November 08, 2006
Hochschild Gives A South American Boost To Londons Mining Sector


Quite a feather in Londons cap to have Hochschild Mining taking a full listing. At first glance Toronto or New York might have seemed a more logical destination, but the Sabanes-Oxley Act has meant that compliance requirements in North America have reached stratospheric levels and London looked more attractive, though a full listing on the LSE is certainly no walkover. Geographically, also, it has advantages as both JP Morgan Cazenove and Goldman Sachs International, the joint sponsors, joint global co-ordinators and joint bookrunners for the IPO are both based in London, as are Canaccord Adams the co-lead manager and Nomura International, the co-manager. The shares were placed at 350 p each to raise around 270 million from institutional investors in the UK, Europe, the US and Canada. On this basis its market capitalisation is just over 1 billion which takes it straight to 99th position in the FTSE 250 Index and makes it worthy of consideration by all types of investors.

The history of this Peruvian mining company is fascinating as it comprises the mining operations of the Hochschild Group which was founded in Chile in 1911 by Mauricio Hochschild. After World War 1 it expanded into Bolivia where the target was tin and it did not start its Peruvian operations until 1925. Even then it stuck to metal trading and beneficiation until the 1940s and during the 2nd World War the Group was a key supplier of tin and other metals to the allied forces. The next major advance came in the 1960s when the Arcata mine was developed in Peru and it is still in production today. Over the next ten years or so more mines were opened in Brazil, Peru and Chile such as the well known Mantos Blancos copper mine in Chile.

It is here that the history gets a bit complicated as in November 1984 Anglo American bought the South African mining operations of Hochschild Group and immediately sold the Peruvian operations to Luis Hochschild who is clearly a descendant of the founder, though the exact relationship is not clear. Anyway it is his son Eduardo who is now executive chairman of the company, having started as a safety assistant at Arcata in 1987 and working his way up to be boss of the company 12 years later. At the executive level he is supported by Roberto Danino as deputy chairman and Alberto Beeck which is director of strategy and corporate development.

The operations sold back to Luis became the basis of Hochschild Mining which then launched an aggressive expansion campaign in Peru as well as in Mexico, Argentina and Chile. In order to spread the financial risk joint ventures were agreed with other local and overseas mining partners to develop the San Jose, Pallacanta, Mina Moris and San Felipe projects. Hochschild Mining is now the fourth largest silver producer in the world with an output of around 10.5 million ounces plus just under 250,000 ounces of gold in 2005. In that year its cash costs of production amounted to US$2.65/oz for silver and US$169/oz for gold which puts it in the first quartile of the 2005 global cost curve for both metals.

Its specialisation is in epithermal vein deposits and it currently has three underground mines Arcata, Ares and Salene - in production in southern Peru. Next up are two advanced and two early stage development projects in Argentina, Mexico and Peru and then a swathe of prospects at various stages. The overall strategy is to bring a sequence of these projects into production and the aim is to push towards annual production of 50 million silver equivalent ounces, or 830,000 gold equivalent ounces if preferred, by 2011. This is quite an uplift from the 2005 figures, but Hochschild is not the sort of company which would risk undershooting a declared target, so it may err on the conservative side.





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Glad to see you guys are friends again.

Bailed out on the drop....!...would have made more 2 days ago !.

Spot gold price fell sub $935. This drop was predicted & RRS, FRES, CEY, HOC etc all suffered as a result. Shorters came out in force. I also took late profit. However gold price predicted by some to test the $1000 level again within a week or two.

but POG was well up on the day, for an interesting reason

Yes, I saw that. Something to do with the ORE RNS today?

go to ORE thread ... have just posted the relevant article from Reuters

News, click HERE

Gone back in HOC long again.

The sp of silver at the moment is booming upwards along with gold re the dollar and quantative easing.

Good report here..

Short Squeeze in Silver - How to Profit

by: Jason Hamlin March 19, 2009

http://seekingalpha.com/article/126743-short-squeeze-in-silver-how-to-profit

Gold SP moving up very strongly aswell.

HOC is the place to be tomorrow I reckon especially with there being a sell off on the DOW and the FTSE this afternoon...



