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Investing.com -- Hochschild Mining stock gained 2.7% after the company announced plans to resume production at its Mara Rosa mine in Brazil next month, following maintenance work on the filtering plant.
The precious metals miner reported second-quarter gold equivalent production of approximately 82,000 ounces, exceeding analyst expectations by 3-4%, with better-than-expected output from both the Inmaculada and Mara Rosa operations. However, stronger revenues were offset by weaker cost performance, resulting in adjusted EBITDA of $123 million, which fell short of consensus estimates by 6%.
The company also appointed Ediney Drummond as Country Manager for its Brazilian operations. Drummond brings over 20 years of mining experience, having previously served as Vice President of Lundin Mining (OTC:LUNMF)’s Brazilian operations.
Hochschild indicated that mining operations at Mara Rosa are progressing according to plan while a review of the filtering plant continues. The company’s preliminary assessment suggests installing a thickener to improve the quantity of solid material fed to the filtration plant would be the optimal solution, though this would take 6-9 months given permitting requirements.
Net debt was reported at $203 million, slightly higher than analyst forecasts. The company plans to provide updated production, capital expenditure, and cost guidance with its interim results on August 27.
RBC analysts commented: "Risk-reward attractive at current levels: Reiterate. We await interim results to learn more about the path forward at Mara Rosa but the appointment of Mr Drummond and the progress of the review leave us encouraged. We see risk-rewards attractive at these levels and see potential for a re-rating as Mara Rosa recovers from recent challenges."
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