12 March
2025
Preliminary
Results
Year ended 31 December
2024
Eduardo Landin, Chief Executive Officer of Hochschild,
commented:
"We are pleased to announce our
best financial performance for 13 years, a testament to our
exceptional team and high-quality assets. Our growth strategy
continues to deliver, with the addition of a record 2.8 million
gold-equivalent ounces of mineable resources, extending the life of
all our current operations and two major growth projects are now
being developed that could boost annual production by over 200,000
ounces. In line with our commitment to shareholder value, we are
restoring our dividend and introducing a clear dividend policy,
underscoring our focus on sustainable returns. Our team remains
dedicated to maximising value, optimising costs, and ensuring
long-term growth."
2024 Strong financial performance
§ Revenue
up 37% at $947.7 million (2023: $693.7
million)[1]
§ Adjusted EBITDA up 54% at $421.4 million (2023: $274.4
million)[2]
§ Profit
before income tax (pre-exceptional) up 272% at $199.1 million
(2023: $53.5 million)
§ Profit
before income tax (post-exceptional) up 507% at $177.2 million
(2023: $43.5 million loss)
§ Basic
earnings per share (pre-exceptional) at $0.23 (2023:
$0.02)
§ Basic
earnings per share (post-exceptional) at $0.19 (2023: loss per
share of $0.10)
§ Cash
and cash equivalents balance of $97.0 million as at 31 December
2024 (2023: $89.1 million)
§ Net
debt2 of $215.6 million as at 31 December 2024 (2023: $257.9
million)
Dividend restored
§ Final
proposed dividend of $1.94 cents per share ($10.0
million)[3]
§ Dividend policy introduced: payout based on 20-30%
of attributable free cashflow[4]
o Minimum annual dividend of $10.0 million: to be distributed
in two instalments
o Subject to leverage being lower than 1.5x Net debt/Adjusted
EBITDA (current Net Debt/Adjusted EBITDA of 0.51x as at 31 December
2024)
2024 Operational Performance[5]
§ Full
year attributable production of 347,374 gold equivalent
ounces
§ All-in
sustaining costs (AISC) 2 from operations of $1,638
per gold equivalent ounce (2023: $1,454)
2024 Exploration and Project Highlights
§ Record
resource additions of 2.8 million gold equivalent ounces
o 1.0 million gold equivalent ounces added at
Inmaculada
o 1.3 million gold equivalent ounces added at
Royropata
o 0.3 million gold equivalent ounces added at San
Jose
o 0.2 million gold ounces added at Mara Rosa
§ Acquisition completed of the Monte Do Carmo project for total
phased payments of $60.0 million ($45.0 million already
paid)
2024 ESG KPIs
§ Lost
Time Injury Frequency Rate of 1.25 (2023: 0.99)[6]
§ Water
consumption of 138lt/person/day (2023:
163lt/person/day)[7]
§ Domestic waste generation of 0.93 kg/person/day (2023:
0.93kg/person/day)8
§ ECO
score of 5.58 out of 6 (2023: 5.76)8,[8]
2025 Outlook
§ Overall
production target:
o 350,000-378,000 gold equivalent ounces
o New Mara Rosa mine set to produce 94,000-104,000 ounces of
gold
§ All-in
sustaining cost target:
o $1,587-$1,687 per gold equivalent ounce
§ Total
sustaining capital expenditure at operating mines expected to be
approximately $169-180 million
§ Brownfield exploration budget of $36 million
|
$000 unless stated
|
Year ended
31 Dec
2024
|
Year
ended
31 Dec
2023
|
%
change
|
|
Attributable silver production
(koz)
|
8,496
|
9,517
|
(11)
|
|
Attributable gold production
(koz)
|
245
|
186
|
32
|
|
Revenue
|
947,696
|
693,716
|
37
|
|
Adjusted EBITDA
|
421,354
|
274,370
|
54
|
|
Profit from continuing operations
(pre-exceptional)
|
133,511
|
9,505
|
1,305
|
|
Profit (loss) from continuing
operations (post-exceptional)
|
113,749
|
(60,033)
|
(289)
|
|
Basic earnings per share
(pre-exceptional) $
|
0.23
|
0.02
|
1,050
|
|
Basic earnings (loss) per share
(post-exceptional) $
|
0.19
|
(0.10)
|
(290)
|
________________________________________________________________________________________
A presentation will be held for
analysts and investors at 9.30am (UK time) on Wednesday 12 March
2025 at the offices of Hudson Sandler,
25 Charterhouse Square, London,
EC1M 6AE
The presentation and a link to the
live audio webcast of the presentation can be found at the
Hochschild website:
www.hochschildmining.com
or:
https://brrmedia.news/HOC_FY_24
To join the event
via conference call, please see dial in details below:
International Dial in: +44 (0)330
551 0200
US Toll-Free Number: 866 580
3963
Canada Toll Free: 1 866 378
3566
Password: Hochschild Mining FY24
________________________________________________________________________________________
Enquiries:
Hochschild Mining PLC
Charles Gordon
+44 (0)20 3709 3264
Head of Investor
Relations
Hudson Sandler
Charlie Jack
+44 (0)20
7796 4133
Public Relations
________________________________________________________________________________________
Non-IFRS Financial Performance Measures
The Company has included certain
non-IFRS measures in this news release. The Company believes that
these measures, in addition to conventional measures prepared in
accordance with IFRS, provide investors an improved ability to
evaluate the underlying performance of the Company. The non-IFRS
measures are intended to provide additional information and should
not be considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS. These measures do not
have any standardised meaning prescribed under IFRS, and therefore
may not be comparable to other issuers.
About Hochschild Mining PLC
Hochschild Mining PLC is a leading
precious metals company listed on the London Stock Exchange (HOCM.L
/ HOC LN) and crosstrades on the OTCQX Best Market in the U.S.
(HCHDF), with a primary focus on the exploration, mining,
processing and sale of silver and gold. Hochschild has over fifty
years' experience in the mining of precious metal epithermal vein
deposits and operates two underground epithermal vein mines:
Inmaculada, located in southern Peru; and San Jose in southern
Argentina, and an open pit gold mine, Mara Rosa, located in the
state of Goiás, Brazil. Hochschild also has numerous
long-term projects throughout the Americas.
Forward looking statements
This announcement may contain forward looking statements. By
their nature, forward looking statements involve risks and
uncertainties because they relate to events and depend on
circumstances that will or may occur in the future. Actual results,
performance or achievements of Hochschild Mining PLC may, for
various reasons, be materially different from any future results,
performance or achievements expressed or implied by such forward
looking statements.
The forward-looking statements reflect knowledge and
information available at the date of preparation of this
announcement. Except as required by the Listing Rules and
applicable law, the Board of Hochschild Mining PLC does not
undertake any obligation to update or change any forward-looking
statements to reflect events occurring after the date of this
announcement. Nothing in this announcement should be construed as a
profit forecast.
Note
The information contained within this announcement is deemed
by the Company to constitute inside information as stipulated under
the Market Abuse Regulation (Regulation (EU) No.596/2014). Upon the
publication of this announcement via a Regulatory Information
Service, this inside information is now considered to be in the
public domain.
LEI: 549300JK10TVQ3CCJQ89
CHAIR'S STATEMENT
I am very pleased to report that
we have made good progress across the entire business
during the year. Precious metal prices have continued to reach new
highs, and our management has been able to advance our strategy and
key objectives, particularly in Brazil, where we reached major
milestones with both commercial production at our Mara Rosa mine
and strategic growth with the addition of the new Monte do Carmo
project. Furthermore, our brownfield team
has also added significant high-quality resources at all our
operating mines, especially in Peru. These
achievements not only reflect our ability to grow and deliver value
but also align with our drive for excellence in all aspects of our
business-development, operational performance and
sustainability.
With regards to our people, we
have continued to prioritise the safety of our employees, through
the use of Safety 2.0, a framework of training programmes and
initiatives that seek to reinforce Hochschild's safety-first
approach in all that we do. The fruits of this work are
reflected in the accident frequency rate which is, yet again,
industry-leading and a testament to the work of our operations
teams.
We cannot, and do not, measure our
success solely with reference to our operational and financial
results, as the impact of our operations on our wider stakeholders
are equally important. We actively engage with our local
communities and seek to meet their needs by creating positive
social impacts and promoting economic development in the areas
where we operate.
Our collective efforts are reflected in the
year-on-year increase in the proportion of local procurement and
the wide-ranging social investment programme implemented for the
benefit of our local communities in Peru, Argentina, and
Brazil.
As a company committed to
sustainable growth, we recognise that responsible environmental
management is crucial to our long-term success. In 2024, our
environmental performance was excellent, as measured by our unique
and industry-leading ECO Score tool. Our green credentials were
further reinforced by our ability to reduce, to all-time lows, the
amount of water consumed in our operations. The year also saw the
renewal of our ESG-linked debt facility which will see the interest
rate adjusted in line with specific aspects of our environmental
and safety performance.
Looking at Hochschild as an
employer, turnover of personnel continues to be very low. The Board
was also pleased to note the outcome of the working climate survey
which saw a significant improvement in the satisfaction of our
colleagues in Peru and Argentina over a five-year period. This
year, we will work to implement the actions that have been
identified to build on this strong foundation.
It is with great pride that
Hochschild's collective efforts on all of these fronts have been
the subject of external validation, with a number of ESG
organisations upgrading their ratings on the Company as well as our
inclusion in the FTSE4Good Index. Details of the wide-ranging
programmes undertaken in our countries of operation can be found in
the Sustainability section of the Annual Report and our standalone
Sustainability Report to be published during Q2 2025.
In Brazil, we achieved significant
milestones, notably reaching commercial production at our Mara Rosa
mine in May 2024 after a successful construction phase which was
completed on time and on budget. In addition, we further
strengthened our position by optioning and subsequently acquiring
the Monte do Carmo project for a total cost of $60 million. This
highly promising asset in the business-friendly neighbouring state
of Tocantins has all the potential to become our next major
low-cost construction project in Brazil, complementing the growth
trajectory we have established in this key region and utilising our
team's proven expertise.
One of the standout highlights has
been the performance of our brownfield exploration team. With their
relentless dedication and innovative approach, we have achieved
remarkable results in 2024, including a record addition of 2.8
million gold equivalent ounces to our resource base. As we have
consistently emphasised, we believe strongly in the untapped
potential of our assets and the successes we've seen this year
validate that belief and underline the vital role that brownfield
exploration plays in our strategy. These resource additions are not
only a testament to the hard work of our team but also confirm our
confidence that our existing operations will remain at the heart of
our Company for many years to come.
Our operations once again
delivered reliable performance, underscored by the achievement of
first production from the Mara Rosa mine, a significant milestone,
which further solidified our operational foundation as we continue
to expand our footprint. Although costs were moderately above our
initial guidance, this was largely due to persistent inflationary
pressures in Argentina and a slower-than-expected ramp-up in
Brazil. As with any major mine development, a certain degree of
fine-tuning is often necessary in the final stages, but we remain
confident that these challenges have been overcome and the
operation will deliver a full year of output in 2025. Furthermore,
the combination of a record gold price and our continued
operational efficiency enabled us to generate strong cashflow,
which allowed us to reduce a portion of our debt and continue to
invest in our project pipeline.
I would like to express my
gratitude and that of the Board to Michael Rawlinson, who will be
retiring at the conclusion of the forthcoming AGM, for his
dedicated service as a Board member, Senior Independent Director
and Chair of the Remuneration Committee. We will all miss his
insight and valued contributions in our discussions and wish him
all the best for the future. I am delighted that Michael will be
succeeded by Tracey Kerr as Senior Independent Director and by Jill
Gardiner as Remuneration Committee Chair.
Outlook
2024 was a year marked by
exceptional performance in the precious metals market, with both
gold and silver reaching notable price milestones. Gold surged to a
new high of $2,800 per ounce, while silver experienced a solid 21%
increase in the year-end spot price, although still well below its
record high from 2011. This robust market environment has
significantly benefited us, and we are pleased to report that this
price strength has continued into 2025, providing us with a strong
foundation as we move forward.
2024 was a year of solid financial
discipline and progress, as we made significant strides in
achieving our medium-term financial targets. A key focus for us has
been the reduction of our existing debt, and I'm pleased to report
that we successfully reduced our net debt position by just over $40
million during the year. This was achieved while simultaneously
making strategic investments in the final stages of development at
Mara Rosa and the acquisition of Monte do Carmo, which will
contribute to our growth and long-term success.
As part of our comprehensive
capital allocation strategy, we also recognise the importance of
capital return to our shareholders. With this in mind, the Board is
pleased to announce that our strong balance sheet has allowed us to
reinstate our dividend payout and to recommend a final dividend of
$1.94 cents per share
($10.0 million). Furthermore, the Board has approved a new dividend
policy aimed at providing greater predictability and consistency
for our investors in the years ahead. This move underscores our
commitment to maintaining a balance between reinvesting in our
business for future growth and delivering tangible returns to our
shareholders and could also include future share buybacks, if
considered appropriate by the Directors.
As we look back on a successful
2024, I would like to take this opportunity to express my gratitude
to our leadership team, as well as the several thousand Hochschild
employees, contractors, and partners who have played a pivotal role
in our achievements. Their dedication and hard work have been
instrumental in delivering for our Company and our stakeholders,
and I am incredibly proud of what we have accomplished
together.
Eduardo Hochschild, Chairman
11 March 2025
CHIEF EXECUTIVE OFFICER'S STATEMENT
I am proud to say that we have
made significant strides in executing the strategy we outlined in
November 2023 which focused on four key pillars: brownfield
exploration, operational efficiency, ESG and disciplined capital
allocation.
Our new Mara Rosa mine was
completed on time and on budget and is now operating as planned.
This achievement marks another key step forward for the Company
whilst at the same time, our other operations, particularly
Inmaculada, have consistently exceeded expectations, showcasing the
strength and resilience of our existing portfolio. Additionally, we
have made great progress in expanding our growth pipeline by adding
an exciting new project in Brazil and have also continued to
advance the development of our Royropata project in Peru. These
efforts position us well for the next phase of growth and lay the
foundation for future value creation.
ESG
Our corporate purpose places
responsibility at the core of how we conduct our business. As
outlined by Eduardo Hochschild, our commitment to this
responsibility is reflected through a wide range of programmes,
initiatives, and actions that continue to drive positive change. I
am proud to highlight that our principle-led approach has
translated into real, impactful developments across our operations.
In 2024, we took a significant step by forming a multi-disciplinary
team dedicated to coordinating our ESG efforts, further emphasizing
its critical role in our corporate strategy.
Through our community engagement
initiatives, we successfully completed the first phase of work
necessary to advance the Royropata project. Additionally, in the
area of safety, our operating units in Peru and Argentina achieved
Level 8 certification from Det Norske Veritas for their risk
management information systems, making Hochschild the first mining
company to secure this prestigious level of accreditation. We
continue to maintain excellent environmental performance,
reinforcing our dedication to sustainability and responsible
resource management across all aspects of our
operations.
Operations
Hochschild Mining's operational
performance in 2024 continued to demonstrate the strength of our
assets and our ability to meet our Company production target. We
delivered 347,374 attributable gold equivalent ounces, marking a
16% increase compared to the prior year's output of 300,749 ounces
mostly due to a first contribution from the new Mara Rosa mine. The
all-in sustaining cost (AISC) for the year was slightly higher than
expected, reflecting persistent inflationary pressures in Argentina
and a slower-than-expected initial ramp-up in Brazil.
The Inmaculada mine delivered a
strong performance in 2024, with an 8% increase in production,
totalling 220,501 gold equivalent ounces (up from 203,849 ounces in
2023). This was largely driven by a series of successful
operational efficiency initiatives aimed at increasing overall
mined tonnage. The AISC for Inmaculada was $1,512 per gold
equivalent ounce. Over at San Jose, production was in line with
expectations at 123,732 million gold equivalent ounces in 2024
(2023: 134,264 million ounces), primarily reflecting scheduled
lower grades. In addition, a $9 million project to expand plant
capacity by approximately 20% was successfully completed by the end
of the year, enabling the future treatment of existing lower-grade
ores. AISC for San Jose was higher than anticipated at $1,973 per
gold equivalent ounce, due to continued inflationary pressures in
Argentina, without the benefit of currency devaluation to offset
cost increases.
The Mara Rosa mine achieved a
major milestone in 2024, with construction being completed early in
the year. After commissioning, the mine reached commercial
production in mid-May and eventually delivered 63,770 gold
equivalent ounces at an all-in sustaining cost of $1,408 per gold
equivalent ounce. Although the ramp-up process took slightly longer
than expected, the team at Mara Rosa did a good job in overcoming
the start-up challenges associated with a new mine. We are
optimistic about the future, as 2025 will mark the first full year
of production from this new asset, and we anticipate strong
contributions to our overall performance moving forward.
Projects
With the project completed at Mara
Rosa, the business development team turned its attention to the
next stage of growth in Brazil. In March, we secured an option to
acquire the Monte do Carmo project in the neighbouring Tocantins
state from Cerrado Gold and following a period of extensive
exploration and a twin drilling programme, which returned
encouraging results, we exercised the option and closed the
purchase in November for a total cost of $60 million. This
high-quality addition to our pipeline added a low-cost, long-life
asset located in a mining-friendly jurisdiction within close
proximity to Mara Rosa. With permitting substantially de-risked and
strong exploration upside, we believe that we have the right team
in place to deliver another exciting opportunity for all
stakeholders. In 2025, we look forward to advancing the project
through additional drilling and detailed engineering with the aim
of a decision on construction later in the year.
In Peru, we have made good
progress at our Royropata project close to the former Pallancata
mine. We achieved the key milestone of securing the community
easements with our neighbouring communities on all the required
land during the year and are aiming to submit the Modified
Environmental Impact Assessment ("MEIA") to the government in 2026.
We are also confident that our recent success at adding to the
project's resource base will boost the project economics as we
advance through the permitting process.
Exploration
Brownfield exploration remains one
of the cornerstones of our strategy, and I am proud of the work
accomplished by Oscar Garcia and his dedicated brownfield team.
Their efforts have resulted in a record year of resource additions,
with 2.8 million gold equivalent ounces added across all our
operations and projects. A standout achievement was at Inmaculada,
where over 1 million ounces were discovered, primarily in the
northern part of the known deposit. In the Royropata area, we made
significant strides towards the end of the year, discovering an
important amount of resources that increases its initial
life-of-mine. Additionally, we successfully replaced resources at
San Jose and uncovered new mineralisation below the main pit at
Mara Rosa, further highlighting the substantial potential to extend
the life-of-mine at this new mine. These milestones underscore the
strength and resilience of our exploration efforts, positioning us
for continued success in the future.
Financial position
With the increased production from
Mara Rosa and record gold prices during the year, the Company
generated significant cashflow with the result that the Company's
liquidity remains strong. Cash and cash equivalents of $97.0
million at the end of December (2023: $89.1 million) reflected
strong operational cash flow during the year offset by the
remaining project capital expenditure of just over $16 million at
Mara Rosa in the first half of the year as well as the payment of a
total of $45.0 million to Cerrado Gold Inc. for the Monte Do Carmo
project in Brazil, and expenditure on the Royropata MEIA process of
$32.9 million. Total debt of $312.6 million (31 December 2023:
$347.1 million) was composed of $200.0 million from the existing
ESG-linked loan facility with repayments between 2025 and 2027,
$30.0 million from a recently negotiated $300.0 million ESG-linked
loan facility with repayments between 2028 and 2029, and short-term
borrowings. Net debt was reduced to $215.6 million (31 December
2023: $257.9 million).
Financial results
Total Group production was 11%
higher than 2023 and this was boosted by a 19% rise in the gold
price received and a 22%
rise in the silver price. Consequently, revenue
increased by 37% to $947.7 million (2023: $693.7 million). All-in
sustaining costs were at $1,638 per gold equivalent ounce or $19.7
per silver equivalent ounce (2023: $1,454 per ounce/$17.5 per
ounce). Adjusted EBITDA of $421.4 million (2023: $274.4 million)
increased by 54% versus 2023 reflecting the production and price
rises partially offset by an increase in cost of sales.
Pre-exceptional earnings per share increased to $0.23 (2023: $0.02
per share) mainly due to the higher profitability, net of taxes.
Post-exceptional earnings per share was higher at $0.19 (2023:
$0.10 loss per share) and includes the impairment charges at the
Azuca and Arcata projects of $13.7 million, the impairment of the
investment in Aclara Resources Inc. of $5.1 million, and the
write-off of work in progress of $3.1 million in Peru. The net
after-tax effect of exceptional items is a loss of $19.8
million.
Outlook
We expect attributable production
in 2025 of between 350,000-378,000 gold equivalent ounces. This
will be driven by: 199,000-209,000 gold equivalent ounces from
Inmaculada; an attributable contribution of 57,000 to 65,000 gold
equivalent ounces from San Jose; and first full year of production
from the Mara Rosa mine of between 94,000 and 104,000 gold ounces.
All-in sustaining costs for operations are expected at between
$1,587 and $1,687 per gold equivalent ounce. This forecast reflects
some carry over capex at Inmaculada resulting from the 2022/2023
MEIA delay which mostly consists of the expansion of the tailings
dam and the construction of a reverse osmosis plant. The forecast
also includes project capex at Inmaculada, mainly an additional
increase in tailings dam capacity as well as mine development capex
to access new mine areas and ongoing net inflation in Argentina as
well as, to a lesser extent, in Brazil and Peru.
