0g/t Au
25SA_033: 18.4m @ 0.6 g/t Au
Incl. 2.9m @ 1.3g/t Au
Incl. 7.6m @ 0.9g/t Au
25SA_033: 10.8m @ 0.4 g/t Au
25SA_033: 3.8m @ 0.9 g/t Au
25SA_034: 11.1m @ 0.7 g/t Au
Incl. 3.1m @ 1.9g/t Au
25SA_035: 4.6m @ 0.4 g/t Au
Incl. 1.0m @ 1.5g/t Au
25SA_035: 9.8m @ 0.4 g/t Au
Incl. 5.9m @ 105g/t Au
25SA_035: 0.9m @ 9.0 g/t Au
25SA_028: 0.7m @ 1.6 g/t Au
25SA_028: 0.3m @ 3.4 g/t Au
25SA_030: 4.5m @ 0.4 g/t Au
25SA_037: 3.4m @ 0.5g/t Au
25SA_037: 7.2m @ 0.5g/t Au
25SA_038: 17.9m @ 0.4g/t Au
25SA_038: 91.8m @ 0.6g/t Au
25SA_038: 7.9m @ 0.3g/t Au
25SA_038: 12.0m @ 0.4g/t Au
25SA_040: 6.0m @ 0.6g/t Au
25SA_041: 108.6m @ 0.9g/t Au
25SA_041: 8.2m @ 0.3g/t Au
25SA_041: 1.9m @ 0.5g/t Au
25SA_042: 29.3m @ 0.6g/t Au
25SA_043: 2.6m @ 0.4g/t Au
25SA_043: 24.4m @ 0.4g/t Au
25SA_044: 35.4m @ 0.6g/t Au
25SA_044: 5.9m @ 0.5g/t Au
25SA_044: 23.8m @ 1.1g/t Au
25SA_044: 12.1m @ 1.8g/t Au
25SA_044: 33.6m @ 0.5g/t Au
25SA_045: 56.4m @ 0.9g/t Au
25SA_047: 26.6m @ 0.9g/t Au
25SA_048: 67.2m @ 0.8g/t Au
25SA_049: 2.8m @ 0.5g/t Au
25SA_050: 30.0m @ 0.4g/t Au
25SA_050: 2.8m @ 1.7g/t Au
25SA_051: 7.5m @ 0.4g/t Au
25SA_052: 3.0m @ 0.6g/t Au
25SA_053: 5.6m @ 0.7g/t Au
25SA_053: 28.7m @ 0.4g/t Au
25SA_053: 1.3m @ 5.6g/t Au
25SA_054: 36.3m @ 1.2g/t Au
25SA_054: 13.5m @ 0.3g/t Au
25SA_055: 18.8m @ 0.3g/t Au
25SA_057: 2.9m @ 0.5g/t Au
25SA_058: 31.9m @ 0.4g/t Au
25SA_058: 6.2m @ 0.5g/t Au
25SA_058: 15.7m @ 1.1g/t Au
25SA_059: 13.7m @ 0.4g/t Au
El Dorado 25ELD_002: 1.0m @ 0.9g/t Au
Boqueirao 25BQR_013: 8.0m @ 0.3g/t Au
During Q1 2026, resource drilling will continue in Sierra Alta.
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 12 (#_ftn12)
Gross revenue before exceptional items increased by 27% to $1,229.7 million in
2025 (2024: $966.1 million) due to the higher average realised precious metal
prices, partially offset by lower gold and silver production with gold output
decreasing mainly due to the operational challenges at Mara Rosa. Silver
output fell mainly due to scheduled grade reductions at Inmaculada and San
Jose, partially offset by higher tonnage at both operations.
Gold
Gross revenue before exceptional items from gold increased to $823.4 million
(2024: $660.1 million) due to the 37% increase in the average realised gold
price, partially offset by lower gold production from Mara Rosa.
Silver
Gross revenue before exceptional items from silver increased in 2025 to $404.6
million (2024: $305.6 million) due to the 54% increase in the average realised
silver price, partially offset by lower silver production at Inmaculada and
San Jose.
Gross average realised sales prices
The following table provides figures for average realised prices (before the
deduction of commercial discounts) and ounces sold for 2025 and 2024:
Average realised prices Year ended Year ended % change
31 Dec 2025
31 Dec 2024
Silver ounces sold (koz) 9,145 10,643 (14)
Avg. realised silver price ($/oz) 44.2 28.7 54
Gold ounces sold (koz) 255.6 281.46 (9)
Avg. realised gold price ($/oz) 3,222 2,345 37
Hedges
2025 realised prices and revenue include the effect of the following hedges:
forwards for 29,167 gold ounces at a price of $2,117 per ounce, and zero cost
collars for 60,000 gold ounces at a strike put of $2,000 per ounce and a
strike call of $2,485 per ounce, the impact of which was a loss of $86.1
million in 2025. 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.
In August 2025, the Group renegotiated the gold forward hedge agreement
resulting in the extension of 20,813 ounces from August to December 2025 to
the first semester of 2028. At the date of the roll-forward, the fair value of
these instruments amounted to a liability of $26.4 million. In accordance with
IFRS 9, the accumulated loss recognised in the cash flow hedge reserve within
equity was reclassified to the income statement following the discontinuation
of the original hedge relationship and the realisation of the hedged item.
Given the non-recurring and non-cash nature of this hedge accounting
reclassification to the income statement, and the fact that the cash
settlement will occur in 2028 once the instruments mature, the resulting
charge of $26.4 million has been presented as an exceptional item within
revenue. This presentation facilitates a better understanding by users of the
financial statements of the Group´s underlying operating performance by
separating the effects of this discrete, non-cash hedge accounting
reclassification from revenue and profitability trends.
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 2025, the
Group recorded commercial discounts of $21.1 million (2024: $18.4 million).
The ratio of commercial discounts to gross revenue in 2025 was 2%, in line
with 2024.
Revenue
Revenue before exceptional items was $1,208.6 million (2024: $947.7 million),
including gold revenue of $813.4 million (2024: $649.3 million) and silver
revenue of $393.4 million (2024: $298.0 million). In 2025, gold accounted for
67% and silver 33% of the Company's consolidated net revenue (2024: gold 69%
and silver 31%).
Reconciliation of gross revenue by mine to Group net revenue before
exceptional items
$000 Year ended Year ended % change
31 Dec 2025
31 Dec 2024
Silver revenue
Inmaculada 226,695 180,285 26
Mara Rosa 358 343 4
Pallancata - (59) 100
San Jose 177,514 125,027 42
Commercial discounts (11,162) (7,599) 47
Net silver revenue 393,405 297,997 32
Gold revenue
Inmaculada 441,218 324,129 36
Mara Rosa 101,701 150,634 (32)
Pallancata - (185) 100
San Jose 280,500 185,512 51
Commercial discounts (9,981) (10,839) (8)
Net gold revenue 813,438 649,251 25
Other revenue 1,732 448 287
Revenue 1,208,575 947,696 28
Cost of sales
Total cost of sales was $677.9 million in 2025 (2024: $605.3 million). The
direct production cost excluding depreciation and amortisation was higher at
$508.0 million (2024: $454.0 million) mainly due to: higher volumes at
Inmaculada and San Jose; higher mining and waste movement at Mara Rosa due to
the normalisation of the stripping ratio as well as higher filtration and
tailings management costs; and rising precious metal prices resulting in
increased royalties. Depreciation and amortisation in production cost
increased from $157.2 million in 2024 to $173.6 million in 2025 mainly due to
higher tonnage extracted at Inmaculada and San Jose and the change in the
depreciation method from units of production to straight line basis for
certain minor equipment in Inmaculada. The depreciation increase was partially
offset by the impact of lower tonnage produced in Mara Rosa. Workers' profit
sharing increased from $3.1 million in 2024 to $15.5 million in 2025 mainly
due to higher precious metal prices. Fixed costs incurred during total or
partial production stoppages due to operational challenges at Mara Rosa were
$15.1 million (2024: $1.1 million due to bad weather in San Jose). Increase in
inventories was $35.5 million in 2025 (2024: $10.1 million) mainly due to
higher products in process of $23.0 million and $8.3 million at Mara Rosa and
Inmaculada respectively; and higher final products at San Jose of $5.5
million.
$000 Year ended Year ended % change
31 Dec 2025
31 Dec 2024
Direct production cost excluding depreciation and amortisation 508,024 454,006 12
Depreciation and amortisation in production cost 173,577 157,165 10
Workers' profit sharing and others 13 (#_ftn13) 16,730 3,145 432
Fixed costs during operational stoppages and reduced capacity 15,094 1,071 1,309
Change in inventories (35,486) (10,124) 251
Cost of sales 677,939 605,263 12
Fixed costs during operational stoppages and reduced capacity
$000 Year ended Year ended % change
31 Dec 2025
31 Dec 2024
Personnel 2,960 712 316
Third party services 9,563 301 3,077
Supplies 1,532 33 4,542
Others 1,039 25 4,056
Fixed costs during operational stoppages and reduced capacity 15,094 1,071 1,309
Unit cost per tonne
The Company reported unit cost per tonne at its operations of $136.7 per tonne
in 2025, an 8% increase versus 2024 ($127.0 per tonne). This was mainly due to
the impact of the lower tonnage at Mara Rosa.
Unit cost per tonne by operation (including royalties) 14 (#_ftn14) :
Operating unit ($/tonne) Year ended Year ended % change
31 Dec 2025
31 Dec 2024
Peru
Inmaculada 142.5 143.2 -
Brazil
Mara Rosa 63.3 48.3 31
Argentina
San Jose 293.0 287.2 2
Total 136.7 127.0 8
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 2025
$000 unless otherwise indicated Inmaculada San Jose Mara Rosa Total
(+) Cost of sales 310,319 252,344 115,276 677,939
(+) Other adjustments 15 (#_ftn15) (167) - (16,145) (16,312)
(-) Depreciation and amortisation in cost of sales (100,581) (49,492) (15,275) (165,348)
(+) Selling expenses 657 20,225 1,040 21,922
(+) Commercial deductions 16 (#_ftn16) 3,389 21,814 44 25,247
Gold 2,417 10,542 38 12,997
Silver 972 11,272 6 12,250
Cash cost 213,617 244,891 84,940 543,448
Gold 441,218 270,167 102,053 813,438
Silver 226,695 166,355 355 393,405
Revenue (pre-exceptional) 17 (#_ftn17) 667,913 436,522 102,408 1,206,843
Ounces sold (000s)
Gold 143.7 72.3 39.6 255.6
Silver 5,601 3,534 9 9,144
Group cash cost ($/oz)
Co product Au 982 2,096 2,103 1,430
Co product Ag 12.9 26.4 31.2 19.3
By product Au (98) 930 2,101 534
By product Ag (41.1) (10.1) (2,000.4) (31.1)
Year ended 31 December 2024
$000 unless otherwise indicated Inmaculada San Jose Mara Rosa 18 (#_ftn18) Other 19 (#_ftn19) Total
(+) Cost of sales 271,020 223,529 110,630 84 605,263
(+) Other adjustments 20 (#_ftn20) - (1,071) (31,638) - (32,709)
(-) Depreciation and amortisation in cost of sales (94,190) (46,905) (15,690) - (156,785)
(+) Selling expenses 614 15,847 931 14 17,406
(+) Commercial deductions(16) 3,436 17,620 1,590 11 22,657
Gold 2,291 9,872 1,584 1 13,748
Silver 1,145 7,748 6 10 8,909
Cash cost 180,880 209,020 65,823 109 455,832
Gold 324,057 175,892 144,836 (114) 644,671
Silver 180,285 117,443 330 (69) 297,989
Revenue(17) 504,342 293,335 145,166 (183) 942,660
Ounces sold (000s)
Gold 143.6 74.4 61.2 - 279.1
Silver 6,342 4,290 11 - 10,643
Group cash cost ($/oz)
Co product Au 809 1,685 1,034 (230) 1,108
Co product Ag 10.2 19.5 13.1 14.9 13.5
By product Au (4) 1,127 1,031 (1,058) 529
By product Ag (22.9) 5.4 (7,074.8) 463.9 (19.4)
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 21 (#_ftn21)
All-in sustaining cash costs per silver equivalent ounce
The Company has calculated its all-in sustaining cost per gold and silver
equivalent ounce on an attributable basis and excludes Peruvian royalties
which are recognised in the income tax line. Management believes that the
updated methodology better aligns with prevailing industry practices and
enhances comparability with peers. All previous periods have been re-presented
to reflect this change.
Year ended 31 December 2025
$000 unless otherwise indicated Inmaculada San Jose Mara Rosa Main Corporate Total
Operations & others
(+) Direct production cost excluding depreciation and amortisation 199,360 206,007 102,657 508,024 - 508,024
(+) Other items and workers profit sharing in cost of sales 22 (#_ftn22) 16,369 (2,680) 993 14,682 - 14,682
(+) Operating and exploration capex for units 23 (#_ftn23) 135,071 37,388 39,176 211,635 830 212,465
(+) Brownfield exploration expenses 24 (#_ftn24) 2,713 11,883 987 15,583 4,404 19,987
(+) Administrative expenses (excl depreciation and amortisation) 6,138 7,291 3,196 16,625 36,794 53,419
Sub-total 359,651 259,889 147,009 766,549 42,028 808,577
Sub-total attributable 359,651 132,544 147,009 639,204 42,028 681,232
Attributable Au ounces produced 142,233 39,255 39,956 221,444 - 221,444
Attributable Ag ounces produced (000s) 5,618 1,848 9 7,475 - 7,475
Attributable Ounces produced (Au Eq oz) 209,921 61,526 40,062 311,509 - 311,509
Attributable Ounces produced (Ag Eq 000s oz) 17,423 5,107 3,325 25,855 - 25,855
Attributable all-in sustaining costs per oz produced ($/oz Au Eq) 1,713 2,154 3,670 2,052 135 2,187
Attributable all-in sustaining costs per oz produced ($/oz Ag Eq) 20.7 26.0 44.2 24.7 1.6 26.3
(+) Commercial deductions 3,389 21,185 44 24,618 - 24,618
(+) Selling expenses 657 20,225 1,040 21,922 - 21,922
Sub-total 4,046 42,040 1,084 47,170 - 47,170
Sub-total attributable 4,046 21,440 1,084 26,570 - 26,570
Attributable Au ounces sold 143,667 36,879 39,.567 180,546 - 180,546
Attributable Ag ounces sold (000s) 5,601 1,802 9 7,412 - 7,412
Attributable ounces sold (Au Eq oz) 211,153 58,596 39,688 309,437 - 309,437
Attributable ounces sold (Ag Eq 000s oz) 17,526 4,863 3,294 25,683 - 25,683
Sub-total ($/oz Au Eq) attributable 19 366 27 86 - 86
Sub-total ($/oz Ag Eq) attributable 0.2 4.4 0.3 1.0 - 1.0
Attributable all-in sustaining costs per oz sold ($/oz Au Eq) 1,732 2,520 3,697 2,138 135 2,273
Attributable all-in sustaining costs per oz sold ($/oz Ag Eq) 20.9 30.4 44.5 25.7 1.6 27.4
Year ended 31 December 2024 25 (#_ftn25)
$000 unless otherwise indicated Inmaculada San Jose Mara Rosa 26 (#_ftn26) Main Corporate Total
Operations & others
(+) Direct production cost excluding depreciation and amortisation 171,372 176,365 106,185 453,922 84 454,006
(+) Other items and workers profit sharing in cost of sales 27 (#_ftn27) 3,145 (14,468) (30,059) (41,382) - (41,382)
(+) Operating and exploration capex for units 28 (#_ftn28) 138,582 33,035 5,289 176,906 2,857 179,763
(+) Brownfield exploration expenses(24) 4,423 9,821 516 14,760 3,880 18,640
(+) Administrative expenses (excl depreciation and amortisation) 4,639 6,512 1,932 13,083 33,654 46,737
Sub-total 322,161 211,265 83,863 617,289 40,475 657,764
Sub-total attributable 322,161 107,745 83,863 513,769 40,475 554,244
Attributable Au ounces produced 143,775 37,602 61,219 242,596 - 242,596
Attributable Ag ounces produced (000s) 6,368 2,117 11 8,496 - 8,496
Attributable Ounces produced (Au Eq oz) 220,501 63,103 61,353 344,957 - 344,957
Attributable Ounces produced (Ag Eq 000s oz) 18,302 5,238 5,092 28,632 - 28,632
Attributable all-in sustaining costs per oz produced ($/oz Au Eq) 1,461 1,707 1,367 1,490 117 1,607
Attributable all-in sustaining costs per oz produced ($/oz Ag Eq) 17.6 20.6 16.5 17.9 1.4 19.4
(+) Commercial deductions 3,436 17,620 1,590 22,646 - 22,646
(+) Selling expenses 614 15,847 931 17,392 - 17,392
Sub-total 4,050 33,467 2,521 40,038 - 40,038
Sub-total attributable 4,050 17,068 2,521 23,639 - 23,639
Attributable Au ounces sold 143,637 37,927 61,160 242,724 - 242,724
Attributable Ag ounces sold (000s) 6,342 2,188 11 8541 - 8541
Attributable ounces sold (Au Eq oz) 220,041 64,287 61,294 345,622 - 345,622
Attributable ounces sold (Ag Eq 000s oz) 18,263 5,336 5,087 28,686 - 28,686
Sub-total ($/oz Au Eq) attributable 18 266 41 68 - 68
Sub-total ($/oz Ag Eq) attributable 0.2 3.2 0.5 0.8 - 0.8
Attributable all-in sustaining costs per oz sold ($/oz Au Eq) 1,479 1,973 1,408 1,558 117 1,675
Attributable all-in sustaining costs per oz sold ($/oz Ag Eq) 17.8 23.8 17.0 18.8 1.4 20.2
Administrative expenses
Administrative expenses were higher at $55.6 million (2024: $50.2 million)
mainly due to higher professional fees of $8.9 million (2024: $7.1 million)
and legal workers profit sharing in Peru of $3.2 million resulting from higher
precious metal prices (2024: $1.4 million).
Exploration expenses
In 2025, exploration expenses increased to $28.7 million (2024: $26.9 million)
mainly due to higher prospects and generative expenditure in Peru of $4.1
million (2024: $1.5 million), and higher exploration expenses at San Jose of
$11.9 million (2024: $9.8 million). These were partially offset by lower
exploration expenses at Inmaculada of $2.7 million (2024: $4.4 million), and
Monte do Carmo exploration expenses in 2024 of $1.6 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 2025, the Company
capitalised $10.0 million relating to brownfield exploration (2024: $7.4
million), bringing the total investment in exploration for 2025 to $38.7
million (2024: $34.3 million).
Selling expenses
Selling expenses increased to $21.9 million (2024: $17.5 million) mainly due
to higher precious metal prices impacting Argentinian export taxes.
