StockMarketWire.com - Hochschild Mining swung into the black in the six months to the end of June posting pre-tax profits of $60.3 million against a loss of $43.4 million last time.

Revenues rose to $339.3 million (H1 2015: $190.3 million) and adjusted EBITDA increased to $170.3 million (H1 2015: $39.3 million).

Hochschild said its mines delivered a very good first half with both Inmaculada and Arcata performing above expectations.

The company, as a whole, produced 118 thousand ounces of gold and 8.2 million ounces of silver which, when converted to the silver equivalent number of 17 million ounces, confirms that the run rate is ahead of the original full year target of 32 million ounces.

Inmaculada was the key driver with grade and recoveries running ahead of plan and the plant consistently outperforming its design capacity. This led to production of 111 thousand gold equivalent ounces at an all-in sustaining cost of around $600 per ounce which places the mine in the bottom decile of the industry cost curve.

In addition, Arcata enjoyed its finest half for over five years with production improving by 15% versus the same period of 2015. San Jose in Argentina has continued to deliver remarkably consistent output in an improved domestic economic environment.

With the Company's overall cost position substantially lowered, all operations generated strong cashflow and we can look forward to a further boost at Pallancata when the transition to feed from the new Pablo vein is completed.

The Company's production target for the year has increased by over 6% to 34.0 million silver equivalent ounces following the good performances at Inmaculada and Arcata in the first half. All-in sustaining cost expectations for the Company have also been revised following a strong first half and are now expected to be between $11.0 and $11.5 per silver equivalent ounce which compares very favourably to our original guidance of between $12.0 and $12.5.

Chairman Eduardo Hochschild said: "Our long term investment strategy has now started to deliver strong results with an impressive operational performance combined with more positive precious metal prices which has in turn led to our re-entry into the FTSE 250. The Company has returned to profitability, materially reduced its debt position and is investing primarily in brownfield growth. In this constructive environment, the Board has decided to pay a dividend of 1.38 US cents per share, representing approximately 25% of net earnings, which we believe is an appropriate payout at this early stage of the cycle."






At 8:06am: [LON:HOC] Hochschild Mining PLC share price was +4.8p at 298.9p



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