Summary of Hochschild Mining PLC Q3 Results 2025 Conference Call Company Overview - **Company**: Hochschild Mining PLC - **Industry**: Mining, specifically gold and silver production Key Points and Arguments Production and Financial Performance - Group production for Q3 was over **70,000 gold equivalent ounces** despite minimal production from Mar-a-Rosa due to a four-week processing plant shutdown in July [2][4] - Mar-a-Rosa's production rates improved from **44,000 tons per day** in August to over **70,000 tons per day** [3] - Imaculada produced close to **50,000 gold equivalent ounces** in Q3, contributing to a total of **156,000 ounces** for the year, on track to meet the annual forecast of **199,000 to 209,000 ounces** [4] - The company ended the quarter with a cash balance of **$92 million**, net debt of **$246 million**, and a net debt-to-EBITDA ratio of **0.4 times** [5] Operational Challenges and Adjustments - Lower grades in production were attributed to adjustments in mine sequencing to address geomechanical challenges, which have now been resolved [4][16] - A **$40 million** increase in working capital was noted, primarily in Argentina, to safeguard the balance sheet ahead of midterm elections [6][19] - The company is exploring opportunities to process previously marginal lower-grade material due to sustained higher gold prices, which could improve margins [6][11] Future Outlook - The company expects production rates from Mar-a-Rosa to rise in Q4, with guidance set between **35,000 and 45,000 ounces** [4][27] - The turnaround program at Mar-a-Rosa is progressing well, with all four tailing filters operational [3][39] - The company is in the budgeting process and considering a potential **15% reduction in production** due to lower cut-off grades, but expects the impact to be less than **10%** [11][34] Exploration and Project Development - The brownfield exploration program is yielding encouraging results, expected to lead to further resource additions [5] - The Vulcan project, which has around **11 million gold ounces** in resources, is progressing towards feasibility and permitting stages, with an estimated construction CAPEX of **$1 billion** [21][29] Market Conditions and Strategic Decisions - The company is maintaining its CAPEX levels and is not planning additional development to reach lower-grade areas, focusing instead on maximizing net present value [12][35] - The management expressed confidence in the team's performance and the company's outlook for 2026 [39] Additional Important Information - The company is managing inventory strategically in Argentina to avoid currency conversion losses ahead of elections [19][25] - The management is optimistic about the impact of higher gold prices on cash flow generation in Q4 [6][39] This summary encapsulates the key points discussed during the conference call, highlighting the company's production performance, operational challenges, future outlook, and strategic initiatives.

Core Viewpoint - The company has shown significant growth in revenue and net profit, indicating strong financial performance in the recent reporting period. Financial Performance - Operating revenue for the reporting period reached 143,944,106.17 yuan, representing a year-on-year increase of 157% [1] - Net profit attributable to shareholders was 37,465,866.14 yuan, reflecting a 206.58% increase compared to the previous year [1] - The net profit after deducting non-recurring gains and losses was 37,180,398.36 yuan, up by 250.50% year-on-year [1] - Basic and diluted earnings per share were both 0.04 yuan, marking a 200.82% increase [1] - The weighted average return on equity was 5.97%, compared to 11.85% in the previous year [1] Cash Flow - The net cash flow from operating activities was 73,643,150 yuan for the reporting period [1] - The net cash flow from financing activities was -356 million yuan, a decrease of 374 million yuan year-on-year [21] - The net cash flow from investing activities was 431 million yuan, compared to -11.61 million yuan in the same period last year [21] Asset and Liability Changes - Total assets at the end of the reporting period were 1,434,697,079.47 yuan, compared to 2,522,764,227.75 yuan at the end of the previous year [1] - Shareholders' equity attributable to the company was 640,329,532.68 yuan, up from 529,407,519.19 yuan at the end of the previous year [1] - Significant changes in liabilities included a 234.89% increase in short-term loans, which now account for a larger proportion of total assets [31] Shareholder Structure - The top ten shareholders included new entrants such as Guangfa Strategy Preferred Mixed Securities Investment Fund and Hong Kong Central Clearing Limited, replacing previous shareholders [40] - The largest shareholder, Shandong Zhaojin Ruining Mining Co., Ltd., holds 20% of the total shares, remaining unchanged [41]

上月从跟踪黄金矿业股的最大ETF中撤出6.69亿美元的投资者，在周二金价暴跌后显然显得明智。 随着现货黄金遭遇十多年来最严重抛售，范艾克黄金矿业ETF（VanEck Gold Miners ETF）暴跌9.4%，创下2020年3月以来最惨跌幅。纽蒙特 矿业公司（Newmont Corp.）、阿格尼科鹰矿业公司（Agnico Eagle Mines Ltd.）、巴里克矿业公司（Barrick Mining Corp.）等矿企股价均下跌 约9%——纽蒙特与阿格尼科抹去了一周多的涨幅，巴里克则回吐了一个多月的收益。该ETF在周三盘前交易中又下跌4%。 此前已有大量警示称，黄金2025年以来上涨约60%、突破每盎司4000美元的行情，已脱离现实。而黄金矿企的处境更令人担忧：它们今年的 股价涨幅是黄金本身的两倍。 "黄金板块的涨幅，尤其是大盘股的涨幅，可能有些过猛过快——毕竟黄金本身的涨幅仅为矿企股价的一半。"菲耶拉资本公司（Fiera Capital Corp.）投资组合经理坎迪斯·邦松德（Candice Bangsund）表示。 邦松德预计，未来几个月黄金与矿企股价将趋于平稳，尤其是如果美联储未能如市场预期那样完成 ...

