Hochschild Mining PLC

Hochschild Mining PLC (LSE: HOC) is a UK-based precious metals producer listed on FTSE 250. The company is engaged in the exploration, mining, processing, and sale of gold and silver. Its current operations include the Inmaculada mine in southern Peru, the San Jose mine in Argentina, and the Mara Rosa mine in Brazil. This report covers the key recommendation rationale and conclusion for the stock.

Key Recommendation Rationale – Sell at GBX 296.58

• Resistance near Current levels: HOC’s stock price has breached Resistance (R2) which was stated in the previous report on 23 June 2025 therefore, there can be a possibility of a decline from resistance levels. Considering the market conditions and the price action, it is prudent to exit the stock.
• Elevated Production Costs Undermine Margin Gains: Despite a notable increase in production and a supportive precious metals price environment, Hochschild’s All-In Sustaining Costs (AISC) rose to $1,638 per gold equivalent ounce, up from $1,454 in 2023 — a nearly 13% increase. This cost escalation, driven by inflationary pressures (especially in Argentina) and operational ramp-up challenges in Brazil, narrows the margin gains that would otherwise have been decent in a year of record revenue and prices. For investors and analysts, this raises concerns about the company’s cost containment strategy and resilience to inflationary cycles, particularly in more volatile jurisdictions.
• Safety Performance Shows Regression - Hochschild’s Lost Time Injury Frequency Rate (LTIFR) increased from 0.99 in 2023 to 1.25 in 2024, indicating a deterioration in workplace safety despite the company’s emphasis on its Safety 2.0 framework. While still comparatively decent by industry standards, this uptick may suggest implementation gaps or operational strain at newer sites such as Mara Rosa. In the context of ESG priorities, any backslide in health and safety metrics could negatively influence external ESG ratings or investor confidence, especially for funds with stringent sustainability mandates.

Valuation Methodology: Price/ Earnings Approach

Share Price Chart  

HOC Daily Technical Chart, Source - Refinitiv 

Conclusion

HOC is expected to trade at a discount, considering the Safety Performance Shows Regression and fears of global slowdown. For conducting the valuation, the following peers have been considered Anglo Asian Mining PLC (LSE: AAZ), Griffin Mining Ltd (LSE: GFM) and others.

Given its current trading levels, Elevated Production Costs Undermine Margin Gains, recent rally in the share price, relative valuation, and associated risks, it is prudent to exit the stock at the current levels. Hence, a ‘Sell’ recommendation is given on the stock at the current Market Price of GBX 296.58 as of 14 July 2025 at 09:17 AM GMT+1.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 14 July 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and/or technical analysis taking into consideration both short-term and long-term scenario.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’

Note 6: Dividend Yield may vary as per the stock price movement.