Source: Sharecast
Berenberg said Hochschild's gold and silver production broadly met its forecasts, although sales lagged due to a deliberate $40m product inventory/receivables build at San José in Argentina, to protect against a potential currency devaluation following the Argentine mid-term elections on 26 October.
Guidance for 2025 production and unit costs was maintained as its Mara Rosa asset, in Brazil, continued its turnaround, with limited output in Q3.
Overall, the German bank said Hochschild's Q3 was "fairly stable", and while the company's Argentina exposure "remains a source of uncertainty", it noted that San José contributes only 7% of its net asset value.
The stock, on which Berenberg has a 'hold' rating, closed down 3.8% on the day of release amid a broader selloff in gold miners.
"We update our model to account for the results and factor in Hochschild’s stake in the Volcan gold project in Chile (expected by the company to list in Toronto via Tiernan Gold in November, with Hochschild retaining 87% ownership). Our NAV increases by 5%, which lifts our price target to 400p," said Berenberg, which also noted Hochschild shares were currently trading on 0.86x NAV and 3.3x 2026 underlying earnings.
Reporting by Iain Gilbert at Sharecast.com