Hochschild Mining Shares Fall After Expensive 2025 Outlook, RBC Downgrade By Investing.com
Investing.com — Hochschild’s ( LON: ) share price fell sharply on Wednesday, falling over 14% after the company released updated production and cost data that revealed higher-than-expected capital expenditures and operating expenses for 2025.
The update, which came alongside full-year 2024 results, raised concerns about the miner’s ability to maintain its financial performance amid rising costs.
Hochschild reported gold-equivalent production of 347,000 ounces for 2024, broadly in line with expectations, but its 2025 guidance cast a shadow over its outlook.
The company projected all-in sustaining costs for the year to range between $1,587 and $1,687 per ounce, roughly 5% above RBC Capital Markets analysts’ estimates.
Additionally, capital expenditures for 2025 are projected at $197 million to $208 million, an increase of 7% compared to previous projections.
Inflation and unfavorable currency dynamics, particularly the absence of a devaluation of the Argentine peso, were cited as the main factors driving the increase in costs.
This update is in sharp contrast to the recent rise in Hochschild’s share price (170%).
The revised figures point to lower profit margins in 2025 and potential difficulties in managing upcoming capital expenditure.
RBC Capital Markets, which previously gave Hochschild an “outperform” rating, downgraded the stock to “sector perform” after the update.
The brokerage also cut its price target to 260p from 300p, reflecting a moderate outlook for the miner.
RBC analysts noted that while Hochschild’s production numbers remain solid and its Mara Rosa project in Brazil is expected to double free cash flow in 2025, elevated costs and capex obligations in the coming years could limit shareholder returns .
Analysts also noted that part of the company’s 2025 production is hedged by an average gold price of $2,301 an ounce, reducing the potential benefits of higher gold prices in the near term.
