This article launches the in Hochschild Mining.
The top 3 points that the profitability of mining companies are production levels, prices and commodity prices.
Hochschild’s balanced gold and silver production provides exposure to the highest value of gold and an imaginable increase in the value of silver.
A series of ‘predicted C/B ratios’ are calculated to calculate adjusted production levels, 2019 prices, and average prices of learned uncooked curtains.
I am still on a “buy” at Hochschild Mining (OTCPK: HCHDF) (LSE: HOC) despite its 40% peak since the beginning of the year. Hochschild’s exposure to gold (an increase of 28% since the beginning of the year) reduces the threat of decline, while exposure to silver (an increase of 41% since the beginning of the year) indicates abundant bullish potential.
Hochschild Mining has deep old roots in South America and has operated as Hochschild Mining for more than 50 years. Hochschild’s circle of relatives remains a percentage shareholder and internal ownership is 51%. Originally, they were a mining company. They have gone on to extract cash, but due to the low costs of uncooked materials, they, like many silver mining corporations, also mine gold. I think many mining corporations overlooked in the LSE deserve to gain advantages from high commodity costs. If cash is about to revel in an extended bullish race, mid-cap miners will likely see the safest capital appreciation. Hochschild is in a similar (or stronger) position to Highland Gold Mining (OTC: HGHGF), which recently reveled in a 25% jump in its percentage price. (Here’s my article if you’re interested).
Figure 1 – Hochschild (blue) similar to the value of silver (silver) and gold (Hochschild (blue) similar to the value of silver (silver) and gold (orange) (Table of authors)
In the 2019 Annual Report, the total amount of gold extracted from 317522 ounces and the total amount of silver extracted from 20,062,000 ounces. Using the average costs of these uncooked materials, a general gold or silver equivalent can be calculated. The gold equivalent 477,400 ounces and the silver equivalent 38.7 million ounces. In 2019, turnover is divided into 56% gold and 44% silver. Hochschild has “tested and probable” gold reserves of 757,500 ounces and 41.2 million ounce silver reserves in operational mines. Including progression projects, the “measured and indicated” silver reserves are 175 million ounces and the gold reserves are 10,657,000 ounces. This implies that the business is sustainable.