Other income/expenses
Other income was lower at $10.2 million (2024: $21.0 million) primarily
reflecting a lower benefit from the Argentinian Government export programme to
settle a portion of San Jose exports at the blue-chip exchange rate which
remained in force until April 2025 totaling $3.0 million (2024: $16.0
million), partially offset by a $1.3 million gain in 2025 on the early
settlement of the deferred consideration for the acquisition of the Monte do
Carmo project, originally payable in June 2026 for $10 million.
Other expenses before exceptional items were higher at $65.2 million (2024:
$43.2 million) mainly due to mine closure provision increases of $24.0 million
(2024: $14.7 million) at Selene, Sipan and Ares, the provision for recovery of
the ICMS credit (state tax on circulation of merchandise and transportation
and communication services in Brazil) of $4.6 million (2024: $nil), higher
provision for legal claims of $5.9 million (2024: $1.6 million), and a higher
corporate social responsibility contribution in Argentina as a result of
higher commodity prices of $5.9 million (2024: $4.4 million).
Adjusted EBITDA
Adjusted EBITDA increased by 39% to $583.7 million (2024: $421.4 million)
mainly due to the increase in revenue resulting from increased precious metal
prices, partially offset by higher costs of sales, and a lower benefit from
the Argentinian Government export programme to settle a portion of San Jose
exports at the blue-chip exchange rate.
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 2025
31 Dec 2024
Profit from continuing operations before exceptional items, share of loss of 365,261 224,722 63
an associate, net finance income/(cost), foreign exchange loss and income tax
Depreciation and amortisation in cost of sales 165,348 156,785 5
Depreciation and amortisation in administrative expenses, other expenses and 2,879 3,050 (6)
fixed costs during operational stoppages and reduced capacity
Exploration expenses 28,695 26,854 7
Personnel and other exploration related fixed expenses (6,551) (5,620) 17
Other non-cash items, net 29 (#_ftn29) 28,097 15,563 81
Adjusted EBITDA 583,729 421,354 39
Adjusted EBITDA margin 48% 44% 9
Finance income
Finance income of $11.8 million decreased from $13.1 million in 2024 mainly
due to lower interest on Argentinian mutual funds of $2.9 million (2024: $6.9
million), partially offset by a higher gain on Argentinian bonds of $2.0
million (2024: $0.3 million).
Finance costs
Finance costs increased from $26.9 million in 2024 to $41.1 million in 2025,
principally due to the unrealised fair value loss of $7.5 million on the
financial liability related to the stream agreements with Sprott (2024: $nil),
and the unrealised fair value loss of $7.4 million related to the warrants
issued in connection with Tiernan´s capital raise in December 2025.
Foreign exchange (losses)/gains
The Group recognised a foreign exchange loss of $4.0 million (2024: $10.4
million) mainly due to the impact of devaluation of the local currency on
monetary assets in Argentina of $6.5 million (2024: $9.1 million), partially
offset by a foreign exchange gain in Brazil of $1.4 million (2024: loss of
$1.0 million).
Income tax
The Company's pre-exceptional income tax charge was $129.7 million (2024:
$65.6 million). The increase in the charge is mainly explained by higher
profitability versus 2024 due to increased precious metal prices.
The effective tax rate (pre-exceptional) for the period was 39.2% (2024:
33.0%), compared to the weighted average statutory income tax rate of 31.2%
(2024: 31.1%). The higher effective tax rate in 2025 versus the average
statutory rate is mainly explained by: the effect of higher royalties and the
Special Mining Tax resulting from higher prices which increased the effective
rate by 5.9%, and the withholding tax increasing the rate by 2.3%. These
effects were partially offset by the impact of local currency devaluations on
deferred taxes in Brazil and Peru decreasing the rate by 1.5%.
Exceptional items
Exceptional items in 2025 totalled a $46.7 million gain after tax (2024: $19.8
million loss after tax) related to: the non-cash recycling of the accumulated
loss arising from the roll-forward of gold hedges in August 2025 of $26.4
million; and the reversal of impairment of: the Volcan project of $43.2
million, the investment in Aclara Resources Inc. of $22.2 million, and the San
Jose mining unit of $13.6 million. Also included were listing and transaction
expenses of $10.2 million arising from Tiernan Gold listing on the TSXV and
concurrent capital raise. 2024 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 tax effect of these exceptional items was a $4.2 million tax gain (2024:
$2.1 million).
Cash flow and balance sheet review
Cash flow:
$000 Year ended Year ended Change
31 Dec 2025
31 Dec 2024
Net cash generated from operating activities 423,918 321,247 102,671
Net cash used in investing activities (231,231) (277,000) 45,769
Cash flows generated generated/(used in) from financing activities 27,618 (34,818) 62,436
Foreign exchange adjustment (324) (1,582) 1,258
Net increase in cash and cash equivalents during the year 219,981 7,847 212,134
Net cash generated from operating activities increased from $321.2 million in
2024 to $423.9 million in 2025 mainly due to higher Adjusted EBITDA of $583.7
million (2024: $421.4 million), partially offset by higher tax payments and
working capital movements.
Net cash used in investing activities decreased from $277.0 million in 2024 to
$231.2 million in 2025 mainly due to the cash consideration paid for the
acquisition of Monte do Carmo of $45.0 million in 2024 and lower expenditure
on the Royropata MEIA process of $8.3 million (2024: $32.9 million), primarily
due to investments in Royropata easements incurred in 2024. These effects were
partially offset by the consideration received for the sale of Crespo project
net of transaction costs of $13.9 million in 2024, and the early settlement of
the deferred consideration related to the acquisition of Monte do Carmo of
$8.8 million in 2025.
Cash from financing activities increased from an outflow of $34.8 million to
an inflow of $27.6 million in 2025, primarily due to: the $275.0 million final
settlement of the former $300m medium-term facility in 2024; the draw-down of
$90.0 million from the existing $300.0 million medium-term loan facility
(2024: $30m draw-down); a net increase of $135.0 million in short and
medium-term bank loans (2024: net increase of $80.0 million in short-term
loans); and the net proceeds from Tiernan´s capital raise of $40.0 million
(net of agent fees and transaction costs). These effects were partially offset
by: the full repayment of the $200.0 medium-term facility (2024: $140 million
draw-down); the payment for the execution of the buy-down option related to
the Sprott stream agreements on the Monte do Carmo project of $13.0 million in
2025; and payments of dividends to shareholders of $15.2 million (2024: $nil).
Working capital
$000 As at As at
31 December 2025 31 December 2024
Trade and other receivables 155,544 135,814
Inventories 118,211 87,087
Derivative financial liabilities (111,567) (40,276)
Income tax payable, net (95,651) (21,019)
Trade and other payables (219,796) (208,222)
Provisions (55,455) (35,082)
Working capital (208,714) (81,698)
The Group's working capital position decreased by $127.0 million from $(81.7)
million to $(208.7) million. The key drivers of the decrease were: higher
income tax payable of $74.6 million resulting from higher profitability and
higher derivative financial liabilities of $71.3 million due primarily to
unrealised changes in fair value of the Group hedge contracts. These effects
were partially offset by higher inventories of $31.1 million.
Net debt
$000 unless otherwise indicated As at As at
31 December 2025 31 December 2024
Cash and cash equivalents 316,954 96,973
Non-current borrowings (225,000) (163,333)
Current borrowings 30 (#_ftn30) (114,643) (149,249)
Net debt (22,689) (215,609)
The Group's reported net debt position was $22.7 million as at 31 December
2025 (2024: $215.6 million). The decrease is mainly explained by the higher
cash generated by the business and net proceeds from Tiernan Gold´s capital
raise in the TSXV in December 2025 of $40.0 million. Net debt to adjusted
EBITDA was 0.04x (2024: 0.5x) 31 (#_ftn31) .
Capital expenditure
$000 Year ended Year ended
31 Dec 2025
31 Dec 2024
Inmaculada 138,556 138,582
Mara Rosa 39,541 35,318
San Jose 43,575 46,143
Operations 221,672 220,043
Monte do Carmo 13,373 90,602
Pallancata 8,253 32,908
Other 6,478 4,529
Total 249,776 348,082
Capital expenditure decreased from $348.1 million in 2024 to $249.8 million in
2025, mainly reflecting lower spending at Monte do Carmo following the
acquisition of the project in November 2024. The acquisition resulted in
one-off capital expenditure in 2024 totalling $86.6 million, comprising $60.0
million of cash consideration ($45.0 million was paid and $15.0 million
deferred, of which $10.0 million was settled in advance at a discount in 2025)
and $26.2 million of assumed liabilities representing the fair value of the
loan and streaming agreements with Sprott transferred to the Group on
completion, of which $13.0 million was paid in 2025 related to the buy down of
50% of the stream agreements. Capital expenditure was also lower at
Pallancata, primarily due to investments in Royropata easements incurred in
2024.
Final proposed dividends
$000 Year ended
31 Dec 2025
Net cash generated from operating activities 423,918
Less: non-attributable net cash generated from operating activities (75,480)
Attributable net cash generated from operating activities 348,438
Net cash used in investing activities (231,231)
Less: non-attributable net cash used in investing activities 21,829
Attributable net cash used in investing activitiies (209,402)
Attributable free cash flow 139,036
Net Debt / Adjusted EBITDA 0.04x
Dividend payout of 20-30% 27,807 - 41,711
Minimum annual dividend 10,000
Total dividends 30,868
Interim dividends 5,145
Final proposed dividends 25,723
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 2025,
which will be made available to shareholders on or around 7 April 2026 and
which includes, among other things, the financial statements and accompanying
notes set out herein.
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 Directors' 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 2025
Year ended 31 December 2025 Year ended 31 December 2024
Notes Before exceptional items Exceptional items Total Before exceptional items Exceptional items Total
US$000
US$000
(note 11) US$000 (note 11) US$000
US$000 US$000
Revenue 5 1,208,575 (26,427) 1,182,148 947,696 - 947,696
Cost of sales 6 (677,939) - (677,939) (605,263) - (605,263)
Gross profit 530,636 (26,427) 504,209 342,433 - 342,433
Administrative expenses 7 (55,604) - (55,604) (50,232) - (50,232)
Exploration expenses 8 (28,695) - (28,695) (26,854) - (26,854)
Selling expenses 9 (21,922) - (21,922) (17,489) - (17,489)
Other income 12 10,163 - 10,163 20,955 - 20,955
Other expenses 12 (65,243) (10,158) (75,401) (43,245) - (43,245)
(Impairment reversal)/ impairment and write-off of non-current assets, net 16, 17 (4,074) 56,845 52,771 (846) (16,769) (17,615)
and 18
Profit/(loss) before share of (loss)/gain of an associate net finance 365,261 20,260 385,521 224,722 (16,769) 207,953
income/(cost), foreign exchange loss and income tax
Share of (loss)/ gain of an associate 19 (1,643) 22,187 20,544 (1,408) (5,081) (6,489)
Finance income 13 11,826 - 11,826 13,097 - 13,097
Finance costs 13 (41,112) - (41,112) (26,928) - (26,928)
Foreign exchange loss, net 13 (3,955) - (3,955) (10,416) - (10,416)
Profit/(loss) before 330,377 42,447 372,824 199,067 (21,850) 177,217
income tax
Income tax (expense)/benefit 14 (129,650) 4,228 (125,422) (65,556) 2,088 (63,468)
Profit/(loss) for the year 200,727 46,675 247,402 133,511 (19,762) 113,749
Attributable to:
Equity shareholders of the Parent 159,553 42,347 201,900 116,767 (19,762) 97,005
Non-controlling interests 41,174 4,328 45,502 16,744 - 16,744
200,727 46,675 247,402 133,511 (19,762) 113,749
Basic earnings/(loss) per ordinary share for the year (expressed in US dollars 15 0.31 0.08 0.39 0.23 (0.04) 0.19
per share)
Diluted earnings/(loss) per ordinary share for the year (expressed in US 15 0.31 0.08 0.39 0.23 (0.04) 0.19
dollars per share)
Consolidated statement of comprehensive income
For the Year ended 31 December 2025
Year ended 31 December
Notes 2025 2024
US$000 US$000
Profit for the year 247,402 113,749
Other comprehensive income that might be reclassified to profit or loss in
subsequent periods:
Loss on cash flow hedges 38(a) (176,860) (85,560)
Loss on discontinuation of hedge relationship 38(a) 26,427 -
Deferred tax benefit on cash flow hedges 38(e) 51,749 28,473
Exchange differences on translating foreign operations(1) 11,269 (30,252)
Unrealised change in credit risk of financial liability 25 (174) -
Share of other comprehensive profit/(loss) of an associate 19 2,017 (2,492)
(85,572) (89,831)
Other comprehensive income that will not be reclassified to profit or loss in
subsequent periods:
Gain on equity instruments at fair value through other comprehensive income 20 96 15
(OCI)
96 15
Other comprehensive loss for the year, net of tax (85,476) (89,816)
Total comprehensive profit for the year 161,926 23,933
Total comprehensive loss attributable to:
Equity shareholders of the Parent 116,424 7,189
Non-controlling interests 45,502 16,744
161,926 23,933
(1) Foreign exchange effect generated in the Group's companies when the
functional currency is the local currency, mainly generated by the decrease
(2024: increase) of the US$ exchange rate in Brazil.
Consolidated statement of financial position
As at 31 December 2025
Notes As at As at
31 December 2025 31 December 2024
US$000 US$000
ASSETS
Non-current assets
Property, plant and equipment 16 1,238,438 1,070,758
Evaluation and exploration assets 17 93,797 132,303
Intangible assets 18 66,134 49,632
Investment in an associate 19 43,372 15,811
Financial assets at fair value through OCI 20 86 475
Other receivables 21 18,660 18,316
Deferred income tax assets 30 105,137 27,677
1,565,624 1,314,972
Current assets
Inventories 22 118,211 87,087
Trade and other receivables 21 155,544 135,814
Income tax receivable 14 795 186
Other financial assets 2,640 3,807
Cash and cash equivalents 23 316,954 96,973
Assets held for sale 24 - 12,660
594,144 336,527
Total assets 2,159,768 1,651,499
EQUITY AND LIABILITIES
Capital and reserves attributable to shareholders of the Parent
Equity share capital 29 9,068 9,068
Other reserves (415,316) (329,431)
Retained earnings 1,127,834 931,236
721,586 610,873
Non-controlling interests 155,508 76,478
Total equity 877,094 687,351
Non-current liabilities
Other payables 25 34,225 46,501
Derivative financial liabilities 38(e) 178,222 61,343
Borrowings 27 225,000 163,333
Provisions 28 161,892 146,781
Deferred income tax liabilities 30 85,428 82,504
684,767 500,462
Current liabilities
Trade and other payables 25 219,796 208,222
Derivative financial liabilities 38(e) 111,567 40,276
Borrowings 27 114,643 149,249
Provisions 28 55,455 35,082
Income tax payable 14 96,446 21,205
Liabilities directly associated with assets held for sale 24 - 9,652
597,907 463,686
Total liabilities 1,282,674 964,148
Total equity and liabilities 2,159,768 1,651,499
These financial statements were approved by the Board of Directors on 10 March
2026 and signed on its behalf by:
Eduardo Landin
Chief Executive Officer
10 March 2026
Consolidated statement of cash flows
For the Year ended 31 December 2025
Year ended 31 December
Notes 2025 2024
US$000 US$000
Cash flows from operating activities
Cash generated from operations 34 473,893 365,040
Interest received 2,906 3,272
Interest paid 27 (17,703) (27,074)
Payment of mine closure costs 28 (15,829) (11,833)
Income tax, special mining tax and mining royalty paid(1) (19,349) (8,158)
Net cash generated from operating activities 423,918 321,247
Cash flows from investing activities
Purchase of property, plant and equipment (209,190) (213,513)
Purchase of evaluation and exploration assets 17(1) (6,337) (55,629)
Purchase of intangibles 18 (2,612) (19,534)
Early settlement of Monte do Carmo´s deferred consideration 4(b) (8,750) -
Investment in associate 19 (5,000) -
Proceeds from sale of property, plant and equipment 558 759
Proceeds from sale of assets held for sale 24 100 13,890
Purchase of Argentinian bonds 13(6) - (5,838)
Proceeds from sale of Argentinian bonds 13(6) - 2,865
Net cash used in investing activities (231,231) (277,000)
Cash flows from financing activities
Proceeds from borrowings 27 410,000 311,607
Repayment of borrowings 27 (386,486) (340,991)
Payment of lease liabilities 26 (5,499) (5,046)
Dividends paid to shareholders 31 (15,195) -
Dividends paid to non-controlling interests 31 (2,246) (388)
Proceeds from Tiernan Reverse Takeover Transaction ("RTO") and offering 4(a) 40,044 -
Buy-down option of Sprott Stream Agreement 25(a) (13,000) -
Net cash flows generated from/(used in) financing activities 27,618 (34,818)
Increase in cash and cash equivalents during the year 220,305 9,429
Exchange difference (324) (1,582)
Cash and cash equivalents at beginning of year 96,973 89,126
Cash and cash equivalents at end of year 23 316,954 96,973
(1) Taxes paid have been offset with value added tax (VAT) credits received
of US$30,632,000 (2024: US$6,732,000).
Consolidated statement of changes in equity
For the Year ended 31 December 2025
Other reserves
Notes Equity share capital US$000 Fair value reserve of financial assets at fair value Share of other comprehensive loss of an associate Cumulative translation adjustment US$000 Unrealised gain/(loss) on cash flow hedges Merger reserve US$000 Share- based payment reserve US$000 Change in fair value of Sprott agreement US$000 Total other reserves Retained earnings US$000 Capital and reserves attributable to shareholders of the Non-controlling interests US$000 Total
through OCI
Parent
US$000 US$000 US$000 US$000
equity
US$000
US$000
Balance at 9,068 (127) 419 (20,180) (11,546) (210,046) 6,643 - (234,837) 834,231 608,462 60,122 668,584
1 January 2024
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 31 - - - - - - - - - - - (388) (388)
Other changes in associate's equity 19 - - 1,865 - - - - - 1,865 - 1,865 - 1,865
Modification of share-based payment awards 28(2) - - - - - - (7,954) - (7,954) - (7,954) - (7,954)
Accrual of share-based payments - - - - - 1,311 - 1,311 - 1,311 - 1,311
Balance at 9,068 (112) (208) (50,432) (68,633) (210,046) - - (329,431) 931,236 610,873 76,478 687,351
31 December 2024
Other comprehensive income/(expense) - 96 2,017 11,269 (98,684) - - (174) (85,476) - (85,476) - (85,476)
Profit for the year - - - - - - - - - 201,900 201,900 45,502 247,402
Total comprehensive income/(expense) for the year - 96 2,017 11,269 (98,684) - - (174) (85,476) 201,900 116,424 45,502 161,926
Dividends paid to shareholders 31 - - - - - - - - - (15,195) (15,195) - (15,195)
Dividends to non- controlling interests 31 - - - - - - - - - - - (2,246) (2,246)
Sale of financial assets at fair value through OCI (409) - - - - - - (409) 775 366 - 366
Change in ownership interest in Tiernan without loss of 4 - - - - - - - - 9,118 9,118 35,774 44,892
control
Balance at 9,068 (425) 1,809 (39,163) (167,317) (210,046) - (174) (415,316) 1,127,834 721,586 155,508 877,094
31 December 2025
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
The financial information for the year ended 31 December 2025 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 2024
have been delivered to the Registrar of Companies and those for 2025 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 2025, the Group has one operating mine (Inmaculada)
located in southern Peru, one operating mine (San Jose) located in Argentina
and one operating mine (Mara Rosa) located in Brazil. The Group also has a
portfolio of projects located across Peru, Argentina, Brazil, and Chile, at
various stages of development.
