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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METALS STOCKS

Gold rises to near $930 as safety buying continues

By Moming Zhou, MarketWatch
Last update: 9:43 a.m. EST Feb. 11, 2009

Gold futures rose Wednesday for a second session, climbing near $930 an ounce to the highest level in nearly two weeks as investors continued to buy the metal amid doubts on new economic rescue plans unveiled in the U.S.
Gold for February delivery was last up $11.30, or 1.2%, at $925 an ounce on the Comex division of the New York Mercantile Exchange. It rose to $929 earlier, the loftiest intraday level since Jan. 30. Trading more actively, the April contract rose 1.3% to $926 an ounce.

Gold gained more than 2% in the previous session after the Treasury Secretary Timothy Geithner introduced a new plan to rescue the ailing banking sector. The Senate also passed an $838 billion stimulus package Tuesday by a 61-37 vote.

Markets, however, cast doubts on the plans. Stocks and crude oil prices tumbled, while safe haven buying pushed up gold and Treasury securities, as well as the U.S. dollar.
It's the "flight to safety, pure and simple," said Jon Nadler, senior analyst at Kitco Bullion Dealers.
Crude oil rebounded Wednesday, recouping part of Tuesday's losses, while U.S. stock futures were flat as unease continued over the lack of details surrounding the Treasury's plan.

If gold breaks the $930 mark, it could rise to as high as $950 an ounce in the short term, said Ashraf Laidi, chief market strategist at London-based CMC Markets. Most analysts are projecting gold to rise above $1,000 this year, as safe-haven buying and demand for gold as a hedge against inflation are expected to continue.

Holdings of SPDR Gold Trust, the largest exchange-traded fund backed by gold, hit a new record high of 894.72 tons as of Tuesday, up 1.5% from a day earlier, according to the latest data from the fund. The total was higher than that reported a month earlier by a margin of nearly 110 tons, or 14%.
Other metals were mixed Tuesday. March copper slid 2.9% to $1.53 a pound, while March silver rose 1% to $13.255 an ounce. March palladium gained 0.5% to $213.15 an ounce, and the April contract for sister metal platinum added 2% to $1,056 an ounce.
Moming Zhou is a MarketWatch reporter based in New York.

Positive..

http://www.nasdaq.com/aspxcontent/NewsStory.aspx?cpath=20090211\ACQRTT200902111557RTTRADERUSEQUITY_1230.htm&selected=9999&selecteddisplaysymbol=9999&StoryTargetFrame=_top&mkt=WORLD&chk=unchecked〈=&link=&headlinereturnpage=http://www.international.nasd

bought a few this morning ... would have been more, but somewhat self-immolated with nymex yesterday

Well done, good to have you onboard cyners.

Hochschild Mining PLC

FORECASTS WIRES
2008 2009
Date Rec Pre-tax () EPS (p) DPS (p) Pre-tax () EPS (p) DPS (p)

Investec Securities
10-02-09 BUY 126.55 20.66 5.06 76.26 11.44 5.06

Canaccord Adams
19-12-08 BUY 19.60 5.41 31.09 6.08

Earnings per share of 20p concensus would put the stock on circa of 8.5 P/E for 2008 results, far too cheap imho.

Should be at least double that and I can only conclude the stock is way undervalued.

Excelent article here for a bullish read on gold...

The prospects for $1,200-1,300 gold by the end of Q3 remain underpinned by a set of cogent fundamental variables involving currencies, interest rates and the global economy. Meanwhile, even as the divergence between gold and oil begins to fade, any oil-friendly dynamics are seen as a positive for gold's luster

http://seekingalpha.com/article/120130-oil-gold-ratio-surges

Recognia software as used by Institutions is now flagging up a BUY signal and a target price of 250p to 271p.

Event Date: 09 Feb 2009
Opportunity Type: Intermediate-Term Bullish
Close Price: 165.00
Target Price Range: 250.00 - 271.00

Price Period: Daily
Volume: 205,790
Pattern Duration: 85 days
Inbound Trend Duration: 88 days


https://site.recognia.com/interactiveinvestor/serve.shtml?page=chart&event_id=UKvskmAAdTWQAOgABAACAAABYCRg&instrument_type=S&symbol=HOCM.L&exchange=LONDON&ref=chart_eid&sid=492537475

And I can say that during the period sept 2008 to present they have been VERY accurate with there forecasts.

bought just a modest number at 171 ..... greed tempts me to top up, but sp already 195

You should have made a bob or two then Cyners.

I reckon theres broker upgrades to come and very soon.

Its been a lot higher than this earlier in the year.

