Hochschild Mining PLC (LON:HOC) has decided not to reinstate its dividend after it swung to a loss in the first half of the year as gold and silver mining was halted due to the coronavirus (COVID-19) pandemic.
The Peru-based, FTSE 250-listed miner was hit by stoppages at all its mines and exploration programmes from the middle of March until the restart was announced towards the end of May.
Peruvian operations were forced to stop for much of July at the Inmaculada mine when a number of positive cases of the virus were found.
Revenue for the six months to end-June, 2020, came out at US$232mln after silver production fell 53% and gold 43%, as the company had already revealed.
Hochschild slid to a US$9mln loss before tax from continuing operations from a US$16.7mln profit last time, with profit before tax and exceptionals falling 68% to $13.1mln.
Having scrapped its final dividend for 2019 in April, the board said that as the Inmaculada mine is still in a ramp-up phase and pointing to continued uncertainty about the COVID-19 crisis in the countries where it operates, the decision has been taken that “it would be inappropriate to pay a distribution to shareholders at this time”.
On the outlook, although precious metal prices have climbed to long-term highs, the company said it is “hopeful of delivering a strong rebound in profitability in the second half of the year provided our people are able to operate safely and experience less disruption” and aims to provide guidance when a full assessment has been made of the mine suspensions.
The second half will see a big focus on brownfield and greenfield activity to boost reserves and resources and identify new pipeline projects, it added.