A project capex budget of $19
million has been assigned to the new Monte Do Carmo project along
with $9 million for Royropata and the exploration budget is
approximately $36 million.
The prospects for the Company
remain exciting as we continue to advance our two key growth
projects in Brazil and Peru, which are set to significantly
increase production in the next three years. We are actively
pursuing efficiency improvements to mitigate cost inflation,
inspired by the success at Inmaculada. Our strong financial
position and continuing high precious metal prices gives us
confidence and this is reflected by the reinstatement of the
dividend and the introduction of a new policy, as outlined by our
Chair. I remain optimistic that, in the year ahead, we will
continue to deliver increased value for all our stakeholders in a
responsible and sustainable manner.
Eduardo Landin, Chief Executive Officer
11 March 2025
OPERATING REVIEW
OPERATIONS
Note: 2025, 2024 and 2023
equivalent figures calculated assume a gold/silver ratio of
83x.
Production
In 2024, Hochschild delivered
attributable production of 347,374 gold equivalent ounces or 28.8
million silver equivalent ounces, in line with the Company's
guidance and an increase versus the 2023 result (300,749 gold
equivalent ounces). Higher production from Inmaculada and a first
contribution from the new Mara Rosa mine in Brazil was partially
offset by lower production in San Jose and no production from
Pallancata.
The overall attributable
production target for 2025 is 350,000-378,000 gold equivalent
ounces.
Total 2024 group production
|
|
Year ended
31 Dec
2024
|
Year
ended
31 Dec
2023
|
|
Silver production (koz)
|
10,530
|
11,683
|
|
Gold production (koz)
|
281.14
|
225.77
|
|
Total silver equivalent
(koz)
|
33,864
|
30,423
|
|
Total gold equivalent
(koz)
|
408.00
|
366.54
|
|
Silver sold (koz)
|
10,643
|
11,547
|
|
Gold sold (koz)
|
281.46
|
221.40
|
Total production includes 100% of all production, including
production attributable to Hochschild's minority shareholder at San
Jose.
Attributable 2024 group production
|
|
Year ended
31 Dec
2024
|
Year
ended
31 Dec
2023
|
|
Silver production (koz)
|
8,496
|
9,517
|
|
Gold production (koz)
|
245.01
|
186.09
|
|
Silver equivalent (koz)
|
28,832
|
24,962
|
|
Gold equivalent (koz)
|
347.37
|
300.75
|
Attributable production includes 100% of all production from
Inmaculada, Mara Rosa and 51% from San Jose.
Attributable 2025 Production forecast split
|
Operation
|
Oz Au Eq
|
|
Inmaculada
|
199,000-209,000
|
|
Mara Rosa
|
94,000-104,000
|
|
San Jose
|
57,000-65,000
|
|
Total
|
350,000-378,000
|
Costs
All-in sustaining cost from
operations in 2024 was $1,638 per gold equivalent ounce or $19.7 per silver
equivalent ounce (2023: $1,454 per gold equivalent ounce
or $17.5 per
silver equivalent ounce), higher than guidance as anticipated,
mainly as a result of: ongoing high net inflation in Argentina; a
slower-than-expected ramp-up at the new Mara Rosa mine resulting in
lower production for the year; higher costs resulting from rising
precious metal prices including increased royalties, commercial
deductions, legal workers profit sharing in Peru, export tax in
Argentina and industry inflation. These effects were partially
offset by lower costs at Inmaculada as a result of
higher-than-forecast production resulting from cost efficiency
initiatives during the year and the delay of some planned
capex.
The all-in sustaining cost from
operations in 2025 is expected to be between $1,587 and $1,687 per
gold equivalent ounce.
2025 AISC forecast split
|
Operation
|
$/oz Au Eq
|
|
Inmaculada
|
1,605-1,705
|
|
Mara Rosa
|
1,287-1,370
|
|
San Jose
|
2,007-2,135
|
|
Total from operations
|
1,587-1,687
|
PERU
Inmaculada
The 100% owned Inmaculada
gold/silver underground operation is located in the Department of
Ayacucho in southern Peru. It commenced operations in June
2015.
|
Inmaculada summary
|
Year ended
31 Dec
2024
|
Year
ended
31 Dec
2023
|
% change
|
|
Ore production (tonnes)
|
1,197,965
|
1,137,109
|
5
|
|
Average silver grade
(g/t)
|
179
|
177
|
1
|
|
Average gold grade
(g/t)
|
3.90
|
4.09
|
(5)
|
|
Silver produced (koz)
|
6,368
|
5,515
|
15
|
|
Gold produced (koz)
|
143.78
|
137.40
|
5
|
|
Silver equivalent produced
(koz)
|
18,302
|
16,919
|
8
|
|
Gold equivalent produced
(koz)
|
220.50
|
203.85
|
8
|
|
Silver sold (koz)
|
6,342
|
5,488
|
16
|
|
Gold sold (koz)
|
143.64
|
136.66
|
5
|
|
Unit cost ($/t)
|
143.2
|
142.3
|
1
|
|
Total cash cost ($/oz Au
co-product)
|
809
|
803
|
-
|
|
All-in sustaining cost ($/oz Ag
Eq)
|
18.2
|
15.5
|
17
|
|
All-in sustaining cost ($/oz Au
Eq)
|
1,512
|
1,287
|
18
|
Production
The Inmaculada mine delivered gold
equivalent production of 220,501 ounces (2023: 203,849 ounces),
which is an 8% improvement on 2023 when the mine was impacted by
permit delays. There was also a rise in tonnage from the
implementation of continuous improvement initiatives at
site.
Costs
All-in sustaining cost was $1,512
per gold equivalent ounce (2023: $1,287 per ounce) with the
increase versus 2023 mainly explained by the capex catch-up versus
2023 when a significant portion was deferred to 2024/2025 due the
MEIA approval delay although a portion of this capex was delayed to
2025 which explains the result being lower than
guidance.
Royropata
The 100% owned Royropata project
is located in the Department of Ayacucho in southern Peru and is
close to the Pallancata mine which was placed on temporary care and
maintenance in December 2023.
In 2024, work continued on the
MEIA process. All feasibility study engineering was completed
whilst baseline studies continued throughout the year. Easements
with communities were all successfully received by the end of the
year. The aim is complete all field work in 2025 with the
preparation of the MEIA documents expected to last into 2026 with
submission to SENACE targeted for the middle of 2026.
ARGENTINA
San Jose
The San Jose silver/gold mine is
located in Argentina, in the province of Santa Cruz, 1,750
kilometres south west of Buenos Aires. San Jose commenced
production in 2007. Hochschild holds a controlling interest of 51%
and is the mine operator. The remaining 49% is owned by McEwen
Mining Inc.
|
San Jose summary
|
Year ended
31 Dec
2024
|
Year
ended
31 Dec
2023
|
% change
|
|
Ore production (tonnes)
|
581,303
|
579,100
|
-
|
|
Average silver grade
(g/t)
|
253
|
270
|
(6)
|
|
Average gold grade
(g/t)
|
4.55
|
5.03
|
(10)
|
|
Silver produced (koz)
|
4,150
|
4,422
|
(6)
|
|
Gold produced (koz)
|
73.73
|
80.99
|
(9)
|
|
Silver equivalent produced
(koz)
|
10,270
|
11,144
|
(8)
|
|
Gold equivalent produced
(koz)
|
123.73
|
134.26
|
(8)
|
|
Silver sold (koz)
|
4,290
|
4,274
|
-
|
|
Gold sold (koz)
|
74.37
|
77.23
|
(4)
|
|
Unit cost ($/t)
|
287.2
|
264.0
|
9
|
|
Total cash cost ($/oz Ag
co-product)
|
19.5
|
15.9
|
23
|
|
All-in sustaining cost ($/oz Ag
Eq)
|
23.8
|
18.9
|
26
|
|
All-in sustaining cost ($/oz Au
Eq)
|
1,973
|
1,570
|
26
|
Production
San Jose's production in 2024
totalled 123,732 gold equivalent ounces (2023: 134,264 ounces) with
the decrease versus 2023 reflecting lower grades although the
operation ended the year moderately above guidance.
In April 2024, the Board approved
a $9 million project to increase the plant throughout capacity from
1,650 tonnes per day to 2,000 tonnes per day. This project was
completed by the year end.
Costs
All-in sustaining costs were at
$1,973 per gold equivalent ounce (2023: $1,570 per ounce) with the
increase versus 2023 mainly due to the significant net inflation in
the country in addition to lower grades and increases in selling
expenses, commercial deductions and export taxes aligned with
higher metal prices.
BRAZIL
Mara Rosa
The 100% owned Mara Rosa open pit
gold mine is located in the mining friendly jurisdiction of Goiás
State in Brazil. Mara Rosa commenced production in mid-May
2024.
|
Mara Rosa summary
|
Year ended
31 Dec
2024
|
|
Ore production (tonnes)
|
1,757,955
|
|
Average gold grade
(g/t)
|
1.35
|
|
Silver produced (koz)
|
11
|
|
Gold produced (koz)
|
63.64
|
|
Silver equivalent produced
(koz)
|
5,293
|
|
Gold equivalent produced
(koz)
|
63.77
|
|
Silver sold (koz)
|
11
|
|
Gold sold (koz)
|
63.54
|
|
Unit cost ($/t)
|
48.3
|
|
Total cash cost ($/oz Au
co-product)
|
1,034
|
|
All-in sustaining cost ($/oz Au
Eq)
|
1,408
|
Production
The new Mara Rosa mine reached
commercial production in mid-May 2024 and after a
slower-than-expected ramp-up during the second and third quarters.
Issues with the mining contractor and underperforming mechanical
filters in the plant were solved with the result that output was
steady state in Q4 with 25,530 ounces of gold delivered. Overall
production in 2024 was 63,770 gold equivalent ounces.
Costs
All-in sustaining costs were at
$1,408 per gold equivalent ounce with the increase versus the
guided range of $1,090-$1,120 per ounce mainly due to the
slower-than-expected ramp-up of the mine (mentioned above), local
inflation and the dry stacking/filtration process costs.
Development project: Monte Do Carmo
In March 2024, Hochschild
announced that it had entered into an option agreement for $15
million to acquire a 100% interest in Cerrado Gold Inc's Monte Do
Carmo Project located in the mining-friendly state of Tocantins,
Brazil. The option was exercised in
November 2024 and, after making $45 million in phased payments in
2024, the Company was able to complete the acquisition of 100% of
the project with $30 million paid in the fourth quarter.
Monte Do Carmo comprises 21
mineral concessions encompassing 82,542 hectares, hosts multiple
identified gold targets along a 30km mineralised trend, including
the principal Serra Alta gold deposit, which hosts a Measured and
Indicated resource of 1,012koz gold and Inferred resource of 66koz
gold and was the subject of a Feasibility Study dated 31 October
2023. The project benefits from significant existing site
infrastructure including year-round access via a paved highway and
close proximity to the Isamu Ikeda hydropower plant. Permitting is
substantially advanced, with the Environmental Impact Assessment
approved and the Preliminary Licence granted by the Tocantins state
environmental agency in May 2023.
The Company believes that the
Monte Do Carmo is a compelling strategic opportunity to enhance
Hochschild's project pipeline and growth profile through the
addition of a high-quality, long-life project. The key benefits to
Hochschild, shareholders and other stakeholders,
include:
·
High quality project: Adds a
low-cost, long-life asset located in a mining-friendly jurisdiction
of Brazil, within close proximity to the Mara Rosa mine
·
Significant exploration
upside: Offers compelling near-mine exploration opportunities
underpinned by a large land package which remains relatively
underexplored
·
De-risked permitting: Project permitting
significantly advanced with the installation license recently
granted
· Leverages Hochschild's expertise and presence in Brazil:
Aligned with Hochschild's core strengths and long-term strategy of
acquiring and optimising development stage projects in Latin
America, specifically in Brazil, a country where the Company has
robust management and technical teams
·
Enhances Hochschild's portfolio: Provides the
next leg of growth for Hochschild following the completion of the
Mara Rosa mine
Following the original option
agreement, the Company executed a 1,704m twin hole drilling
programme which validated the deposit's mineral resource estimate.
In addition, a 4,806m resource drilling campaign was conducted
across five
prospective mineralisation zones. The campaign incorporated
additional gold resources (both Measured and Indicated and
Inferred) which confirmed the strong geological potential of the
project.
The Company also devised an
exploration plan across seven new targets that commenced in
November 2024. Furthermore, it is currently anticipated that, with
the twin hole exploration results, further upside from additional
drilling and several engineering optimisations already identified,
the Company will be in a strong position to reach an eventual
construction decision by the end of 2025.
Hochschild's programme in 2025
includes:
·
Ongoing drilling programs to expand the resource
base
·
Advance installation license for the main
project
·
Conduct any additional environmental analyses as
identified during due diligence
·
Develop the detailed engineering
studies
BROWNFIELD EXPLORATION
Inmaculada
During the year, the team carried
out 34,477m of drilling for both potential and resources. A number
of structures were drilled (see below) and by the end of the year
1.0 million gold equivalent ounces of inferred resources had been
added at a grade of approximately 4.72 grams per tonne of gold
equivalent.
|
Vein
|
Results (resources/potential)
|
|
Tesoro
|
IMM23-361: 14.9m @ 3.4g/t Au &
203g/t Ag
IMS24-231A: 24.7m @ 4.5g/t Au
& 155g/t Ag
IMS24-221: 5.6m @ 2.4g/t Au &
45g/t Ag
IMS24-222: 39.3m @ 5.1g/t Au &
303g/t Ag
IMS24-227A: 17.9m @ 1.4g/t Au
& 26g/t Ag
IMS24-380: 3.7m @ 3.5g/t Au &
242g/t Ag
IMS24-231A: 20.3m @ 2.9g/t Au
& 298g/t Ag
IMS24-257: 28.1.m @ 2.2g/t &
72g/t Ag
IMM24-387A: 1.7m @ 4.2g/t Au &
193g/t Ag
IMM24-393B: 10.0m @ 2.3g/t Au
& 26g/t Ag
IMS24-233: 7.7m @ 6.9g/t Au &
485g/t Ag
IMS24-238A: 9.3m @ 7.5g/t &
64g/t Ag
IMS24-239: 18.4m @ 9.3g/t &
366g/t Ag
IMS24-241: 1.7m @ 1.0g/t &
44g/t Ag
IMM24-397B: 2.6m @ 14.1g/t Au
& 806g/t Ag
IMM24-401A: 1.3m @ 2.0g/t Au &
117g/t Ag
|
|
Tesoro Techo
|
IMS24-213A: 11.0m @ 1.6g/t Au
& 46g/t Ag
IMS24-216: 6.9m @ 0.5g/t Au &
76g/t Ag
IMS24-218: 9.6m @ 5.8g/t Au &
384g/t Ag
IMM24-380: 4.8m @ 5.0g/t Au &
389g/t Ag
IMS24-248: 1.0m @ 0.8g/t Au &
186g/t Ag
IMM24-387A: 1.5m @ 3.2g/t Au &
59g/t Ag
IMM24-393B: 8.7m @ 5.7g/t Au &
84g/t Ag
IMS24-234: 0.4m @ 3.6g/t Au &
437g/t Ag
IMS24-250: 3.3m @ 1.4g/t Au &
79g/t Ag
IMS24-233: 1.0m @ 1.2g/t Au &
29g/t Ag
IMS24-257: 4.1m @ 3.5g/t Au &
322g/t Ag
IMS24-232: 1.4m @ 0.6g/t Au &
63g/t Ag
IMS24-246A: 2.3m @ 2.8g/t Au &
51g/t Ag
IMM24-397B: 1.6m @ 16.3g/t Au
& 92g/t Ag
IMM24-401A: 1.4m @ 0.8g/t Au &
56g/t Ag
|
|
Andrea
|
IMM24-375: 12.0m @ 13.0g/t Au
& 970g/t Ag
IMS24-218: 2.8m @ 8.2g/t Au &
184g/t Ag
IMM24-380: 2.5m @ 4.0g/t Au &
249g/t Ag
IMM24-397: 1.3m @ 1.5g/t Au &
142g/t Ag
IMS24-259: 1.1m @ 3.5g/t Au &
97g/t Ag
IMS24-264: 2.2m @ 1.5g/t Au &
97g/t Ag
|
|
Carmen
|
IMM24-375: 0.6m @ 2.8g/t Au &
19g/t Ag
|
|
Juliana NE
|
IMM24-375: 1.3m @ 2.8g/t Au &
293g/t Ag
IMS24-218: 0.6m @ 4.7g/t Au &
165g/t Ag
|
|
Laura
|
IMS24-215: 1.6m @ 3.3g/t Au &
3g/t Ag
|
|
Lia
|
IMM23-212: 0.9m @ 2.9g/t Au &
4g/t Ag
IMS24-239: 2.2m @ 2.2g/t Au &
130g/t Ag
IMS24-242A: 3.6m @ 0.5g/t Au &
10g/t Ag
|
|
Nicolas
|
IMS24-217: 1.4m @ 0.6g/t Au &
85g/t Ag
IMM24-393B: 5.0m @ 1.7g/t Au &
67g/t Ag
IMS24-239: 1.2m @ 5.0g/t Au &
17g/t Ag
IMS24-241: 4.0m @ 1.8g/t Au &
68g/t Ag
IMS24-242A: 4.2m @ 9.9g/t Au &
48g/t Ag
|
In the first quarter of 2025, the
team is planning 7,500m of potential drilling to conclude the
exploration of the Eduardo, Kary, Tesoro, Bárbara N and Keyla veins
as well as starting drilling of the area to the south of the Divina
and Lucy veins.
San Jose
During 2024, the brownfield team
carried out a further 17,431m of drilling for potential and
resources. A number of structures were drilled (see below) and by
the end of the year 19.2 million silver equivalent ounces of
inferred resources had been added at a grade of approximately 644
grams per tonne of silver equivalent.
|
Vein
|
Results (potential)
|
|
Dalia
|
SJD-2775: 2.8m @ 1.3g/t Au &
288g/t Ag
SJD-2776: 2.8m @ 2.0g/t Au &
513g/t Ag
SJD-2777: 3.0m @ 1.3g/t Au &
86g/t Ag
SJD-2778: 1.7m @ 0.5g/t Au &
19g/t Ag
SJD-2788: 1.7m @ 4.8g/t Au &
51g/t Ag
SJD-2789: 0.8m @ 2.6g/t Au &
457g/t Ag
SJD-2795: 0.8m @ 0.6g/t Au &
90g/t Ag
SJD-2800: 1.2m @ 30.8g/t Au &
67g/t Ag
|
|
Emilia
|
SJM-663: 0.8m @ 1.0g/t Au &
74g/t Ag
SJM-664: 0.9m @ 6.5g/t Au &
47g/t Ag
SJM-666: 0.6m @ 0.5g/t Au &
5g/t Ag
SJM-668: 0.8m @ 0.1g/t Au &
4g/t Ag
SJM-669: 0.9m @ 1.1g/t Au &
11g/t Ag
SJM-697: 0.8m @ 4.5g/t Au &
262g/t Ag
|
|
Frea
|
SJD-2844: 2.2m @ 59.9g/t Au &
3,448g/t Ag
SJD-2846: 1.3m @ 0.4g/t Au &
6g/t Ag
SJD-2847: 1.1m @ 0.3g/t Au &
3g/t Ag
SJD-2849: 1.1m @ 0.1g/t Au &
3g/t Ag
SJM-663: 8.8m @ 12.7g/t Au &
101g/t Ag
SJM-664: 1.3m @ 0.3g/t Au &
7g/t Ag
SJM-666: 10.8m @ 5.1g/t Au &
38g/t Ag
SJM-668: 1.7m @ 0.3g/t Au &
4g/t Ag
SJM-669: 0.9m @ 1.6g/t Au &
21g/t Ag
SJM-673: 3.6m @ 3.4g/t Au &
50g/t Ag
SJD-2901: 1.0m @ 0.1g/t Au &
5g/t Ag
SJD-2903A: 0.9m @ 0.1g/t Au &
2g/t Ag
SJD-2905: 6.7m @ 4.4g/t Au &
27g/t Ag
SJD-2907: 1.3m @ 1.9g/t Au &
17g/t Ag
SJD-2910: 0.8m @ 0.0g/t Au &
1g/t Ag
SJD-2911: 1.2m @ 0.1g/t Au &
1g/t Ag
SJM-698: 0.8m @ 5.6g/t Au &
38g/t Ag
SJM-670: 0.9m @ 0.3g/t Au &
8g/t Ag
|
|
Majo
|
SJD-2771: 1.8m @ 2.0g/t Au &
380g/t Ag
SJD-2772: 2.3m @ 2.5g/t Au &
246g/t Ag
SJD-2774: 1.0m @ 0.5g/t Au &
20g/t Ag
|
|
Maura
|
SJD-2874A: 0.9m @ 0.3g/t Au &
2g/t Ag
SJD-2878: 0.9m @ 0.0g/t Au &
1g/t Ag
SJD-2879: 1.5m @ 13.2g/t Au &
70g/t Ag
SJD-2881: 0.9m @ 7.5g/t Au &
82g/t Ag
SJD-2885: 0.8m @ 0.6g/t Au &
81g/t Ag
SJD-2887: 4.7m @ 3.6g/t Au &
52g/t Ag
SJD-2892: 4.2m @ 2.8g/t Au &
70g/t Ag
SJD-2894: 0.8m @ 0.1g/t Au &
5g/t Ag
SJD-2897: 0.9m @ 0.7g/t Au &
17g/t Ag
SJD-2899: 1.0m @ 0.7g/t Au &
19g/t Ag
|
|
Odin
|
SJD-2775: 0.9m @ 4.6g/t Au &
556g/t Ag
SJD-2776: 1.4m @ 0.4g/t Au &
12g/t Ag
SJD-2777: 2.2m @ 5.5g/t Au &
70g/t Ag
SJD-2778: 1.1m @ 0.3g/t Au &
48g/t Ag
SJD-2788: 2.1m @ 7.6g/t Au &
360g/t Ag
SJD-2789: 1.7m @ 4.4g/t Au &
412g/t Ag
SJD-2795: 1.3m @ 2.8g/t Au &
137g/t Ag
SJD-2801: 0.8m @ 0.5g/t Au &
32g/t Ag
SJD-2802: 0.6m @ 0.2g/t Au &
47g/t Ag
SJD-2904: 1.1m @ 2.1g/t Au &
308g/t Ag
SJD-2906: 0.8m @ 0.0g/t Au &
2g/t Ag
SJD-2909: 0.9m @ 0.1g/t Au &
3g/t Ag
|
|
Olivia
|
SJD-2916: 1.2m @ 5.6g/t Au &
1,374g/t Ag
|
|
Ramal Frea
|
SJD-1601: 3.7m @ 7.2g/t Au &
180g/t Ag
|
|
SIG. Odin
|
SJD-2904: 2.0m @ 16.1g/t Au &
1,007g/t Ag
|
|
SIG. Odin Sur
|
SJD-2775: 1.4m @ 3.0g/t Au &
299g/t Ag
SJD-2776: 0.8m @ 0.1g/t Au &
14g/t Ag
SJD-2777: 0.8m @ 0.1g/t Au &
15g/t Ag
SJD-2778: 1.9m @ 0.8g/t Au &
81g/t Ag
SJD-2788: 5.9m @ 23.3g/t Au &
314g/t Ag
SJD-2789: 3.1m @ 4.0g/t Au &
323g/t Ag
SJD-2795: 4.0m @ 2.6g/t Au &
60g/t Ag
|
The plan for the first quarter is
to perform potential drilling at San Jose in the Kospi West, Frea
South and Odin South veins.
