Hochschild Mining (LON:HOC) outlined what it called its “strongest ever” financial year in 2025, driven largely by higher gold and silver prices and solid performance at its core operations, while providing updates on growth projects in Brazil and Peru and a variable dividend payout under its capital returns policy.
2025 financial performance driven by metal prices
Management said 2025 delivered record financial results. The company reported production of 311,000 ounces, with revenue up 28% and EBITDA up 39% to nearly $600 million. CFO Eduardo Noriega added that revenue was more than $1.2 billion, attributable net profit was $159.6 million, earnings per share were $0.31, and adjusted EBITDA totaled $584 million.
Hochschild reported an attributable all-in sustaining cost (AISC) of $2,138 per gold-equivalent ounce for 2025, which management said was in line with expectations and higher than 2024. Noriega said cost pressures reflected factors including lower grades at Inmaculada, mining in border areas of the San José deposit (lower grades), and lower production volumes and grades at Mara Rosa, along with capital spending to address operational issues.
Balance sheet, cash flow, and dividend
Management highlighted a stronger balance sheet, ending the year with $317 million in cash (the CEO also referenced year-end cash of $370 million in opening remarks) and net debt of $23 million. The company said its net debt to EBITDA ratio was 0.04x, which it described as well below the threshold it targets across the cycle.
Noriega detailed cash movement during the year, with cash increasing from $97 million to $317 million. The company cited cash generation of $315 million from Inmaculada and $162 million from San José, while $30 million was used at Mara Rosa to recover from production challenges. Hochschild also invested $77 million in Royropata and $30 million in Monte do Carmo (including a $13.5 million buy-down option related to the Sprott agreement and a $9.75 million early settlement of deferred consideration).
On shareholder returns, the company declared a final dividend of $0.05 per share (also referenced as 5p in the presentation), totaling $26 million. Combined with an interim dividend, total dividends paid for the period were $31 million. Hochschild reiterated its dividend policy targets distributing 20%–30% of attributable cash flow, with a minimum annual dividend of $10 million, subject to maintaining net debt to EBITDA below 1.5x.
Operations and costs: Inmaculada, San José, and Mara Rosa
In operations, management described Inmaculada as the flagship mine producing above 200,000 ounces per year, and emphasized ongoing exploration potential. Over the last 10 years, the company said it discovered 80 new veins at Inmaculada and “brought” 5.2 million ounces of gold. For 2026, Hochschild plans nearly 18,000 meters of drilling and aims to add at least 250,000 ounces.
At San José in Argentina, management said 2025 production was 120,000 ounces and expected 2026 to be “more or less the same.” The company described Argentina as a difficult inflationary environment but said San José generated significant cash. Noriega also noted that in 2025 the group produced 100% concentrates in Argentina to benefit from strong concentrate commercial terms relative to doré. He added that the elimination of an Argentine export benefit in April 2025 increased costs versus 2024, when the benefit applied for the full year.
Mara Rosa, an open-pit gold mine in Brazil, was a major focus of the call. Management said turnaround work is on track and that crushing, milling, and filtering are now performing at nameplate capacity. It said ramp-up to full production is expected in H1 2026 once cyanide is in place, which management described as adding flexibility even though plant capacity has been reached. The company also said the dry-stack tailings operation is “totally controlled” despite rainy-season conditions.
During Q&A, management indicated:
- Peak milling throughput is expected to be 7,000–8,000 tons per day, equating to roughly 2.6 million tons per year, consistent with a stated plant capacity of about 2.5 million tons per year.
- The current bottleneck is mining output rather than processing, with mine throughput averaging around 5.5 (thousand) tons per day recently.
- The company selected Fagundes as a new mining contractor and plans to overlap contractors for the next few months, targeting improved mining rates beginning in Q2.
- Management said the deposit grade profile is unchanged and reiterated a strategy of processing higher-grade ore in early years and medium-grade material later from stockpiles.
Growth pipeline: Royropata and Monte do Carmo
Hochschild emphasized continued development of Royropata (Peru) and Monte do Carmo (Brazil). The company said it added 1.7 million ounces of gold equivalent in resources during 2025, particularly at Inmaculada and Royropata. It also said Royropata accounted for 1.1 million ounces of the additions and described Royropata as a “major brownfield discovery.”
Management said Royropata now totals nearly 3 million ounces of gold equivalent with “very good grades,” and described the deposit as approximately 90% silver with average silver grades around 550 grams per ton. It also highlighted vein widths of about 30 meters or more. The company said it has community agreements and easements in place and is working with Ausenco and peer reviewer Stantec on documentation for permitting. Management expects to file the environmental permit documentation in August 2026 following Peru’s elections, with an approval timeline of roughly a year after filing, and reiterated its aim for production from 2028 onwards.
When asked about expanding the Royropata plant footprint, management said it is not in current plans because the environmental permit being prepared does not include plant expansion. Management said a 3,000 ton capacity could achieve about 150,000 ounces per year, and that including an expansion would require a more complex environmental study.
For Monte do Carmo, management said it acquired the project for $60 million and described it as fully permitted. The company is completing a gap analysis and engineering work by the end of May, with an objective to present an economic case by June 30 and update project economics in mid-2026. Management said new metallurgical tests showed 94% recovery, and that a transmission line permit is already in place. Hochschild said it aims to start production in 2028 if construction begins in July 2026.
In response to analyst questions on capital intensity, management gave early estimates of total CapEx across Monte do Carmo and Royropata of roughly $500 million—about $300 million and $200 million, respectively—while noting numbers are not final and could vary with detailed engineering and assumptions. On Royropata specifically, management later suggested a range of $150 million to $200 million, citing mine development needs and tailings capacity requirements.
Taxes, closure costs, and non-core assets
On taxes, Hochschild reported an effective tax rate of 39% in 2025. Noriega explained that about 6% of that was due to Peru’s Special Mining Tax and royalties, which are calculated based on operating margin but booked in the income tax line, and that withholding taxes added another 2%. Excluding those impacts, management said the effective income tax rate would have been 31%.
In Q&A, management said cash taxes can differ from the P&L due to prepayment and regularization mechanics in Peru and Argentina, and indicated there may be a regularization in 2026. Later, the company provided an estimate of around $90 million in cash taxes for 2026.
On mine closure provisions, management said changes were driven mainly by updated engineering information tied to projects being closed, including Ares, Sipán, and Selene, with inflation a smaller component.
The company also discussed its approach to non-core assets and investments. Management said it executed the reverse takeover (RTO) of Tiernan Gold and noted Aclara continues permitting processes in Brazil and Chile while working on vertical integration. In response to a webcast question on why Tiernan shares were not distributed to shareholders as was done with Aclara, management said Tiernan’s Volcan project is a precious metals asset with significant optionality, and that Hochschild is retaining a 69% non-dilutive shareholding. Management also said it had not decided whether to monetize its Aclara holding, while reiterating a desire to remain focused on core operations.
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.