Group 1 - Gold stocks experienced a collective rebound in early trading, with notable increases in share prices: Zhaojin Mining rose by 4.91% to HKD 32.02, Zijin Mining increased by 3.33% to HKD 33.56, Shandong Gold rose by 2.35% to HKD 36.56, Lingbao Gold increased by 2.18% to HKD 19.22, and Chifeng Jilong Gold rose by 1.81% to HKD 30.3 [3] - The surge in gold prices was driven by ongoing concerns over a potential U.S. government shutdown, leading to increased market expectations for a Federal Reserve rate cut and central banks globally increasing their gold holdings [3] - As of the close, the December gold futures price on the New York Mercantile Exchange reached USD 4,359.4 per ounce, marking a 3.47% increase [3] Group 2 - HSBC's recent commodity outlook report indicates that the upward momentum for gold is expected to continue until 2026, supported by strong gold purchases from central banks, ongoing fiscal concerns in the U.S., and expectations for further monetary easing [3] - The target price for gold set by HSBC is USD 5,000 per ounce, reflecting the anticipated sustained demand and market conditions [3]

Core Viewpoint - The recent sharp decline in gold and silver prices, with gold experiencing its largest single-day drop in over 12 years, highlights the volatility in the precious metals market and the potential for significant market corrections even in favorable macroeconomic conditions [4][5][7]. Market Overview - On October 21, gold prices fell by 6.3%, nearing the $4000 mark, while silver saw an even steeper decline of 8.7%, ending a streak of record highs [4][5]. - Major gold mining companies, including Barrick Gold, Newmont Mining, and Agnico Eagle Mines, saw their stock prices drop by over 8% in early trading following the market turmoil [6]. Market Dynamics - The previous surge in gold prices was driven by expectations of significant interest rate cuts by the Federal Reserve and inflation hedging strategies by investors [7]. - The sudden sell-off indicates that overheated market sentiment can lead to drastic corrections, even when macroeconomic indicators seem favorable [7]. Technical Analysis - Analysts from Goldman Sachs noted that there was no clear catalyst for the price drop, attributing it to overcrowded positions in the market [10][11]. - The market had become excessively crowded after nine consecutive weeks of price increases, leading to a necessary "cleaning" of positions [12]. Role of ETFs - Exchange-Traded Funds (ETFs) played a crucial role in the recent market fluctuations, serving as the primary tool for investors to quickly establish and liquidate positions [13]. - The trading volume of the GLD gold ETF reached a record high, accounting for 8% of the total trading volume of all listed ETFs in the U.S. [14]. - Since February, the assets under management (AUM) of U.S. listed gold ETFs have nearly doubled, with over half of the annual inflows occurring in the last three months [16]. Future Outlook - Despite the recent downturn, the long-term macroeconomic factors driving gold prices remain unchanged, such as the U.S. national debt reaching a historic high of $37.98 trillion [17]. - Analysts expect that as the market stabilizes, there will be an influx of capital from investors who have not yet entered the market [19]. - Maintaining the $4000 per ounce price level is critical, with attention on whether physical buyers in Asia will enter the market following the recent price movements [20].

Core Viewpoint - Investors who withdrew $669 million from the largest ETF tracking gold mining giants appear to have made a wise decision following a significant drop in gold prices, which fell 6.3% on Tuesday, marking the largest single-day decline in over 12 years [1] Group 1: Market Performance - The VanEck Gold Miners ETF experienced a 9.4% drop on Tuesday, the largest single-day decline since March 2020 [1] - Major gold mining companies such as Newmont Corporation (NEM.US), Agnico Eagle Mines, and Barrick Gold (B.US) all saw declines exceeding 9% [1] - Newmont and Agnico Eagle Mines lost back over a week’s worth of gains in just one day, while Barrick Gold reversed a month’s worth of gains [1] Group 2: Investor Sentiment - There is a growing skepticism among investors regarding the sustainability of the recent surge in gold prices, with significant capital outflows from the VanEck Gold Miners ETF indicating doubts about the rally [2] - The ETF saw its largest monthly outflow in five months, with $668.6 million withdrawn in September [2] - Despite the outflows, the ETF has still risen 115% year-to-date, with Newmont's stock up 131% in the same period [2] Group 3: Expert Opinions - Analysts express concerns that the gold sector's rapid price increases may be unsustainable, with some suggesting that the current market conditions resemble a "blow-off top" [2] - Nancy Tengler, CEO of Laffer Tengler Investments, notes that the current situation in the gold market is troubling, as it has become a "no-risk trade" with no one questioning its valuation [3] - John Ciampaglia, CEO of Sprott Asset Management, believes that while short-term volatility will remain high, the long-term outlook for gold mining stocks remains strong due to decreasing costs and high gold prices [7] Group 4: Future Outlook - Upcoming earnings reports from major gold mining companies, including Newmont and Agnico Eagle Mines, are anticipated to show strong performance due to favorable market conditions [7] - Despite the bullish sentiment in the derivatives market, where options trading volume for SPDR Gold Shares reached a record high, there are concerns that a stronger dollar could trigger a sell-off in gold mining stocks [7]