Royropata
Exploration was mostly in the
fourth quarter in the Royropata area and was concentrated around
the Marco vein with infill drilling and also for potential
resources (2,858m). By the end of the year 95.6 million silver
equivalent ounces of inferred resources had been added at a grade
of approximately 639 grams per tonne of silver
equivalent.
|
Vein
|
Results (potential drilling)
|
|
Marco 24
|
DLRY-A17: 2.0m @ 1.2g/t Au &
400g/t Ag
DLRY-A20: 16.2m @ 9.1g/t Au &
2,408g/t Ag
DLRY-A22: 2.1m @ 0.9g/t Au &
376g/t Ag
DLRY-A23: 4.8m @ 0.5g/t Au &
189g/t Ag
DLRY-A24: 2.2m @ 2.4g/t Au &
656g/t Ag
DLRY-A25: 20.2m @ 10.7g/t Au &
2,541g/t Ag
DLRY-A27: 8.1m @ 2.0g/t Au &
514g/t Ag
DLRY-A30: 1.4m @ 0.4g/t Au &
94g/t Ag
DLRY-A31: 26.1m @ 0.5g/t Au &
133g/t Ag
DLRY-A32: 7.8m @ 1.7g/t Au &
409g/t Ag
DLRY-A34: 26.9m @ 1.8g/t Au &
459g/t Ag
DLRY-A62: 3.8m @ 0.3g/t Au &
114g/t Ag
DLRY-A60: 23.5m @ 5.2g/t Au &
1,535g/t Ag
|
|
Marco W
|
DLRY-A49: 1.2m @ 0.2g/t Au &
68g/t Ag
|
|
Hanna
|
DLRY-A22: 1.4m @ 0.3g/t Au &
80g/t Ag
DLRY-A24: 2.8m @ 1.5g/t Au &
459g/t Ag
DLRY-A27: 0.8m @ 0.3g/t Au &
63g/t Ag
DLRY-A32: 0.8m @ 0.7g/t Au &
275g/t Ag
DLRY-A62: 1.7m @ 0.6g/t Au &
172g/t Ag
|
|
Larry
|
DLRY-A17: 1.1m @ 1.4g/t Au &
333g/t Ag
DLRY-A25: 1.5m @ 2.3g/t Au &
506g/t Ag
DLRY-A31: 1.7m @ 0.4g/t Au &
123g/t Ag
DLRY-A34: 0.8m @ 1.4g/t Au &
386g/t Ag
DLRY-A62: 3.8m @ 0.5g/t Au &
124g/t Ag
PST-22: 1.3m @ 0.4g/t Au &
102g/t Ag
|
Mara Rosa
The Mara Rosa brownfield programme
commenced in the second quarter of the year with one of the key
aims being to confirm economic mineralisation below the existing
Posse pit and to add resources. 5,984m of resources drilling and
3,136m of potential drilling was executed with the result that
218,000 ounces of gold were added at a grade of 1.39 grams per
tonne of gold.
|
Vein
|
Results (resources/potential)
|
|
Posse
|
24POSP_003: 9.2m @ 1.0g/t
Au
24POSP_004: 46.7m @ 1.1g/t
Au
24POSP_005: 53.0m @ 1.0g/t
Au
24POSP_006: 18.2m @ 1.0g/t
Au
24POSP_007: 15.8m @ 1.0g/t
Au
24POSP_008: 1.0m @ 0.3g/t
Au
24POSP_011: 32.9m @ 1.0g/t
Au
24POSP_012: 12.0m @ 1.1g/t
Au
24POSP_013: 17.9m @ 1.0g/t
Au
24POSP_014: 39.0m @ 1.0g/t
Au
24POSP_015: 28.1m @ 1.0g/t
Au
24POSP_017: 9.5m @ 0.9g/t
Au
|
The plan for the first quarter of
2025 is to perform potential drilling between the Posse and
Pastinho zones.
FINANCIAL REVIEW
The reporting currency of Hochschild Mining PLC is US
dollars. In discussions of financial performance, the Group removes
the effect of exceptional items, unless otherwise indicated, and in
the income statement results are shown both pre and post such
exceptional items. Exceptional items are those items, which due to
their nature or the expected infrequency of the events giving rise
to them, are disclosed separately on the face of the income
statement to enable a better understanding of the financial
performance of the Group and to facilitate comparison with prior
years.
Revenue
Gross revenue [9]
Gross revenue increased by 36% to
$966.1 million in 2024 (2023: $710.6 million) due to higher average
realised precious metal prices and higher gold production. Gold
output increased due to the commencement of production in Mara
Rosa; and higher production in Inmaculada due to a more normalised
period versus 2023 when the operation was impacted by permit
delays, and the implementation of
continuous improvement initiatives at site. These were partially offset by the absence of revenue from
the Pallancata mine, mainly silver production, which was placed on
care and maintenance towards the end of 2023.
Gold
Gross revenue from gold in 2024
increased to $660.1 million (2023: $437.0 million) due to the 19%
increase in the average realised gold price and higher gold
production.
Silver
Gross revenue from silver
increased in 2024 to $305.6 million (2023: $273.0 million) due to
the 22% increase in the average realised silver price and higher
silver production in Inmaculada, partially offset by the absence of
silver production from the Pallancata mine.
Gross average realised sales prices
The following table provides
figures for average realised prices (before the deduction of commercial discounts)
and ounces sold for 2024 and 2023:
|
Average realised prices
|
Year ended
31 Dec 2024
|
Year
ended
31 Dec 2023
|
%
change
|
|
Silver ounces sold
(koz)
|
10,643
|
11,547
|
(8)
|
|
Avg. realised silver price
($/oz)
|
28.7
|
23.6
|
22
|
|
Gold ounces sold (koz)
|
281.46
|
221.40
|
27
|
|
Avg. realised gold price
($/oz)
|
2,345
|
1,974
|
19
|
2024 realised prices and revenue
include the effect of the following hedges: forwards for 27,600
gold ounces at a price of $2,100 per ounce, and zero cost collars
for 100,000 gold ounces at a strike put of $2,000 per ounce and a
strike call of $2,252 per ounce, the impact of which was a loss of
$27.9 million in 2024. 2023 includes forwards for 29,250 gold
ounces at a price of $2,047 per ounce, and for 3.3 million silver
ounces at a price of $25 per ounce, the impact of which was a gain
of $7.8 million in 2023.
Commercial discounts
Commercial discounts refer to
refinery treatment charges, refining fees and payable deductions
for processing concentrate, and are deducted from gross revenue on
a per tonne basis (treatment charge), per ounce basis (refining
fees) or as a percentage of gross revenue (payable deductions). In
2024, the Group recorded commercial discounts of $18.4 million
(2023: $16.9 million). The ratio of commercial discounts to gross
revenue in 2024 was 2%, in line with 2023.
Net revenue
Net revenue was $947.7 million
(2023: $693.7 million), including net gold revenue of $649.3
million (2023: $429.9 million) and net silver revenue of $298.0
million (2023: $263.3 million). In 2024, gold accounted for 69% and
silver 31% of the Company's consolidated net revenue (2023: gold
62% and silver 38%).
Reconciliation of gross revenue by mine to Group net
revenue
|
$000
|
Year ended
31 Dec 2024
|
Year
ended
31 Dec 2023
|
%
change
|
|
Silver revenue
|
|
|
|
|
Inmaculada
|
180,285
|
129,456
|
39
|
|
Mara Rosa
|
343
|
-
|
-
|
|
Pallancata
|
(59)
|
43,380
|
(100)
|
|
San Jose
|
125,027
|
100,212
|
25
|
|
Commercial discounts
|
(7,599)
|
(9,779)
|
(22)
|
|
Net silver revenue
|
297,997
|
263,269
|
13
|
|
Gold revenue
|
|
|
|
|
Inmaculada
|
324,129
|
267,188
|
21
|
|
Mara Rosa
|
150,634
|
-
|
-
|
|
Pallancata
|
(185)
|
14,985
|
(101)
|
|
San Jose
|
185,512
|
154,832
|
20
|
|
Commercial discounts
|
(10,839)
|
(7,123)
|
52
|
|
Net gold revenue
|
649,251
|
429,882
|
51
|
|
Other revenue
|
448
|
565
|
(21)
|
|
Net revenue
|
947,696
|
693,716
|
37
|
Cost of sales
Total cost of sales was $605.3
million in 2024 (2023: $508.2 million). The direct production cost
excluding depreciation and amortisation was higher at $454.0
million (2023: $363.0 million) mainly due to higher production in
Inmaculada, the commencement of production in Mara Rosa, ongoing
net inflation in Argentina, and rising precious metal prices
resulting in increased royalties. These effects were partially
offset by no production in Pallancata. Depreciation and
amortisation in production cost increased from $144.8 million in
2023 to $157.2 million in 2024 mainly due to higher production in
Inmaculada and the commencement of production in Mara Rosa,
partially offset by no production in Pallancata. Fixed costs
incurred during total or partial production stoppages in San Jose
(due to bad weather) were $1.1 million in 2024 (2023: $3.3 million
mainly due to partial stoppages at Inmaculada and Pallancata).
Increase in inventories was $10.1 million in 2024 (2023: $4.8
million) mainly due to higher products in process of $14.8 million
in Mara Rosa, partially offset by lower products in process in
Inmaculada of $4.6 million.
|
$000
|
Year ended
31 Dec 2024
|
Year
ended
31 Dec 2023
|
% change
|
|
Direct production cost excluding
depreciation and amortisation
|
454,006
|
362,980
|
25
|
|
Depreciation and amortisation in
production cost
|
157,165
|
144,812
|
9
|
|
Other items and workers' profit
sharing
|
3,145
|
1,862
|
69
|
|
Fixed costs during operational
stoppages and reduced capacity
|
1,071
|
3,314
|
(68)
|
|
Change in inventories
|
(10,124)
|
(4,754)
|
113
|
|
Cost of sales
|
605,263
|
508,214
|
19
|
Fixed costs during operational stoppages and reduced
capacity
|
$000
|
Year ended
31 Dec 2024
|
Year
ended
31 Dec 2023
|
%
change
|
|
Personnel
|
712
|
3,032
|
(77)
|
|
Third party services
|
301
|
865
|
(65)
|
|
Supplies
|
33
|
34
|
(3)
|
|
Others
|
25
|
(617)
|
(104)
|
|
Fixed costs during operational
stoppages and reduced capacity
|
1,071
|
3,314
|
(68)
|
Unit cost per tonne
The Company reported unit cost per
tonne at its operations of $127.0 per tonne in 2024, a 26% decrease
versus 2023 ($171.1 per tonne). This was mainly due to the
commencement of production in Mara Rosa with a lower cost per tonne
than the other operations, partially offset by ongoing high net
inflation in Argentina impacting San Jose.
Unit cost per tonne by operation (including
royalties)[10]:
|
Operating unit ($/tonne)
|
Year ended
31 Dec 2024
|
Year
ended
31 Dec 2023
|
%
change
|
|
Peru
|
143.2
|
137.0
|
5
|
|
Inmaculada
|
143.2
|
142.3
|
1
|
|
Pallancata
|
-
|
122.9
|
-
|
|
Brazil
|
|
|
|
|
Mara Rosa
|
48.3
|
-
|
-
|
|
Argentina
|
|
|
|
|
San Jose
|
287.2
|
264.0
|
9
|
|
Total
|
127.0
|
171.1
|
(26)
|
Cash costs
Cash costs include cost of sales,
commercial deductions and selling expenses, less depreciation and
amortisation included in cost of sales.
Cash cost reconciliation
Year ended 31 December 2024
|
$000 unless otherwise indicated
|
Inmaculada
|
Mara
Rosa[11]
|
San Jose
|
Other[12]
|
Total
|
|
(+) Cost of
sales[13]
|
271,020
|
78,992
|
222,458
|
84
|
572,554
|
|
(-) Depreciation and amortisation
in cost of sales
|
(94,190)
|
(15,690)
|
(46,905)
|
-
|
(156,785)
|
|
(+) Selling expenses
|
614
|
931
|
15,847
|
14
|
17,406
|
|
(+) Commercial
deductions[14]
|
3,436
|
1,590
|
17,620
|
11
|
22,657
|
|
Gold
|
2,291
|
1,584
|
9,872
|
1
|
13,748
|
|
Silver
|
1,145
|
6
|
7,748
|
10
|
8,909
|
|
Group cash cost
|
180,880
|
65,823
|
209,020
|
109
|
455,832
|
|
Gold
|
324,057
|
144,836
|
175,892
|
(114)
|
644,671
|
|
Silver
|
180,285
|
330
|
117,443
|
(69)
|
297,989
|
|
Revenue[15]
|
504,342
|
145,166
|
293,335
|
(183)
|
942,660
|
|
Ounces sold (000s)
|
|
|
|
|
|
|
Gold
|
143.6
|
61.2
|
74.4
|
-
|
279.1
|
|
Silver
|
6,342
|
11
|
4,290
|
-
|
10,643
|
|
Group cash cost ($/oz)
|
|
|
|
|
|
|
Co product Au
|
809
|
1,034
|
1,685
|
(230)
|
1,108
|
|
Co product Ag
|
10.2
|
13.1
|
19.5
|
14.9
|
13.5
|
|
By product Au
|
(4)
|
1,031
|
1,127
|
(1,058)
|
529
|
|
By product Ag
|
(22.9)
|
(7,074.8)
|
5.4
|
463.9
|
(19.4)
|
Year ended 31 December 2023
|
$000 unless otherwise indicated
|
Inmaculada
|
Pallancata
|
San Jose
|
Total
|
|
(+) Cost of sales[16]
|
234,627
|
72,118
|
197,399
|
504,144
|
|
(-) Depreciation and amortisation in
cost of sales
|
(75,306)
|
(18,964)
|
(48,901)
|
(143,171)
|
|
(+) Selling expenses
|
533
|
461
|
13,868
|
14,862
|
|
(+) Commercial
deductions[17]
|
3,057
|
4,319
|
12,923
|
20,299
|
|
Gold
|
2,079
|
891
|
6,440
|
9,410
|
|
Silver
|
978
|
3,428
|
6,483
|
10,889
|
|
Group cash cost
|
162,911
|
57,934
|
175,289
|
396,134
|
|
Gold
|
267,188
|
14,094
|
148,600
|
429,882
|
|
Silver
|
129,456
|
39,952
|
93,861
|
263,269
|
|
Revenue15
|
396,644
|
54,046
|
242,461
|
693,151
|
|
Ounces sold (000s)
|
|
|
|
|
|
Gold
|
136.7
|
7.5
|
77.2
|
221.4
|
|
Silver
|
5,488
|
1,785
|
4,274
|
11,547
|
|
Group cash cost ($/oz)
|
|
|
|
|
|
Co product Au
|
803
|
2,010
|
1,391
|
1,110
|
|
Co product Ag
|
9.7
|
24.0
|
15.9
|
13.0
|
|
By product Au
|
238
|
1,936
|
970
|
551
|
|
By product Ag
|
(19.4)
|
24.1
|
4.8
|
(3.7)
|
Co-product cash cost per ounce is
the cash cost allocated to the primary metal (allocation based on
proportion of revenue), divided by the ounces sold of the primary
metal. By-product cash cost per ounce is the total cash cost minus
revenue and commercial discounts of the by-product divided by the
ounces sold of the primary metal.
All-in sustaining cost
reconciliation[18]
All-in sustaining cash costs per silver equivalent
ounce
Year ended 31 December 2024
|
$000 unless otherwise indicated
|
Inmaculada
|
Mara
Rosa[19]
|
San Jose
|
Main
operations
|
Corporate
&
others
|
Total
|
|
(+) Direct production cost
excluding depreciation and amortisation
|
171,372
|
106,185
|
176,365
|
453,922
|
84
|
454,006
|
|
(+) Other items and workers profit
sharing in cost of sales[20]
|
3,145
|
(30,059)
|
(14,468)
|
(41,382)
|
-
|
(41,382)
|
|
(+) Operating and exploration
capex for units[21]
|
138,582
|
5,289
|
33,035
|
176,906
|
2,857
|
179,763
|
|
(+) Brownfield exploration
expenses[22]
|
4,423
|
516
|
9,821
|
14,760
|
3,880
|
18,640
|
|
(+) Administrative expenses (excl
depreciation and amortisation)
|
4,639
|
1,932
|
6,512
|
13,083
|
33,654
|
46,737
|
|
(+) Royalties and special mining
tax[23]
|
7,108
|
-
|
-
|
7,108
|
7,051
|
14,159
|
|
Sub-total
|
329,269
|
83,863
|
211,265
|
624,397
|
47,526
|
671,923
|
|
Au ounces produced
|
143,775
|
61,219
|
73,730
|
278,724
|
-
|
278,724
|
|
Ag ounces produced
(000s)
|
6,368
|
11
|
4,150
|
10,529
|
-
|
10,529
|
|
Ounces produced (Au Eq
oz)
|
220,501
|
61,353
|
123,732
|
405,586
|
-
|
405,586
|
|
Ounces produced (Ag Eq 000s
oz)
|
18,302
|
5,092
|
10,270
|
33,664
|
-
|
33,664
|
|
All-in sustaining costs per ounce produced ($/oz Ag
Eq)
|
18.0
|
16.5
|
20.6
|
18.6
|
1.4
|
20.0
|
|
All-in sustaining costs per ounce produced ($/oz Au
Eq)
|
1,493
|
1,367
|
1,707
|
1,539
|
117
|
1,656
|
|
(+) Commercial
deductions
|
3,436
|
1,590
|
17,620
|
22,646
|
-
|
22,646
|
|
(+) Selling expenses
|
614
|
931
|
15,847
|
17,392
|
-
|
17,392
|
|
Sub-total
|
4,050
|
2,521
|
33,467
|
40,038
|
-
|
40,038
|
|
Au ounces sold
|
143,637
|
61,160
|
74,366
|
279,163
|
-
|
279,163
|
|
Ag ounces sold (000s)
|
6,342
|
11
|
4,290
|
10,643
|
-
|
10,643
|
|
Ounces sold (Au Eq oz)
|
220,041
|
61,294
|
126,052
|
407,387
|
-
|
407,387
|
|
Ounces sold (Ag Eq 000s
oz)
|
18,263
|
5,087
|
10,463
|
33,813
|
-
|
33,813
|
|
Sub-total ($/oz Ag Eq)
|
0.2
|
0.5
|
3.2
|
1.1
|
-
|
1.1
|
|
All-in sustaining costs per ounce sold ($/oz Ag
Eq)
|
18.2
|
17.0
|
23.8
|
19.7
|
1.4
|
21.1
|
|
All-in sustaining costs per ounce sold ($/oz Au
Eq)
|
1,512
|
1,408
|
1,973
|
1,638
|
117
|
1,755
|
Year ended 31 December 2023
|
$000 unless otherwise indicated
|
Inmaculada
|
Pallancata
|
San Jose
|
Main
operations
|
Corporate
&
Others
|
Total
|
|
(+) Direct production cost
excluding depreciation and amortisation
|
162,570
|
49,940
|
150,470
|
362,980
|
-
|
362,980
|
|
(+) Other items and workers profit
sharing in cost of sales[24]
|
1,373
|
489
|
(21,164)
|
(19,302)
|
-
|
(19,302)
|
|
(+) Operating and exploration
capex for units[25]
|
86,031
|
2,458
|
40,834
|
129,323
|
57
|
129,380
|
|
(+) Brownfield exploration
expenses[26]
|
1,371
|
1,070
|
8,233
|
10,674
|
3,171
|
13,845
|
|
(+) Administrative expenses (excl
depreciation and amortisation)
|
3,498
|
491
|
5,433
|
9,422
|
36,507
|
45,929
|
|
(+) Royalties and special mining
tax[27]
|
3,978
|
542
|
-
|
4,520
|
2,278
|
6,798
|
|
Sub-total
|
258,821
|
54,990
|
183,806
|
497,617
|
42,013
|
539,630
|
|
Au ounces produced
|
137,399
|
7,390
|
80,985
|
225,774
|
-
|
225,774
|
|
Ag ounces produced
(000s)
|
5,515
|
1,746
|
4,422
|
11,683
|
-
|
11,683
|
|
Ounces produced (Au Eq
oz)
|
203,845
|
28,421
|
134,265
|
366,531
|
-
|
366,531
|
|
Ounces produced (Ag Eq 000s
oz)
|
16,919
|
2,359
|
11,144
|
30,422
|
-
|
30,422
|
|
All-in sustaining costs per ounce produced ($/oz Ag
Eq)
|
15.3
|
23.3
|
16.5
|
16.4
|
1.4
|
17.8
|
|
All-in sustaining costs per ounce produced ($/oz Au
Eq)
|
1,270
|
1,935
|
1,369
|
1,358
|
115
|
1,472
|
|
(+) Commercial
deductions
|
3,057
|
4,319
|
12,923
|
20,299
|
-
|
20,299
|
|
(+) Selling expenses
|
533
|
461
|
13,868
|
14,862
|
-
|
14,862
|
|
Sub-total
|
3,590
|
4,780
|
26,791
|
35,161
|
-
|
35,161
|
|
Au ounces sold
|
136,661
|
7,516
|
77,227
|
221,404
|
-
|
221,404
|
|
Ag ounces sold (000s)
|
5,488
|
1,785
|
4,274
|
11,547
|
-
|
11,547
|
|
Ounces sold (Au Eq oz)
|
202,783
|
29,024
|
128,723
|
360,530
|
-
|
360,530
|
|
Ounces sold (Ag Eq 000s
oz)
|
16,831
|
2,409
|
10,684
|
29,924
|
-
|
29,924
|
|
Sub-total ($/oz Ag Eq)
|
0.2
|
2.0
|
2.4
|
1.1
|
-
|
1.1
|
|
All-in sustaining costs per ounce sold ($/oz Ag
Eq)
|
15.5
|
25.3
|
18.9
|
17.5
|
1.4
|
18.9
|
|
All-in sustaining costs per ounce sold ($/oz Au
Eq)
|
1,287
|
2,099
|
1,570
|
1,454
|
115
|
1,569
|
Administrative expenses
Administrative expenses were
higher at $50.2 million (2023: $47.2 million) mainly due to higher
personnel expenses arising from a higher performance bonus
provision, long-term incentive plan and legal workers profit
sharing in Peru.