Talking about Gold....noticed that quite a few producers,minors,and explorers rose today...!.

Hochschild Mining extends deadline of Minera Andes offer - Update
precious metal company Hochschild Mining PLC said it agreed to extend the deadline of its proposals to the board of Minera Andes Inc., or MAI to purchase either the whole company or 49% stake in Minera Santa Cruz, the joint venture company of Hochschild and MAI. The terms of the extended offer remains unchanged.
The company said that the offer is now open for acceptance until 10pm GMT on 13 February 2009.

10 oclock it is then.

Just wondering what the sp action will be if they get rejected. Then again if they arent?.

Boyo .... so why no announcement? .... i'm sure you must have the CEO-sec's inside leg measurement and thus should know these things!

have decided to bank my profit (thanks GF!) on the basis that delayed news is never good news

(Cyners tipped by that chap who gave us the hunting winner. Evils sidekick))

Every Cloud Has a Silver Lining Argues Lucian Miers, the Bard of the Boleyn
Buy Hochschild Mining (HOC) at 200p

If you believe, as I do that the recovery in the silver price will continue, then Hochschild represents an excellent opportunity to benefit. The company mines silver and to a lesser extent gold in South America and is profitable and growing fast. By coincidence its share price has until recently mirrored that of Fresnillo the worlds largest silver producer. Both collapsed from last years 500p to around 80p in December and then started to rally. Fresnillo, however, has now reached around 400p while HOC is available at 200p. I expect it to reach 300p in short order.

I attach a table of my Sharecrazy tips and would like to provide a brief update for those who followed them:

London Asia Private Equity Fund(LCP) now known as China Growth(yes Growth)(COGP) has collapsed as predicted and I would buy back for a 88% profit
Meldex (MDX) is a zero. Buy back off the shareholder register for 1p for a 99% profit
Rightmove (RMV) (down 32%) in my opinion has further to fall: stay short
Manganeze Bronze (MGNS) has fallen 80% and I would close at 72p for a healthy profit.
Sainsbury (SBRY) is up 35% and I would hold for further gains.
Capital and regional (CAL) has fallen 70% I would stay short.
Severfield Rowen (SFR) has fallen 2% since I tipped it as a buy. I would still hold but put a stop loss in at 140p
Aero Inventory (AI.) has risen 3% since I tipped it as a buy and I would sell it as its recent announcement seems inconsistent with its stated business model and makes me nervous. (I hope to update on this one soon)
Hunting(HTG) has risen 13% since I tipped it as a buy and I predict has much further to rise.
Big Yellow Group (BGY) down 5% remains a short.
Pursuit Dynamics(PDX) down 14% has much further to fall.
Climate Exchange (CLE) down 28% remains ludicrously over valued and still represents excellent value on the short tack.
New Star Asset Management (NSAM) halved as predicted and can be bought back at sub 2p.
As you can see from this I am a very clever chap. Indeed one might say that the former apprentice to Londons most boastful bear now has a right to be rather boastful in how own right. But unlike Evil I am a modest man, though with little to be modest about. So I suggest that you tuck away a few Hothschild and if you are grateful send a case of lager over to the Newham penthouse.

The bard of the Boleyn, Lucian Miers is East Londons most infamous short seller

Posted by Lucian Miers on Fri Feb 13, 04:27 PM in Comment

Comment

thanks GF, but am happy to be out for the moment until the result of t/o is known .... as i said, delayed announcements are never good news

PRECIOUS-Gold strikes 7-mth high as funds buy, ETF at record
Tue Feb 17, 2009 2:13am EST

http://www.reuters.com/article/goldMktRpt/idUST34487720090217

Just posted by pro TAer Zak Mir:

Zak Mir



Reged: 28/06/07
Posts: 643
Re: HOCHSCHILD MINING (HOC)- Bad Day-but opportun
#439779 - 17/02/09 08:37 AM Edit Reply Quote



A great looking U shaped charting recovery since December, and while the stock remains above the initial September support at 200p the upside here should be to the last intraday high of that month at 334p.

http://seekingalpha.com/article/120796-will-silver-now-outperform-gold

Will Silver Now Outperform Gold? 14 comments
by: Peter Cooper February 16, 2009 | about stocks: GLD / IAU / SLV

"However, there has been plenty of evidence recently to suggest that the control of the spot price of silver by the futures market is about to break down. And when that happens silver prices will go to the moon".

This will have been a tremendous CFD for some people...danger is of a temporary drop followed by a sharp recovery in the event of non acceptance (see latest RNS)....otherwise 3 here we come (I think) !.