Core Viewpoint - The company reported significant growth in both revenue and net profit for the first three quarters of the year, driven by increased sales volume and prices from its subsidiary, as well as investment gains from the disposal of another subsidiary [2]. Financial Performance - The company's operating revenue for the first three quarters reached 340 million yuan, representing a year-on-year increase of 119.51% [2]. - The net profit attributable to shareholders was 82.16 million yuan, showing a year-on-year growth of 191.20% [2]. Key Drivers - The growth in revenue and profit was primarily attributed to the sales volume and selling price increase from the subsidiary, Watukola Gold Mine [2]. - The company also recognized investment gains from the disposal of its subsidiary, New Gold International, contributing to the overall financial performance [2].

Core Viewpoint - Barrick Gold's Loulo-Gounkoto mine in Mali has resumed production after a nine-month halt due to a government takeover, following an agreement to restart payments to contractors [1] Group 1: Production Resumption - The Loulo-Gounkoto mine resumed production last week after government management took over in June [1] - The resumption of production is attributed to an agreement reached between Barrick and the Malian government to restart payments to contractors, which had been suspended since January [1] Group 2: Financial Impact - The Loulo-Gounkoto mine is one of Barrick's most significant assets, projected to contribute 723,000 ounces of gold production in 2024 [1] - Barrick was unable to capitalize on the historical rise in gold prices this year due to the government takeover [1] Group 3: Disputes with Government - The disputes between Barrick and the Malian government date back to 2023, primarily involving tax payment disputes and new mining laws [1] - Other companies in the industry, such as Randgold and B2Gold, have resolved similar disputes through negotiations with the government, while Barrick's issues have only recently made progress [1] Group 4: Market Reaction - On Tuesday, Barrick's stock fell by 9.3%, reflecting a broader decline in the precious metals sector, as gold futures experienced the largest single-day dollar drop in history [1]

Core Insights - The report from CITIC Securities indicates that Zijin Mining (02899) benefited from rising gold and copper prices, achieving a revenue of 86.49 billion yuan in Q3 2025, a year-on-year increase of 8.1%, and a net profit attributable to shareholders of 14.57 billion yuan, a year-on-year increase of 57.1% and a quarter-on-quarter increase of 11.0% [1] Group 1 - The production of gold significantly exceeded the annual plan's progress [1] - Copper production experienced a quarter-on-quarter decline due to the flooding incident at the Kamoa-Kakula copper mine in the Democratic Republic of Congo, with the company actively working on the resumption of operations in the eastern section of the Kamoa mine [1] Group 2 - On September 30, Zijin Gold International (02259) successfully listed on the Hong Kong Stock Exchange, setting multiple records for mining company IPOs [1] - As the controlling shareholder of Zijin Gold International, the company stands to benefit from substantial returns from future high-speed growth and potential overall market value enhancement through revaluation [1] Group 3 - Zijin Gold International has completed the acquisition of 100% equity in the Raygorodok gold mine in Kazakhstan, with all conditions precedent for the agreement having been fulfilled or waived as of October 10, 2025 [1]

Group 1 - The core viewpoint of the report maintains a "buy" rating for Zhaojin Mining (01818) with a target price of HKD 43.72, driven by the clear timeline for the commencement of the Haiyu gold mine and the gradual release of production capacity, which is expected to lead to upward revisions in profit forecasts and valuation [1] - The company reported strong year-on-year growth in Q3, with revenue reaching RMB 12.43 billion, a significant increase of 53.73%, and net profit attributable to shareholders of approximately RMB 2.12 billion, up 140.43% [1] - In Q3 alone, the company achieved revenue of approximately RMB 5.08 billion, reflecting a year-on-year growth of 59.03% and a quarter-on-quarter increase of 25.73%, with net profit of about RMB 678 million, a year-on-year increase of 106.69% [1] Group 2 - The ongoing bull market in gold provides strong support, with the average gold price in Q3 reaching USD 3,459 per ounce, a year-on-year increase of 39.88%, significantly boosting the company's revenue [2] - The Haiyu gold mine, the largest single gold mine discovered in China, has proven reserves exceeding 560 tons and an average grade of 4.20 grams per ton, positioning it as a world-class asset with substantial future value [2] - The Haiyu gold mine's production system has successfully completed initial testing, with full production expected to ramp up between 2026 and 2027, potentially yielding at least 15 tons of gold annually, which will enhance the company's competitive edge due to low production costs [2]