Exploration expenses
In 2024, exploration expenses
increased to $26.9 million (2023: $21.3 million) mainly due higher
exploration expenses at Inmaculada of $4.4 million (2023: $1.4
million), higher expenses at San Jose of $9.8 million (2023: $8.2
million), expenditure on exploration at Monte do Carmo ($1.6
million), higher expenses at Mara Rosa of $1.3 million (2023:
$nil), and Pallancata of $2.1 million (2023: $1.1 million). These
were partially offset by the absence of exploration expenses in
Canada from the Snip project, which was terminated in 2023 ($2.2
million).
In addition, the Group capitalises
part of its brownfield exploration, which mostly relates to costs
incurred converting potential resources to the Inferred or Measured
and Indicated categories. In 2024, the Company
capitalised $7.4 million relating to brownfield exploration (2023:
$nil), bringing
the total investment in exploration for 2024 to $34.3 million (2023:
$21.3 million).
Selling expenses
Selling expenses increased
to $17.5 million (2023: $14.9 million) mainly due
to higher gold prices impacting Argentinean export
taxes.
Other income/expenses
Other income was lower at $21.0
million (2023: $30.3 million) principally due to: the Argentinian
Government export programme to settle a portion of San Jose exports
at the blue chip exchange rate totaling $16.0 million (2023: $21.2
million), the collection of a British Columbia, Canada tax credit
of $0.5 million (2023: $3.2 million) from the Snip project, and the
insurance reimbursement received in 2023 in connection with damage
to Inmaculada's machine belt in 2022 of $2.1
million.
Other expenses before exceptional
items were lower at $43.2 million (2023: $47.6 million) mainly due
to reduced mine closure provision increases of $14.7 million (2023:
$28.4 million), partially offset by higher care and maintenance
expenses at Pallancata of $8.3 million, which was placed on
temporary care and maintenance during the fourth quarter of 2023
(2023: $2.5 million).
Adjusted EBITDA
Adjusted EBITDA increased by 54%
to $421.4 million (2023: $274.4 million) mainly due to the increase
in revenue resulting from increased precious metal prices and
higher gold production.
Adjusted EBITDA is calculated as
profit from continuing operations before exceptional items, net
finance costs, foreign exchange losses and income tax plus non-cash
items (depreciation and amortisation and changes in mine closure
provisions) and exploration expenses other than personnel and other
exploration related fixed expenses.
|
$000 unless otherwise indicated
|
Year ended
31 Dec 2024
|
Year
ended
31 Dec 2023
|
%
change
|
|
Profit from continuing operations
before exceptional items, net finance income/(cost), foreign
exchange loss and income tax
|
224,722
|
82,128
|
174
|
|
Depreciation and amortisation in
cost of sales
|
156,785
|
143,171
|
10
|
|
Depreciation and amortisation in
administrative expenses and other expenses
|
3,050
|
2,075
|
47
|
|
Exploration expenses
|
26,854
|
21,297
|
26
|
|
Personnel and other exploration
related fixed expenses
|
(5,620)
|
(5,397)
|
4
|
|
Other non-cash income, net
[28]
|
15,563
|
31,096
|
(50)
|
|
Adjusted EBITDA
|
421,354
|
274,370
|
54
|
|
Adjusted EBITDA margin
|
44%
|
39%
|
13
|
Finance income
Finance income of $13.1 million
increased from 2023 ($7.5 million) mainly due to the gain on
Argentinian mutual funds held since September 2023 of $6.9 million
(2023: $1.5 million).
Finance costs
Finance costs increased from $18.2
million in 2023 to $26.9 million in 2024, principally due to higher
interest expense which totalled $18.6 million (2023: $12.2 million)
resulting from the lower capitalisation of
interest expenses that are directly attributable to the
construction of Mara Rosa of $6.0 million (2023: $18.7). This was
partially offset by the impact of lower interest rates and a lower
average medium-term loan balance.
Foreign exchange (losses)/gains
The Group recognised a foreign
exchange loss of $10.4 million (2023: $15.6 million) mainly due to
the impact of devaluation of the local currency on monetary assets
in Argentina of $9.1 million (2023: $16.0 million).
Income tax
The Company's pre-exceptional
income tax charge was $65.6 million (2023: $44.0 million). The
increase in the charge is mainly explained by higher profitability
versus 2023.
The effective tax rate
(pre-exceptional) for the period was 33.0% (2023: 82.2%), compared
to the weighted average statutory income tax rate
of 31.1% (2023: 31.8%). The higher effective tax
rate in 2024 versus the average statutory rate is mainly explained
by: the effect of Royalties and the Special Mining Tax which
increased the effective rate by 5.0%; the additions to the mine
closure provision increasing the rate by 3.1%; and the impact of non-recognised
tax losses in non-operating companies increasing the rate by
1.4%. These
effects were partially offset by foreign exchange in Argentina and
Brazil decreasing the rate by 5.8%, and the recognition deferred tax
assets reducing the rate by 1.9%.
Exceptional items
Exceptional items in 2024 totalled
a $19.8 million loss after tax (2023: $69.5 million loss after tax)
related to impairment charges at the Azuca and Arcata projects of
$13.7 million, the impairment of the investment in Aclara Resources
Inc. of $5.1 million, and the write-off of work in progress of $3.1
million in Peru. 2023 includes impairment
losses at the Azuca and Crespo projects of $63.3 million and the
San Jose mining unit of $17.4 million; the restructuring charges in
Pallancata of $9.0 million resulting from placing the operation in
care and maintenance; and the impairment of the investment in
Aclara Resources Inc. of $7.2 million.
The tax effect of these
exceptional items was a $2.1 million tax gain (2023: $27.4
million).
Cash flow and balance sheet review
Cash flow:
|
$000
|
Year ended
31 Dec 2024
|
Year
ended
31 Dec 2023
|
Change
|
|
Net cash generated from operating
activities
|
321,247
|
178,761
|
142,486
|
|
Net cash used in investing
activities
|
(277,000)
|
(245,506)
|
(31,494)
|
|
Cash flows generated
generated/(used in) from financing activities
|
(34,818)
|
22,769
|
(57,587)
|
|
Foreign exchange
adjustment
|
(1,582)
|
(10,742)
|
9,160
|
|
Net increase in cash and cash
equivalents during the year
|
7,847
|
(54,718)
|
62,565
|
Net cash generated from operating
activities increased from $178.8 million in 2023 to $321.2 million
in 2024 mainly due to higher Adjusted EBITDA of $421.4 million (2023: $274.4
million).
Net cash used in investing
activities increased from $245.5 million in 2023 to $277.0 million
in 2024 mainly due to higher scheduled
capex in Inmaculada resulting from mine
developments deferred in 2023 due to the MEIA permit delays of
$138.6 million (2023: $86.0 million), the
consideration paid for the acquisition of Monte do Carmo of $45.0
million, and expenditure on the Royropata MEIA process of $32.9 million
(2023: $6.4 million). These effects were partially offset by
lower capex in Mara Rosa of $29.3 million (2023:
$121.1 million).
Cash from financing activities
decreased from an inflow of $22.8 million to an outflow of $34.8
million in 2024, primarily due the $275.0
million repayment of the existing $300.0 medium-term facility
(2023: $25.0 million), partially offset by the draw-down of $140.0
million from the $200.0 million medium-term loan facility (2023:
$60.0 million), the $30.0 million draw-down from the new $300.0
million medium-term facility, and a net increase of $80.0 million
in short-term loans (2023: $10.2 million repayment of Minera Santa
Cruz stock market promissory notes).
Working capital
|
$000
|
As at
31 December
2024
|
As
at
31
December 2023
|
|
Trade and other
receivables
|
135,814
|
80,456
|
|
Inventories
|
87,087
|
68,261
|
|
Derivative financial
liabilities
|
(40,276)
|
(344)
|
|
Income tax (payable)/receivable,
net
|
(21,019)
|
1,734
|
|
Trade and other
payables
|
(208,222)
|
(135,839)
|
|
Provisions
|
(35,082)
|
(26,741)
|
|
Working capital
|
(81,698)
|
(12,473)
|
The Group's working capital
position decreased by $69.2 million from $(12.5) million to $(81.7)
million. The key drivers of the decrease were: higher trade and
other payables of $72.4, higher derivative financial liabilities of
$39.9 million, and higher income tax payable of $22.8 million;
partially offset by higher trade and other receivables of $55.4
million, and higher inventories of $18.8 million.
Net debt
|
$000 unless otherwise
indicated
|
As at
31 December
2024
|
As
at
31
December 2023
|
|
Cash and cash
equivalents
|
96,973
|
89,126
|
|
Non-current borrowings
|
(163,333)
|
(234,999)
|
|
Current borrowings
[29]
|
(149,249)
|
(112,064)
|
|
Net debt
|
(215,609)
|
(257,937)
|
The Group's reported net debt
position was $215.6 million as at 31 December 2024 (31 December
2023: $257.9 million). The decrease is mainly explained by
the higher cash generated by the business,
despite strategic investments to complete the construction of Mara
Rosa, the acquisition of Monte do Carmo and the investments in
Royropata easements. Total borrowings were reduced by $34.5 million
mainly due to $275.0 million repayment of the existing $300.0
medium-term facility partially offset by the draw-down of $140.0
million from the $200.0 million medium-term loan facility, the
$30.0 million draw-down from the new $300.0 medium-term facility,
and a net increase of $80.0 million in short-term
loans.
Capital expenditure
|
$000
|
Year ended
31 Dec 2024
|
Year
ended
31 Dec 2023
|
|
Inmaculada
|
138,582
|
86,031
|
|
Mara Rosa[30]
|
35,318
|
145,804
|
|
San Jose
|
46,143
|
47,682
|
|
Operations
|
220,043
|
279,517
|
|
Monte do Carmo
|
90,602
|
-
|
|
Pallancata
|
32,908
|
6,428
|
|
Other
|
4,529
|
2,447
|
|
Total
|
348,082
|
288,392
|
2024 capital expenditure increased
from $288.4 million in 2023 to $348.1 million in 2024 mainly due to
the acquisition of Monte do Carmo on 7
November 2024 for a total consideration of $86.6 million, which
includes cash consideration of $60.0 million of which $45.0 million
has been paid and $15.0 million has been deferred, and $26.2
million liabilities assumed representing the fair value of the loan
and streaming agreement with Sprott which were transferred to the
Group on completion. Also, higher
scheduled capex in Inmaculada resulting
from mine developments deferred in 2023 due to the MEIA permit
delays. These effects were partially
offset by reduced capex at Mara Rosa of $29.3 million (2023: $121.1
million), and lower capitalised interest
expenses that are directly attributable to the construction of Mara
Rosa of $6.0 million (2023: $18.7 million).
Final proposed dividends
|
$000
|
Year ended
31 Dec 2024
|
|
Net cash generated from operating
activities
|
321,247
|
|
Less: non-attributable net cash
generated from operating activities
|
(36,566)
|
|
Attributable net cash generated from operating
activities
|
284,681
|
|
Net cash used in investing
activities
|
(277,000)
|
|
Less: non-attributable net cash
used in investing activities
|
22,610
|
|
Attributable net cash used in investing
activitiies
|
(254,390)
|
|
Attributable free cash flow
|
30,291
|
|
Net Debt / Adjusted
EBITDA
|
0.51x
|
|
Dividend payout of
20-30%
|
6,058 -
9,087
|
|
Minimum annual dividend
|
10,000
|
|
Final proposed dividend
|
10,000
|
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The responsibility statement below
has been prepared in connection with the Company´s Annual Report
and Accounts for the year ended 31 December 2024.
The Directors confirm that to the
best of their knowledge:
o the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair view
of the assets, liabilities, financial position and profit or loss
of the Company and the undertakings included in the consolidation
taken as a whole; and
o the Management Report (as defined in the Director's Report)
includes a fair review of the development and performance of the
business and the position of the Company and the undertakings
included in the consolidation taken as a whole, together with a
description of the principal risks and uncertainties that they
face.
Consolidated income statement
For the year ended 31 December
2024
|
|
|
Year
ended 31 December 2024
|
Year
ended 31 December 2023
|
|
|
Notes
|
Before
exceptional items US$000
|
Exceptional items
(note
11)
US$000
|
Total
US$000
|
Before
exceptional items US$000
|
Exceptional items
(note
11)
US$000
|
Total
US$000
|
|
Revenue
|
5
|
947,696
|
-
|
947,696
|
693,716
|
-
|
693,716
|
|
Cost of sales
|
6
|
(605,263)
|
-
|
(605,263)
|
(508,214)
|
-
|
(508,214)
|
|
Gross profit
|
|
342,433
|
-
|
342,433
|
185,502
|
-
|
185,502
|
|
Administrative expenses
|
7
|
(50,232)
|
-
|
(50,232)
|
(47,192)
|
-
|
(47,192)
|
|
Exploration expenses
|
8
|
(26,854)
|
-
|
(26,854)
|
(21,297)
|
-
|
(21,297)
|
|
Selling expenses
|
9
|
(17,489)
|
-
|
(17,489)
|
(14,862)
|
-
|
(14,862)
|
|
Other income
|
12
|
20,955
|
-
|
20,955
|
30,261
|
-
|
30,261
|
|
Other expenses
|
12
|
(43,245)
|
-
|
(43,245)
|
(47,553)
|
(8,960)
|
(56,513)
|
|
Impairment and write-off of
non-current assets, net
|
16, 17
and 18
|
(846)
|
(16,769)
|
(17,615)
|
(2,731)
|
(80,843)
|
(83,574)
|
|
Profit/(loss) before net finance
income/(cost), foreign
exchange loss and income tax
|
|
224,722
|
(16,769)
|
207,953
|
82,128
|
(89,803)
|
(7,675)
|
|
Share of loss of an
associate
|
19
|
(1,408)
|
(5,081)
|
(6,489)
|
(2,277)
|
(7,183)
|
(9,460)
|
|
Finance income
|
13
|
13,097
|
-
|
13,097
|
7,473
|
-
|
7,473
|
|
Finance costs
|
13
|
(26,928)
|
-
|
(26,928)
|
(18,199)
|
-
|
(18,199)
|
|
Foreign exchange loss,
net
|
13
|
(10,416)
|
-
|
(10,416)
|
(15,620)
|
-
|
(15,620)
|
|
Profit/(loss) before income
tax
|
|
199,067
|
(21,850)
|
177,217
|
53,505
|
(96,986)
|
(43,481)
|
|
Income tax
(expense)/benefit
|
14
|
(65,556)
|
2,088
|
(63,468)
|
(44,000)
|
27,448
|
(16,552)
|
|
Profit/(loss) for the
year
|
|
133,511
|
(19,762)
|
113,749
|
9,505
|
(69,538)
|
(60,033)
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
Equity shareholders of the
Parent
|
|
116,767
|
(19,762)
|
97,005
|
8,991
|
(63,997)
|
(55,006)
|
|
Non-controlling
interests
|
|
16,744
|
-
|
16,744
|
514
|
(5,541)
|
(5,027)
|
|
|
|
133,511
|
(19,762)
|
113,749
|
9,505
|
(69,538)
|
(60,033)
|
|
Basic earnings/(loss) per ordinary
share for the year (expressed in US dollars per share)
|
15
|
0.23
|
(0.04)
|
0.19
|
0.02
|
(0.12)
|
(0.10)
|
|
Diluted earnings/(loss) per
ordinary share for the year (expressed in US dollars per
share)
|
15
|
0.23
|
(0.04)
|
0.19
|
0.02
|
(0.12)
|
(0.10)
|
Consolidated statement of
comprehensive income
For the year ended 31 December
2024
|
|
|
Year
ended 31 December
|
|
|
Notes
|
2024
US$000
|
2023
US$000
|
|
Profit/(loss) for the
year
|
|
113,749
|
(60,033)
|
|
Other comprehensive income that
might be reclassified to profit or loss in subsequent
periods:
|
|
|
|
|
Loss on cash flow
hedges
|
39(a)
|
(85,560)
|
(19,704)
|
|
Deferred tax benefit on cash flow
hedges
|
39(e)
|
28,473
|
6,617
|
|
Exchange differences on
translating foreign operations1
|
|
(30,252)
|
17,722
|
|
Share of other comprehensive loss
of an associate
|
19
|
(2,492)
|
(855)
|
|
|
|
(89,831)
|
3,780
|
|
Other comprehensive income that
will not be reclassified to profit or loss in subsequent
periods:
|
|
|
|
|
Gain/(loss) on equity instruments
at fair value through other comprehensive income (OCI)
|
20
|
15
|
(49)
|
|
|
|
15
|
(49)
|
|
Other comprehensive (loss)/income
for the year, net of tax
|
|
(89,816)
|
3,731
|
|
Total comprehensive profit/(loss)
for the year
|
|
23,933
|
(56,302)
|
|
Total comprehensive loss
attributable to:
|
|
|
|
|
Equity shareholders of the
Parent
|
|
7,189
|
(51,275)
|
|
Non-controlling
interests
|
|
16,744
|
(5,027)
|
|
|
|
23,933
|
(56,302)
|
1 Foreign exchange effect
generated in the Group´s companies when the functional currency is
the local currency, mainly generated by the increase (2023:
decrease) of the US$ exchange rate in Brazil.
