Summary of Hochschild Mining (HCHD.F) Q2 Results Conference Call Company Overview - **Company**: Hochschild Mining (HCHD.F) - **Date of Call**: July 23, 2025 - **Key Speakers**: Eduardo Landon (CEO), Eduardo Noriega (CFO), Charlie Gordon (Head of Investor Relations) Key Points Production and Financial Performance - **Group Production**: Approximately 82,000 gold equivalent ounces in Q2, an increase from Q1 due to normalization at San Jose and solid performance at Inmaculada [2][4] - **Mararosa Operation**: Production halted for processing improvements; 12,400 ounces of gold produced before the halt, totaling around 28,500 ounces for H1 [3][4] - **Inmaculada Performance**: Over 54,000 gold equivalent ounces produced in Q2, with a total of 106,000 ounces for H1, on track for a full-year forecast of around 200,000 ounces [4][5] - **Cash Flow and Debt**: Cash balance of $110 million, net debt reduced to $103 million, net debt to EBITDA ratio at approximately 0.4 times [5] Operational Challenges - **Mararosa Filtering Issues**: Current filtering operations not meeting expectations due to inadequate initial engineering studies; a thickener is needed to improve filtering efficiency [11][12] - **Expected Timeline for Solutions**: Anticipated installation of the thickener within 6 to 9 months, aiming to achieve 50% solids for effective filtering [13][19] - **Impact on Costs**: High operational costs expected for 2025 due to maintenance and production halts; future costs projected to stabilize around $1,200 to $1,400 per ounce [22][23] Future Outlook - **Production Ramp-Up**: Gradual ramp-up expected in the second half of 2025, with potential production challenges during the rainy season [24][36] - **Monte De Carne Project**: Ongoing engineering studies; expected to present financial analysis by the end of 2025, with construction potentially starting in Q2 2026 [27][28] - **Dividend Policy**: No expected impact on dividend policy despite operational slowdowns at Mararosa [32][33] Exploration and Resource Management - **Exploration Programs**: Ongoing exploration at Inmaculada, San Jose, Mararosa, and Montego Carmo; results to be reported in Q3 [4][5] - **Resource Management Strategy**: Plan to mine higher-grade materials in the initial years to maximize NPV, with a focus on brownfield exploration to supplement future production [46][48] Additional Insights - **Contractor Performance**: Mining contractor performing well, achieving 70,000 to 80,000 tons per day; improvements needed in mechanical availability [65][67] - **Grade Reconciliation**: Initial grades are aligning with original plans, with expectations to maintain higher grades in the early years of operation [67] Conclusion - Hochschild Mining is navigating operational challenges at the Mararosa site while maintaining strong production levels at Inmaculada and San Jose. The company is focused on resolving filtering issues and optimizing production strategies to ensure long-term growth and stability.