--------------------------------------------------------------------------------

John Embry: Gold and Silver Are the Ultimate Insurance Policy

by: Andrew Mickey March 11, 2009

http://seekingalpha.com/article/125324-john-embry-gold-and-silver-are-the-ultimate-insurance-policy

The Mother of All Depressions (MOAD)

http://www.321gold.com/editorials/moria ... 1909a.html

Bob Moriarty
Archives
Mar 19, 2009

The US government lit the fuse to the $683 trillion dollar derivative's debt bomb on Wednesday March 18, 2009 with the announcement the Fed would purchase $300 billion dollars worth of US Treasury used toilet paper and an additional $750 billion dollars worth of mortgage backed used toilet paper. In total the commitment to counterfeit over a trillion dollars leaves only $682 trillion dollars worth of derivatives to sort out.

Economics is all about price discovery. No one knows what the real value is of the $683 trillion dollars in derivatives. No one knows who owns what. No one knows who owes what. If left to its own devices, the market would lower prices until all assets had a value to someone. The government in its infinite wisdom has just short-circuited this discovery mechanism.

This is the end of the dollar. Everyone with any sense on earth will be unloading both their treasuries and mortgage-backed cr?p on the Fed. The Fed has just p????d $1 trillion of counterfeit money into a $683 trillion dollar cesspit. It can't possibly fix the problem. When the world realizes the impact of the Fed monetizing all debt, there will be a total default. And then what happens?

The Mother of All Depressions.

The ability to publicly fund its debt has been what has kept the US government spending. Once that ability is dead, so is the government.

The meeting of the G20 in London on April 2, 2009 will be the most important financial meeting in history. If the delegates do not adopt a new gold standard of honest money, the dollar will totally default within a few months. The fuse has been lit. There is nothing the government can do beyond what they have already done. Nothing has worked. Nothing can work.

Bob Moriarty
President: 321gold

Hoc are presenting in London next week!

These evenings are great for private investors, and the venue is superb!

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Proactive Investors One2One Forums

The directors of Hochschild LSE:HOC) Noventa (AIM: NVTA), Avalon Rare Metals (TSX: AVL) and London Mining (OSEBX: LOND) will be presenting:

Thursday the 26th March 2009
Chesterfield Mayfair Hotel, 35 Charles Street, Mayfair, W1J 5EB

The presentations will start at 6:00pm and finish at 7:30pm. After the presentations are complete the directors will also be available to take questions during a free canape and wine reception. Details on the presenting companies and FREE registration can be found by clicking the link below.

To register for this FREE event, CLICK HERE


Nearest tube stations are Green Park, 5 minutes walk, (Piccadilly / Jubilee / Victoria lines) and Bond Street, 7 minutes walk (Central Line).

Im hoping fpr a big day from HOC friday.

Hochschild Mining posts full year loss of $19m - MoneyAM


Hochschild Mining posts an after-tax loss of $19m despite the firm achieving its production target of 26.1 million silver equivalent ounces last year.

The firm made an after-tax profit of $85.1m in 2007.

Results to the end of December were hit by $45m of exceptional items, including an impairment of $34.7m relating to fixed assets, despite revenue rising 42% to $433.8m.

But the frim said it ended the year in a solid financial position with a cash balance of $116.1m and it had acted swiftly to address volatile market conditions by reducing costs and conserving cash holdings.

Executive chairman Eduardo Hochschild said: "We may face volatile markets but the cost saving measures we swiftly implemented at the end of last year ensure that we are in a sound financial position and well placed to deliver our long term growth strategy.

"With solid assets, an excellent project pipeline and an enthusiastic and dedicated management team, we are well positioned for the coming year."

surely sp will get hammered?

Don't forget!click HERE for details and to register, HOC are presenting tomorrow night in London!

why is it that companys looking for savings start with the dividend every time - surely HOC has plenty in the kitty and will settle with their workers by paying them a bonus at least as good as last year and directors, of course, will not notice any difference in their own fees. time was when many coys took pride in supporting share holders who were prepared to risk their own hard earned money.

HOC has locked in it's gold production for 2009 at $972 / oz.
Tricky to say if that's a good strategy or not as some say gold has had it's day, others talk of $1500 / oz. For HOC it assures them of a known revenue stream, but maybe restricts their growth potential.

surely it is only a smallish proportion of output and in present markets very sensible

Bought a few of these as an hedge against small caps turning a little stale.

Broker seems to like them with a Buy recommendation.....

Hochschild Mining PLC

FORECASTS
2009 2010

Date Rec Pre-tax () EPS (p) DPS (p) Pre-tax
) EPS (p) DPS (p)

Canaccord Adams
05-05-09 BUY 57.14 6.72 2.69 160.00 23.53 7.40