Consolidated statement of
financial position
As at 31 December 2024
|
|
Notes
|
As
at
31
December 2024
US$000
|
As
at
31
December 2023
US$000
|
|
ASSETS
|
|
|
|
|
Non-current assets
|
|
|
|
|
Property, plant and
equipment
|
16
|
1,070,758
|
1,018,853
|
|
Evaluation and exploration
assets
|
17
|
132,303
|
67,322
|
|
Intangible assets
|
18
|
49,632
|
29,983
|
|
Investment in an
associate
|
19
|
15,811
|
22,927
|
|
Financial assets at fair value
through OCI
|
20
|
475
|
460
|
|
Other receivables
|
22
|
18,316
|
12,438
|
|
Deferred income tax
assets
|
31
|
27,677
|
763
|
|
|
|
1,314,972
|
1,152,746
|
|
Current assets
|
|
|
|
|
Inventories
|
23
|
87,087
|
68,261
|
|
Trade and other
receivables
|
22
|
135,814
|
80,456
|
|
Derivative financial
assets
|
39(a)
|
-
|
846
|
|
Income tax receivable
|
14
|
186
|
4,713
|
|
Other financial assets
|
|
3,807
|
2,264
|
|
Cash and cash
equivalents
|
24
|
96,973
|
89,126
|
|
Assets held for sale
|
25
|
12,660
|
17,398
|
|
|
|
336,527
|
263,064
|
|
Total assets
|
|
1,651,499
|
1,415,810
|
|
EQUITY AND LIABILITIES
|
|
|
|
|
Capital and reserves attributable
to shareholders of the Parent
|
|
|
|
|
Equity share capital
|
30
|
9,068
|
9,068
|
|
Other reserves
|
|
(329,431)
|
(234,837)
|
|
Retained earnings
|
|
931,236
|
834,231
|
|
|
|
610,873
|
608,462
|
|
Non-controlling
interests
|
|
76,478
|
60,122
|
|
Total equity
|
|
687,351
|
668,584
|
|
Non-current liabilities
|
|
|
|
|
Other payables
|
26
|
46,501
|
1,711
|
|
Derivative financial
liabilities
|
39(a)
|
61,343
|
16,581
|
|
Borrowings
|
28
|
163,333
|
234,999
|
|
Provisions
|
29
|
146,781
|
147,372
|
|
Deferred income tax
liabilities
|
31
|
82,504
|
67,039
|
|
|
|
500,462
|
467,702
|
|
Current liabilities
|
|
|
|
|
Trade and other
payables
|
26
|
208,222
|
135,839
|
|
Derivative financial
liabilities
|
39(a)
|
40,276
|
1,190
|
|
Borrowings
|
28
|
149,249
|
112,064
|
|
Provisions
|
29
|
35,082
|
26,741
|
|
Income tax payable
|
14
|
21,205
|
2,979
|
|
Liabilities directly associated
with assets held for sale
|
25
|
9,652
|
711
|
|
|
|
463,686
|
279,524
|
|
Total liabilities
|
|
964,148
|
747,226
|
|
Total equity and
liabilities
|
|
1,651,499
|
1,415,810
|
These financial statements were
approved by the Board of Directors on 11 March 2025 and signed on
its behalf by:
Eduardo Landin
Chief Executive Officer
11 March 2025
Consolidated statement of cash
flows
For the year ended 31 December
2024
|
|
|
Year
ended 31 December
|
|
|
Notes
|
A
2024
US$000
|
2023
US$000
|
|
Cash flows from operating
activities
|
|
|
|
|
Cash generated from
operations
|
35
|
365,040
|
217,016
|
|
Interest received
|
|
3,272
|
5,508
|
|
Interest paid
|
28
|
(27,074)
|
(24,839)
|
|
Payment of mine closure
costs
|
29
|
(11,833)
|
(13,325)
|
|
Income tax, special mining tax and
mining royalty paid1
|
|
(8,158)
|
(5,599)
|
|
Net cash generated from operating
activities
|
|
321,247
|
178,761
|
|
Cash flows from investing
activities
|
|
|
|
|
Purchase of property, plant and
equipment
|
|
(213,513)
|
(259,730)
|
|
Purchase of evaluation and
exploration assets
|
17(2)
|
(55,629)
|
(2,523)
|
|
Purchase of intangibles
|
18
|
(19,534)
|
(124)
|
|
Purchase of Argentinian
bonds
|
13(5)
|
(5,838)
|
-
|
|
Proceeds from sale of Argentinian
bonds
|
13(5)
|
2,865
|
-
|
|
Proceeds from sale of financial
assets at fair value though profit and loss
|
21
|
-
|
723
|
|
Proceeds from sale of property,
plant and equipment
|
|
759
|
1,148
|
|
Proceeds from sale of assets held
for sale
|
25
|
13,890
|
-
|
|
Sale of royalty related to Volcan
project
|
|
-
|
15,000
|
|
Net cash used in investing
activities
|
|
(277,000)
|
(245,506)
|
|
Cash flows from financing
activities
|
|
|
|
|
Proceeds from
borrowings
|
28
|
311,607
|
137,413
|
|
Repayment of borrowings
|
28
|
(340,991)
|
(111,980)
|
|
Payment of lease
liabilities
|
27
|
(5,046)
|
(2,338)
|
|
Dividends paid to non-controlling
interests
|
32
|
(388)
|
(326)
|
|
Net cash flows (used in)/generated
from financing activities
|
|
(34,818)
|
22,769
|
|
Net increase/(decrease) in cash
and cash equivalents during the year
|
|
9,429
|
(43,976)
|
|
Exchange difference
|
|
(1,582)
|
(10,742)
|
|
Cash and cash equivalents at
beginning of year
|
|
89,126
|
143,844
|
|
Cash and cash equivalents at end
of year
|
24
|
96,973
|
89,126
|
1 Taxes paid have been offset with value added tax (VAT)
credits of US$6,732,000 (2023: US$10,175,000).
Consolidated statement of changes
in equity
For the year 31 December
2024
|
|
|
|
|
Other
reserves
|
|
|
|
|
|
|
Notes
|
Equity
share capital US$000
|
|
Fair
value reserve of financial assets at fair value through
OCI
|
Share of
other comprehensive loss of an associate US$000
|
Dividends expired US$000
|
Cumulative translation adjustment US$000
|
Unrealised gain/(loss) on cash flow hedges
US$000
|
Merger
reserve US$000
|
Share-
based payment reserve US$000
|
Total
other reserves US$000
|
Retained
earnings US$000
|
Capital
and reserves attributable to shareholders of the Parent
US$000
|
Non-controlling interests US$000
|
Total
equity
US$000
|
|
Balance at 1 January
2023
|
|
9,061
|
|
(78)
|
1,274
|
99
|
(37,902)
|
1,541
|
(210,046)
|
6,312
|
(238,800)
|
886,980
|
657,241
|
65,475
|
722,716
|
|
Other comprehensive
income/(expense)
|
|
-
|
|
(49)
|
(855)
|
-
|
17,722
|
(13,087)
|
-
|
-
|
3,731
|
-
|
3,731
|
-
|
3,731
|
|
Loss for the year
|
|
-
|
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(55,006)
|
(55,006)
|
(5,027)
|
(60,033)
|
|
Total comprehensive
income/(expense) for the year
|
|
-
|
|
(49)
|
(855)
|
-
|
17,722
|
(13,087)
|
-
|
-
|
3,731
|
(55,006)
|
(51,275)
|
(5,027)
|
(56,302)
|
|
Cancellation of dividends
expired
|
|
-
|
|
-
|
-
|
(99)
|
-
|
-
|
-
|
-
|
(99)
|
152
|
53
|
-
|
53
|
|
Dividends to non- controlling
interests
|
32
|
-
|
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(326)
|
(326)
|
|
Exercise of share-based
payments
|
|
7
|
|
-
|
-
|
-
|
-
|
-
|
-
|
(584)
|
(584)
|
577
|
-
|
-
|
-
|
|
Accrual of share-based
payments
|
|
-
|
|
-
|
-
|
-
|
-
|
-
|
-
|
2,443
|
2,443
|
-
|
2,443
|
-
|
2,443
|
|
Forfeiture of share-based
payments
|
|
-
|
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,528)
|
(1,528)
|
1,528
|
-
|
-
|
-
|
|
Balance at 31 December
2023
|
|
9,068
|
|
(127)
|
419
|
-
|
(20,180)
|
(11,546)
|
(210,046)
|
6,643
|
(234,837)
|
834,231
|
608,462
|
60,122
|
668,584
|
|
Other comprehensive
income/(expense)
|
|
-
|
|
15
|
(2,492)
|
-
|
(30,252)
|
(57,087)
|
-
|
-
|
(89,816)
|
-
|
(89,816)
|
-
|
(89,816)
|
|
Profit for the year
|
|
-
|
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
97,005
|
97,005
|
16,744
|
113,749
|
|
Total comprehensive
income/(expense) for the year
|
|
-
|
|
15
|
(2,492)
|
-
|
(30,252)
|
(57,087)
|
-
|
-
|
(89,816)
|
97,005
|
7,189
|
16,744
|
23,933
|
|
Dividends to non- controlling
interests
|
32
|
-
|
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(388)
|
(388)
|
|
Other changes in associate's
equity
|
19
|
-
|
|
-
|
1,865
|
-
|
-
|
-
|
-
|
-
|
1,865
|
-
|
1,865
|
-
|
1,865
|
|
Modification of share- based
payment awards
|
29
|
-
|
|
-
|
-
|
-
|
-
|
-
|
-
|
(7,954)
|
(7,954)
|
-
|
(7,954)
|
-
|
(7,954)
|
|
Accrual of share-based
payments
|
|
-
|
|
-
|
-
|
-
|
-
|
-
|
-
|
1,311
|
1,311
|
-
|
1,311
|
-
|
1,311
|
|
Balance at 31 December
2024
|
|
9,068
|
|
(112)
|
(208)
|
-
|
(50,432)
|
(68,633)
|
(210,046)
|
-
|
(329,431)
|
931,236
|
610,873
|
76,478
|
687,351
|
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER
2024
The financial information for the
year ended 31 December 2024 does not constitute statutory accounts
as defined in sections 435 (1) and (2) of the Companies Act 2006.
Statutory accounts for the year ended 31 December 2023 have been
delivered to the Registrar of Companies and those for 2024 will be
delivered following the Company's annual general meeting. The
auditor has reported on these accounts; their reports were
unqualified. Their report did not include a reference to any other
matters to which the auditor drew attention by way of emphasis of
matter and did not contain a statement under section 498 (2) or (3)
of the Companies Act 2006.
1 Corporate
information
Hochschild Mining PLC (hereinafter
"the Company") is a public limited company incorporated on 11 April
2006 under the Companies Act 2006 as a Limited Company and
registered in England and Wales with registered number 05777693.
The Company's registered office is located at 17 Cavendish Square,
London W1G 0PH, United Kingdom.
The ultimate controlling party of
the Company is Mr Eduardo Hochschild whose beneficial interest in
the Company and its subsidiaries (together "the Group" or
"Hochschild Mining Group") is 38.27% and it is held through Pelham
Investment Corporation ("Pelham"), a Cayman Islands
company.
On 8 November 2006, the Company's
shares were admitted to the Official List of the UKLA (United
Kingdom Listing Authority) and to trading on the London Stock
Exchange.
The Group's principal business is
the mining, processing and sale of silver and gold. At 31 December
2024, the Group has one operating mine (Inmaculada) located in
southern Peru, one operating mine (San Jose) located in Argentina
and one operating mine (Mara Rosa) located in Brazil. The Group's
previously operating Pallancata mine went into care and maintenance
in November 2023. The Group also has a portfolio of projects
located across Peru, Argentina, Brazil, and Chile, at various
stages of development.
These consolidated financial
statements were approved for issue by the Board of Directors on 11
March 2025.
The Group's subsidiaries, all held
indirectly, except for Hochschild Mining Holdings Limited, are as
follows:
|
|
|
|
Equity
interest at
31
December
|
|
Company
|
Principal activity
|
Country
of incorporation
|
2024
%
|
2023
%
|
|
Hochschild Mining (Argentina)
Corporation S.A.1
|
Holding
company
|
Argentina
|
100
|
100
|
|
MH Argentina
S.A.2
|
Exploration office
|
Argentina
|
100
|
100
|
|
Minera Santa Cruz S.A.1 and
13
|
Production of gold and silver
|
Argentina
|
51
|
51
|
|
Minera Hochschild Chile S.C.M.
3
|
Exploration
|
Chile
|
100
|
100
|
|
Andina Minerals Chile SpA
(formerly Andina Minerals Chile Ltd.) 3
|
Exploration
|
Chile
|
100
|
100
|
|
Southwest Minerals (Yunnan) Inc.
4
|
Exploration
|
China
|
100
|
100
|
|
Hochschild Mining Holdings
Limited5
|
Holding
company
|
England
and Wales
|
100
|
100
|
|
Hochschild Mining Ares (UK)
Limited5
|
Administrative office
|
England
and Wales
|
100
|
100
|
|
Hochschild Mining Brazil Holdings
Corp. (formerly 1334940 BC) 5
|
Holding
company
|
England
and Wales
|
100
|
100
|
|
Southwest Mining Inc.
4
|
Exploration
|
Mauritius
|
100
|
100
|
|
Southwest Minerals Inc.
4
|
Exploration
|
Mauritius
|
100
|
100
|
|
Minera Hochschild Mexico, S.A. de
C.V. 6
|
Exploration
|
Mexico
|
100
|
100
|
|
Hochschild Mining (Peru) S.A.
4
|
Holding
company
|
Peru
|
100
|
100
|
|
Compañía Minera Ares S.A.C.
4
|
Production of gold and silver
|
Peru
|
100
|
100
|
|
Compañía Minera Arcata S.A.
4
|
Production of gold and silver
|
Peru
|
99.1
|
99.1
|
|
Empresa de Transmisión Aymaraes
S.A.C. 4
|
Power
transmission
|
Peru
|
100
|
100
|
|
Compañía Minera Crespo S.A.C.
4 and 10
|
Exploration
|
Peru
|
-
|
100
|
|
Cúspide Copper S.A.C. 4 and
11
|
Exploration
|
Peru
|
100
|
-
|
|
Compañía Minera Cerro Salto S.A.C.
4 and 12
|
Exploration
|
Peru
|
100
|
-
|
|
Hochschild Mining (US) Inc.
7
|
Holding
company
|
USA
|
100
|
100
|
|
Hochschild Mining Canada
Corp8
|
Exploration
|
Canada
|
100
|
100
|
|
Tiernan Gold Corp.
8
|
Holding
company
|
Canada
|
100
|
100
|
|
Amarillo Mineracao do Brasil Ltda.
9
|
Production of gold and silver
|
Brazil
|
100
|
100
|
|
Serra Alta Mineracao Ltda. 9
and note 4
|
Exploration
|
Brazil
|
100
|
-
|
|
Serra Alta Participacoes
Inmobiliarias S.A. 9 and note 4
|
Exploration
|
Brazil
|
100
|
-
|
1 Registered address: Av. Santa Fe 2755, floor 9, Buenos
Aires, Argentina.
2 Registered address: Sargento Cabral 124, Comodoro
Rivadavia, Provincia de Chubut, Argentina.
3 Registered address: Av. Apoquindo 4775 of 1002, Comuna
Las Condes, Santiago de Chile, Chile.
4 Registered address: La Colonia 180, Santiago de Surco,
Lima, Peru.
5 Registered address: 17 Cavendish Square, London,
W1G0PH, United Kingdom.
6 Registered address: Calle Aguila Real No 122, Colonia
Carolco, Monterrey, Nuevo Leon, CP 64996, Mexico.
7 Registered address: 1025 Ridgeview Dr. 300, Reno,
Nevada 89519, USA.
8 Registered address: Suite 1700, Park Place, 666
Burrard Street, Vancouver BC, V6C 2X8.
9 Registered address: Fazenda Invernada s/n, Zona Rural,
Mara Rosa - Goiás - Brazil, CEP: 76.490-000.
10 The Company was sold on March 2024 to a third
party.
11 The Company was incorporated on 8 July 2024.
12The Company was incorporated on 20 July 2024.
13 The Group has a 51% interest in Minera Santa
Cruz S.A. (Minera Santa Cruz), while the remaining 49% is held by a
non-controlling interest. The significant financial information in
respect of this subsidiary before intercompany eliminations as at
and for the years ended 31 December 2024 and 2032 is as
follows:
|
|
As at
31 December
|
|
2024
US$000
|
2023
US$000
|
|
Non-current assets
|
133,371
|
136,098
|
|
Current assets
|
144,568
|
100,511
|
|
Non-current liabilities
|
(66,806)
|
(71,813)
|
|
Current liabilities
|
(57,922)
|
(44,965)
|
|
Equity
|
(153,211)
|
(119,831)
|
|
Cash and cash
equivalents
|
45,454
|
22,182
|
|
Revenue
|
293,335
|
242,461
|
|
Depreciation and
amortisation
|
(48,899)
|
(52,829)
|
|
Interest income
|
1,071
|
1,251
|
|
Interest expense
|
(3,043)
|
(4,090)
|
|
Income tax
|
(632)
|
(4,480)
|
|
Profit/(loss) for the year and
total comprehensive income
|
34,170
|
(10,269)
|
|
Net cash generated from operating
activities
|
74,625
|
66,034
|
|
Net cash used in investing
activities
|
(46,143)
|
(48,227)
|
|
Net cash used in financing
activities
|
(5,210)
|
(11,098)
|
Profit/(loss) attributable to
non-controlling interests in the consolidated income statement,
non-controlling interest in the consolidated statement of financial
position, and dividends declared to non-controlling interests in
the consolidated statement of changes in equity are solely related
to Minera Santa Cruz.
2 Material
accounting policies
(a) Basis of
preparation
The consolidated financial
statements of the Group have been prepared in accordance with UK
adopted International Accounting Standards.
The basis of preparation and
accounting policies used in preparing the consolidated financial
statements for the years ended 31 December 2024 and 2023 are set
out below. The consolidated financial statements have been prepared
on a historical cost basis except for the revaluation of certain
financial instruments that are measured at fair value at the end of
each reporting period, as explained below. These accounting
policies have been consistently applied, except for the effects of
the adoption of new and amended accounting standard.
The financial statements are
presented in US dollars (US$) and all monetary amounts are rounded
to the nearest thousand ($000) except when otherwise
indicated.
Changes in accounting policy and
disclosures
The accounting policies adopted in
the preparation of the consolidated financial statements are
consistent with those followed in the preparation of the Group's
annual consolidated financial statements for the year ended 31
December 2023. Amendments and interpretations apply for the first
time in 2024, but do not have an impact on the consolidated
financial statements of the Group. The Group has not early adopted
any other standard, interpretation or amendment that has been
issued but is not yet effective.
Supplier Finance Arrangements -
Amendments to IAS 7 and IFRS 7
Amendments to IFRS 16: Lease
Liability in a Sale and Leaseback
Amendments to IAS 1:
Classification of Liabilities as Current or Non-current
Standards, interpretations and
amendments to existing standards that are not yet effective and
have not been previously adopted by the Group
Certain new standards, amendments
and interpretations to existing standards have been published and
are mandatory for the Group's accounting periods beginning on or
after 1 January 2025 or later periods but which the Group has not
previously adopted. These have not been listed as they are not
expected to impact the Group.
(b) Judgements
in applying accounting policies and key sources of estimation
uncertainty
Many of the amounts included in
the financial statements involve the use of judgement and/or
estimation. These judgements and estimates are based on
management's best knowledge of the relevant facts and
circumstances, having regard to prior experience, but actual
results may differ from the amounts included in the financial
statements. Information about such judgements and estimates is
contained in the accounting policies and/or the notes to the
financial statements.
Significant areas of estimation
uncertainty and critical judgements made by management in preparing
the consolidated financial statements include:
Significant estimates:
Useful lives of assets for depreciation and amortisation
purposes - note 2(f).
Estimates are required to be made
by management as to the useful lives of assets. For depreciation
calculated under the unit of-production method, estimated
recoverable reserves and resources are used in determining the
depreciation and/or amortisation of mine-specific assets. This
results in a depreciation/amortisation charge proportional to the
depletion of the anticipated remaining life-of-mine production.
Each item's life, which is assessed annually, has regard to both
its physical life limitations and to present assessments of
economically recoverable reserves and resources of the mine
property at which the asset is located. These calculations require
the use of estimates and assumptions, including the amount of
recoverable reserves and resources. Changes are accounted for
prospectively.
Ore reserves and resources - note 2(h).
There are numerous uncertainties
inherent in estimating ore reserves and resources. Assumptions that
are valid at the time of estimation may change significantly when
new information becomes available. Changes in the forecast prices
of commodities, exchange rates, production costs or recovery rates
may change the economic status of reserves and resources and may,
ultimately, result in the reserves and resources being
updated.
Recoverable values of mining assets - notes 2(k), 16, 17 and
18.
The values of the Group's mining
assets are sensitive to a range of characteristics unique to each
mine unit. Key sources of estimation for all assets include
uncertainty around ore reserve estimates and cash flow projections.
In performing impairment reviews, the Group assesses the
recoverable amount of its operating assets principally with
reference to fair value less costs of disposal
("FVLCD").
The recoverable values of the CGUs
and advanced exploration projects are determined using a FVLCD
methodology. FVLCD for CGUs is determined using a combination of
level 2 and level 3 inputs. The FVLCD of producing mine assets is
determined using a discounted cash flow model and for developing
stage mine assets or advanced exploration projects is determined
using a discounted cash flow model or the value-in-situ
methodology. When using a value-in-situ methodology, the in-situ
value is based on a comparable company analysis and applies a
realisable 'enterprise value' to unprocessed mineral resources per
ounce of resources, to estimate the amount that would be paid by a
willing third party in an arm's length transaction. (notes 16, 17
and 18).
There is judgement involved in
determining the assumptions that are considered to be reasonable
and consistent with those that would be applied by market
participants. Significant estimates used in a discounted cash flow
model include future gold and silver prices, future capital
requirements, reserves and resources volumes, production costs and
the application of discount rates which reflect the macro-economic
risk, as applicable. When using a value-in-situ methodology, the
in-situ value is based on a comparable company analysis.