These consolidated financial statements were approved for issue by the Board
of Directors on 10 March 2026.
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 2025 2024
% %
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 14) Production of gold and silver Argentina 51 51
Minera Hochschild Chile S.C.M. (3) Exploration Chile 100 100
Andina Minerals Chile SpA (3) Exploration Chile 69.8 100
Southwest Minerals (Yunnan) Inc. (4) Exploration China 100 100
Hochschild Mining Holdings Limited(6) Holding company England and Wales 100 100
Hochschild Mining Ares (UK) Limited(6) Administrative office England and Wales 100 100
Hochschild Mining Brazil Holdings Corp. (6) 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. (7) 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
Cúspide Copper S.A.C. (4 and 13) Exploration Peru 100 100
Compañía Minera Cerro Salto S.A.C. (4 and 13) Exploration Peru - 100
Toro Bravo Peru S.A.C. (5) Exploration Peru 100 -
Hochschild Mining (US) Inc. (8) Holding company USA 100 100
Hochschild Mining Canada Corp(9) Exploration Canada 100 100
Tiernan Gold Corp. (9 and 11) Holding company Canada 69.8 100
Amarillo Mineracao do Brasil Ltda. (10) Production of gold and silver Brazil 100 100
Serra Alta Mineracao Ltda. (10 and note 4(b)) Exploration Brazil 100 100
Serra Alta Participacoes Inmobiliarias S.A. (10 and note 4(b)) Exploration Brazil 100 100
(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: La Colonia 180, Santiago de Surco, Lima, Peru. The
company was incorporated on 2 February 2025.
(6) Registered address: 17 Cavendish Square, London, W1G0PH, United Kingdom.
(7) Registered address: Calle Aguila Real No 122, Colonia Carolco,
Monterrey, Nuevo Leon, CP 64996, Mexico.
(8) Registered address: 1025 Ridgeview Dr. 300, Reno, Nevada 89519, USA.
(9) Registered address: Suite 1700, Park Place, 666 Burrard Street,
Vancouver BC, V6C 2X8.
(10) Registered address: Fazenda Invernada s/n, Zona Rural, Mara Rosa -
Goiás - Brazil, CEP: 76.490-000.
(11) The Group has a 69.8% interest in Tiernan Gold Corp, while the remaining
30.2% is held by non-controlling shareholders (see note 4(a)).
(12) The Company was incorporated on 8 July 2024.
(13)The Company was incorporated on 20 July 2024 and sold on 27 February 2025.
(14) 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 shareholder.
1 Corporate information continued
The significant financial information in respect of subsidiaries that contain
material non-controlling interest before intercompany eliminations as at and
for the years ended 31 December 2025 and 2024 is as follows:
Minera Santa Cruz S.A. Tiernan Gold Corp.
As at 31 December As at 31 December
2025 2024 2025 2024
US$000 US$000 US$000 US$000
Non-current assets 140,380 133,371 87,251 -
Current assets 291,237 144,568 39,709 -
Non-current liabilities (76,857) (66,806) (13,065) -
Current liabilities (108,487) (57,922) (3,200) -
Equity (246,273) (153,211) (110,695) -
Cash and cash equivalents 149,114 45,454 39,673 -
Revenue 436,522 293,335 - -
Depreciation and amortisation (49,338) (48,899) - -
Impairment reversal of non-current assets 14,179 - 43,255 -
Interest income 1,275 1,071 441 -
Interest expense (1,482) (3,043) (2) -
Income tax (47,326) (632) (12) -
Profit for the year 97,646 34,170 24,687 -
Comprehensive income - - 4,803 -
Net cash generated from operating activities 153,130 74,625 1,477 -
Net cash used in investing activities (43,425) (46,143) (1,823) -
Net cash (used in)/generated from financing activities (6,046) (5,210) 28,129 -
Profit/(loss) attributable to non-controlling interests in the consolidated
income statement, non-controlling interest in the consolidated statement of
financial position, and dividends declared to non-controlling interests in the
consolidated statement of changes in equity are solely related to Minera Santa
Cruz and Tiernan Gold Corp.
2 Material accounting policies
(a) Basis of preparation
The consolidated financial statements of the Group have been prepared in
accordance with UK adopted International Accounting Standards.
The basis of preparation and accounting policies used in preparing the
consolidated financial statements for the years ended 31 December 2025 and
2024 are set out below. The consolidated financial statements have been
prepared on a historical cost basis except for the revaluation of certain
financial instruments that are measured at fair value at the end of each
reporting period, as explained below. These accounting policies have been
consistently applied, except for the effects of the adoption of new and
amended accounting standard.
The financial statements are presented in US dollars (US$) 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 2024, except for the adoption of new standards effective as of 1
January 2025. Amendments apply for the first time in 2025, but do not have an
impact on the consolidated financial statements of the Group.
- Lack of exchangeability - Amendments to IAS 21
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 2026 or later periods but which the Group has
not previously adopted. These have not been listed as they are not expected to
have a material impact the Group financial statements. The Group has not yet
completed its assessment of IFRS 18. The analysis is expected to conclude on
second quarter of 2026.
(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.
Depreciation commences when assets are available for use. Land is not
depreciated.
- 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 (refer to 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 28(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 was presented to the provincial authority in December
2022 and observations were received in December 2025. The Group plans to
present an updated Mine Closure Plan, prepared with the support of external
consultants, by the end of 2026.
- Valuation of financial instruments - note 38.
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 28(2).
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 2023, 2024 and 2025, regarding LTIP
2023; 2024, 2025 and 2026, regarding LTIP 2024; and 2025, 2026 and 2027,
regarding LTIP 2025, 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 MRI. The balance
of the awards is disclosed in note 28(2).
Critical judgements:
- Assessment of impairment indicators for the Group's CGUs - notes 16,
17 and 18.
Assessment of impairment indicators are performed during the year and they
were identified in certain of the CGUs - refer to notes 16, 17 and 18 for
details.
- Income tax - notes 2(t), 2(u), 14, 30 and 36(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 30).
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 36(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. Following advancement of engineering, permitting and project
development activities, management concluded that the technical feasibility
and commercial viability of the Monte do Carmo project are demonstrable.
Accordingly, in line with the Group's accounting policy and the requirements
of IAS 16 and IAS 23, the asset has been reclassified from Exploration &
Evaluation to Property, Plant and Equipment.
- Climate change
· General
Between 2024 and 2025, the Group undertook a climate-related scenario
analysis, a detailed transition risk assessment, an update of the physical
climate risk assessment on its operations, and a financial quantification of
carbon pricing which is considered to be the Group´s most material transition
risk. These studies identified current and future climate-related risks to the
Group's infrastructure. While current climate change-related factors are
reflected in the Group´s existing budget, the financial impact of future
carbon pricing on the Group is not expected to materialise until 2030. The
magnitude of this impact remains uncertain due to the details of the emission
trading system schemes as well as our own operational emissions' profile.
Despite the adoption of the Group's climate change strategy, 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
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. The financial quantification of the
future impact of the most significant climate change-related physical risks on
the Group will be conducted in 2026. 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.
- Business combinations and asset acquisitions - note 4.
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). 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.
Where the acquiree does not meet the definition of a business under IFRS 3,
the transaction has been accounted for in accordance with IFRS 2 Share-based
Payment as the acquiree is deemed to have issued equity instruments in
exchange for its identifiable net assets. Any excess of the deemed
consideration over the fair value of the identifiable net assets acquired is
recognised as a listing expense in the income statement. In December 2025,
Tiernan Gold Corp., an indirect wholly-owned subsidiary of the Group,
completed a reverse takeover of Railtown Capital Corp., a TSXV-listed capital
pool company. As Railtown did not meet the definition of a business under IFRS
3, the transaction was accounted for in accordance with IFRS 2 (note 4(a)).
- Stream Agreements- note 25(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 25(a) for details on the Monte do
Carmo's acquisition and the Stream Agreements, respectively.
Management determined that the Secured Note and Stream Agreement are closely
connected, with the option by Sprott to set off the US$20,000,000 stream
payment against the Secured Note upon commencement of production. Therefore,
management considered the two contracts as a single unit of account. The
Stream Agreement meets 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
25(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 there were
sufficient external and internal indicators to support a full reversal of the
accumulated impairment of the investment in Aclara as of 31 December, 2025.
As a result, the Group has recognised a reversal of impairment of
US$22,187,000 as at 31 December 2025.
- Loss on discontinuation of hedge relationship - note 38 (a).
Management uses judgement in determining whether an item should be presented
as exceptional in the income statement. In accordance with the Group's policy,
"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."
Given the non-recurring and non-cash nature of this hedge accounting
reclassification to the income statement, and the fact that the cash
settlement will occur in 2028 once the instruments mature, the resulting
charge has been presented as an exceptional item within revenue. This
presentation facilitates a better understanding by users of the financial
statements of the Group´s underlying operating performance by separating the
effects of this discrete, non-cash hedge accounting reclassification from
revenue and profitability trends.
(c) Basis of consolidation
The consolidated financial statements set out the Group's financial position,
performance and cash flows as at 31 December 2025 and 31 December 2024 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 27 for details of the US$300 million medium-term
loan) and related covenant forecasts to assess whether the Group is able to
continue in operation for the period to 31 March 2027 (the "Going Concern
Period") which is at least 12 months from the date of these consolidated
financial statements. The Directors also considered the impact of a downside
scenario on the Group's future cash flows and liquidity position as well as
debt covenant compliance.
Scenarios analysed
For the purposes of the going concern assessment, the base case scenario
reviewed by the Directors (the "Base Scenario") reflects, among other things,
budgeted production for 2026 and current life-of-mine plans for Inmaculada,
San Jose and Mara Rosa. The Base Scenario also assumes average precious metal
prices of US$3,994/oz for gold and US$48.1/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
expenditure, which are under the Group's control, while available, would not
be necessary.
Under the Base and the Severe scenarios, the Group's liquid resources, which
as at the date of this report include an undrawn amount of US$180 million,
remain more than adequate for the Group's forecast expenditure and scheduled
repayments of the amounts owed under the Group´s borrowings, with sufficient
headroom maintained to comply with debt covenants.
Reverse Stress Tests
Management also performed reverse stress tests which were considered in the
Directors´ assessment. Under these tests, the Directors concluded that:
- prices of US$1,797/oz for gold and US$21.7/oz for silver for the duration
of the Going Concern Period would result in sufficient headroom to comply with
the Group´s minimum level of liquidity; and
- 21 weeks of concurrent stoppages at each of Inmaculada, San Jose and Mara
Rosa would result in sufficient headroom to comply with the Group´s debt
covenants of the medium-term loan facility.
In its application of the above reverse stress tests, no mitigation actions
were applied. The Directors considered the nature and extent of the conditions
required to trigger these outcomes and concluded the likelihood of such
scenarios occurring during the Going Concern Period to be remote.
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 consolidated
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.
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 15
Vehicles 5
During the period, management reassessed the depreciation method applied to
certain items of plant and equipment at Inmaculada. Following an extension of
the life of mine, management determined that the estimated useful lives of
these assets, ranging between 10 and 15 years, were shorter than the revised
life of mine. As a result, the depreciation method for these assets was
changed from the units-of-production method to depreciation on a straight-line
basis over their estimated useful lives. This change has been accounted for as
a change in accounting estimate and applied prospectively (refer to note
16(2)).
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 (loss)/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.
Royalty intangible assets
Royalty interests represent contractual rights to receive a percentage of
revenue or production from specific mining operations. These assets are
recognised at cost or at fair value when acquired. Royalty intangible assets
have a finite useful life. Royalty intangible assets have a finite useful life
and are amortised using the units-of-production method over the expected life
of the related mining operation.
(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.
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 28). 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.
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 the performance and/or service conditions have not
been met.
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 costumers 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 32(a)) is recognised in
revenue when services are provided.
Income from the sale of aggregates in Mara Rosa is recognised in revenue (note
5).
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 36).
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 36).
(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 36(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.
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.
- 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; or
- 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;
- expenses related to a corporate transaction, including listing expenses
and related transaction costs;
- gains or losses arising from the discontinuation of hedge relationships;
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 38(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.
Since 13 December 2023 changed to 20% and the benefit was in forced until
April 2025. As at 31 December 2025 the Group recognised a benefit from the
programme of US$2,979,000 (2024: US$15,996,000), disclosed as other income
(refer to note 12(1)).
(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 Mara Rosa US$000 Exploration US$000 Other(1) Adjustment Total
US$000
US$000 and US$000
Pallancata US$000 eliminations
US$000
Year ended
31 December 2025
Revenue from external customers 724,643 381,257 133,044 - - 151 - 1,239,095
Inter-segment revenue - - - - - 4,647 (4,647) -
Total revenue from customers 724,643 381,257 133,044 - - 4,798 (4,647) 1,239,095
Provisional pricing adjustment 257 55,265 6 - - - - 55,528
Realised loss on hedges (56,987) - (29,061) - - - - (86,048)
Loss on discontinuation of hedge relationship(2) - - (26,427) - - - - (26,427)
Total revenue 667,913 436,522 77,562 - - 4,798 (4,647) 1,182,148
Segment profit/(loss) 354,559 164,059 (31,667) - (29,020) 3,138 (7,477) 453,592
Others(3) (80,768)
Profit from continuing operations before income tax 372,824
Other segment information
Depreciation(4) (103,029) (53,007) (19,454) (519) (9) (2,352) - (178,370)
Amortisation (385) (489) (515) (446) - (105) - (1,940)
(Impairment) (474) 11,635 (1,415) (37) 43,229 (167) - 52,771
/impairment reversal and (write-off) of assets, net
Assets
Capital expenditure 138,556 43,575 39,541 8,253 15,196(6) 4,655 - 249,776
Current assets 29,325 113,736 53,051 1,501 - 1,971 - 199,584
Other non-current assets 608,566 139,003 365,669 47,926 197,629(7) 39,576 - 1,398,369
Total segment assets 637,891 252,739 418,720 49,427 197,629 41,547 - 1,597,953
Not reportable assets(5) - - - - - 561,815 - 561,815
Total assets 637,891 252,739 418,720 49,427 197,629 603,362 - 2,159,768
( )
(1) "Other" revenue relates to revenues earned by Empresa de Transmisión
Aymaraes S.A.C. for energy transmission services.
(2) The amount represents the reclassification of US$26,427,000 from the
cash flow hedge reserve within equity to the income statement following the
extension of 20,813 ounces of gold forwards from August to December 2025 to
the first semester of 2028. In accordance with IFRS 9, the accumulated loss
was reclassified to the income statement following the discontinuation of the
original hedge relationship and the realisation of the hedged item. The item
is presented as an exceptional item (note 11), and had no impact on realised
on cash flows (note 38(a)).
(3) Comprised of administrative expenses of US$55,604,000, other income of
US$10,163,000, other expenses of US$75,401,000, write-off of assets (net) of
US$4,074 ,000, impairment of non-current assets of US$56,845,000, share of
gain of an associate of US$20,544,000, finance income of US$11,826,000,
finance costs of US$41,112,000, and foreign exchange loss of US$3,955,000.
(4) Includes depreciation capitalised in the Pallancata unit (US$444,000),
San Jose unit (US$1,944,000), Inmaculada unit (US$286,000), Mara Rosa
(US$42,000) and products in process (US$1,102,000).
(5) Not reportable assets are comprised of financial assets at fair value
through OCI of US$86,000, other receivables of US$92,831,000, income tax
receivable of US$795,000, deferred income tax asset of US$105,137,000,
investment in associates US$43,372,000, other financial assets of
US$2,640,000, and cash and cash equivalents of US$316,954,000.
(6) Includes Monte do Carmo capital expenditure of US$13,373,000.
(7) Includes Monte do Carmo balance of US$110,382,000.
Inmaculada US$000 San Jose Mara Rosa US$000 Exploration US$000 Other(1) Adjustment Total
US$000
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 (255) - 452 - 967,391
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 continuing 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 costs 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.
(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
2025 2024
US$000 US$000
Switzerland 284,052 246,763
Canada 458,012 363,922
South Korea 77,308 53,527
Germany 92,399 20,754
Japan - 4,364
Chile 4,155 30,696
Finland 36,718 18,527
USA 203,574 172,082
Luxembourg (409) 2,486
Bulgaria 12,748 8,369
Peru 124,485 54,110
Brazil 1,581 -
Total revenue(1) 1,294,623 975,600
Inter-segment
Peru 4,647 3,975
Total 1,299,270 979,575
Loss on realised hedges
United Kingdom (56,987) (18,010)
Brazil (29,061) (9,894)
Loss on discontinuation of hedge relationship(2)
Brazil (26,427) -
Total 1,186,795 951,671
(1) Includes revenue from customers and provisional pricing adjustments of
US$55,528,000 (2024: US$8,209,000).
(2) The amount represents the non-cash recycling of US$26,427,000 from other
comprehensive income to revenue following the extension of 20,813 ounces of
gold forwards from August to December 2025 to the first semester of 2028. As
the sales of gold designated in the hedge relationship occurred during the
second half of 2025, IFRS 9 requires the recycling of the accumulated loss to
the income statement. The item is presented as an exceptional item (note 11),
and had no impact on cash flows.
