Hochschild Mining Posts Record Half-Year Results as Mara Rosa Recovery Gains Pace

Key Points

• Record first-half performance: Revenue rose 62% to $844 million, adjusted EBITDA increased 119% to $492 million, and free cash flow reached approximately $156 million. Hochschild ended the period with $309 million in cash and short-term investments and declared a $0.04-per-share interim dividend.
• Mara Rosa recovery is progressing: Processing plants were operating near nameplate capacity, and the mine remains on track to produce 67,000–80,000 ounces in 2026. Recovery spending pushed Mara Rosa’s first-half all-in sustaining costs to $3,551 per ounce, while company-wide cost guidance was raised to $2,380–$2,500 per gold-equivalent ounce.
• Growth projects could materially expand output: Royropata in Peru and Monte do Carmo in Brazil are expected to add roughly 200,000 gold-equivalent ounces annually, potentially lifting production above 500,000 ounces per year from 2028. Royropata’s permitting is underway, while Hochschild expects to seek a final investment decision on Monte do Carmo by year-end.

Hochschild Mining LON: HOC reported what management described as its strongest-ever half-year financial performance, supported by higher gold and silver prices, cash generation from its Peruvian and Argentine operations, and progress in restoring operational capacity at its Mara Rosa mine in Brazil.

The company said it produced more than 150,000 ounces during the first half, while revenue increased 62% to $844 million. Adjusted EBITDA rose 119% to $492 million and earnings per share increased 208% to $0.37. Hochschild ended the period with $309 million in cash and short-term investments and a net cash position of $51 million, compared with net debt of $20 million at the end of 2025.

Management declared an interim dividend of $0.04 per share, equivalent to $21 million, in line with its stated dividend policy.

Higher prices lift revenue, while costs rise

Chief Financial Officer Eduardo Noriega said the revenue increase was driven principally by higher gold and silver prices, partly offset by lower scheduled production volumes. Cost of sales increased 11%, reflecting higher activity at Mara Rosa, including waste movement associated with restoring the mine’s operating capability.

Noriega also cited the effect of higher metals prices on royalties, workers’ profit sharing and export taxes, as well as stronger local currencies in Peru and Brazil and net inflation in Argentina. The company’s effective tax rate was 35%, or 32% excluding special mining taxes and foreign-exchange effects in Brazil and Argentina, he said.

Free cash flow totaled approximately $156 million in the first half. Inmaculada generated $288 million in cash flow and San José generated $149 million, while Mara Rosa used $80 million for recovery work, including installation of a thickener and opening the pit. The company also reduced debt by $80 million and paid $84 million in dividends, including $58 million to its San José joint-venture partner McEwen Mining.

Hochschild maintained its production guidance but revised its all-in sustaining cost guidance to between $2,380 and $2,500 per gold-equivalent ounce. First-half attributable all-in sustaining costs were $2,448 per gold-equivalent ounce.

• Inmaculada reported all-in sustaining costs of $1,953 per ounce.
• San José reported all-in sustaining costs of $2,944 per ounce.
• Mara Rosa reported all-in sustaining costs of $3,551 per ounce, including recovery and operational-restoration spending.

Noriega said more than 50 efficiency and cost-reduction initiatives were helping to offset broader mining-industry inflation. However, direct costs tied to higher metals prices, foreign exchange and Argentine inflation led to the revised cost outlook.

Mara Rosa turnaround remains a second-half priority

Management said Mara Rosa’s reorganization is substantially complete. The company has addressed filtering issues, commissioned a thickener in three months, installed a new mining contractor and said crushing, milling, leaching, filtering and dry-stack processes were operating steadily.

The mine remains on track for 2026 production of 67,000 to 80,000 ounces, according to management. The principal remaining task is to complete mine pushbacks and establish sufficient flexibility across mining fronts to access higher-grade material.

Management said August run-rate performance at the crushing, milling and filtering plants was close to nameplate capacity. Still, the company said it does not expect Mara Rosa’s all-in sustaining costs to sustainably fall below $1,500 per ounce at current metals prices, because higher prices increase royalties and other directly linked costs. Hochschild is working with consultants to assess the operation’s optimal cost structure ahead of its 2027 budget.

Projects target production growth from 2028

Hochschild highlighted Royropata in Peru and Monte do Carmo in Brazil as its principal development catalysts. Management said the two projects could add roughly 200,000 gold-equivalent ounces of annual production and lift company output above 500,000 gold-equivalent ounces per year from 2028.

The company submitted Royropata’s environmental permit application to the Peruvian government and expects a review period of about one year, with a potential permit decision around August of next year. Royropata contains 3.3 million gold-equivalent ounces, according to management, and is expected to produce at least 100,000 gold-equivalent ounces annually once developed. Management also discussed a possible soft start next year using lower-grade material remaining at the former Pallancata mine.

At Monte do Carmo, acquired in 2024 for $60 million, Hochschild is completing basic engineering, progressing detailed work on waste-rock facilities and restripping, and engaging suppliers on long-lead equipment. Management expects to present an updated economic assessment and seek a final investment decision from its board by year-end. The project has approximately 1 million ounces of gold, management said.

Hochschild maintained annual sustaining capital expenditure guidance of $210 million to $225 million after spending $105 million in the first half. The company said its capital-allocation priorities remain brownfield exploration and the development of Royropata and Monte do Carmo, while its dividend policy provides for distribution of 20% to 30% of attributable free cash flow.

Management also reported a contractor fatality at Inmaculada in June. It said an investigation was completed and identified opportunities to improve raise-climber lockout procedures, behavioral safety practices and mental-health support for workers. Management said Inmaculada and San José were otherwise operating without material issues and remained positioned to meet annual production targets.

About Hochschild Mining (LON:HOC)

We are a leading underground precious metals producer focusing on high grade silver and gold deposits, with over 50 years' operating experience in the Americas. We currently operate three underground mines, two located in southern Peru and one in southern Argentina. All of our underground operations are epithermal vein mines and the principal mining method used is cut and fill. The ore at our operations is processed into silver-gold concentrate or dore. Hochschild Mining plc is listed on the Main Market of the London Stock Exchange and is headquartered in Lima, Peru.

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