Changes in these assumptions will affect the recoverable
amount of the property, plant and equipment, evaluation and
exploration assets, and intangibles.
Mine closure costs - notes 2(o) and 29(1).
The Group assesses its mine
closure cost provision annually. Significant estimates and
assumptions are made in determining the provision for mine closure
cost as there are numerous factors that will affect the ultimate
liability. These factors include estimates of the extent and costs
of rehabilitation activities, technological changes, regulatory
changes, cost increases, mine life and changes in discount rates.
Those uncertainties may result in future actual expenditure
differing from the amounts currently provided. The provision at the
balance sheet date represents management's best estimate of the
present value of the future closure costs required. In July 2021,
the mine closure law for the province of Santa Cruz in Argentina
was published, establishing a period of 180 business days to
present the Mine Closure Plan. The plan presented to the provincial
authority, in December 2022, accomplishes law regulations and it
has not been approved at the date of the financial statements. The
Group considers the mine closure provision in San Jose to be
largely aligned with Argentina's new law and
regulations.
Valuation of financial instruments - note
39.
The valuation of certain Group
assets and liabilities reflects the changes to certain assumptions
used in the determination of their value, such as future gold and
silver prices, discount rates, and resources and reserves
estimates.
Non market performance conditions on LTIP 2022, LTIP 2023 and
LTIP 2024 - note 29.
There are two parts to the
performance conditions attached to LTIP awards: 50% is subject to
the Company's TSR ranking relative to a tailored peer group of
mining companies, 50% is subject to internal KPIs split equally
between: (i) three-year growth of the Company's Measured and
Indicated Resources (MIR) per share (calculated on an enterprise
value basis), and (ii) average outcome of the annual bonus
scorecard in respect of 2022, 2023 and 2024, regarding LTIP 2022;
2023, 2024 and 2025, regarding LTIP 2023; and 2024, 2025 and 2026,
regarding LTIP 2024, calculated as the simple mean of the three
scorecard outcomes. At each reporting date the Group has to
estimate the value of the shares and the possible outcome regarding
the scorecard and Resources. The balance of the awards is disclosed
in note 29.
Critical judgements:
Income tax - notes 2(t), 2(u), 14, 31 and
37(a).
Judgement is required in
determining whether deferred tax assets are recognised on the
statement of financial position. Deferred tax assets, including
those arising from un-utilised tax losses require management to
assess the likelihood that the Group will generate taxable earnings
in future periods, in order to utilise recognised deferred tax
assets. Estimates of future taxable income are based on forecast
cash flows from operations and the application of existing tax laws
in each jurisdiction. To the extent that future cash flows and
taxable income differ significantly from estimates, the ability of
the Group to realise the net deferred tax assets recorded at the
balance sheet date could be impacted. The Group analyses the
possibility of generating profit in all the companies and
determines the recognition of deferred tax. No deferred tax asset
is recognised in the holding and exploration entities as they are
not expected to generate any profit to settle the temporary
difference (refer to note 31).
Judgement is also required when
determining the recognition of tax liabilities as the tax treatment
of some transactions cannot be finally determined until a formal
resolution has been reached by the tax authorities. Tax liabilities
are also recorded for uncertain exposures which can have an impact
on both deferred and current tax. Tax benefits are not recognised
unless it is probable that the benefit will be obtained and tax
liabilities are recognised if it is probable that a liability will
arise (refer to note 37(a)). The final resolution of these
transactions may give rise to material adjustments to the income
statement and/or cash flow in future periods. The Group reviews
each significant tax liability or benefit each period to assess the
appropriate accounting treatment.
Life of mine (LOM).
There are several aspects which
are determined by the life of mine, such as ore reserves and
resources, recoverable values of mining assets, mine rehabilitation
provision and depreciation. The life of mine for an operation is
specified in the relevant Environmental Impact Assessment (EIA)
which is amended from time to time as more resources at the mine
are identified. EIAs are permits which are granted in the ordinary
course of business to the mining industry. While the processing of
such permits may be subject to delays, the Group has never had an
EIA denied. A crucial element of Peru's legal framework is the
principle of predictability which, in essence, means that if the
legal requirements for any given permit have been satisfied, the
State cannot unlawfully deny the granting of the permit. Taking
this into consideration, as well as the Group's operational
experience, the Group believes that permits will be secured such
that operations can continue without interruption. In the unlikely
scenario that this does not occur, there could be material changes
to those items in the financial statements that are determined by
the life of mine.
Determination of functional currencies - note
2(e).
The determination of functional
currency requires management judgement, particularly where there
may be several currencies in which transactions are undertaken and
which impact the economic environment in which the entity operates.
In Argentina, the exchange control restrictions limit the companies
to hold US dollars but do not restrict carrying out transactions in
US dollar.
Recognition of evaluation and exploration assets and transfer
to development costs - notes 2(g), 16 and 17.
Judgement is required in
determining when there is sufficient evidence that there is a
future economic benefit of an exploration project, at which point
the exploration costs are capitalised. This includes an assessment
of whether there is a high degree of confidence of the existence of
economically recoverable minerals, mine-site exploration is being
conducted to convert resources to reserves, or mine-site
exploration is being conducted to confirm resources. The stage,
timeline and associated risks of the project are also considered.
The exploration and evaluation assets are then assessed for
impairment when facts and circumstances suggest that the carrying
amount is not recoverable.
Climate change
General
The Group completed a
climate-related scenario analysis and a detailed transition
assessment for the transition risk and opportunity identified most
relevant to the business.
The risk assessed is the impact of carbon pricing
on operational and capital expenditure and the opportunity assessed
is the reduction of land transport emissions.
This year the Group will conduct a
financial quantification assessment of climate-related risks. Once
this assessment is completed the Group will be able to estimate the
future economic impact of the climate-related risks and incorporate
it into the projections used for impairment testing purposes and
financial statements, as applicable.
In the future, the adoption of the
Group's climate change strategy and the introduction of unexpected
climate-change regulations in the countries where the Group
operates may affect the financial quantification estimates and
could result in changes to financial results and the carrying
values of certain assets and liabilities in forthcoming reporting
periods.
Physical risks
As previously stated, the Group
completed a climate-related scenario analysis, identifying
five 5 physical risks rated as "high":
water stress and drought, extreme
rainfall flooding, wildfires, extreme winds and storms, and extreme
heat. The costs associated with
managing these risks are incorporated into the Group´s operational
and capital expenditure when they are anticipated to
materialise.
As the Group progresses its
adaptation strategy, the identification of additional risks or the
development of the Group's response may result in changes to
financial results and the carrying values of assets and liabilities
in future reporting periods.
Acquiring a subsidiary or a group of assets - note
4(a).
In identifying a business
combination (note 2(c)) or acquisition of assets the Group applies
the concentration test in accordance with IFRS 3 to determine
whether an acquisition is a business combination or an asset
acquisition. The concentration test is met if substantially all of
the fair value of the gross assets acquired is concentrated in a
single identifiable assets or a group of similar assets. If the
concentration test is met, the acquisition is accounted for as an
asset acquisition. If the concentration test is not met, the Group
considers the underlying inputs, processes and outputs acquired as
a part of the transaction. For an acquired set of activities and
assets to be considered a business there must be at least some
inputs and processes that have the capability to achieve the
purposes of the Group. Where significant inputs and processes have
not been acquired, a transaction is considered to be the purchase
of assets.
For the assets and assumed
liabilities acquired the Group allocates the total consideration
paid (including directly attributable transaction costs) based on
the relative fair values of the underlying items. On 7 November
2024 the Group acquired a 100% interest in the Monte do Carmo gold
project in Brazil, through the acquisition of Serra Alta Mineração
Ltda. (note 4(a)). The transaction was accounted as a purchase of
assets as it met the concentration test, with the main asset
acquired being the Monte do Carmo project which is in a development
stage.
Stream Agreements - note 26(a).
Judgement was required in
determining the accounting treatment for the initial recognition
and subsequent measurement of the obligations included in the
Secured Note and Stream Agreement with Sprott Private Resource
Streaming and Royalty Corp. ("Sprott"), assigned to the Group upon
the acquisition of the Monte do Carmo project. Refer to notes 4 and
26(a) for details on the Monte do Carmo´s acquisition and Stream
Agreements, respectively.
Management determined that the
Secured Note and Stream Agreement are closely connected,
with the option by Sprott to set off the
$20,000,000 stream payment against the Secured Note upon
commencement of production. Therefore, management has considered
the two contracts as a single unit of account The Stream Agreement,
including the Buy-down option meet the definition of a derivative
and is accounted for at fair value through profit and loss
("FVTPL"). The key assumptions on which management has based its
determination of fair value are disclosed in note 26(a).
Investment in an associate - note 19.
Judgement is required in
determining the recoverable amount of the investment in Aclara
Resources Inc. ('Aclara'). Management determined that the
value derived from the US$25,000,000 private placement, announced
by Aclara Resources Inc. in December 2024 and completed in February
2025, approximates the recoverable amount of Aclara. Therefore, the
Group adjusted the carrying amount of the investment to reflect the
value of the shares issued in the private placement. As a result,
the Group has determined an impairment charge of US$5,081,000 as at
31 December 2024.
(c) Basis of
consolidation
The consolidated financial
statements set out the Group's financial position, performance and
cash flows as at 31 December 2024 and 31 December 2023 and for the
years then ended, respectively.
Subsidiaries are those entities
controlled by the Group regardless of the amount of shares owned by
the Group. Control is achieved when the Group is exposed, or has
rights, to variable returns from its involvement with the investee
and has the ability to affect those returns through its power over
the investee. Non-controlling interests' rights to safeguard their
interest are fully considered in assessing whether the Group
controls a subsidiary. Specifically, the Group controls an investee
if, and only if, the Group has:
power over the investee (i.e.
existing rights that give it the current ability to direct the
relevant activities of the investee);
exposure, or rights, to variable
returns from its involvement with the investee; and
the ability to use its power over
the investee to affect its returns.
Generally, there is a presumption
that a majority of voting rights result in control. To support this
presumption and when the Group has less than a majority of the
voting or similar rights of an investee, the Group considers all
relevant facts and circumstances in assessing whether it has power
over an investee, including:
the contractual arrangement with
the other vote holders of the investee;
rights arising from other
contractual arrangements; and
the Group's voting rights and
potential voting rights.
The Group re-assesses whether or
not it controls an investee if facts and circumstances indicate
that there are changes to one or more of the three elements of
control.
Basis of consolidation
Subsidiaries are consolidated from
the date of their acquisition, being the date on which the Group
obtains control, and continue to be consolidated until the date
that such control ceases.
Assets, liabilities, income and
expenses of a subsidiary acquired or disposed of during the year
are included in the consolidated financial statements from the date
the Group gains control until the date the Group ceases to control
the subsidiary.
Profit or loss and each component
of OCI are attributed to the equity holders of the parent of the
Group and to the non-controlling interests, even if this results in
the non-controlling interests having a deficit balance. When
necessary, adjustments are made to the financial statements of
subsidiaries to bring their accounting policies in line with the
Group's accounting policies. All intra-group assets and
liabilities, equity, income, expenses and cash flows relating to
transactions between members of the Group are eliminated in full on
consolidation.
A change in the ownership interest
of a subsidiary, without loss of control, is accounted for as an
equity transaction, affecting retained earnings. If the Group loses
control over a subsidiary, it (i) derecognises the assets
(including goodwill) and liabilities of the subsidiary; (ii)
derecognises the carrying amount of any non-controlling interest
(NCI); (iii) derecognises the cumulative translation differences,
recorded in equity; (iv) recognises the fair value of the
consideration received; (v) recognises the fair value of any
investment retained; (vi) recognises any surplus or deficit in
profit or loss; and (vii) reclassifies the parent's share of
components previously recognised in other comprehensive income to
profit or loss or retained earnings, as appropriate.
An NCI represents the equity in a
subsidiary not attributable, directly and indirectly, to the parent
company and is presented separately within equity in the
consolidated statement of financial position, separately from
equity attributable to owners of the parent.
Business combinations
Business combinations are
accounted for using the acquisition method. The cost of an
acquisition is measured as the aggregate of the consideration
transferred, measured at acquisition date fair value and the amount
of any NCI in the acquiree. The choice of measurement of NCI,
either at fair value or at the proportionate share of the
acquiree's identifiable net assets, is determined on a transaction
by transaction basis. Acquisition costs incurred are expensed and
included in administrative expenses.
Goodwill is initially measured at
cost, being the excess of the aggregate of the consideration
transferred and the amount recognised for the NCI, and any interest
previously held, over the net identifiable assets acquired and the
liabilities assumed. Assets acquired and liabilities assumed in
transactions separate to the business combinations, such as the
settlement of pre-existing relationships or post-acquisition
remuneration arrangements, are accounted for separately from the
business combination in accordance with their nature and applicable
IFRSs. Identifiable intangible assets meeting either the
contractual-legal or the separability criteria are recognised
separately from goodwill. Contingent liabilities representing a
present obligation are recognised if the acquisition date fair
value can be measured reliably.
(d) Going
concern
Directors' assessment
The Directors have reviewed Group
liquidity, including cash resources and borrowings (refer to note
28 for details of the US$300 million and US$200 million medium-term
loans) and related covenant forecasts to assess whether the Group
is able to continue in operation for the period to 31 March 2026
(the "Going Concern Period") which is at least 12 months from the
approval date of these financial statements. The Directors also
considered the impact of a downside scenario on the Group's future
cash flows and liquidity position as well as debt covenant
compliance.
Scenarios Analysed
For the purposes of the going
concern review, the base case scenario reviewed by the Directors
(the "Base Scenario") reflects, among other things, budgeted
production for 2025 and 2026 life-of-mine plans for Inmaculada, San
Jose and Mara Rosa, and assumes average precious metal prices of
US$2,616/oz for gold and US$32.2/oz for silver (the "Assumed
Prices"), being the average analysts' consensus prices for the
Going Concern Period.
The Directors also considered a
severe but plausible downside scenario ("the Severe Scenario")
which takes into account the combined impact of a three-week
stoppage of all operations, unforeseen social-related costs and
lower precious metal prices which are lower than the Assumed Prices
(a 10% lower gold price and 15% lower silver price) ("the Downside
Assumptions").
Even in the Severe Scenario it has
been assumed that all employees remain on full pay and that
mitigating actions, such as the deferral of discretionary
exploration capital expenditure, which are under the Group's
control, while available, would not be necessary.
Under the Base and the Severe
scenarios, the Group's liquid resources, which as at the date of
this report include an undrawn amount of US$270 million remain more
than adequate for the Group's forecast expenditure and scheduled
repayments of the amounts owed under the Group´s borrowings, with
sufficient headroom maintained to comply with debt
covenants.
Reverse Stress Tests
Management also performed reverse
stress tests which were considered in the Directors´ assessment.
Under these tests, the Directors concluded that:
•
prices of US$1,544/oz for
gold and US$19.0/oz for silver for the duration of the Going
Concern Period would result in the minimum levels of compliance
with the debt covenants of the medium-term loan facilities;
and
•
21 weeks of concurrent
stoppages at each of Inmaculada, San Jose and Mara Rosa would
result in the minimum levels of compliance with the debt
covenants.
In its application of the above
reverse stress tests, no mitigation actions were
applied.
Conclusion
After their review, the Directors
have a reasonable expectation that the Group and the Company have
adequate resources to continue in operational existence during the
Going Concern Period. Accordingly, the Directors are satisfied the
going concern basis of accounting is appropriate in preparing the
financial statements.
(e) Currency
translation
The functional currency for each
entity in the Group is determined by the currency of the primary
economic environment in which it operates. For the holding
companies and operating entities this currency is US dollars and
for the other entities it is the local currency of the country in
which it operates. The Group's financial information is presented
in US dollars, which is the Company's functional currency.
Transactions denominated in currencies other than the functional
currency of the entity are initially recorded in the functional
currency using the exchange rate prevailing at the date of the
transaction. Monetary assets and liabilities denominated in foreign
currencies are remeasured at the exchange rate prevailing at the
statement of financial position date. Exchange gains and losses on
settlement of foreign currency transactions which are translated at
the rate prevailing at the date of the transactions, or on the
translation of monetary assets and liabilities which are translated
at period-end exchange rates, are taken to the income statement.
Non-monetary assets and liabilities denominated in foreign
currencies that are stated at historical cost are translated to the
functional currency at the foreign exchange rate prevailing at the
date of the transaction. Exchange differences arising from monetary
items that are part of a net investment in a foreign operation are
recognised in equity and transferred to income on disposal of such
net investment.
Subsidiary financial statements
expressed in their corresponding functional currencies are
translated into US dollars by applying the exchange rate at
period-end for assets and liabilities and the transaction date
exchange rate for income statement items. The resulting difference
on consolidation is included as a cumulative translation adjustment
in equity. On disposal of a foreign operation, the component of OCI
relating to that particular foreign operation is reclassified to
profit or loss.
(f) Property,
plant and equipment
Property, plant and equipment is
stated at cost or deemed cost less accumulated depreciation and
impairment losses. Cost comprises its purchase price and directly
attributable costs of acquisition or construction required to bring
the asset to the condition necessary for the asset to be capable of
operating in the manner intended by management. Economical and
physical conditions of assets have not changed substantially over
this period.
The cost less residual value of
each item of property, plant and equipment is depreciated over its
useful life. Each item's estimated useful life has been assessed
with regard to both its own physical life limitations and the
present assessment of economically recoverable reserves and
resources of the mine property at which the item is located.
Estimates of remaining useful lives are made on a regular basis for
all mine buildings, machinery and equipment, with annual
reassessments for major items. Depreciation is charged to cost of
production on a units of production basis for mine buildings and
installations and plant and equipment used in the mining production
process, or charged directly to the income statement over the
estimated useful life of the individual asset on a straight-line
basis when not related to the mining production process. Changes in
estimates, which mainly affect units of production calculations,
are accounted for prospectively. Depreciation commences when assets
are available for use. Land is not depreciated.
An asset's carrying amount is
written-down immediately to its recoverable amount if the asset's
carrying amount is greater than its estimated recoverable
amount.
Gains and losses on disposals are
determined by comparing the net proceeds with the carrying amount
and are recognised within other income/expenses, in the income
statement.
The expected useful lives under
the straight-line method are as follows:
|
|
Years
|
|
Buildings
|
3 to 33
|
|
Plant and equipment
|
5 to 10
|
|
Vehicles
|
5
|
Borrowing costs directly
attributable to the acquisition or construction of an asset that
necessarily takes a substantial period of time to be ready for its
intended use are capitalised as part of the cost of the asset. All
other borrowing costs are expensed where incurred. For borrowings
associated with a specific asset, the actual rate on that borrowing
is used. Otherwise, a weighted average cost of borrowing is used.
The Group capitalises the borrowing costs related to qualifying
assets with a value of US$1,000,000 or more, considering that the
substantial period of time to be ready is six or more
months.
Mining properties and development
costs
Purchased mining properties are
recognised as assets at their cost of acquisition or at fair value
if purchased as part of a business combination. Costs associated
with developments of mining properties are capitalised.
Mine development costs are, upon
commencement of commercial production, depreciated using the units
of production method based on the estimated economically
recoverable reserves and resources to which they relate.
When a mine construction project
moves into the production stage, the capitalisation of certain mine
construction costs ceases and costs are either regarded as part of
the cost of inventory or expensed, except for costs which qualify
for capitalisation relating to mining asset additions or
improvements, underground mine development or mineable reserve
development.
Construction in progress and
capital advances
Assets in the course of
construction are capitalised as a separate component of property,
plant and equipment. Once the asset moves into the production
phase, the cost of construction is transferred to the appropriate
category. Construction in progress is not depreciated. Capital
advances to suppliers related to the purchase of property, plant
and equipment are disclosed in construction in progress.
Subsequent expenditure
Expenditure incurred to replace a
component of an item of property, plant and equipment is
capitalised separately with the carrying amount of the component
being written-off. Other subsequent expenditure is capitalised if
future economic benefits will arise from the expenditure. All other
expenditure including repairs and maintenance expenditures are
recognised in the income statement as incurred.
(g) Evaluation
and exploration assets
Exploration and evaluation
expenses are capitalised when there is sufficient evidence that
there is a future economic benefit to the Group. All other
exploration and evaluation expenses are expensed as incurred.
Exploration and evaluation expenses are considered to have a future
benefit to the Group when there is a high degree of confidence of
the existence of economically recoverable minerals, mine-site
exploration is being conducted to convert resources to reserves, or
mine-site exploration is being conducted to confirm resources. The
stage, timeline and associated risks of the project are also
considered. For exploration and evaluation conducted near operating
mine sites, exploration and evaluation expenses are capitalised
upon the confirmation of resources.
Payments or option payments made
by the Group to acquire licenses for exploration and evaluation
assets, or to acquire an underlying mineral project, are
capitalised in exploration and evaluation expenses or expensed as
incurred, following the same criteria described above.
The Group's exploration and
evaluation assets are carried at acquired costs until such time as
the technical feasibility and commercial viability of the
extraction of resources in an area of interest are demonstrable,
usually after a pre-feasibility study has been completed, at which
time they are classified as mine development costs and are tested
for impairment, and are then reclassified to mining properties and
development costs. For exploration and evaluation conducted near
operating mine sites, exploration and evaluation expenses are
classified as development costs upon the conversion of resources to
reserves.