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 2025 Year ended 31 December 2024
US$000 % Revenue Segment US$000 % Revenue Segment
Asahi Refining Canada Ltd. 458,012 38% Inmaculada, Mara Rosa and San Jose 363,922 38% Inmaculada, Mara Rosa and San Jose
MKS Switzerland S.A. 168,936 14% Inmaculada 121,108 13% Inmaculada
Argor Heraus S.A. 115,213 10% Inmaculada 125,655 13% Inmaculada and San Jose
Auramet International Inc. 91,995 8% Inmaculada and Mara Rosa 132,284 14% Inmaculada
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
2025 2024
US$000 US$000
Peru 696,068 647,416
Brazil 476,051 435,195
Argentina 139,003 132,716
Chile 87,247 37,366
Total non-current segment assets 1,398,369 1,252,693
Financial assets at fair value through OCI 86 475
Investment in associates 43,372 15,811
Other receivables 18,660 18,316
Deferred income tax assets 105,137 27,677
Total non-current assets 1,565,624 1,314,972
4 Asset acquisition and partial disposal of subsidiary
(a) Tiernan Gold Corp. Reverse Takeover Transaction and Private Placement
On December 16, 2025, Tiernan Gold Corp. ("Tiernan"), an indirect wholly-owned
subsidiary of the Company, completed a reverse take over with Railtown Capital
Corp. ("Railtown"), a capital pool company listed on the TSX Venture Exchange
("TSXV"), by way of a three-cornered amalgamation (the "Transaction"). As a
result of the Transaction, Railtown acquired all of the issued and outstanding
securities of Tiernan in exchange for securities of Railtown, and the combined
entity continued under the name Tiernan Gold Corp. HM Holdings Ltd., an
indirect wholly-owned subsidiary of the Company, retained control of the
resulting public entity (the "Resulting Issuer"). Accordingly, the Transaction
constituted a reverse takeover of Railtown by Tiernan for accounting purposes.
In connection with the Transaction, Tiernan consolidated its issued and
outstanding common shares on the basis of one post-consolidation common share
for approximately every 2.68 pre-consolidation common share, and Railtown
consolidated its securities on the basis of one post-consolidation security
for approximately every 7.09 pre-consolidation security. Concurrently with the
Transaction, Tiernan completed a private placement of subscription receipts
for aggregate gross proceeds of C$58,351,000 (US$42,445,000), comprising (i) a
treasury offering by Tiernan that generated gross proceeds of C$40,000,000
(US$29,096,000) and (ii) a secondary offering by Hochschild that generated
gross proceeds of C$18,351,000 (US$13,349,000). Each subscription receipt was
issued at a price of C$5.00 consisting of approximately C$4.49 for one common
share and C$0.51 for one-half of a common share purchase warrant. The value of
the shares issued by Tiernan as part of the treasury offering was C$35,880,000
(US$25,929,000), which was measured with the subscription price per share paid
by investors, with the remaining C$4,120,000 (US$3,167,000) allocated to the
warrants. Of the total gross proceeds from the secondary offering,
C$16,461,000 (US$11,960,000) were received directly by Hochschild Mining
Holdings, and C$1,890,000 (US$1,375,000) were allocated to Tiernan in respect
of the warrants issued. Upon completion of the Transaction, the subscription
receipts automatically converted into one common share of the Resulting Issuer
and one-half of one common share purchase warrant, with each whole warrant
exercisable to acquire one common share at an exercise price of C$6.50 for a
period of 24 months following the closing of the private placement.
For accounting purposes, Tiernan was identified as the acquirer and Railtown
as the acquiree. Railtown did not meet the definition of a business under IFRS
3 Business Combinations. As the Resulting Issuer is deemed to have issued
equity instruments in exchange for the identifiable net assets of Railtown,
the Transaction was accounted for as a reverse takeover and accounted in
accordance with IFRS 2 Share-based Payment . The excess of the deemed
consideration over the fair value of Railtown's identifiable net assets
resulted in a listing expense of US$9,052,000, while transaction costs of
US$1,106,000 were also incurred. Both amounts were recognised in the Group's
income statement within other expenses and classified as exceptional items
(refer to note 11).
In addition, as part of the private placement completed in connection with the
Transaction, Tiernan issued warrants denominated in Canadian dollars. As the
functional currency of the Resulting Issuer is the US dollar, these warrants
do not meet the "fixed-for-fixed" criterion under IAS 32 Financial
Instruments: Presentation and are therefore classified as financial
liabilities measured at fair value through profit or loss. At the completion
date of the Transaction, the Group recognised a financial liability of
US$4,542,000 in respect of these warrants. Subsequent changes in the fair
value of the warrants, resulting in an unrealised loss of US$7,365,000, are
recognised in profit or loss within finance cost (refer to note 13(5)).
Tiernan continues to be consolidated in the Group's consolidated financial
statements. There was no change in control at the Group level. A
non-controlling interest of US$32,006,000 was recognised on consolidation of
Tiernan.
Effects on equity of changes in ownership in Tiernan US$000
Change in ownership interest in Tiernan without loss of control 9,118
Non-controlling interest 35,774
Total impact on equity 44,892
Effects on cash flows of Private Placement US$000
Treasury offering - shares 25,929
Secondary offering - shares 11,960
Issuance of warrants 4,542
Agent fees and transaction costs (2,387)
Total impact on cash flows 40,044
(b) Acquisition of Monte do Carmo
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 25(a)), net of
its deferred income tax asset of US$899,000 (iv) additional exploration
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.
In September 2025, the Group settled early the deferred payment of
US$8,750,000 from the original amount of US$10,000,000 due in June 2026;
resulting in a gain of US$1,250,000, which has been recognised in the income
statement, within other income (see note 12). The carrying value of the
remaining deferred consideration amounts to US$4,862,000 as at 31 December
2025 (see note 25).
5 Revenue before exceptional items
Year ended 31 December 2025 Year ended 31 December 2024
Revenue(1) Revenue(1)
Goods sold US$000 Shipping services Total Goods sold US$000 Shipping services Total
US$000
US$000
US$000
US$000
Gold (from dore bars) 664,140 421 664,561 556,551 731 557,282
Silver (from dore bars) 245,304 224 245,528 221,776 485 222,261
Gold (from concentrates) 208,551 4,230 212,781 105,192 2,610 107,802
Silver (from concentrates) 112,103 2,658 114,761 71,046 1,749 72,795
Gold (from precipitates) (283) - (283) 6,801 - 6,801
Silver (from precipitates) 15 - 15 2 - 2
Services and aggregates 1,732 - 1,732 448 - 448
Total revenue from costumers 1,231,562 7,533 1,239,095 961,816 5,575 967,391
Provisional pricing adjustments(2) 55,528 - 55,528 8,209 - 8,209
Realised loss on hedges (86,048) - (86,048) (27,904) (27,904)
Total 1,201,042 7,533 1,208,575 942,121 5,575 947,696
( )
(1) Includes commercial discounts (refinery treatment charges, refining fees
and payable deductions for processing concentrate), and are deducted from
gross revenue on a per tonne basis (treatment charge), per ounce basis
(refining fees) or as a percentage of gross revenue (payable deductions). In
2025, the Group recorded commercial discounts of US$25,247,000 (2024:
US$22,720,000). Gross revenue is presented net of dore commercial discounts of
US$4,104,000 (2024: US$4,282,000).
(2) 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.
6 Cost of sales
Cost of sales comprises:
Year ended 31 December
2025 2024
US$000 US$000
Direct production costs excluding depreciation and amortisation 508,024 454,006
Depreciation and amortisation in production costs 173,577 157,165
Workers profit sharing 15,512 3,145
Cost of sales of aggregates and transmission services 1,218 -
Fixed costs during operational stoppages and reduced capacity(1) 15,094 1,071
Change in inventories (35,486) (10,124)
Cost of sales 677,939 605,263
(1 ) Corresponds to the fixed cost at the operation during reduced
capacity and stoppages in Mara Rosa of US$15,094,000 (2024: corresponds to the
fixed cost at the operation during stoppages in San Jose of US$1,071,000).
The main components included in cost of sales are:
Year ended 31 December
2025 2024
US$000 US$000
Depreciation and amortisation in cost of sales(1) 165,348 156,785
Personnel expenses (note 10)(2) 167,120 132,412
Mining royalty (note 37) 12,655 9,694
Change in products in process and finished goods (35,486) (10,124)
Fixed costs at the operations during stoppages and reduced capacity(3) 15,094 1,071
(1) The depreciation and amortisation in production cost is US$173,577,000
(2024: US$157,165,000). The difference with the depreciation and amortisation
in cost of sales is included in inventory.
(2) Includes workers profit sharing of US$15,512,000 (2024: US$3,145,000)
and excludes personnel expenses of US$2,960,000 (2024: US$712,000) 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 reduced capacity and stoppages. These costs mainly
include third party services of US$9,563,000 (2024: US$301,000), personnel
expenses of US$2,960,000 (2024: US$712,000), supplies of US$1,532,000 (2024:
US$33,000), depreciation and amortisation of US$40,000 (2024: US$Nil) and
other costs of US$999,000 (2024: other costs of US$25,000).
7 Administrative expenses
Year ended 31 December
2025 2024
US$000 US$000
Personnel expenses (note 10) 31,042 28,586
Professional fees(1) 8,879 7,088
Donations 773 1,235
Lease rentals 1,675 1,583
Third party services 417 522
Indirect taxes 2,645 1,986
Depreciation and amortisation 2,283 2,588
Depreciation of right-of-use assets 227 147
Technology and systems 1,878 1,156
Security 1,132 830
Other 4,653 4,511
Total 55,604 50,232
(1) Corresponds to tax and advisory fees of US$2,959,000 (2024:
US$2,670,000), audit fees of US$2,178,000 (2024: US$1,934,000), legal fees of
US$1,285,000 (2024: US$1,030,000) and other professional fees of US$2,457,000
(2024: US$1,454,000).
8 Exploration expenses
Year ended 31 December
2025 2024
US$000 US$000
Mine site exploration(1)
Arcata - 93
Ares 126 300
Inmaculada 2,713 4,423
Pallancata 2,259 2,106
San Jose 11,883 9,821
Mara Rosa 1,065 1,278
18,046 18,021
Prospects(2)
Peru 1,187 193
Chile (98) 40
Brazil - 1,581
1,089 1,814
Generative(3)
Peru 2,934 1,317
2,934 1,317
Personnel (note 10) 6,275 5,550
Others 276 70
Depreciation right-of-use assets 75 82
Total 28,695 26,854
(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.
9 Selling expenses
Year ended 31 December
2025 2024
US$000 US$000
Personnel expenses (note 10) 202 200
Warehouse services 2,101 1,569
Taxes(1) 16,628 13,034
Transportation costs 786 429
Other 2,205 2,257
Total 21,922 17,489
(1) Corresponds to the export duties in Argentina.
10 Personnel expenses
Year ended 31 December
2025 2024
US$000 US$000
Salaries and wages 142,451 124,828
Workers' profit sharing (note 28) 23,447 6,590
Other legal contributions 36,179 30,056
Statutory holiday payments 9,461 10,317
Long-Term Incentive Plan (note 28) 4,157 3,562
Termination benefits 4,209 4,861
Other 1,177 1,017
Total 221,081 181,231
Personnel expenses are distributed as follows:
Year ended 31 December
2025 2024
US$000 US$000
Cost of sales(1) 170,080 133,124
Administrative expenses 31,042 28,586
Exploration expenses 6,275 5,550
Selling expenses 202 200
Other expenses 9,193 9,492
Capitalised as property, plant and equipment 4,289 4,279
Total 221,081 181,231
(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$2,960,000 (2024: US$712,000).
The average number of employees for 2025 and 2024 were as follows:
Year ended 31 December
2025 2024
US$000 US$000
Peru 1,445 1,492
Argentina 1,387 1,444
Chile 4 5
Brazil 395 343
United Kingdom 11 11
Total 3,242 3,295
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, are 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
2025 2024
US$000 US$000
Revenue
Loss on discontinuation of hedge relationship (note 38 (a)) (26,427) -
Sub total (26,427) -
Other expenses
Listing expense and transaction costs (note 4) (10,158) -
Sub total (10,158) -
Impairment and write-off of non-current assets
Reversal of impairment/(impairment) of non-current assets(1) 56,845 (13,732)
Write-off of non-current assets(2) - (3,037)
Sub total 56,845 (16,769)
Share of (loss)/ gain of an associate
Reversal of impairment/ (impairment) of investment in associate (note 19) 22,187 (5,081)
Sub total 22,187 (5,081)
Income tax
Income tax (expense)/ benefit related to the above (3) 4,228 2,088
Sub total 4,228 2,088
Total 46,675 (19,762)
( )
(1) Corresponds to the reversal of impairment of the Volcan project of
US$43,255,000 and San Jose mine unit of US$13,590,000 (2024: corresponds to
the impairment related to the Azuca project of US$13,732,000) (refer to notes
16, 17, 18 and 24).
(2) In 2024, 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 24).
(3) Corresponds to the deferred tax expense generated by the reversal of
impairment of San Jose mine unit of US$4,757,000 and deferred tax credit of
US$8,985,000 generated by the loss on discontinuation of hedge relationship
(2024: 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).
Except for US$202,000 of transaction costs incurred in connection with the
Tiernan Transaction (note 4(a)), included within financing activities in the
cash flow statement, none of the above exceptional items impacted the Group's
cash flows (2024: none).
12 Other income and other expenses before exceptional items
Year ended 31 December
2025 2024
US$000
US$000
Other income
Income from export programme in Argentina(1) 2,979 15,996
Logistic services 1,608 1,704
Gain of early settlement of deferred consideration (note 4(b)) 1,250 -
Income from third party use of mine 889 -
Lease rentals 424 165
Gain on sale of Arcata and Azuca 416 -
Gain on sale of property, plant and equipment 377 656
Other 2,220 2,434
Total 10,163 20,955
Other expenses
Increase in provision for mine closure (note 28(1)) (24,023) (14,717)
Care and maintenance expenses of Pallancata mine unit (9,431) (8,320)
Corporate social responsibility contribution in Argentina(2) (5,913) (4,396)
Increase in provision for legal claims (3) (5,861) (1,578)
Provision for recovery of tax credits(4) (4,644) -
Care and maintenance expenses of Ares mine unit (4,564) (2,365)
Termination benefits in Minera Santa Cruz (2,187) (2,704)
Provision of obsolescence of supplies (note 22) (1,745) (864)
Cost of recovery of expenses (1,378) (1,860)
Depreciation right-of-use assets (329) (315)
Other (5,168) (6,126)
Total (65,243) (43,245)
( )
(1) 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. The
programme remained in force until April 2025.
(2) Relates to a contribution in Argentina to the Santa Cruz province
calculated as a proportion of sales.
(3) Mainly related to contingencies related to the ISS (municipal tax on
services) in Brazil, labour lawsuits in Argentina and penalties in Peru.
(4) Provision for recovery of ICMS (state tax on circulation of merchandise
and transportation and communication services) credit in Brazil.
13 Finance income, finance costs and foreign exchange loss
Year ended 31 December
2025 2024
US$000
US$000
Finance income
Interest income(1) 2,569 2,972
Changes in the fair value of financial instruments through profit or loss(2) 2,911 6,887
Gain from sale of financial asset 2,012 327
Debit valuation adjustment (DVA) of hedges 1,817 866
Gain on execution of buy-down option(3) 1,250 -
Change in fair value of financial liability through profit or loss (note - 233
25(a))
Other(4) 1,267 1,812
Total 11,826 13,097
Finance costs
Interest on secured bank loans (note 27(b)) (15,635) (15,425)
Other interest (3,179) (3,123)
Total interest expense (18,814) (18,548)
Loss from changes in the fair value of financial instruments(5) (8,119) (2,973)
Change in fair value of financial liability through profit or loss (note (7,482) -
25(a))
Unwinding of discount on mine rehabilitation (note 28(1)) (3,070) (3,110)
Loss on discount of other receivables(6) (1,042) -
Other (2,585) (2,297)
Total (41,112) (26,928)
Foreign exchange loss, net
Argentina (6,486) (9,133)
Peru 679 187
Brazil(2) 2,640 (2,272)
Others (788) 802
Total (3,955) (10,416)
(1) Excludes interest on deposits and liquidity funds of US$248,000 (2024:
US$296,000) that is directly attributable to the construction of Mara Rosa and
Monte do Carmo which have 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.
(3 ) Corresponds to the gain on the execution of the buy-down option
related to the Stream Agreements with Sprott, refer to note 25(a).
(4 ) Mainly includes interest income related to tax claims resolved in
favour of Compania Minera Ares of US$271,000 (2024: US$1,142,000).
(5) Includes the loss arising from changes in the fair value of warrants
classified as derivative financial liabilities of US$7,365,000 (note 4),
change in fair value of Railtown's legacy options and warrants of US$466,000
and the foreign exchange effect related to the settlement of Argentinean bonds
of US$288,000 (2024: US$2,973,000).
(6) Mainly related to the effect of the discount of tax credits in Brazil.
14 Income tax expense
Year ended 31 December 2025 Year ended 31 December 2024
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 113,085 - 113,085 35,735 - 35,735
Withholding tax 7,662 - 7,662 (835) - (835)
120,747 - 120,747 34,900 - 34,900
Deferred taxation
Origination and reversal of temporary differences (note 30) (19,727) (4,228) (23,955) 16,497 (2,088) 14,409
Corporate income tax 101,020 (4,228) 96,792 51,397 (2,088) 49,309
Current mining royalties
Mining royalty charge (note 37) 14,974 - 14,974 7,108 - 7,108
Special mining tax charge (note 37) 13,656 - 13,656 7,051 - 7,051
Total current mining royalties 28,630 - 28,630 14,159 - 14,159
Total taxation expense/(benefit) in the income statement 129,650 (4,228) 125,422 65,556 (2,088) 63,468
The weighted average statutory income tax rate was 30.5% for 2025 and 33.1%
for 2024. This is calculated as the average of the statutory tax rates
applicable in the countries in which the Group operates, weighted by the
profit/(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 recognised in
equity during the Year ended 31 December 2025 of US$51,749,000 (2024:
US$28,473,000).
There was a withholding tax of US$7,662,000 with respect to dividends received
in the UK from a Peruvian subsidiary.
The Group has assessed the OECD Pillar Two ('Global Minimum Tax') rules. The
Group is not expected to be within the scope of the Pillar Two rules. As a
result, no current or deferred tax impact has been recognised in respect of
Pillar Two for the period.
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
2025 2024
US$000
US$000
Profit from operations before income tax 372,824 177,217
At average statutory income tax rate of 30.5% (2024: 33.1%) 113,831 58,618
Expenses not deductible for tax purposes(1) 7,846 1,888
Non-recognised tax losses 3,851 3,937
Non-taxable (gain from reversal)/loss from impairments(2) (17,226) 1,270
Special mining tax and mining royalty deductible for corporate income tax (8,446) (4,177)
Permanent differences arising on special investment regime(3) (4,259) (4,939)
(Recognition of previously unrecognised deferred tax)/ unrecognised deferred (741) 6,729
tax(4)
Other (2,587) (2,353)
Corporate income tax at average effective income tax rate of 24.7% (2024: 92,269 60,973
34.4%) before foreign exchange effect, special mining tax and mining royalty
and withholding tax
Foreign exchange rate effect(5) (3,139) (10,829)
Corporate income tax at average effective income tax rate of 23.9% (2024: 89,130 50,144
28.3%) before special mining tax and mining royalty and withholding tax
Special mining tax and mining royalty(6) 28,630 14,159
Corporate income tax and mining royalties at average effective income tax rate 117,760 64,303
of 31.6% (2024: 36.3%) before withholding tax
Withholding tax 7,662 (835)
Total taxation charge in the income statement at average effective tax rate 125,422 63,468
33.6% (2024: 35.8%) from operations
(1 ) In 2025, US$5,151,000 mainly relates to non-deductible expenses
related to Tiernan´s Reverse Takeover and Private Placement, including:
listing expenses, the unrealised loss on the warrants issued in connection
with the Private Placement, and transaction costs (refer to notes 4 and
11).
