Mara Rosa gold mine in Brazil. (Image supplied by Hochschild Mining)
Hochschild Mining (LON: HOC) shares rose after the company reported a sharp jump in realized gold prices, reinforcing bullish sentiment toward precious metals producers.
Shares in the South America-focused miner jumped more than 3% in early trading in London and were last trading at 663.5p, giving the company a market capitalization of £3.4 billion ($4.6 billion), as investors responded to stronger pricing and steady operational delivery.
Hochschild said its average realized gold price climbed to $4,471 per oz, up from $3,222 at its March results and $2,708 a year earlier, marking a near 40% annual increase and boosting quarterly cash generation.
Chief executive Eduardo Landin said the company delivered a “solid start” to the year, citing strong performance at the flagship Inmaculada mine in Peru and ongoing improvements at Mara Rosa in Brazil, while reaffirming full-year production and cost guidance.
Landin added that engineering work at the Monte Do Carmo project is advancing toward a potential construction decision in the third quarter, alongside progress at the Royropata silver project in Peru.
Market confidence
Analysts broadly backed the update, pointing to better-than-expected production and improving momentum at key assets.
RBC Capital Markets said first-quarter output of 76,000 oz gold equivalent beat expectations, driven by stronger throughput at Mara Rosa, where a turnaround plan is gaining traction, and reiterated its “Outperform” rating with a 920p price target.
Peel Hunt also flagged a slight production beat and highlighted a swing to net cash of $95.9 million, describing output as stronger than expected and maintaining a “Buy” rating and 920p target.
The results come as Peru, where most of Hochschild’s operations are located, faces political uncertainty following an inconclusive first-round presidential vote. A run-off is looming and final results remain delayed, a backdrop that could shape regulatory and investment conditions for miners operating in the country.