(h)
Determination of ore reserves and resources
The Group estimates its ore
reserves and mineral resources based on information compiled by
internal competent persons. Reports to support these estimates are
prepared each year and are stated in conformity with the 2012 Joint
Ore Reserves Committee (JORC) code.
It is the Group's policy to have
the report audited every two years by a Competent Person. Reserves
and resources are used in the units of production calculation for
depreciation and amortisation as well as the determination of the
timing of mine closure cost and impairment analysis.
(i)
Investment in associates
An associate is an entity over
which the Group has significant influence. Significant influence is
the power to participate in the financial and operating policy
decisions of the investee, but is not control or joint control over
those policies.
The considerations made in
determining significant influence are similar to those necessary to
determine control over subsidiaries. The Group's investment in its
associate are accounted for using the equity method.
Under the equity method, the
investment in an associate is initially recognised at cost. The
carrying amount of the investment is adjusted to recognise changes
in the Group's share of net assets of the associate since the
acquisition date. Goodwill relating to the associate is included in
the carrying amount of the investment and is not tested for
impairment separately.
The statement of profit or loss
reflects the Group's share of the results of operations of the
associate. Any change in OCI of those investees is presented as
part of the Group's OCI. In addition, when there has been a change
recognised directly in the equity of the associate, the Group
recognises its share of any changes, when applicable, in the
statement of changes in equity. Unrealised gains and losses
resulting from transactions between the Group and the associate are
eliminated to the extent of the interest in the
associate.
The aggregate of the Group's share
of profit or loss of an associate is shown on the face of the
statement of profit or loss outside operating profit and represents
profit or loss after tax and non-controlling interests in the
subsidiaries of the associate.
The financial statements of the
associate are prepared for the same reporting period as the Group.
When necessary, adjustments are made to bring the accounting
policies in line with those of the Group.
After application of the equity
method, the Group determines whether it is necessary to recognise
an impairment loss on its investment in its associate. At each
reporting date, the Group determines whether there is objective
evidence that the investment in the associate is impaired. If there
is such evidence, the Group calculates the amount of impairment as
the difference between the recoverable amount of the investment and
its carrying value, and then recognises the loss within "Share of
profit of an associate" in the statement of profit or
loss.
Upon loss of significant influence
over the associate, the Group measures and recognises any retained
investment at its fair value. Any difference between the carrying
amount of the associate upon loss of significant influence and the
fair value of the retained investment and proceeds from disposal is
recognised in profit or loss.
(j)
Intangible assets
Right to use energy of
transmission line
Transmission line costs represent
the investment made by the Group to construct the transmission line
on behalf of the government to be granted the right to use it. This
is an asset with a finite useful life equal to that of the mine to
which it relates and that is amortised applying the units of
production method for that mine.
Water permits
Water permits are recorded at cost
and allow the Group to withdraw a specified amount of water from
the ground for reasonable, beneficial uses. This is an asset with
an indefinite useful life (note 18(2)).
Legal rights
Legal rights correspond to
expenditures required to give the Group the right to use a property
for the surface exploration work, development and production. This
is an asset with a finite useful life equal to that of the mine to
which it relates and that is amortised applying the units of
production method for that mine.
Other intangible assets
Other intangible assets are
primarily computer software which are capitalised at cost and are
amortised on a straight-line basis over their useful life of three
years.
(k) Impairment
of non-financial assets
Assets that have an indefinite
useful life are not subject to amortisation and are tested annually
for impairment.
The carrying amounts of property,
plant and equipment and evaluation and exploration assets are
reviewed for impairment if events or changes in circumstances
indicate that the carrying value may not be recoverable. If there
are indicators of impairment, an exercise is undertaken to
determine whether the carrying values are in excess of their
recoverable amount. Such review is undertaken on an asset by asset
basis, except where such assets do not generate cash flows
independent of other assets, and then the review is undertaken at
the cash-generating unit (CGU) level.
The assessment requires the use of
estimates and assumptions such as long-term commodity prices,
discount rates, future capital requirements, reserves and resources
volumes (reflected in the production volume) and production costs.
Changes in these assumptions will affect the recoverable amount of
the property, plant and equipment and evaluation and exploration
assets.
If the carrying amount of an asset
or its cash-generating unit (CGU) exceeds the recoverable amount,
an impairment provision is recorded to reflect the asset at the
lower amount. Impairment losses are recognised in the income
statement.
Calculation of recoverable
amount
The recoverable values of the CGUs
and advanced exploration projects are determined using a FVLCD
methodology. FVLCD for CGUs was determined using a combination of
level 2 and level 3 inputs. The FVLCD of the producing mine assets
is determined using a discounted cash flow model and for the
developing stage mine assets or advanced exploration projects is
determined using a discounted cash flow model or the value-in-situ
methodology, which applies a realisable 'enterprise value' to
unprocessed mineral resources per ounce of resources, to estimate
the amount that would be paid by a willing third party in an arm's
length transaction. (notes 16, 17 and 18).
Reversal of impairment
An impairment loss is reversed if
there has been a change in the estimates used to determine the
recoverable amount. An impairment loss is reversed only to the
extent that the asset's carrying amount does not exceed the
carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had been
recognised.
(l)
Inventories
Inventories are valued at the
lower of cost or net realisable value. Cost is determined using the
weighted average method.
The cost of work in progress and
finished goods (ore inventories) is based on the cost of
production. For this purpose, the costs of production
include:
costs, materials and contractor
expenses which are directly attributable to the extraction and
processing of ore;
depreciation of property, plant
and equipment used in the extraction and processing of ore;
and
related production overheads
(based on normal operating capacity).
Net realisable value is the
estimated selling price in the ordinary course of business, less
applicable variable selling expenses.
(m) Trade and other
receivables
Current trade receivables are
carried at the original invoice amount and then subsequently
measured at amortised cost less provision made for impairment of
these receivables. Non current receivables are stated at amortised
cost. A provision for impairment of trade receivables is
established using the expected credit loss impairment model
according IFRS 9. The amount of the provision is the difference
between the carrying amount and the recoverable amount and this
difference is recognised in the income statement. The revaluation
of provisionally priced contracts stated in 2(q) is recorded as
trade receivables.
(n) Share
capital
Ordinary shares are classified as
equity. Any excess above the par value of shares received upon
issuance of those shares is classified as share premium. In the
case the excess above par value is available for distribution, it
is classified as merger reserve and then transferred to retained
earnings. The Group had the merger reserve available for
distribution within retained earnings.
(o)
Provisions
Provisions are recognised when the
Group has a present obligation (legal or constructive) as a result
of a past event, it is probable that an outflow of resources will
be required to settle the obligation and a reliable estimate can be
made of the amount of the obligation (note 29). If the effect of
the time value of money is material, provisions are determined by
discounting the expected future cash flows at a pre-tax rate that
reflects current market assessments of the time value of money and,
where appropriate, the risks specific to the liability. Where
discounting is used, the increase in the provision due to the
passage of time is recognised as a finance cost.
Mine closure cost
Provisions for mine closure costs
are made in respect of the estimated future costs of closure and
restoration and for environmental rehabilitation costs (which
include the dismantling and demolition of infrastructure, removal
of residual materials and remediation of disturbed areas) in the
accounting period when the related environmental disturbance
occurs. The provision is discounted and the unwinding of the
discount is included in finance costs. At the time of establishing
the provision, a corresponding asset is capitalised and is
depreciated over future production from the mine to which it
relates. The provision is reviewed on an annual basis for changes
in cost estimates, discount rates and operating lives of the
mines.
Changes to estimated future costs
are recognised in the statement of financial position by adjusting
the mine closure cost liability and the related asset originally
recognised. If, for mature mines, the related mine assets net of
mine closure cost provisions exceed the recoverable value, that
portion of the increase is charged directly to the income
statement. Similarly, if reductions to the estimated costs exceed
the carrying value of the mine asset, that portion of the decrease
is credited directly to the income statement. For closed sites,
changes to estimated costs are recognised immediately in the income
statement.
Workers' profit sharing and other
employee benefits
In accordance with Peruvian
legislation, companies in Peru must provide for workers' profit
sharing equivalent to 8% of taxable income in each year. This
amount is charged to the income statement within personnel expenses
(note 10) and is considered deductible for income tax purposes. The
Group has no pension or retirement benefit schemes.
Other
Other provisions are accounted for
when the Group has a legal or constructive obligation for which it
is probable there will be an outflow of resources for which the
amount can be reliably estimated.
(p)
Share-based payments
Cash-settled
transactions
A liability is recognised for the
fair value of cash-settled transactions. The fair value is measured
initially and at each reporting date up to and including the
settlement date, with changes in fair value recognised in personnel
expenses. The fair value is expensed over the period until the
vesting date with recognition of a corresponding
liability.
The fair value of the awards is
taken to be the market value of the shares at the date of award
adjusted by a factor for anticipated relative Total Shareholder
Return (TSR) performance. Fair values are subsequently remeasured
at each reporting date to reflect the number of awards expected to
vest based on the current and anticipated TSR performance. The
approach used to account for vesting conditions when measuring
equity-settled transactions also applies to cash-settled
transactions.
Equity-settled
transactions
The cost of equity-settled
transactions is determined by the fair value at the date when the
grant is made using an appropriate valuation model and is
recognised, together with a corresponding increase in other
reserves in equity, over the period in which the performance and/or
service conditions are fulfilled. The cumulative expense recognised
for equity-settled transactions at each reporting date until the
vesting date reflects the extent to which the vesting period has
expired and the Group's best estimate of the number of equity
instruments that vest. The income statement expense for a period
represents the movement in cumulative expense recognised as at the
beginning and end of that period and is recognised in personnel
expenses (note 10).
Service and non-market performance
conditions are not taken into account when determining the grant
date fair value of awards, but the likelihood of the conditions
being met is assessed as part of the Group's best estimate of the
number of equity instruments that will ultimately vest. Market
performance conditions are reflected within the grant date fair
value. Any other conditions attached to an award, but without an
associated service requirement, are considered to be non-vesting
conditions. Non-vesting conditions are reflected in the fair value
of an award and lead to an immediate expensing of an award unless
there are also service and/or performance conditions. No expense is
recognised for awards that do not ultimately vest because
non-market performance and/or service conditions have not been met.
Where awards include a market or non-vesting condition, the
transactions are treated as vested irrespective of whether the
market or non-vesting condition is satisfied, provided that all
other performance and/or service conditions are satisfied. When the
terms of an equity-settled award are modified, the minimum expense
recognised is the grant date fair value of the unmodified award,
provided the original vesting terms of the award are met. An
additional expense, measured as at the date of modification, is
recognised for any modification that increases the total fair value
of the share-based payment transaction, or is otherwise beneficial
to the employee. Where an award is cancelled by the entity or by
the counterparty, any remaining element of the fair value of the
award is expensed immediately through profit or loss.
On 22 May 2024, beneficiaries of
LTIPs were communicated of a change in the payment mechanism
resulting in a modification of the LTIP from an equity settled to a
cash settled transaction. This resulted in a recognition of
liability based on the fair valuation of the cash settled LTIPs as
at the date of modification and reversal of the share-based payment
reserves, the incremental fair value of the cash-settled award over
that of the equity-settled award as at the modification date
amounting to US$405,000 is expensed to the profit and loss. The
liability is remeasured at each reporting date.
(q) Revenue
recognition
The Group is involved in the
production and sale of gold and silver from dore and concentrate
containing both gold and silver. Dore bars are either sold directly
to customers or are sent to a third party for further refining into
gold and silver before they are sold. Concentrate is sold directly
to customers.
Revenue from contracts with
customers is recognised when control of the goods or services are
transferred to the customer at an amount that reflects the
consideration to which the Group expects to be entitled in exchange
for those goods or services. Revenue excludes any applicable sales
taxes.
The revenue is subject to
adjustment based on inspection of the product by the customer.
Revenue is initially recognised on a provisional basis using the
Group's best estimate of contained gold and silver. Any subsequent
adjustments to the initial estimate of metal content are recorded
in revenue once they have been determined.
In addition, certain sales are
"provisionally priced" where the selling price is subject to final
adjustment at the end of a period, normally ranging from 15 to 120
days after the start of the delivery process to the customer, based
on the market price at the relevant quotation point stipulated in
the contract. Revenue is initially recognised when the conditions
set out above have been met, using market prices at that date. The
price exposure is considered to be an adjustment and hence
separated from the sales contract at each reporting date. The
provisionally priced metal is revalued based on the forward selling
price for the quotational period stipulated in the contract until
the quotational period ends. The selling price of gold and silver
can be measured reliably as these metals are actively traded on
international exchanges. The revaluation of provisionally priced
contracts is recorded as revenue.
Commercial discounts related to
the refining, recovery and treatment of minerals are presented
netted from sales.
A proportion of the Group's sales
are sold under CIF Incoterms, whereby the Group is responsible for
providing freight/shipping services (as principal) after the date
that the Group transfers control of the metal in concentrate to its
customers. The Group, therefore, has separate performance
obligations for freight/shipping services which are provided solely
to facilitate sale of the commodities it produces.
Other Incoterms commonly used by
the Group are FOB, where the Group has no responsibility for
freight or insurance once control of the products has passed at the
loading port, and Delivered at Place (DAP) where control of the
goods passes when the product is delivered to the agreed
destination. For arrangements which have these Incoterms, the only
performance obligations are the provision of the product at the
point where control passes.
For CIF arrangements, the
transaction price (as determined above) is allocated to the metal
in concentrate and freight/shipping services using the relative
stand-alone selling price method. Under these arrangements, a
portion of consideration may be received from the customer in cash
at, or around, the date of shipment under a provisional invoice.
Therefore, some of the upfront consideration that relates to the
freight/shipping services yet to be provided, is deferred. It is
then recognised as revenue over time using an output method (being
days of shipping/transportation elapsed) to measure progress
towards complete satisfaction of the service as this best
represents the Group's performance. This is on the basis that the
customer simultaneously receives and consumes the benefits provided
by the Group as the services are being provided. The costs
associated with these freight/shipping services are also recognised
over the same period of time as incurred.
Income from services provided to
related parties (note 33 (a)) is recognised in revenue when
services are provided.
Deferred revenue results when cash
is received in advance of revenue being earned. Deferred revenue is
recorded as a liability until it is earned. Once earned, the
liability is reduced and revenue is recorded. The Group analyses
when revenue is earned or deferred.
(r)
Contingencies
A contingent liability is a
possible obligation depending on whether some uncertain future
event occurs, or a present obligation where payment is not probable
or the amount cannot be measured reliably. Contingent liabilities
are not recognised in the financial statements and are disclosed in
notes to the financial statements unless their occurrence is remote
(note 37).
A contingent asset is a possible
asset that arises from past events, and whose existence will be
confirmed only by the occurrence or non-occurrence of one or more
uncertain future events not wholly within the control of the
entity. Contingent assets are not recognised in the financial
statements, but are disclosed in the notes if their recovery is
deemed probable (note 37).
(s) Finance
income and costs
Finance income and costs comprise
interest expense on borrowings, the accumulation of interest on
provisions, interest income on funds invested, unwinding of
discount, and gains and losses from the change in fair value of
derivative instruments.
Interest income is recognised as
it accrues, taking into account the effective yield on the
asset.
(t) Income
tax
Income tax for the year comprises
current and deferred tax. Income tax is recognised in the income
statement except to the extent that it relates to items charged or
credited directly to equity, in which case it is recognised in
equity.
Current tax expense is the
expected tax payable on the taxable income for the year, using tax
rates enacted at the statement of financial position date, and any
adjustment to tax payable in respect of previous years.
Deferred tax is provided using the
balance sheet liability method, providing for temporary differences
between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation
purposes, with the following exceptions:
where the temporary difference
arises from the initial recognition of goodwill or of an asset or
liability in a transaction that is not a business combination that
at the time of the transaction affects neither accounting nor
taxable profit or loss; and
in respect of taxable temporary
differences associated with investments in subsidiaries and
associates, where the timing of the reversal of the temporary
differences can be controlled and it is probable that the temporary
differences will not reverse in the foreseeable future.
Deferred tax assets and
liabilities are measured at the tax rates that are expected to
apply to the period when the asset is realised or the liability is
settled based on the tax rates (and tax laws) that have been
enacted or substantively enacted at the statement of financial
position date.
A deferred tax asset is recognised
only to the extent that it is probable that future taxable profits
will be available against which the asset can be utilised. Deferred
tax assets are reduced to the extent that it is no longer probable
that the related tax benefit will be realised.
(u) Uncertain
tax positions
An estimated tax liability is
recognised when the Group has a present obligation as a result of a
past event, it is probable that the Group will be required to
settle that obligation and a reliable estimate can be made of the
amount of the obligation. The liability is the best estimate of the
consideration required to settle the present obligation at the
balance sheet date, taking into account risks and uncertainties
surrounding the obligation. Separate liabilities for interest and
penalties are also recorded if appropriate.
Movements in interest and penalty
amounts in respect of tax liability are not included in the tax
charge, but are disclosed in the income statement. Tax liabilities
are based on management's interpretation of country-specific tax
law and the likelihood of settlement. This involves a significant
amount of judgement as tax legislation can be complex and open to
different interpretation. Management uses in-house tax experts,
professional firms and previous experience when assessing tax
risks. Where actual tax liabilities differ from the liabilities,
adjustments are made which can have a material impact on the
Group's profits for the year. Refer to note 37(a) for specific tax
contingencies.
(v)
Leases
Right-of-use assets
The Group recognises right-of-use
assets at the commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use assets are
measured at cost, less any accumulated depreciation and impairment
losses, and adjusted for any remeasurement of lease liabilities.
The cost of right-of-use assets includes the amount of lease
liabilities recognised, initial direct costs incurred, and lease
payments made at or before the commencement date less any lease
incentives received. The right-of-use asset is depreciated over the
shorter of the asset's useful life and the lease term on a
straight-line basis. Right-of-use assets are subject to
impairment.
Lease liabilities
At the commencement date of the
lease, the Group recognises lease liabilities measured at the
present value of lease payments to be made over the lease term. The
lease payments include fixed payments (including in-substance fixed
payments) less any lease incentives receivable, and amounts
expected to be paid under residual value guarantees. The lease
payments also include the exercise price of a purchase option
reasonably certain to be exercised by the Group and payments of
penalties for terminating a lease, if the lease term reflects the
Group exercising the option to terminate. The variable lease
payments are recognised as expense in the period in which the event
or condition that triggers the payment occurs.
In calculating the present value
of lease payments, the Group uses the incremental borrowing rate at
the lease commencement date if the interest rate implicit in the
lease is not readily determinable. After the commencement date, the
amount of lease liabilities is increased to reflect the accretion
of interest, and reduced for the lease payments made. In addition,
the carrying amount of lease liabilities is remeasured if there is
a modification, a change in the lease term, a change in the
in-substance fixed lease payments or a change in the assessment to
purchase the underlying asset.
Short-term leases and leases of
low-value assets
The Group applies the short-term
lease recognition exemption to its short-term leases of machinery
and equipment (i.e., those leases that have a lease term of 12
months or less from the commencement date and do not contain a
purchase option). It also applies the lease of low-value assets
recognition exemption to leases of office equipment that are
considered of low value (i.e., below US$5,000). Lease payments on
short-term leases and leases of low-value assets are recognised as
expense on a straight-line basis over the lease term.
(w) Financial
instruments
A financial instrument is any
contract that gives rise to a financial asset of one entity and a
financial liability or equity instrument of another
entity.
Financial assets
Initial recognition and
measurement
Financial assets are classified,
at initial recognition, as subsequently measured at amortised cost,
fair value through other comprehensive income (OCI), and fair value
through profit or loss.
The classification of financial
assets at initial recognition depends on the financial asset's
contractual cash flow characteristics and the Group's business
model for managing them.
The Group's business model for
managing financial assets refers to how it manages its financial
assets in order to generate cash flows. The business model
determines whether cash flows will result from collecting
contractual cash flows, selling the financial assets, or
both.
Purchases or sales of financial
assets that require delivery of assets within a time frame
established by regulation or convention in the market place
(regular way trades) are recognised on the trade date, i.e., the
date that the Group commits to purchase or sell the
asset.
On July 2023, the Group purchased
AL41 bonds, which are sovereign bonds issued by the Republic of
Argentina, denominated in U.S. dollars that were paid with
Argentine pesos and that pay income in U.S. dollars in local
accounts. They are national public securities issued in dollars
with a fixed step-up rate of 3.50% per year from (and including) 9
July 2022 until (and including) 8 July 2029 and 4,875% from (and
including) 9 July 2029 until maturity (9 July 2041). Its technical
value is US$100.21 with a residual value of 100.00%. They are
measured at fair value through profit and loss.
On October 2024, the Group
purchased BPJ25 bonds, which are public bonds issued by the Central
Bank of Argentina denominated in U.S. dollars that were paid with
Argentine pesos and that pay principal in U.S. dollars in local
accounts (no interest is paid under the BPJ25). The BPJ25 have been
issued in U.S. dollars with a maturity date of 30 June 2025. Its
technical value is US$41.69 with a residual value of 41.69%. They
are measured at amortised cost.