(2 ) Non-taxable reversal of impairment of the Volcan project and the
investment in Aclara (refer to note 11).
(3 ) 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.
(4 ) Mainly corresponds to the impact on deferred taxes of the changes in
estimate of the mine closure provision.
(5 ) The foreign exchange effect is composed of a profit of US$4,271,000
(2024: US$676,000 loss) from Peru , a loss of US$2,070,000 (2024: US$7,359,000
profit) from Argentina and a profit of US$938,000 (2024: US$4,151,000 profit)
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 credit in 2025 is the devaluation of the Peruvian
soles (2024: devaluation of the Argentinian pesos).
(6 ) Corresponds to the mining royalty and special mining tax in Peru
(note 37).
The amounts after offset, as presented on the face of the statement of
financial position, are as follows:
As at 31 December
2025 2024
US$000
US$000
Income tax receivable(1) 795 186
Income tax payable(2) (96,446) (21,205)
Total (96,651) (21,019)
(1) Corresponds to the tax credit of Empresa de Transmision Aymaraes of
US$649,000 (2024: US$103,000).
(2) Mainly corresponds to the corporate income tax payables of Compañia
Minera Ares of US$44,701,000 (2024: US$10,664,000), Minera Santa Cruz of
US$40,170,000 (2024: US$5,353,000), Amarillo Mineracao do Brasil of US$Nil
(2024: US$1,688,000) and mining royalties payables of Compañia Minera Ares of
US$11,451,000 (US$3,459,000).
15 Basic and diluted earnings per share
Earnings per share (EPS) is calculated by dividing profit for the year
attributable to equity shareholders of the Parent by the weighted average
number of ordinary shares issued during the year.
The Company does not have dilutive potential ordinary shares as at 31 December
2025.
The Group presents profit before exceptional items attributable to equity
holders of the Parent and Basic and Diluted Earnings per share as alternative
performance measures (APMs). These measures are not defined under IFRS and may
not be comparable with similarly titled measures used by other companies. It
is presented to provide additional information on the underlying performance
of the Group by excluding items that management considers exceptional. The
measure is calculated as profit attributable to equity holders of the Parent,
adjusted to exclude exceptional items.
As at 31 December 2025 and 2024, EPS has been calculated as follows:
Year ended 31 December
2025 2024
Basic earnings per share
Before exceptional items (US$) 0.31 0.23
Exceptional items (US$) 0.08 (0.04)
Total for the year (US$) 0.39 0.19
Diluted earnings per share
Before exceptional items (US$) 0.31 0.23
Exceptional items (US$) 0.08 (0.04)
Total for the year (US$) 0.39 0.19
Profit attributable to equity holders of the Parent is derived as follows:
Year ended 31 December
2025 2024
Profit attributable to equity holders of the Parent (US$000) 201,900 97,005
Exceptional items after tax - attributable to equity holders of the Parent (42,347) 19,762
(US$000)
Profit before exceptional items attributable to equity holders of the Parent 159,553 116,767
(US$000)
The following reflects the share data used in the basic and diluted earnings
per share computations:
Year ended 31 December
2025 2024
Basic weighted average number of ordinary shares in issue (thousands) 514,458 514,458
Weighted average number of ordinary shares in issue for the purpose of diluted 514,458 514,458
earnings per share (thousands)
16 Property, plant and equipment
Mining properties and development Land and buildings US$000 Plant and equipment(2, 3) Vehicles(4) Mine Construction in progress and capital advances(1, 5) US$000 Total
costs(1) US$000 US$000 closure US$000
US$000 asset
US$000
Year ended 31 December 2025
Cost
At 1 January 2025 1,819,515 582,238 761,172 18,789 100,928 13,313 3,295,955
Additions 145,723 1,502 24,677 3,499 - 53,563 228,964
Change in discount rate (note 28(1)) - - - - 2,074 - 2,074
Change in mine closure estimate (note 28(1)) - - - - 5,061 - 5,061
Disposals - - (946) (2,510) - - (3,456)
Write-offs(6) - (683) (16,903) (5,249) - (1,294) (24,129)
Foreign exchange effect (47) 185 71 2 203 - 414
Transfers and other movements(8) 101,358 18,898 14,065 649 - (34,023) 100,947
At 31 December 2025 2,066,549 602,140 782,136 15,180 108,266 31,559 3,605,830
Accumulated depreciation and impairment
At 1 January 2025 1,298,124 409,293 433,955 12,025 71,800 - 2,225,197
Depreciation for the year 108,556 19,630 44,052 3,209 2,923 - 178,370
Disposals - - (822) (2,569) - - (3,391)
Write-offs - (529) (14,330) (5,196) - - (20,055)
Reversal of impairment (5,247) (2,556) (4,913) (78) - - (12,794)
Foreign exchange effect - 1 64 - - - 65
Transfers and other movements(8) - - (74) 74 - - -
At 31 December 2025 1,401,433 425,839 457,932 7,465 74,723 - 2,367,392
Net book value at 31 December 2025 665,116 176,301 324,204 7,715 33,543 31,559 1,238,438
(1) With the capitalisation rate of 6.97%, there were borrowing costs
capitalised in property, plant and equipment amounting to US$1,391,000.
(2) Within plant and equipment, costs of US$479,385,000 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$268,134,000 and the
depreciation charge for the year is US$23,034,000.
(3) Plant and equipment include US$3,526,000 of right-of-use assets (note
26).
(4) Vehicles include US$5,874,000 of right-of-use assets (note 26).
(5) Within construction in progress and capital advances there are capital
advances amounting to US$1,674,000, mainly related to Amarillo Mineracao do
Brasil of US$1,665,000 (2024: US$2,027,000, mainly related to Compania Minera
Ares of US$999,000).
(6) Mainly corresponds to the write-off of construction in progress and
plant and equipment in the San José and Mara Rosa units (refer to note 16 and
24).
(7) During the year, the Group reassessed the depreciation method applied to
certain items of equipment at Inmaculada to better reflect the life of the
assets, resulting in a change in accounting estimate. This change increased
depreciation expense for the year by $9,835,000 and has been applied
prospectively. The change will affect depreciation expense in future periods.
(8) Mainly includes the transfer of US$100,686,000 from evaluation and
exploration assets (Monte do Carmo project of 98,516,000) (note 17).
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. None of the Group's property, plant and equipment are pledged
as security for borrowings.
16 Property, plant and equipment continued
Mining properties and development Land and buildings US$000 Plant and equipment Vehicles(4) Mine Construction in progress and capital advances US$000 (1, 5) Total
costs US$000 (2, 3) US$000 closure US$000
US$000(1) 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 28(1)) - - - - (3,736) - (3,736)
Change in mine closure estimate (note 28(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(7) 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(7) 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 ) With the capitalisation rate of 6.33%, there were borrowing costs
capitalised in property, plant and equipment amounting to US$6,678,000.
(2) 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.
(3) Plant and equipment include US$1,564,000 of right-of-use assets (note
26).
(4) Vehicles include US$5,194,000 of right-of-use assets (note 26).
(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.
(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 24).
(7) 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.
2025
In June 2025, management determined that there was a trigger of impairment in
the Mara Rosa mine unit due to the operational challenges presented during the
first half of the year, including heavier-than-usual rainfall and contractor
performance issues. These conditions limited access to ore, particularly
high-grade zones, and further compounded challenges with the filtering
process. The Group suspended the processing plant for four weeks, and the
measures taken resulted in a reduction to the expected production, ramping up
through H1 2026 when the plant is expected to achieve full capacity. The
corresponding impact on the operations 'costs was considered. The impairment
test resulted in no impairment being recognised as the negative impact of the
operational challenges described above was offset by strong gold prices. The
recoverable value of Mara Rosa was determined using a FVLCD methodology. No
indicators of impairment were identified at 31 December 2025.
In December 2025, management again 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 decrease in the post-tax discount rate from 18.3%
to 12.5%. The impairment test resulted in a full reversal of the previously
recognised impairment, adjusted for the depreciation that would have been
recorded had the asset not been impaired, amounting to US$13,590,000 in total,
allocated as follows: US$12,794,000 to Property, Plant and Equipment,
US$379,000 to Exploration and Evaluation assets (note 17) and US$417,000 to
Intangible assets (note 18).
The recoverable value of San Jose was determined using a FVLCD methodology.
The key assumptions on which management has based its determination of FVLCD
and the associated recoverable values calculated for the San Jose CGU are gold
and silver prices, future capital requirements, production costs, reserves and
resources (reflected in the production volume), and the discount rate.
Real prices US$ per oz. 2026 2027 2028 2029 Long-term
Gold 4,044 3,845 3,475 3,183 3,000
Silver 48.8 46.1 42.1 37.1 32.0
San Jose
Discount rate (post-tax) 12.5%
Discount rate (pre-tax) 12.9%
The period of four years was used to prepare the cash flow projections of San
Jose mine which is consistent with its estimated 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
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. As the full amount of previous impairments has
been reversed as at 31 December 2025, no reasonable change in any of the key
assumptions would result in an additional reversal of impairment.
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 were
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 was 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 (note 18).
17 Evaluation and exploration assets
Azuca US$000 Monte do Carmo Volcan US$000 Other Total
Mara Rosa US$000 US$000 US$000 US$000
Cost
Balance at 1 January 2024 84,717 1,422 - 65,819 22,907 174,865
Additions(1) 366 1,351 2,891 1,073 3,344 9,025
Acquisition of assets (note 4(b))(1) - 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 24) (85,083) - - - (4,011) (89,094)
Balance at 31 December 2024 - 1,410 83,254 58,838 21,408 164,910
Additions(1) - 2,828 8,942 1,823 4,607 18,200
Foreign exchange effect - - 6,320 6,023 - 12,343
Transfers to property, plant and equipment (note 16) - (2,173) (98,516) - 3 (100,686)
Balance at 31 December 2025 - 2,065 - 66,684 26,018 94,767
Accumulated impairment
Balance at 1 January 2024 66,629 - - 35,511 5,403 107,543
Impairment (note 24) 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 (80,361) - - - (4,011) (84,372)
Balance at 31 December 2024 - - - 31,258 1,349 32,607
Impairment reversal(2) - - - (33,671) (379) (34,050)
Foreign exchange effect - - - 2,413 - 2,413
Balance at 31 December 2025 - - - - 970 970
Net book value as at 31 December 2024 - 1,410 83,254 27,580 20,059 132,303
Net book value as at 31 December 2025 - 2,065 - 66,684 25,048 93,797
( )
(1 ) From the total additions, the payment in cash amounted to US$6,337,000
(2024: US$55,629,000)
(2 ) Impairment reversal related to Volcan amounting to US$43,255,000 in
total, allocated as follows: US$33,671,000 to Exploration and Evaluation
assets and US$9,584,000 to Intangible assets (note 18).
At 31 December 2024 the Group recorded an impairment with respect to
evaluation and exploration assets of the Azuca project of US$13,732,000 (see
note 24).
There were borrowing costs capitalised in evaluation and exploration assets of
US$5,928,000 (2024: US$39,000).
18 Intangible assets
Transmission Water Software Legal rights(3) Royalty intangible assets US$000 Total
line(1) permits(2) licences US$000 US$000
US$000 US$000 US$000
Cost
Balance at 1 January 2024 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 24) - - - - 3,967 3,967
Balance at 31 December 2024 33,374 18,720 2,248 24,617 3,967 82,926
Foreign exchange effect - 1,843 - - - 1,843
Additions - - 165 2,447 - 2,612
Transfers - - - 41 - 41
Disposals - - - (116) - (116)
Addition of royalty intangible asset (note 24) - - - - 4,715 4,715
Balance at 31 December 2025 33,374 20,563 2,413 26,989 8,682 92,021
Accumulated amortisation and impairment
Balance at 1 January 2024 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
Amortisation for the year(4) 908 - 31 1,001 - 1,940
Impairment reversal(5) (408) (9,584) (9) - - (10,001)
Foreign exchange effect - 650 3 1 - 654
Balance at 31 December 2025 20,963 - 2,192 2,732 - 25,887
Net book value as at 31 December 2024 12,911 9,786 81 22,887 3,967 49,632
Net book value as at 31 December 2025 12,411 20,563 221 24,457 8,482 66,134
(1) The transmission line in San Jose is amortised using the units of
production method. At 31 December 2025 the remaining amortisation period is
approximately 4 years (2024: 7 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) Reversal of impairment relating to San Jose of US$417,000 (note 16) and
Volcan of US$9,584,000.
As at 30 June 2025, management identified indicators for a reversal of
impairment for the Volcan project driven by an increase in long-term gold
price assumptions, resulting in the recognition of a partial reversal of
impairment of US$30,779,000.
During the second half of 2025, additional positive market evidence became
available following the completion of the reverse takeover transaction and
concurrent financing on 16 December 2025, which provided an observable
valuation benchmark for the Volcan project (note 4). Based on this
transaction, management concluded that the recoverable amount of the Volcan
CGU exceeded its carrying amount as at 31 December 2025.
Accordingly, the remaining accumulated impairment loss of US$12,476,000 was
fully reversed as at 31 December 2025. Total reversal of impairment for 2025
amounts to US$43,255,000 in total, allocated as follows: US$33,671,000 to
Exploration and Evaluation assets (note 17) and US$9,584,000 to Intangible
assets.
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 as of 31 December 2024 was
determined using a FVLCD methodology. The Group used a value in-situ
methodology, which applies a realisable 'enterprise value' to unprocessed
mineral resources per ounce of resources. The enterprise value used in the
calculation performed as at 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. The estimated recoverable amount is not materially different than its
carrying value.
US$000 As at As at
31 December 2025
31 December 2024
Current carrying value Volcan CGU 87,247 37,366
19 Investment in an associate
The Group retains a 19.45% interest in Aclara Resources Inc. ("Aclara") (2024:
19.50%), 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
2025 2024
US$000 US$000
Current assets 24,908 29,821
Non-current assets 160,081 123,980
Current liabilities (9,571) (6,231)
Non-current liabilities (1,371) (1,415)
Equity 174,047 146,155
Non-controlling interest(1) 19,610 18,603
Equity attributable to shareholders 154,437 127,552
Group's share in equity 19.45% (2024: 19.50%) 30,038 24,873
Fair value adjustment on initial recognition and accumulated adjustments for 13,334 13,125
non-attributable changes to equity(2)
Accumulated impairment - (22,187)
Group's carrying amount of the investment 19.45% (2024: 19.50%) 43,372 15,811
Summarised consolidated statement of profit and loss
Administrative expenses (7,642) (8,239)
Exploration expenses (1,985) (459)
Share of loss of joint venture (432) (115)
Finance income 1,308 1,657
Finance cost (303) (64)
Foreign exchange gain/(loss) 107 (193)
Loss from operations for the year (8,947) (7,413)
Loss from continuing operations attributable to shareholders (8,447) (7,223)
Group's share of loss for the year (1,643) (1,408)
Other comprehensive profit that may be reclassified to profit or loss in
subsequent periods, net of tax
Exchange differences on translating foreign operations 10,373 (12,780)
Total comprehensive profit/(loss) for the year 10,373 (12,780)
Group's share of comprehensive profit/(loss) for the year 2,017 (2,492)
(1 ) On April 17, 2024 Aclara closed a strategic financing of
US$29,027,000 by the company CAP S.A. in Aclara's Chilean subsidiary which
owns the Penco Module and all of Aclara's mining concessions in Chile in
exchange for 20% equity participation in REE UNO Spa which had a corresponding
impact on the Group's equity.
(2) Includes the 20% of the fair value adjustment, estimated by the Group,
of Aclara's exploration and evaluation asset on initial recognition of
US$12,307,000, and other non-attributable changes to equity of US$1,027,000
(31 December 2024: US$12,307,000 and US$818,000 respectively).
The movement of investment in associate is as follows:
Year ended 31 December
2025 2024
US$000 US$000
Beginning balance 15,811 22,927
Impairment reversal/(impairment) 22,187 (5,081)
Share of loss for the period (1,643) (1,408)
Share of comprehensive profit/(loss) for the period 2,017 (2,492)
Capital contribution through private placement 5,000 -
Equity gain in Aclara from CAP strategic financing - 1,865
Ending balance 43,372 15,811
2025
During 2025, both external and internal indicators of a reversal of impairment
were identified for the Group's investment in Aclara. External indicators
included developments in the rare earths market such as the expansion of
Chinese restrictions on rare-earth exports during the year and the resulting
increased focus on establishing non-China supply chains. Internal indicators
included progress in project development, notably the release of the Carina
pre-feasibility study and upgraded Mineral Resource Estimate, continued and
positive advancement of the Penco environmental approval process, the
commitment of up to US$5,000,000 in strategic funding from the U.S.
International Development Finance Corporation, and the decision by the
directors of Aclara to construct a heavy rare earth separation facility in
Louisiana, USA. These factors resulted in a sustained uplift in Aclara's
recoverable value, as reflected by a prolonged increase in the share price
above the cost of the investment.
Therefore, management concluded that the recoverable amount of the investment
exceeded its carrying amount, resulting in the full reversal of the previously
recognised impairment charges of US$22,187,000.
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 and the Group paid US$5,000,000.
The Group reassessed the recoverable value of its investment in Aclara,
adjusting the carrying amount of the investment to reflect the value of the
shares issued in the private placement. As a result, the Group determined an
impairment charge of US$5,081,000 as at 31 December 2024.
The carrying amount of the investment recognised the changes in the Group's
share of net assets of the associate since the acquisition date. The balance
as at 31 December 2025, after recognising the changes in the Group's share of
net assets of the associate and the impairment charge is US$43,372,000 (2024:
US$15,811,000).
The fair value of Aclara shares, based on the market price per share, as at 31
December 2025 amounted to US$67,460,000 (2024: US$10,173,000).
No dividends were received from the associate during 2025 and 2024.
The associate had no contingent liabilities or capital commitments as at 31
December 2025 and 31 December 2024.
20 Financial assets at fair value through OCI
Year ended 31 December
2025 2024
US$000 US$000
Beginning balance 475 460
Fair value change recorded in OCI 96 15
Sales of financial assets (485) -
Ending balance 86 475
( )
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 Trade and other receivables
As at 31 December
2025 2024
Non-current Current Non-current Current
US$000 US$000 US$00 US$000
Trade receivables - 81,373 - 37,238
Advances to suppliers - 8,111 - 13,324
Tax claims 11,369 4,757 8,060 7,826
Funds in escrow(1) - 305 - 14,278
Receivables from related parties (note 32(a)) - 176 - 121
Other(2) 1,245 10,588 3,279 11,619
Total assets classified as receivables 12,614 105,310 11,339 84,406
Prepaid expenses 3,270 5,176 2,764 11,083
Value Added Tax (VAT)(3) 2,776 45,058 4,213 40,325
Total 18,660 155,544 18,316 135,814
The fair values of trade and other receivables approximate their book value.
