Hochschild Mining Plc (LON: HOC) have seen their shares plummet on Friday after the firm announced it would be cutting its 2020 guidance for its Pallancata project in Peru.
Shares in the established mining company plummeted 8% on Friday to 171p. 22/11/19 16:08BST.
Shares in the FTSE250 (INDEXFTSE: MCX) crashed after the disappointing announcement from the specialist British based silver and gold mining firm.
Hochschild have operations in North, Central and South America.
The announcement made on Friday morning will disappoint shareholders, as the firm gave shareholders an optimistic update after an uncertain quarterly update.
Precious metals firm Hochschild said it is still “firmly on track” for its 2019 output guidance of 457,000 gold equivalent ounces or 37 million silver equivalent ounces.
Hochschild added that its overall production target for 2020 is 432,000 gold equivalent 35.0 million silver equivalent ounces ounces, which includes a drop in Pallancata’s expected production to 7 million silver equivalent ounces.
Chief Executive Ignacio Bustamante, said: “Our ongoing strategy is expected to deliver consistent production at competitive costs in 2020, with, once again, an increase in output at Inmaculada. Following permitting delays at Pallancata, we have decided to give our brownfield exploration team more time to deliver additional resources and have therefore reduced the operation’s expected production to 7 million silver equivalent ounces. However, we remain excited by the geological potential surrounding all our operations.
Bustamante added that: “Costs are expected to rise moderately due to a one-off $22 million project to increase tailings capacity at Inmaculada and the reduced production at Pallancata.”
Shareholders of Hochschild will be thoroughly disappointed following the reassurance that was given following the disappointing quarterly update, and upon reflections on the stock price, shareholders are not best pleased.
In an industry where competitors have made ground, this will be a concern for seniority and stakeholders.
Serabi Gold (LON: SRB) and Eurasia Mining (LON: EUA) have seen their shares surge following strong quarterly updates, whilst Bluejay Mining (LON: JAY) have announced a share placing plan to raise funds for operations in Greenland.