(1) Represents funds held in escrow in connection with Royropata easements.
(2) Includes account receivables from contractors for the sale of supplies
of US$2,190,000 (2024: US$1,773,000), funds restricted in relation to ongoing
employee legal claims in Minera Santa Cruz of USD$1,250,000 (2024:
USD$549,000), loan to third parties of US$787,000 (2024: US$1,381,000), and ,
net of a provision for impairment of receivables of US$1,045,000 (2024:
US$1,016,000).
(3) Primarily relates to US$19,830,000 (2024: US$18,277,000) 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$6,719,000 (2024: US$6,978,000), and Amarillo Mineracao do
Brasil of US$19,829,000 (2024: US$18,514,000). The VAT is valued at its
recoverable amount. Recovery is effected either through cash refunds, offset
against other tax liabilities or, where permitted, transfer to third parties.
In Argentina, VAT balances are generally expected to be recovered within
approximately six months. In Brazil, PIS and COFINS credits are offset against
income tax and social contributions, while ICMS credits are expected to be
realised through authorised transfers. In Peru, VAT is recoverable through
cash refunds or offset against other taxes. The recovery occurs on a monthly
basis given the entity's ongoing export activities.
As at 31 December 2025 and 2024, none of the financial assets classified as
receivables (net of impairment) were past due.
22 Inventories
As at 31 December
2025 2024
US$000 US$000
Finished goods valued at cost 7,393 1,874
Products in process valued at cost 53,333 23,623
Products in process accrual valued at cost(1) 8,118 8,152
Supplies and spare parts(2) 56,150 58,476
124,994 92,125
Provision for obsolescence of supplies (6,783) (5,038)
Ending balance 118,211 87,087
(1) Corresponds to the estimated production costs from 26 to 31 December
2025 (2024: 26 to 31 December 2024).
(2) Includes in transit inventory of US$342,000 (2024: US$689,000).
Finished goods include concentrate, dore and aggregates. Products in process
include stockpile and precipitates.
The Group either sells dore bars as a finished product or if it is
commercially advantageous to do so, delivers the bars for refining into gold
and silver ounces which are then sold. In the latter scenario, the dore bars
are classified as products in process. At 31 December 2025 and 2024, the Group
had no dore on hand included in products in process.
Concentrate is sold to smelters, but in addition could be used as a product in
process to produce dore.
Products in process accrual valued at cost include stockpile (2024:
stockpile).
As part of the Group's short-term financing policies, it acquires pre-shipment
loans which are guaranteed by the sales contracts. The Group has contracts as
at 31 December 2025 of US$Nil (2024: US$Nil) (note 27).
The amount of expense recognised in profit and loss related to the consumption
of inventory of supplies, spare parts and raw materials in 2025 is
US$147,890,000 (2024: US$140,623,000).
Movements in the provision for obsolescence comprise an increase in the
provision of US$1,745,000 (2024: US$864,000) and the reversal of US$Nil
related to supplies and spare parts, that had been provided for (2024:
US$Nil).
23 Cash and cash equivalents
As at 31 December
Cash and cash equivalents 2025 2024
US$000 US$000
Cash in hand 723 679
Current demand deposit accounts(1) 94,514 94,167
Time deposits(2) 221,717 2,122
Mutual funds - 5
Cash and cash equivalents considered for the statement of cash flows (note 316,954 96,973
2(y))
(1) Relates to bank accounts which are freely available and bear interest.
The balance has checks in transit. Includes US$10,609,000 current demand
deposit accounts restricted to be utilised for advancing the Volcan project
and its related business expenses (2024: US$11,837,000).
(2) These deposits have an average maturity of 6 days (2024: average of 4
days).
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.
24 Assets held for sale
Azuca and Arcata projects
Prior to classifying Arcata and Azuca disposal group as assets and liabilities
related to asset held for sale, as at 30 June 2024, the Group recognised an
impairment of US$13,732,000. The recoverable value of the Azuca and Arcata
project was determined using a FVLCD methodology, based on the proposed
economic terms of sale. In November 2024, the Group entered into an agreement
whereby the third party acquired the assets and liabilities of Arcata and
Azuca from Compañia Minera Ares for US$1,000,000 as a non-refundable cash
payment at closing, and a 1.0% and 1.5% Royalty Net Smelter Return (NSR) for
Arcata and Azuca, respectively. The buyer also took over the environmental
liabilities amounting to US$9,652,000. The Group has provided a guarantee for
the mine closure obligations for up to US$5,778,623 with maturity in January
2026. Upon completion of the transaction on 27 February 2025, the Group
derecognised the assets and liabilities directly associated with assets held
for sale which amounted to US$12,660,000 and US$9,652,000, respectively as at
31 December 2024.
The cash received for the sale of Azuca and Arcata projects was US$1,000,000
net of transaction costs of US$900,000. The gain on sale amounted to
US$416,000 and is recognised in other income. The 1.0% and 1.5% Royalty Net
Smelter Return (NSR) for Arcata and Azuca, respectively was recognised as a
contingent consideration within other rights as an intangible with a fair
value of US$4,715,000 (note 18) at initial recognition and a deferred tax
liability of US$1,390,000 was recognised in connection with the deferred
consideration.
Crespo project
In 2023, the Group entered into an agreement with a third party whereby the
third party would acquire the assets and liabilities of the Crespo project
from Compañia Minera Ares which resulted in the assets and liabilities of
project Crespo being classified as held for sale at 31 December 2023. In March
2024, the Group received US$15,000,000 as a non-refundable cash payment at
closing, and a 1.5% Royalty Net Smelter Return (NSR) over the Crespo project,
recognised as a contingent consideration within other rights as an intangible
with a fair value of US$3,967,000 (note 18) at initial recognition and a
deferred tax liability of US$1,170,000 was recognised in connection with the
deferred consideration. The buyer also took over the environmental liabilities
of the project amounting to US$711,000. Upon completion of sale, the Group
derecognised the asset held for sales amounting to US$17,398,000 and the
liabilities directly associated with assets held for sale amounting to
US$711,000. No profit or loss was generated on the sale. The cash received for
the sale of Crespo project was US$15,000,000 net of transaction costs of
US$1,110,000.
25 Trade and other payables
As at 31 December
2025 2024
Non-current Current Non-current Current
US$000 US$000 US$000 US$000
Trade payables(1) - 112,794 - 126,357
Salaries and wages payable(2) - 40,832 - 37,059
Payment in advance received(3) - 21,615 - 5,002
Taxes and contributions 15 11,902 33 10,718
Guarantee deposits(4) - 8,068 - 7,896
Accounts payable - hedges - 9,022 - 6,943
Mining royalties (note 37) - 1,621 - 1,470
Accounts payable to related parties (note 32(a)) - 313 - 209
Stream Agreements (note (a)) 19,332 - 25,926 -
Lease liabilities (note 26) 6,340 2,647 3,477 3,246
Deferred consideration (note 4(b)) 4,862 - 13,500 -
Other(5) 3,676 10,982 3,565 9,322
Total 34,225 219,796 46,501 208,222
(1) Trade payables relate mainly to the acquisition of materials, supplies
and contractors' services. These payables do not accrue interest and no
guarantees have been granted.
(2) Salaries and wages payable relates to remuneration payable. At 31
December 2025, there was Board members' remuneration payable of US$Nil (2024:
US$Nil) and Long-Term Incentive Plan payable of US$3,845,000 (2024:
US$3,764,000).
(3) Payments in advance received, mainly related to shipments not recognised
as revenue during the period, amounting to US$17,613,000 in Minera Santa Cruz.
(4) 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.
(5) Current balance includes the accrual of the production costs
corresponding to six days of production from 26 to 31 December of US$5,594,000
(2024: US$7,583,000).
(a) Stream Agreements
On 7 November, 2024, the Company completed the acquisition of 100% of the
Monte Do Carmo Project ("MdC") from Cerrado Gold Inc. ("Cerrado"). At Closing,
the Company assumed all liabilities in connection with the Sprott Private
Resource Streaming and Royalty Corp. ("Sprott") secured note and streaming
contract (collectively "Stream Agreements") that Cerrado had entered into with
Sprott.
The US$20,000,000 metals purchase and sale agreement ("Streaming Contract")
provided for the sale and physical delivery to Sprott of 2.25% of metals
produced from MdC, for the duration of the project. The price payable for the
metals is calculated by reference to the London Bullion Market Association
(LBMA) price for gold or silver as applicable, and amounts to 10% of the
reference price. In connection with the Streaming Contract, Cerrado issued a
US$20,000,000 secured Note to Sprott that bears interest at a rate of 10% per
annum, calculated and payable quarterly which will mature on the earlier of
the achievement of commercial production or 14 March 2031 ("Secured Note").
Under the Stream Agreements, if the Board of Directors approves the
construction of a mining operation with a life-of-mine production of less than
1,049,000 ounces of payable gold, the stream percentage on Monte Do Carmo
would increase linearly from its base value of 2.25% following a formula in
the Streaming Contract.
Management determined that the Secured Note and Streaming Contract with Sprott
are closely connected, with the option of Sprott to set off the stream payment
against the Secured Note, on the commencement of production of Monte Do Carmo.
On 30 June 2025, under the terms of the Stream Agreements, the Company
executed the buy down for 50% of the Streaming Contract by paying
US$13,000,000 to Sprott. As a result, the Secured Note is reduced to
US$10,000,000 and the stream percentage is reduced by 50%. The definitive
stream percentage will be determined upon the Board of Directors' approval of
the construction of the mining operation and will be based on the then
available payable gold ounces in the construction mine plan.
The Group has elected to account for the obligations arising from these
agreements at FVTPL. The Secured Note represents a financial liability for the
contractual obligation to repay the remaining principal of US$10,000,000 and
quarterly interest payments in cash. The Stream Agreements meet the definition
of a derivative and are accounted at FVTPL.
The fair value of the Stream Agreements was determined using the expected cash
flow approach, which uses multiple, probability weighted cash flow projections
discounted to present value.
The changes in the liabilities of the Stream Agreements as at 31 December 2025
are shown below:
US$000
At 7 November 2024 26,159
Unrealised change in fair value (note 13) (233)
At 31 December 2024 25,926
Cash payment for the exercise of the buy-down option (13,000)
Gain on execution of the buy-down option (note 13) (1,250)
Unrealised change in fair value (note 13) 7,482
Change in credit risk recognised in other comprehensive income 174
At 31 December 2025 19,332
The key assumptions on which management has based its determination of fair
value of the Stream Agreements are gold prices, and reserves and resources
(reflected in the production volume). The discount rates for the Secured Note
of 6.3% and 7.4% and the Stream Agreement of 8.1% and 9.7% as at 31 December
2025 and 31 December 2024, respectively, (calculated under the WACC
methodology).
As at 31 December 2025:
Real prices US$ per oz. 2028 2029 Long-term
Gold 3,475 3,183 3,000
As at 31 December 2024:
Real prices US$ per oz. 2028 2029 Long-term
Gold 2,248 1,894 2,100
Reasonable possible changes to any of the key assumptions above as at 31
December 2025 would increase/(decrease) the fair value of the Stream
Agreements:
US$000 US$000
Gold price (decrease by 10%) (1,618)
Gold price (increase by 10%) 1,618
Discount rate (increase by 1%) (871)
Discount rate (decrease by 1%) 855
Reserves and resources volume (decrease by 10%) (1,618)
Reserves and resources volume (increase by 10%) 1,618
The fair value of trade and other payables approximate their book values.
26 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:
Year ended 31 December
2025 2024
US$000 US$000
Depreciation expense for right-of-use assets (included in cost of sales, (4,907) (4,514)
administrative, exploration and other expenses)
Interest expense on lease liabilities (included in finance expenses) (581) (582)
Expense relating to short-term leases (included in cost of sales, (1,099) (959)
administrative, exploration and other expenses)
Expense relating to leases of low-value assets (included in cost of sales, (1,706) (769)
administrative, exploration and other expenses)
Variable lease payments (included in cost of sales and exploration expenses) (22,931) (18,942)
Total amount recognised in profit or loss (31,224) (25,766)
The Group had total cash outflows for leases of US$31,235,000 in 2025 (2024:
US$25,714,000). There were additions to right-of-use assets and lease
liabilities during the year of US$7,182,000 (2024: US$7,094,000). The future
cash outflows relating to leases that have not yet commenced are US$10,423,000
(2024: US$7,716,000). 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 2025 and 2024 is as
follows:
As at Additions US$000 Repayments US$000 Interest As at
31 December 2025
1 January expense
US$000 US$000
2025
US$000
Lease liabilities 6,723 7,182 (5,499) 581 8,987
Less: current balance (3,246) (2,647)
Non-current balance 3,477 6,340
As at Additions US$000 Repayments US$000 Interest As at
31 December 2024
1 January expense
US$000 US$000
2024
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
27 Borrowings
As at 31 December
2025 2024
Effective Non-current Current Effective Non-current Current
interest rate US$000 US$000 interest rate US$000 US$000
Secured bank loans (a)
Pre-shipment and other loans in Minera Santa Cruz (note 22) - - - 8.45% to 13.00% - 1,558
Short-term bank loans 4.19% to 5.55% - 112,953 4.58% and 4.88% - 80,210
Medium-term bank loans 4.40% to 6.60% 225,000 1,690 6.82% to 10.04% 163,333 67,481
Total 225,000 114,643 163,333 149,249
(a) Secured bank loans:
Pre-shipment and other loans in Minera Santa Cruz:
- As at 31 December 2025, Minera Santa Cruz has loans of US$Nil (2024:
US$1,486,000) plus interests of US$Nil (2024: US$72,000, with a maturity
between January and March 2025).
Short-term bank loans:
- As at 31 December 2025, Compañia Minera Ares has one loan with Interbank
amounting to US$30,000,000 plus interests of U$618,000 (maturity in December
2026) and one loan with Banco de Credito del Peru amounting to US$60,000,000
plus interests of US$2,291,000 (maturity in January 2026). Amarillo has one
loan with Citibank amounting to US$20,000,000 plus interests of US$44,000
(maturity in February 2026).
- As at 31 December 2024, Compañia Minera Ares had two loans with Interbank
amounting to US$45,000,000 plus interests of U$119,000 (maturity in November
2025) and one loan with BBVA amounting to US$35,000,000 plus interests of
US$91,000 (maturity in February 2025).
Medium-term bank loans:
- In December 2019, a five-year credit agreement was signed between Minera
Ares and Scotiabank Peru S.A.A., The Bank of Nova Scotia and BBVA Securities
Inc, with Hochschild Mining PLC as guarantor amounting to US$200,000,000. In
September 2021, the Group negotiated with the same counterpart a
US$200,000,000 loan to replace the original loan, plus an additional
US$100,000,000 optional loan ("Original Credit agreement"). 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 Ltda. and Compania Minera Ares SAC, and
The Bank of Nova Scotia and BBVA Securities Inc, with Hochschild Mining PLC as
guarantor. The medium-term facility was fully withdrawn as of December 2024
(US$60,000,000 in 2023, and US$140,000,000 in 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%. The Group fully
repaid the US$200,000,000 in 2025. Financial covenants under the agreement
were: (i) Consolidated Leverage Ratio <= 3 and (ii) Consolidated Interest
Coverage Ratio ≥ 4.00.
- In October 2024, an ESG-linked credit agreement for up to US$300,000,000 was
signed between Amarillo Mineracao do Brasil Ltda. and Compania Minera Ares
SAC, and The Bank of Nova Scotia and BBVA Securities Inc, with Hochschild
Mining PLC as guarantor (the New Credit Agreement). The medium-term facility
can be withdrawn until October 2026, and is payable in equal quarterly
instalments from January 2028 through October 2029, with an interest rate of
three-month SOFR plus a spread of 1.95%, which may be reduced to 1.90% if
certain ESG metrics are achieved. A structuring fee of US$1,950,000 was paid
to the lenders and additional US$225,000 was incurred as transaction costs. In
addition, a commitment fee of 0.528% are payable on quarterly instalments for
any amounts remaining undrawn on the facility. During the year the Group paid
$1,559,000 of commitments fees. US$30,000,000 was withdrawn in December 2024
to repay the remaining amount outstanding of the Original Credit Agreement
US$300,000,000 loan, and US$90,000,000 was withdrawn in 2025. The remaining
balance of US$180,000,000 was undrawn as at 31 December 2025. Financial
covenants under the agreement are: (i) Consolidated Leverage Ratio <= 3 and
(ii) Consolidated Interest Coverage Ratio ≥ 4.00.
There have been no breaches of the financial covenants of any interest-bearing
loans and borrowing in the current period.
- As at 31 December 2025, Compañia Minera Ares has one loan with Interbank
amounting to US$5,000,000 plus interests of US$104,000 (maturity in January
2027). Amarillo has one loan with JP Morgan amounting to US$40,000,000 plus
interests of US$104,000 (maturity in June 2027), and one loan with BBVA
amounting to US$60,000,000 plus interests of US$821,000 (maturity in April
2027).
(b) Capitalised borrowing costs:
In 2025, interest expense of US$7,567,000 that is directly attributable to the
construction of Monte do Carmo (US$6,278,000), Mara Rosa (US$376,000) and
Compañía Minera Ares S.A.C. (US$913,000) has been capitalised and is
included in property, plant and equipment within construction in progress and
capital advances (US$1,289,000) and mining property and development costs
(US$116,000), and exploration and evaluation assets (US$6,162,000).
In 2024, 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)).
The carrying value including accrued interest payable of the medium-term bank
loans as at 31 December 2025 is US$226,690,000 (2024: US$230,814,000). The
maturity of non-current borrowings is as follows:
As at 31 December
2025 2024
US$000 US$000
Between 1 and 2 years 105,000 66,667
Between 2 and 5 years 120,000 96,666
Over 5 years -- -
Total 225,000 163,333
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
2025 2024 2025 2024
US$000
US$000 US$000 US$000
Medium-term bank loans 226,690 230,814 220,076 221,560
The movement in borrowings during the years 2025 and 2024 are as follows:
As at Additions US$000 Repayments US$000 Reclassifications As at
1 January and others (1) US$000 31 December 2025
2025 US$000
US$000
Current
Pre-shipment and other loans in Minera Santa Cruz 1,486 - (1,486) - -
Short-term bank loans 80,000 215,000 (185,000) - 110,000
Medium-term bank loans 66,667 - (66,667) - -
Accrued interest 1,096 15,635 (17,703) 5,615 4,643
149,249 230,635 (270,856) 5,615 114,643
Non-current
Medium-term bank loans 163,333 195,000 (133,333) - 225,000
Total current and non-current borrowings 312,582 425,635 (404,189) 5,615 339,643
(1) Reclassifications and others of accrued interests includes
capitalisation of interests of US$7,567,000 (27(b)), offset by transaction
costs of US$1,742,000, and foreign exchange effect of US$210,000.
As at Additions US$000 Repayments US$000 Reclassifications As at
1 January and others(1) 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.
28 Provisions
Provision Long-Term Incentive Workers profit sharing Legal Total
US$000
US$000
for mine Plan claims
closure(1) US$000 US$000
US$000
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 24) (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
At 1 January 2025 159,419 3,937 6,806 11,701 181,863
Additions - 4,157 23,447 3,476 31,080
Accretion (note 13) 3,070 107 - - 3,177
Change in discount rate 3,713 - - - 3,713
Change in estimates 27,445 - - - 27,445
Foreign exchange effect - - - 468 468
Transfer to other payables - (3,845) (239) - (,084)
Payments (15,829) - (8,845) (1,641) (26,315)
At 31 December 2025 177,818 4,356 21,169 14,004 217,347
Less: current portion (28,880) - (21,169) (5,406) (55,455)
Non-current portion 148,938 4,356 - 8,598 161,892
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 2025
and 2024 respectively, and the cash flows have been adjusted to reflect the
risk attached to these cash flows. Uncertainties on the timing for use of this
provision include changes in the future that could impact the time of closing
the mines, as new resources and reserves are discovered, 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 1.59% (2024: 2.00%).
Expected cash flows will be over a period from one to 25 years (2024: over a
period from one to 25 years).
During the year the Company revised certain estimates related to its mine
closure provision, mainly associated with the Sipan, Selene and Ares units,
which are currently in the closure phase. The change primarily reflects
updated cost assumptions and the inclusion of additional capital and operating
costs related to water treatment activities.
Based on the internal and external reviews of mine rehabilitation estimates,
the provision for mine closure increased by US$27,445,000 due to the change in
estimates and increased by US$3,713,000 due to the change in the discount
rate, as follows:
Change in estimate Change in discount rate Timing of expected outflows
Years
31 December 2025 31 December 2024 31 December 2025 31 December
2024
Arcata - (1) - (7) -
Ares 5,997 10,323 434 99 2026-2036
Sipan 7,405 4,242 465 25 2026-2037
Selene 8,982 144 740 (108) 2026-2033
Recognised in the consolidated income statement 22,384 14,708 1,639 9
Pallancata (934) (789) (75) (417) 2026, 2037- 2049
Matarani - (30) 6 (10) 2036- 2041
Azuca - - - (2) -
Inmaculada 724 3,229 383 (2,126) 2026-2050
San Jose 3,140 419 1,434 (613) 2027-2042
Mara Rosa 2,131 1,268 326 (568) 2037-2045
Recognised in property, plant and equipment 5,061 4,097 2,074 (3,736)
Total 27,445 18,805 3,713 (3,727)
A change in any of the following key assumptions used to determine the
provision would have the following impact:
As at 31 December 2025 US$000
Closure costs (increase by 10%) increase of provision 17,782
Discount rate (increase by 0.5%) (decrease of provision) (6,631)
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 2031 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
2024 awards, granted in March 2024, payable in March 2027 and the 2025 awards,
granted in March 2025, payable in March 2028. The 2023 awards which are
payable in 2026 have a value of US$3,845,000 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 2025 As at 31 December 2024
LTIP 2024 LTIP 2025 LTIP 2023 LTIP 2024
US$000 US$000 US$000 US$000
Dividend yield (%) 0 0 0 0
Expected annual volatility (%) 44.77 44.77 47.46 47.46
Risk-free interest rate (%) 3.59 3.55 4.77 4.77
Expected life (years) 1 2 1 2
Weighted average share price (pence £) 95.99 216.77 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 Legal Claims
The non-current balance of US$8,598,000 (2024: US$6,224,000) mainly
corresponds to labour lawsuits in Minera Santa Cruz of US$5,405,000 and legal
claims in Compañia Minera Ares of US$2,440,000 (2024: US$Nil); the Group
expect to resolve in a period of more than one year. Current contingencies
mainly includes the balance of Compañia Minera Ares of US$4,611,000 (2024:
US$3,002,000) related to administrative fines.
29 Equity
(a) Share capital and share premium
Issued share capital
The issued share capital of the Company as at 31 December 2025 and 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 2024 to 31
December 2025 is as follows:
Number of ordinary shares Share capital US$000
Shares issued as at 31 December 2024 514,458,432 9,068
Shares issued as at 31 December 2025 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 (note 28(2)). As at 31 December
2025 the balance is US$Nil (2024: US$Nil)
30 Deferred income tax
The net deferred income tax assets/(liabilities) are as follows:
Year ended 31 December
2025 2024
US$000 US$000
Beginning of the year (54,827) (66,276)
Income statement benefit/(expense) (note 14) 23,955 (14,409)
Deferred tax recognised on items in other comprehensive income(1) 51,971 27,620
Deferred tax recognised related to Monte do Carmo acquisition - 2,817
Reclassification of deferred tax to assets held for sale - (3,409)
Deferred tax recognised on disposal of Azuca and Arcata projects (note 24) (1,390) -
Deferred tax recognised on disposition of Crespo project (note 24) - (1,170)
End of the year 19,709 (54,827)
(1) The deferred tax recovery for items that will be subsequently reclassified
to profit and loss is US$51,749,000 (2024: US$28,473,000).
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 2024 47,112 86,670 - 8,452 142,234
Income statement expense/(benefit) 7,895 12,852 19 (2,077) 18,419
Reclassification to assets held for sale - 3,262 - - 3,262
At 31 December 2024 55,007 102,514 19 6,375 163,915
Income statement expense/(benefit) (1,150) 8,975 (19) (869) 6,937
Reclassification to assets held for sale - 1,390 - - 1,390
At 31 December 2025 53,857 112,879 - 5,506 172,242
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 2024 17,279 34,774 146 7,402 16,357 75,958
Income statement benefit/(expense) (4,261) (8,306) (242) (2,933) 18,582 2,840
Reclassification to assets held for sale (147) - - - - (147)
Deferred tax recognised related to the Monte do - - 1,918 - 899 2,817
Carmo acquisition
Deferred tax recognised on items in other comprehensive income - - - - 27,620 27,620
At 31 December 2024 12,871 26,468 1,822 4,469 63,458 109,088
Income statement benefit/(expense) 6,000 6,250 (719) 6,823 12,538 30,892
Deferred tax recognised on items in other comprehensive income - - - - 51,971 51,971
At 31 December 2025 18,871 32,718 1,103 11,292 127,967 191,951
(1) Credit/(charge) in the year mainly related to the balance of hedges of
US$95,185,000 (2024 hedges of US$34,445,000), exchange difference credit on
cash basis of US$2,752,000 (2024: credit of US$13,239,000), statutory holiday
provision of US$934,000 (2024: US$875,000) and Long-Term Incentive Plan of
US$2,372,000 (2024: US$2,065,000).
The amounts after offset, as presented on the face of the statement of
financial position, are as follows:
As at 31 December
2025 2024
US$000 US$000
Deferred income tax assets 105,137 27,677
Deferred income tax liabilities (85,428) (82,504)
Total 19,709 (54,827)
In accordance with IAS 12, management has assessed the recoverability of the
deferred tax asset with reference to projected future taxable profits. Based
on this assessment, a deferred tax asset of US$95,185,000 has been recognised
in respect of unrealised hedge losses (2024: US$30,506,000) and US$10,384,000
in respect of tax losses (2024: US$4,469,000) in Brazil (Amarillo Mineração
do Brasil). Tax losses in Brazil may be carried forward indefinitely; however,
their utilisation in any given period is limited to 30% of the taxable income
for that period. Losses in 2025 amounted to $30,540,000 in Brazil, resulting
from operational challenges at Mara Rosa. Remediation initiatives implemented
during the year have strengthened operational processes and workforce
stability, supporting more consistent operations. Based on future financial
and tax projections, management considers it probable that sufficient taxable
profits will be available in the relevant periods to utilise these deductible
temporary differences and unused tax losses.
Tax losses expire in the following years:
As at 31 December
2025 2024
US$000 US$000
Recognised
Expire in four years 3,077 -
Without expiration 30,540 13,145
33,617 13,145
Unrecognised
Expire in one year 766 1,040
Expire in two years 1,196 766
Expire in three years 43 1,196
Expire in four years - 43
Expire after four years 217,114 200,155
219,119 203,200
Total 252,736 216,345
Other unrecognised deferred income tax assets comprise (gross amounts):
As at 31 December
2025 2024
US$000 US$000
Provision for mine closure(1) 14,399 16,633
(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 2025 and 2024, 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.
31 Dividends
Year ended 31 December
2025 2024
US$000 US$000
Dividends paid and proposed during the year
Dividends on ordinary shares:
Final dividend for 2024:1.94 US$ cents per share (2023: Nil US$ cents per 10,050 -
share)
Interim dividend for 2025: 1.00 US$ cents per share (2024: Nil US$ cents per 5,145 -
share)
Total dividends paid in cash 15,195 -
Proposed dividends on ordinary share
Final dividend for 2025: 5.00 US$ cents per share (2024: 1.94 US$ cents per 25,723 10,000
share)
Dividends declared to non-controlling interests: 0.013 US$ per share (2024: 2,246 388
0.002 US$ per share)
Total dividends declared to non-controlling interests 2,246 388
Dividends paid in 2025 to non-controlling interests amounted to US$2,246,000
(2024: US$388,000).
Dividends per share
The proposed final dividend in respect of the year ending 31 December 2025 is
5.00 US$ cents per share (2024: US$1.94).
32 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 2025 and 2024. 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
2025 2024 2025 2024
US$000 US$000 US$000 US$000
Current related party balances
Cementos Pacasmayo S.A.A.(1) 172 73 105 60
UTEC(2) - - 202 -
Tecsup(2) - 30 6 149
REE UNO SpA(3) - 18 - -
Aclara Resources Inc. (3) 2 - - -
Aclara Resources Peru(3) 2 - - -
Total 176 121 313 209
(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 2025 and 2024, 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
2025 2024
US$000 US$000
Expenses
Expense recognised for the rental and services paid to Cementos Pacasmayo (503) (505)
S.A.A.
Expense donation Asociacion Amanatari(1) (160) (80)
Expense scholarship to UTEC (94) (371)
Expense sponsorships to UTEC (5) -
Expense donations to UTEC (202) -
Expense research project with UTEC - (19)
Expense technical services from Tecsup (30) (159)
Income from administrative services to REE UNO SpA 22 40
Income from reimbursement of security costs of Cementos Pacasmayo S.A.A. 881 676
Income from administrative services to Aclara Resources Peru 11 11
Revenue from sale of dore to Farragut Holdings Inc.(2) - 72
( )
(1) Peruvian non-for-profit institution controlled by Eduardo Hochschild.
(2) Cayman Island Company 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) 2025 2024
US$000 US$000
Short-term employee benefits 7,611 6,570
Long-Term Incentive Plans 1,888 1,714
Total compensation paid to key management personnel 9,499 8,284
This amount includes the remuneration paid to the Directors of the Parent
Company of the Group of US$4,601,000 (2024: US$3,482,000).
33 Auditor's remuneration
The auditor's remuneration for services provided to the Group during the years
ended 31 December 2025 and 2024 is as follows:
Amounts paid to Ernst & Young
in the year ended 31 December
2025 2024
US$000 US$000
Audit fees pursuant to legislation(1) 1,661 1,561
Audit related assurance services 341 150
Other assurance services 15 24
Total 2,017 1,735
(1) The total fee includes audit fees of US$635,000 in respect of local
statutory audits of subsidiaries (2024: US$560,000).
Audit fees might be different from those previously reported as they might
include additional out of scope fees and out of pocket expenses. In 2025 and
2024, all fees are included in administrative expenses.
34 Notes to the statement of cash flows
Year ended at 31 December
2025 2024
US$000 US$000
Reconciliation of loss for the year to net cash generated from operating
activities
Profit for the year 247,402 113,749
Adjustments to reconcile Group loss to net cash inflows from operating
activities
Depreciation (note 3(a)) 174,552 158,649
Amortisation of intangibles (note 3(a)) 1,940 1,579
Write-off of assets (note 16) 4,074 3,883
Provision of doubtful receivable 180 245
(Reversal of impairment)/ impairment of assets (note 11) (56,845) 13,732
Share of post-tax (gain)/losses and impairment of associates (note 19) (20,544) 6,489
Gain on sale of property, plant and equipment (note 12) (377) (656)
Provision for obsolescence of supplies (notes 12 and 22) 1,745 864
Increase of provision for mine closure (note 12) 24,023 14,717
Loss on discontinuation of hedge relationship (note 38(a)) 26,427 -
Finance income (note 13) (11,826) (13,097)
Finance costs (note 13) 41,112 26,928
Income tax expense (note 14) 125,422 63,468
Other 6,633 3,351
Increase/(decrease) of cash flows from operations due to changes in assets and
liabilities
Trade and other receivables (56,257) (79,788)
Income tax receivable (1,456) (2,813)
Other financial assets and liabilities 12,477 (2,410)
Inventories (31,767) (21,161)
Trade and other payables (26,090) 70,282
Provisions 13,068 7,029
Cash generated from operations 473,893 365,040
35 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 2025 and 31 December 2024.
(b) Capital commitments
As at 31 December
2025 2024
US$000 US$000
Peru 7,654 26,527
Argentina 477 1,733
Brazil 9,894 -
18,025 28,260
36 Contingencies
The Group is subject to various claims which arise in the ordinary course of
business. In addition, the Group is subject to various laws and regulations
which, if not observed, could give rise to penalties. It is not practical to
determine the amount of any potential claims or penalties or the likelihood of
any unfavourable outcome arising from any future inspections that might be
initiated by the regulators. No provision has been made in the financial
statements and none of these claims are currently expected to result in any
material loss to the Group.
(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 2025, the Group had exposures
totalling US$19,520,000 (2024: US$17,077,000).
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 28(1)).
37 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 2025, the amount payable as under the new mining royalty and
the SMT amounted to US$6,125,000 (2024: US$1,717,000) and US$5,326,000 (2024:
US$1,742,000) 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$14,974,000 (2024: US$7,108,000) of new
mining royalty and US$13,656,000 (2024: US$7,051,000) 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 2025, the amount payable as
mining royalties amounted to US$1,432,000 (2024: US$970,000). The amount
recorded in the income statement as cost of sales was US$10,631,000 (2024:
US$7,331,000).
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 2025, the amount payable as mining
royalties is US$189,000 (2024: US$500,000). The amount recorded in the income
statement as cost of sales was US$2,024,000 (2024: US$2,363,000).
38 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, such as entering into hedging agreements, where
appropriate and within Board approved parameters, to mitigate the impact of
this risk.
Derivative financial assets -Gold forwards and zero cost collars
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 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.
On 6 August 2025 the Group renegotiated the gold forward hedge agreement to
roll forward 20,813 ounces from August to December 2025 to the first semester
of 2028, at a gold price of US$2,150 per ounce (US$2,117 per ounce in the
original agreement). No cashflows resulted from the renegotiation of the
agreements.
The forwards and zero cost collars are being used to hedge exposure to changes
in cash flows from gold commodity prices. There is an economic relationship
between the hedged item and the hedging instruments due to a common
underlying. In accordance with IFRS 9, the derivative instruments are
categorised as cash flow hedges at the inception of the hedging relationship
and, on an ongoing basis, the Group assesses whether a hedging relationship
meets the hedge effectiveness requirements. The Group has established a hedge
ratio of 1:1 for the hedging relationships as the underlying risk of the
silver and gold forwards and zero cost collars is identical to the hedged risk
components. To test the hedge effectiveness, the Group uses the hypothetical
derivative method and compares the changes in the fair value of the gold and
silver forwards against the changes in fair value of the hedged item
attributable to the hedged risk. That said, it is observed that the
effectiveness tests comply with the requirements of IFRS 9 and that the
hedging strategy is highly effective.
The fair values of the gold 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 SOFR swap curve for discounting.
This approach results in the fair value measurement categorised in its
entirety as level 2 in the fair value hierarchy. The fair values of the gold
forwards as at 31 December 2025 and 31 December 2024 are as follows:
As at As at
31 December 2025 US$000
31 December 2024 US$000
Current liabilities (111,567) (40,276)
Non-current liabilities (165,157) (61,343)
(276,724) (101,619)
The effect recorded is as follows:
Year ended Year ended
31 December 2025
31 December 2024
US$000
US$000
Income statement - revenue
- Loss on realised hedges (86,048) (27,903)
- Loss on discontinuation of hedge relationship(1) (26,427) -
Income statement - finance income 1,817 866
Equity - Cashflow hedges reserve
- Unrealised loss on hedges 176,860 85,560
- Loss on discontinuation of hedge relationship(1) (26,427) -
( )
(1) In August 2025, the Group renegotiated the gold forward hedge agreement
resulting in the extension of 20,813 ounces from August to December 2025 to
the first semester of 2028. At the date of the roll-forward, the fair value of
these instruments amounted to a liability of US$26,427,000. In accordance with
IFRS 9, the accumulated loss recognised in the cash flow hedge reserve within
equity, was reclassified to the income statement following the discontinuation
of the original hedge relationship and the realisation of the hedged item.
Given the non-recurring and non-cash nature of this hedge accounting
reclassification to the income statement, and the fact that the cash
settlement will occur in 2028 once the instruments mature, the resulting
charge has been presented as an exceptional item within revenue.
The sensitivity of the fair value of the current hedges outstanding at 31
December 2025 to a reasonable movement in gold prices, with all other
variables held constant, determined as a +/-10% change in gold prices -/+
US$50,627,000 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 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$000
2025 Gold +/-10% +/-2,243
Silver+/-10% +/-3,310
2024 Gold +/-10% +/-530
Silver+/-10% +/-302
( )
(b) Foreign currency risk
The Group produces silver and gold which are typically priced in US$ 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
2025
Argentinian pesos +/-10% -/+10,135 -
Mexican pesos +/-10% +/-78 -
Peruvian nuevos soles +/-10% -/+14,703 -
Reais +/-10% -/+1,056 -
Pounds sterling +/-10% -/+104 -
Canadian dollars +/-10% +/-656 -
Chilean pesos +/-10% +/-604 -
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 -
(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 2025 and 31 December 2024:
Summary commercial partners As at % collected as at 10 March 2026 As at % collected as at 11 March 2025
31 December 2025 US$000 31 December 2024 US$000
US$000 US$000
Trade receivables 81,373 61% 37,238 66%
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
2025 2024
US$000 US$000
A+ 36,089 -
A 251,723 343
AAA 4,658 -
A- - 19,177
AA- 17,187 -
BBB+ - 71,810
BBB- 2,490 -
Not available 4,807 5,643
Total 316,954 96,973
(1) Represents the long-term credit rating as at 3 January 2026 (2023: 3
January 2025).
As at 31 December 2025, the credit rating of the counterparties of the gold
hedges is A+ (2024: A- and BBB+).
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
21, 23 and 38(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 2025 and 2024, the Group held the following financial
instruments measured at fair value:
31 December 2025 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) 86 86
Trade receivables (note 21) 81,373 81,373
Stream Agreements (note 25(a)) (19,332) (19,332)
Derivative financial liabilities(1) (289,789) (289,789)
( )
(1) Includes US$276,724,000 related to hedging instruments, and US$13,065,000
related to the warrants issued in connection with Tiernan´s Private Placement
and Railtown´s legacy options and warrants.
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 21) 37,238 37,238
Mutual funds 5 5
Bonds in Minera Santa Cruz S.A. 2,474 2,474
Stream Agreements (note 25(a)) (25,926) (25,926)
Derivative financial liabilities (101,619) (101,619)
During the year ended 31 December 2025 and 2024, 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$000
Balance at 1 January 2024 29,421
Net change in trade receivables from goods sold 11,892
Changes in fair value of price adjustments (note 5) 8,209
Realised price adjustments during the year (12,284)
Balance at 31 December 2024 37,238
Net change in trade receivables from goods sold 22,720
Changes in fair value of price adjustments (note 5) 55,528
Realised price adjustments during the year (34,113)
Balance at 31 December 2025 81,373
The impact of the hedging instrument and hedge item on the statement of
financial position is as follows:
ounces Average price US$/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
2025
Gold forward and zero cost collar contracts 120,832 From 2,117 to 2,206 Derivative financial liabilities (276,724) (167,317) (167,317)
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)
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.
Derivative financial liabilities - Warrants and Railtown's legacy options and
warrants
As at As at
31 December 2025 US$000
31 December 2024 US$000
Non-current liabilities - Warrants (note 4(a)) (11,920) -
Non- current liabilities - Railtown's legacy options and warrants (note 4(a) (1,145) -
(13,065) -
The effect recorded is as follows:
Year ended Year ended
31 December 2025
31 December 2024
US$000
US$000
Income statement - finance cost(1) (7,831) -
( )
(1) Represents the loss arising from changes in the fair value of warrants
classified as derivative financial liabilities of US$7,365,000 (note 4) and
change in fair value of Railtown's legacy options and warrants of US$466,000.
The fair value of the warrants as at 31 December 2025 was determined using the
Black-Scholes option pricing model, based on the following key assumptions:
exercise price of C$6.50, expiry date of 16 December 2027, risk-free interest
rate of 2.58%, country risk premium of 0.83%, expected volatility of 61.44%,
dividend yield of 0%, and share price of C$7.15.
The reconciliation of the warrants issued in Tiernan in connection with the
Treasury Offering and the Secondary Offering (note 4(a)) is as follow:
Derivative financial liabilities
US$000
Balance at 1 January 2025 -
Warrants issued due to the Treasury Offering and Secondary Offering 4,542
Fair value adjustment 7,365
Foreign exchange effect 13
Balance at 31 December 2025 11,920
The sensitivity of the value of the warrants is as follows:
US$000
Annual volatility (increase by 5%) 681
Annual volatility (decrease by 5%) (724)
Share price (increase by 5%) 1,107
Share price (decrease by 5%) (1,107)
Impact of hedging on equity
Set out below is the reconciliation of each component of equity and the
analysis of other comprehensive income:
Gold
hedges
US$000
Balance at 1 January 2024 (11,546)
Reclassification adjustments for items included in the income statement on
realisation:
Transfer to sales (revenue) 27,903
Revaluation arising on the year (113,463)
Movement in deferred tax 28,473
Balance at 31 December 2024 (68,633)
Reclassification adjustments for items included in the income statement on
realisation:
Transfer to sales (revenue) 86,048
Revaluation arising on the year (262,908)
Loss on discontinuation of hedge relationship(1) 26,427
Movement in deferred tax 51,749
Balance at 31 December 2025 (167,317)
( )
(1) In August 2025, the Group renegotiated the gold forward hedge agreement
resulting in the extension of 20,813 ounces from August to December 2025 to
the first semester of 2028. At the date of the roll-forward, the fair value of
these instruments amounted to a liability of US$26,427,000. In accordance with
IFRS 9, the accumulated loss recognised in the cash flow hedge reserve within
equity, was reclassified to the income statement following the discontinuation
of the original hedge relationship and the realisation of the hedged item.
Given the non-recurring and non-cash nature of this hedge accounting
reclassification to the income statement, and the fact that the cash
settlement will occur in 2028 once the instruments mature, the resulting
charge has been presented as an exceptional item within revenue.
(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 2025
Trade and other payables 199,826 15,016 20,000 - 234,842
Derivative financial liabilities 112,863 115,638 51,437 - 279,938
Borrowings 127,353 114,767 126,684 - 368,804
Total 440,042 245,421 198,121 - 883,584
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
(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 2025
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 221,717(1) - - - 221,717
Liabilities (90,000) (5,000) - - (95,000)
Floating rate
Liabilities (20,000) (100,000) (120,000) - (240,000)
( )
(1) The increase is explained due to higher time deposits held in Minera Santa
Cruz and Compañia Minera Ares (note 23).
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)
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 +/-200bps change in interest rates has a -/+US$4,700,000
effect on profit before tax (2024: -/+US$5,660,000). The Group is exposed to
fluctuations in market interest rates.
This assumes that the amount remains unchanged from that in place at 31
December 2025 and 2024 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 27 and 29).
In 2025 the Group received proceeds from borrowings of US$410,000,000 (2024:
US$311,607,000) whilst US$386,486,000 (2024: US$340,991,000) was repaid. In
2024 the Group closed a US$300,000,000 medium-term committed debt facility
with Scotiabank and BBVA and used US$90,000,000 in 2025.
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.
Profit by Operation(1)
(Segment report reconciliation) as at 31 December 2025
Group (US$000) Inmaculada San Jose Mara Rosa Consolidation adjustment and others Total/HOC
Revenue 667,913 436,522 77,562 151 1,182,148
Cost of sales (pre consolidation) (312,697) (252,238) (108,189) (4,815) (677,939)
Consolidation adjustment 2,545 (106) (7,254) 4,815 -
Cost of sales (post consolidation) (310,152) (252,344) (115,443) - (677,939)
Production cost excluding depreciation and amortisation (199,360) (206,007) (102,657) - (508,024)
Depreciation in production cost (103,575) (50,569) (19,433) - (173,577)
Workers profit sharing (15,512) - - - (15,512)
Other items - - (16,312) - (16,312)
Change in inventories 8,295 4,232 22,959 - 35,486
Gross profit/(loss) 355,216 184,284 (30,627) (4,664) 504,209
Administrative expenses - - - (55,604) (55,604)
Exploration expenses - - - (28,695) (28,695)
Selling expenses (657) (20,225) (1,040) - (21,922)
Other expenses, net - - - (65,238) (65,238)
Operating profit/(loss) before impairment 354,559 164,059 (31,667) (154,201) 332,750
Impairment reversal of non-current assets, net - - - 52,771 52,771
Share of post-tax losses from associate - - - 20,544 20,544
Finance income - 11,826 11,826
Finance costs - - - (41,112) (41,112)
Foreign exchange loss - - - (3,955) (3,955)
Profit/(loss) from operations before income tax 354,559 164,059 (31,667) (114,127) 372,824
Income tax expense - - - (125,422) (125,422)
Profit/(loss) for the year from operations 354,559 164,059 (31,667) (239,549) 247,402
(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 internally employs a Competent Person who has estimated
reserves and mineral resources as at 31 December 2025 for the operating mines
as shown in this report. The 2024 estimates were audited 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 2025. 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$2,250 per ounce and Ag Price: US$27.0
per ounce for Inmaculada and Mara Rosa; Au Price: US$2,750 per ounce and Ag
Price: US$31.0 per ounce for San Jose. The prices used for resources
calculation were: Au: $2,900/oz and Ag: $32.0/oz and Ag/Au ratio of 83x.
ATTRIBUTABLE METAL RESERVES AS AT 31 DECEMBER 2025
Reserve category Proved and probable Ag Au Ag Au Ag Eq Au Eq
(t) (g/t) (g/t) (moz) (koz) (moz) (koz)
OPERATIONS
Inmaculada
Proved 2,356,147 90 2.30 6.8 174.5 21.3 256
Probable 3,136,223 92 2.11 9.3 213.1 27.0 325
Total 5,492,370 91 2.19 16.1 387.5 48.3 581
San Jose
Proved 513,932 199 3.72 3.3 61.5 8.4 101
Probable 372,956 175 3.69 2.1 44.3 5.8 70
Total 886,888 189 3.71 5.4 105.7 14.2 171
Mara Rosa
Proved 5,009,170 - 1.06 - 170.5 14.1 170
Probable 24,446,843 - 0.95 - 746.9 62.0 747
Total 29,456,013 - 0.97 - 917.4 76.1 917
GROWTH PROJECTS
Monte Do Carmo(1)
Proved 2,015,000 - 1.68 - 109.0 9.0 109
Probable 14,780,000 - 1.66 - 787.0 65.3 787
Total 16,795,000 - 1.66 - 896.0 74.4 896
GRAND TOTAL
Proved 9,894,249 32 1.62 10.1 515.4 52.9 637
Probable 42,736,022 8 1.30 11.4 1,791.2 160.1 1,928
TOTAL 52,630,270 13 1.36 21.5 2,306.6 212.9 2,565
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)The prices used for Monte Do Carmo reserves calculation were from 2024
Reserve statement assumptions: Au: $1,750/oz
ATTRIBUTABLE METAL RESOURCES AS AT 31 DECEMBER 2025( )(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
Inmaculada
Measured 4,984,000 98 2.46 302 15.7 394.3 48.5 584
Indicated 6,151,000 100 2.29 290 19.8 452.4 57.3 691
Total 11,135,000 99 2.37 296 35.5 846.7 105.8 1,275
Inferred 19,868,000 93 2.39 292 59.6 1,525.4 186.2 2,244
Pallancata
Measured 1,052,000 293 1.26 397 9.9 42.6 13.4 162
Indicated 2,858,000 466 1.53 593 42.8 140.4 54.5 657
Total 3,910,000 420 1.46 540 52.7 183.0 67.9 819
Inferred 11,898,000 409 1.57 539 156.3 601.8 206.2 2,485
San Jose
Measured 868,530 341 5.73 817 9.5 160.1 22.8 275
Indicated 595,170 242 4.55 619 4.6 87.1 11.8 143
Total 1,463,700 301 5.25 737 14.2 247.2 34.7 418
Inferred 1,359,660 222 3.81 538 9.7 166.7 23.5 283
Mara Rosa
Measured 5,965,000 - 0.98 81 - 187.9 15.6 188
Indicated 31,993,000 - 0.87 72 - 898.1 74.5 898
Total 37,958,000 - 0.89 74 - 1,086.0 90.1 1,086
Inferred 9,353,000 - 0.72 60 - 217.1 18.0 217
GROWTH PROJECTS
Monte Do Carmo(2)
Measured 2,056,000 - 1.73 144 - 115.0 9.5 115
Indicated 16,302,000 - 1.71 142 - 897.0 74.5 897
Total 18,358,000 - 1.72 143 - 1,012.0 84.0 1,012
Inferred 1,053,000 - 1.95 162 - 66.0 5.5 66
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
GRAND TOTAL
Measured 138,904,530 8 0.83 76 35.2 3,692.0 341.6 4,116
Indicated 397,173,170 5 0.74 67 67.3 9,487.9 854.8 10,298
Total 536,077,700 6 0.76 69 102.4 13,178.9 1,196.3 14,413
Inferred 118,549,660 59 1.00 142 225.6 3,823.0 542.9 6,541
(1)Tables represents 100% of the Mineral Resources. Resources are inclusive of
Reserves.
(2)The prices used for Monte Do Carmo resources calculation were from 2024
Resource statement assumptions: Au: $2,100/oz
( )
CHANGE IN ATTRIBUTABLE RESERVES AND RESOURCES
Ag equivalent content (million ounces) Category Percentage attributable December December 2025 Net % change
December 2024 Att.(1) difference
2025 Att.(1)
Inmaculada Resource 100% 271.6 292.0 20.4 7.5%
Reserve 47.1 48.3 1.1 2.4%
Pallancata Resource 100% 191.8 274.2 82.4 43.0%
Reserve - - - -
San Jose Resource 51% 69.8 58.2 (11.7) (16.7%)
Reserve 13.1 14.2 1.0 7.9%
Mara Rosa Resource 100% 105.9 108.2 2.3 2.2%
Reserve 71.8 76.1 4.4 6.1%
Monte Do Carmo Resource 100% 89.5 89.5 - -
Reserve 74.4 74.4 - -
Volcan Resource 69.8% 917.2 917.2 - -
Reserve - - - -
Total Resource 1,645.7 1,739.2 93.5 5.7%
Reserve 206.4 212.9 6.6 3.2%
(1) Attributable reserves and resources based on the Group's percentage
ownership of its joint venture projects. 2024 silver equivalent figures have
been re-presented using a Ag/Au ratio of 83x (previously calculated at Ag/Au
ratio of 75x).
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 26 May 2026 in respect of the
2025 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 2025 final
dividend, a dividend mandate form, also available from the Company's
registrars, should be completed and returned to the registrars by 26 May 2026.
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 visit uk.investorcentre.mpms.mufg.com or use
the Investor Centre app. You will need 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 7 May 2026
Record Date 8 May 2026
Pay Date 16 June 2026
Dividend Type Final
Dividend Amount and Currency 5.00 US cents 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 26 May 2026
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 is reported in the financial statements net of
commercial discounts, plus revenue from the sale of aggregates and services
revenue
2 (#_ftnref2) Revenue (pre-exceptional) is reported in the financial
statements net of commercial discounts, plus revenue from the sale of
aggregates and services revenue, and excludes the non-cash recycling of $26.4
million of accumulated losses related to the roll-forward of gold hedges.
(3)Adjusted EBITDA, net debt and AISC are non-IFRS measures. Please see the
Financial Review pages 20-23 for a definition and calculation of Adjusted
EBITDA, net debt and Attributable AISC. The Company has calculated its all-in
sustaining cost on an attributable basis and excludes Peruvian royalties which
are recognised in the income tax line. Management believes that the updated
methodology better aligns with prevailing industry practices and enhances
comparability with peers. All previous periods have been re-presented to
reflect this change
(4)Please see the Financial Review page 23 for the calculation of the final
proposed dividend
5 (#_ftnref5) 2025 and 2024 equivalent figures calculated using the
gold/silver ratio of 83x
6 (#_ftnref6) FY 2024 environmental KPIs exclude Mara Rosa due to
construction and commissioning activities which occurred prior to May 2024.
2025 environmental KPIs include Mara Rosa
7 (#_ftnref7) Calculated as total number of accidents per million labour
hours
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) 2026 equivalent figures calculated using the gold/silver ratio
of 77x
10 (#_ftnref10) All forecast equivalent figures assume a gold/silver ratio
of 77x
11 (#_ftnref11) Excludes Peruvian royalties which are recognised in the
income tax line. Management believes that the updated methodology better
aligns with prevailing industry practices and enhances comparability with
peers. All previous periods have been re-presented to reflect this change
12 (#_ftnref12) Includes revenue from services of $0.4 million in 2025
(2024: $0.4 million), and aggregate sales in Mara Rosa of $1.4 million in
2025. Gross revenue is the net revenue plus commercial discounts from the sale
of concentrates. and non-cash hedged items
13 (#_ftnref13) Includes cost of sale of aggregates of $1.1 million and cost
of services of $0.1 million
14 (#_ftnref14) Unit cost per tonne is a non-IFRS measure. It is calculated
by dividing mine and treatment production costs (excluding depreciation and
amortisation) of $275.2 million and $228.2 million respectively, by extracted
and treated tonnage of 3,849k and 3,502k respectively
(( 15 (#_ftnref15) ))Other adjustments include: fixed costs during
operational stoppages and reduced capacity in Mara Rosa of $15.1 million, cost
of sale of aggregates of $1.1 million in Mara Rosa, and cost of energy
transmission services of $0.1 million in Inmaculada
16 (#_ftnref16) Includes commercial discounts (from the sales of
concentrate) and commercial discounts from the sale of dore
17 (#_ftnref17) Excludes: revenue from sale of aggregates of $1.4 million
(2024: $nil), energy transmission services of $0.4 million (2024: $0.4
million), and pre-commercial revenue in Mara Rosa in 2024 of $4.6 million
(( 18 (#_ftnref18) ))Excludes pre-commercial selling expenses of $0.1
million, commercial deductions of $0.1 million
(( 19 (#_ftnref19) ))Mainly includes final adjustments to Pallancata's
shipments that occurred in the last quarter of 2023
(( 20 (#_ftnref20) ))Other adjustments include: Mara Rosa's pre commercial
cost of sales of $31.6 million, and costs during operational stoppages and
reduced capacity in San Jose of $1.1 million
21 (#_ftnref21) Calculated using a gold/silver ratio of 83x
22 (#_ftnref22) Other items include workers profit sharing in Inmaculada of
$15.5 million, the gain in San Jose resulting from the government's export
incentive programme of $3.0 million, lease expenditure of $2.1 million, $1.4
million, and $0.9 million in San Jose, Mara Rosa and Inmaculada, respectively,
and other non-sustaining capex of $1.8 million and $0.4 million in San Jose
and Mara Rosa, respectively.
23 (#_ftnref23) Operating capex excludes capitalised leases of $3.9 million
and $2.6 million in San Jose and Inmaculada, respectively, capitalised
depreciation resulting from mine equipment utilised for mine developments
totalling $1.9 million in San Jose, and capitalised interest of $0.9 million
and $0.4 million in Inmaculada and Mara Rosa, respectively
24 (#_ftnref24) Corporate and others include personnel expenses related to
brownfield exploration
25 (#_ftnref25) 2024 all-in-sustaining costs before the change in
methodology (as previously reported) were: Inmaculada $1,512 per gold
equivalent ounce, and main operations $1,638 per gold equivalent ounce
26 (#_ftnref26) 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)
27 (#_ftnref27) 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
28 (#_ftnref28) 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
29 (#_ftnref29) Adjusted EBITDA has been presented before the effect of
significant non-cash (income)/expenses related to changes in mine closure
provisions which were $24.0 million in 2025 (2024: $14.7 million), and the
write-off of property, plant and equipment of $4.1 million in 2025 (2024: $0.9
million)
30 (#_ftnref30) Includes pre-shipment loans and short term interest payables
31 (#_ftnref31) Net debt to EBITDA is a non-IFRS measure and is calculated
as net debt divided by Adjusted EBITDA over the preceding 12 month period.
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