Subsequent measurement
For purposes of subsequent
measurement, the Group's financial assets are classified in the
following categories:
Financial assets at amortised cost
(debt instruments)
The Group measures financial
assets at amortised cost if both of the following conditions are
met:
−
The financial asset is held within a
business model with the objective to hold financial assets in order
to collect contractual cash flows
−
The contractual terms of the
financial asset give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount
outstanding
Financial assets at amortised cost
are subsequently measured using the effective interest (EIR) method
and are subject to impairment. Gains and losses are recognised in
profit or loss when the asset is derecognised, modified or
impaired.
The Group's financial assets at
amortised cost includes trade and other receivables and the BPJ25
bonds..
Financial assets designated at
fair value through OCI (equity instruments)
Upon initial recognition, the
Group can elect to classify irrevocably its equity investments as
equity instruments designated at fair value through OCI when they
meet the definition of equity under IAS 32 Financial Instruments:
Presentation and are not held for trading. The classification is
determined on an instrument-by-instrument basis.
Financial assets designated at
fair value through OCI are carried in the statement of financial
position at fair value with net changes in fair value recognised in
the OCI. Gains and losses on these financial assets are never
recycled to profit or loss. Dividends are recognised as other
income in the statement of profit or loss when the right of payment
has been established, except when the Group benefits from such
proceeds as a recovery of part of the cost of the financial asset,
in which case, such gains are recorded in OCI. Equity instruments
designated at fair value through OCI are not subject to impairment
assessment.
The Group has listed and
non-listed equity investments under this category.
Financial assets at fair value
through profit or loss
Financial assets at fair value
through profit or loss include financial assets held for trading,
financial assets designated upon initial recognition at fair value
through profit or loss, or financial assets mandatorily required to
be measured at fair value. Financial assets are classified as held
for trading if they are acquired for the purpose of selling or
repurchasing in the near term. Derivatives, including separated
embedded derivatives, are also classified as held for trading
unless they are designated as effective hedging instruments.
Financial assets with cash flows that are not solely payments of
principal and interest are classified and measured at fair value
through profit or loss, irrespective of the business model.
Notwithstanding the criteria for debt instruments to be classified
at amortised cost or at fair value through OCI, as described above,
debt instruments may be designated at fair value through profit or
loss on initial recognition if doing so eliminates, or
significantly reduces, an accounting mismatch.
Financial assets at fair value
through profit or loss are carried in the statement of financial
position at fair value with net changes in fair value recognised in
the statement of profit or loss.
The Group has listed equity
investments and embedded derivatives under this category. Dividends
on listed equity investments are also recognised as other income in
the statement of profit or loss when the right of payment has been
established.
Derecognition
A financial asset (or, where
applicable, a part of a financial asset or part of a group of
similar financial assets) is primarily derecognised (i.e., removed
from the Group's consolidated statement of financial position)
when:
−
The rights to receive cash
flows from the asset have expired
−
The Group has transferred its rights
to receive cash flows from the asset or has assumed an obligation
to pay the received cash flows in full without material delay to a
third party under a "pass-through" arrangement; and either (a) the
Group has transferred substantially all the risks and rewards of
the asset, or (b) the Group has neither transferred nor retained
substantially all the risks and rewards of the asset, but has
transferred control of the asset.
Impairment of financial
assets
The Group recognises an allowance
for expected credit losses (ECLs) for all debt instruments not held
at fair value through profit or loss. ECLs are based on the
difference between the contractual cash flows due in accordance
with the contract and all the cash flows that the Group expects to
receive, discounted at an approximation of the original effective
interest rate.
For trade receivables, the Group
applies a simplified approach in calculating ECLs. Therefore, the
Group does not track changes in credit risk, but instead recognises
a loss allowance based on lifetime ECLs at each reporting
date.
Financial liabilities
Initial recognition and
measurement
Financial liabilities are
classified, at initial recognition, as financial liabilities at
fair value through profit or loss, and financial liabilities
measured at amortised cost, or as derivatives designated as hedging
instruments in an effective hedge, as appropriate.
All financial liabilities are
recognised initially at fair value and, in the case of loans and
borrowings and payables, net of directly attributable transaction
costs.
The Group's financial liabilities
include trade and other payables, loans and borrowings including
bank overdrafts, and derivative financial instruments.
Subsequent measurement
The measurement of financial
liabilities depends on their classification, as described
below:
Financial liabilities at fair
value through profit or loss
Financial liabilities at fair
value through profit or loss include financial liabilities held for
trading and financial liabilities designated upon initial
recognition as at fair value through profit or loss.
Financial liabilities measured at
amortised cost
This is the category most relevant
to the Group. After initial recognition, interest-bearing loans and
borrowings are subsequently measured at amortised cost using the
EIR method. Gains and losses are recognised in profit or loss when
the liabilities are derecognised as well as through the EIR
amortisation process.
Amortised cost is calculated by
taking into account any discount or premium on acquisition and fees
or costs that are an integral part of the EIR. The EIR amortisation
is included in finance costs in the statement of profit or
loss.
This category generally applies to
interest-bearing loans and borrowings.
Derecognition
A financial liability is
derecognised when the obligation under the liability is discharged
or cancelled or expires. When an existing financial liability is
replaced by another from the same lender on substantially different
terms, or the terms of an existing liability are substantially
modified, such an exchange or modification is treated as the
derecognition of the original liability and the recognition of a
new liability. The difference in the respective carrying amounts is
recognised in the statement of profit or loss.
Derivative financial instruments
and hedge accounting
The silver and gold forward and
zero cost collar agreements signed by the Group are being used to
hedge the exposure to changes in the cash flows of the silver and
gold commodity prices. Consequently, the Group has opted to apply
hedge accounting under the requirements of IFRS 9 Financial
Instruments.
Initial recognition and subsequent
measurement
These derivative financial
instruments were initially recognised at fair value on the date on
which the derivative contract was entered into and were
subsequently remeasured at fair value. Derivatives are carried as
financial assets when the fair value is positive and as financial
liabilities when the fair value is negative.
For the purpose of hedge
accounting, hedges are classified as cash flow hedges when hedging
the exposure to variability in cash flows that is either
attributable to a particular risk associated with a recognised
asset or liability or a highly probable forecast transaction or the
foreign currency risk in an unrecognised firm
commitment.
At the inception of a hedge
relationship, the Group formally designates and documents the hedge
relationship to which it wishes to apply hedge accounting and the
risk management objective and strategy for undertaking the
hedge.
The documentation includes
identification of the hedging instrument, the hedged item, the
nature of the risk being hedged and how the Group will assess
whether the hedging relationship meets the hedge effectiveness
requirements (including the analysis of sources of hedge
ineffectiveness and how the hedge ratio is determined). A hedging
relationship qualifies for hedge accounting if it meets all of the
following effectiveness requirements:
There is "an economic
relationship" between the hedged item and the hedging
instrument
The effect of credit risk does not
"dominate the value changes" that result from that economic
relationship
The hedge ratio of the hedging
relationship is the same as that resulting from the quantity of the
hedged item that the Group actually hedges and the quantity of the
hedging instrument that the Group actually uses to hedge that
quantity of hedged item
Changes in the fair value of
derivatives designated as cash flow hedges are recognised in other
comprehensive income and accumulated under the heading of cash flow
hedging reserve until changes in the fair value of the hedged item
are recognised in profit or loss. However, the ineffective portion
of the changes in the fair value of such derivatives is recognised
in profit or loss. The Group uses cash flow hedges for hedging the
exposure to variability in silver and gold prices.
The amounts that have been
recognised in other components of equity relating to such hedging
instruments are reclassified to profit or loss when the hedged
transaction affects profit or loss.
(x) Dividend
distribution
Dividends on the Company's
ordinary shares are recognised when they have been appropriately
authorised and are no longer at the Company's discretion.
Accordingly, interim dividends are recognised when they are paid
and final dividends are recognised when they are declared following
approval by shareholders at the Company's Annual General
Meeting.
(y) Cash and
cash equivalents
Cash and cash equivalents are
carried in the statement of financial position at cost. For the
purposes of the statement of financial position, cash and cash
equivalents comprise cash on hand and deposits held with banks that
are readily convertible into known amounts of cash and which are
subject to insignificant risk of changes in value. For the purposes
of the cash flow statement, cash and cash equivalents, as defined
above, are shown net of outstanding bank overdrafts.
Liquidity funds are classified as
cash equivalents if the amount of cash that will be received is
known at the time of the initial investment and the risk of changes
in value is considered insignificant.
(z)
Exceptional items
Exceptional items are those
significant items which, due to their nature or the expected
infrequency of the events giving rise to them, need to be disclosed
separately on the face of the income statement to enable a better
understanding of the financial performance of the Group and
facilitate comparison with prior years.
Exceptional items mainly
include:
Impairments and reversal of
impairments or write-offs of assets, property, plant and equipment
and evaluation and exploration assets;
incremental cost due to pandemics
which are not expected to be recurring;
gains or losses arising on the
disposal of subsidiaries, investments or property, plant and
equipment;
any gain or loss resulting from
restructuring within the Group;
the impact of infrequent labour
action related to work stoppages in mine units;
the penalties generated by the
early termination of agreements with providers or lenders of the
Group;
the reversal of an accumulation of
prior year's tax expenses that resulted from an agreement with the
government; and
the related tax impact of the
above items.
(aa) Fair value
measurement
The Group measures financial
instruments, such as derivatives, at each statement of financial
position date.
Fair value is the price that would
be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement
date. The fair value measurement is based on the presumption that
the transaction to sell the asset or transfer the liability takes
place either:
In the principal market for the
asset or liability, or
In the absence of a principal
market, in the most advantageous market for the asset or
liability
The principal or the most
advantageous market must be accessible by the Group.
The fair value of an asset or a
liability is measured using the assumptions that market
participants would use when pricing the asset or liability,
assuming that market participants act in their best economic
interest.
A fair value measurement of a
non-financial asset takes into account a market participant's
ability to generate economic benefits by using the asset in its
highest and best use or by selling it to another market participant
that would use the asset in its highest and best use. The Group
uses valuation techniques that are appropriate in the circumstances
and for which sufficient data are available to measure fair value,
maximising the use of relevant observable inputs and minimising the
use of unobservable inputs.
All assets and liabilities for
which fair value is measured or disclosed in the financial
statements are categorised within the fair value hierarchy, as
described in note 39(e).
For assets and liabilities that
are recognised in the financial statements on a recurring basis at
fair value, the Group determines whether transfers have occurred
between levels in the hierarchy by re-assessing categorisation
(based on the lowest level input that is significant to the fair
value measurement as a whole) at the end of each reporting
period.
The Group determines the policies
and procedures for both recurring fair value measurement and
unquoted financial assets, and for non-recurring
measurement.
At each reporting date, the Group
analyses the movements in the values of assets and liabilities,
which are required to be re-measured or re-assessed as per the
Group's accounting policies. For this analysis, the Group verifies
the major inputs applied in the latest valuation by agreeing the
information in the valuation computation to contracts and other
relevant documents.
The Group, in conjunction with its
external valuers where applicable, also compares the changes in the
fair value of each asset and liability with relevant external
sources to determine whether the change is reasonable.
For the purpose of fair value
disclosures, the Group has determined classes of assets and
liabilities on the basis of the nature, characteristics and risks
of the asset or liability and the level of the fair value hierarchy
as explained above.
(ab) Export incentive
programme
On 3 October 2023, the Argentinian
Government approved that exporters of crude oil, gas and
derivatives, who meet certain conditions, may receive 25% of the
funds received from exports through negotiable securities acquired
in foreign currency and settled in local currency.
On 23 October 2023, the export
incentive programme was approved increasing the percentage to 30%.
On 20 November 2023 the percentage increased to 50% and since 13
December 2023 changed to 20%. As at 31 December 2024 the Group
recognised a benefit from the programme of US$15,996,000 (2023:
US$21,164,000), disclosed as other income (refer to note
12).
(ac) Stripping costs
In an open-pit operation, it is
necessary to remove overburden or waste material to access the ore
bodies (stripping activity). During the mine development and
pre-production phases, the stripping related costs are capitalised
as part of the cost of development and subsequently recognised as
depreciation in the cost of sales, on a units of production basis,
once commercial production starts.
The removal of waste material
usually continues throughout the life of mine. Upon commencement of
commercial production, the activity is referred to as production
stripping. Production stripping costs are capitalised only when it
is probable that future economic benefits associated with the
stripping activity will flow to the Group, and costs can be
reliably measured. Otherwise, the production stripping costs are
charged to the income statement as operating costs as they are
incurred. Stripping activity costs associated with such development
activities are capitalised as development costs using an average
stripping ratio. The average stripping ratio is calculated by
dividing the estimated number of tonnes of waste material to be
removed by the estimated ore to be mined over the life of the mine,
and is reviewed annually. The amount capitalised is subsequently
depreciated using the units of production method.
3 Segment
reporting
The Group's activities are
principally related to mining operations, which involve the
exploration, production and sale of gold and silver. Products are
subject to the same risks and returns and are sold through similar
distribution channels. The Group undertakes a number of activities
solely to support mining operations including power generation and
services. Transfer prices between segments are set at an arm's
length basis in a manner similar to that used for third parties.
Segment revenue, segment expense and segment results include
transfers between segments at market prices. Those transfers are
eliminated on consolidation.
For internal reporting purposes,
management takes decisions and assesses the performance of the
Group through consideration of the following reporting
segments:
Operating unit - San Jose, which
generates revenue from the sale of gold and silver (dore and
concentrate)
Operating unit - Mara Rosa, which
generates revenue from the sale of gold and silver
(dore)
Operating unit - Inmaculada, which
generates revenue from the sale of gold and silver
(dore)
Former operating unit -
Pallancata, which generated revenue from the sale of gold and
silver (concentrate) until 2023, and it is involved in the
development of the Royropata area.
Exploration, which explores and
evaluates areas of interest in brownfield and greenfield sites with
the aim of extending the life of mine of existing operations and to
assess the feasibility of new mines.
Other - includes the profit or
loss generated by Empresa de Transmisión Aymaraes S.A.C.
The Group's administration,
financing, other activities (including other income and expense),
and income taxes are managed at a corporate level and are not
allocated to operating segments.
Segment information is consistent
with the accounting policies adopted by the Group. Management
evaluates the financial information based on the adopted IFRS
accounting policies in the financial statements.
The Group measures the performance
of its operating units by the segment profit or loss that comprises
gross profit, selling expenses and exploration expenses.
Segment assets include items that
could be allocated directly to the segment.
(a) Reportable
segment information
|
|
Inmaculada US$000
|
San Jose
US$000
|
Mara
Rosa US$000
|
Pallancata US$000
|
Exploration US$000
|
Other1
US$000
|
Adjustment
and
eliminations
US$000
|
Total
US$000
|
|
Year ended 31 December
2024
|
|
|
|
|
|
|
|
|
|
Revenue from external
customers
|
522,406
|
285,142
|
159,646
|
(255)
|
-
|
452
|
-
|
967,391
|
|
Inter-segment revenue
|
-
|
-
|
-
|
|
-
|
3,975
|
(3,975)
|
-
|
|
Total revenue from
customers
|
522,406
|
285,142
|
159,646
|
(255)
|
-
|
4,427
|
(3,975)
|
967,391
|
|
Provisional pricing
adjustment
|
(54)
|
8,193
|
70
|
-
|
-
|
-
|
-
|
8,209
|
|
Realised loss on hedges
|
(18,010)
|
-
|
(9,894)
|
-
|
-
|
-
|
-
|
(27,904)
|
|
Total revenue
|
504,342
|
293,335
|
149,822
|
(255)
|
-
|
4,427
|
(3,975)
|
947,696
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit/(loss)
|
231,141
|
54,094
|
40,830
|
(269)
|
(28,379)
|
2,472
|
(1,799)
|
298,090
|
|
Others2
|
|
|
|
|
|
|
|
(120,873)
|
|
Profit from operations before
income tax
|
|
|
|
|
|
|
|
177,217
|
|
|
|
|
|
|
|
|
|
|
|
Other segment
information
|
|
|
|
|
|
|
|
|
|
Depreciation3
|
(91,251)
|
(48,368)
|
(17,383)
|
(560)
|
(8)
|
(2,584)
|
-
|
(160,154)
|
|
Amortisation
|
(80)
|
(531)
|
(761)
|
(102)
|
-
|
(105)
|
-
|
(1,579)
|
|
Impairment and write-off of
assets, net
|
(730)
|
(15)
|
-
|
(53)
|
(13,732)
|
(3,085)
|
-
|
(17,615)
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Capital expenditure
|
138,582
|
46,143
|
35,318
|
32,908
|
92,0415
|
3,090
|
-
|
348,082
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
17,028
|
67,866
|
35,210
|
1,758
|
5,327
|
6,387
|
-
|
133,576
|
|
Other non-current
assets
|
572,513
|
132,716
|
347,235
|
41,622
|
125,325
|
33,282
|
-
|
1,252,693
|
|
Total segment assets
|
589,541
|
200,582
|
382,445
|
43,380
|
130,652
|
39,669
|
-
|
1,386,269
|
|
Not reportable
assets4
|
-
|
-
|
-
|
|
-
|
265,230
|
-
|
265,230
|
|
Total assets
|
589,541
|
200,582
|
382,445
|
43,380
|
130,652
|
304,899
|
-
|
1,651,499
|
1 "Other" revenue relates to revenues earned by Empresa
de Transmisión Aymaraes S.A.C. for energy transmission
services.
2 Comprised of administrative expenses of US$50,232,000,
other income of US$20,955,000, other expenses of US$43,245,000,
write-off of assets (net) of US$3,883,000, impairment of
non-current assets of US$13,732,000, share of losses of an
associate of US$6,489,000, finance income of US$13,097,000, finance
expense of US$26,928,000, and foreign exchange loss of
US$10,416,000.
3 Includes depreciation capitalised in the Pallancata
unit (US$102,000), San Jose unit (US$2,367,000), Mara Rosa project
(US$146,000), and products in process (-US$1,110,000).
4 Not reportable assets are comprised of financial
assets at fair value through OCI of US$475,000, other receivables
of US$116,892,000, income tax receivable of US$186,000, deferred
income tax asset of US$27,677,000, investment in associates
US$15,811,000, other financial assets of US$3,807,000, assets held
for sale of US$3,409,000, and cash and cash equivalents of
US$96,973,000.
5 Includes Monte do Carmo capital
expenditure of US$90,602,000.
|
|
Inmaculada US$000
|
San Jose
US$000
|
Mara
Rosa
US$000
|
Pallancata US$000
|
Exploration US$000
|
Other1 and 5
US$000
|
Adjustment
and
eliminations
US$000
|
Total
US$000
|
|
Year ended 31 December
2023
|
|
|
|
|
|
|
|
|
|
Revenue from external
customers
|
391,782
|
241,301
|
-
|
51,048
|
-
|
565
|
|
684,696
|
|
Inter-segment revenue
|
-
|
-
|
-
|
|
-
|
9,609
|
(9,609)
|
-
|
|
Total revenue from
customers
|
391,782
|
241,301
|
-
|
51,048
|
-
|
10,174
|
(9,609)
|
684,696
|
|
Provisional pricing
adjustment
|
145
|
1,160
|
-
|
(131)
|
-
|
-
|
-
|
1,174
|
|
Realised gain on hedges
|
4,717
|
-
|
-
|
3,129
|
-
|
-
|
-
|
7,846
|
|
Total revenue
|
396,644
|
242,461
|
-
|
54,046
|
-
|
10,174
|
(9,609)
|
693,716
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit/(loss)
|
152,208
|
30,340
|
-
|
(19,484)
|
(21,485)
|
8,026
|
(262)
|
149,343
|
|
Others2
|
|
|
|
|
|
|
|
(192,824)
|
|
Loss from operations before income
tax
|
|
|
|
|
|
|
|
(43,481)
|
|
|
|
|
|
|
|
|
|
|
|
Other segment
information
|
|
|
|
|
|
|
|
|
|
Depreciation3
|
(74,955)
|
(52,241)
|
(211)
|
(19,477)
|
(342)
|
(5,492)
|
-
|
(152,718)
|
|
Amortisation
|
(72)
|
(588)
|
-
|
|
(7)
|
(135)
|
-
|
(802)
|
|
Impairment and write-off of
assets, net
|
(1,738)
|
(17,398)
|
(1)
|
(859)
|
(63,494)
|
(84)
|
-
|
(83,574)
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Capital expenditure
|
86,031
|
47,682
|
145,804
|
6,428
|
2,320
|
127
|
-
|
288,392
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
23,703
|
63,795
|
1,734
|
4,125
|
14,980
|
4,325
|
-
|
112,662
|
|
Other non-current
assets
|
524,504
|
135,680
|
349,920
|
10,325
|
60,150
|
35,579
|
-
|
1,116,158
|
|
Total segment assets
|
548,207
|
199,475
|
351,654
|
14,450
|
75,130
|
39,904
|
-
|
1,228,820
|
|
Not reportable
assets4
|
-
|
-
|
-
|
|
-
|
186,990
|
-
|
186,990
|
|
Total assets
|
548,207
|
199,475
|
351,654
|
14,450
|
75,130
|
226,894
|
-
|
1,415,810
|
1 "Other" revenue relates to revenues earned by Empresa
de Transmisión Aymaraes S.A.C. for energy transmission
services.
2 Comprised of administrative expenses of US$47,192,000,
other income of US$30,261,000, other expenses of US$56,513,000,
write-off of assets (net) of US$2,731,000, impairment of
non-current assets of US$80,843,000, share of losses of an
associate of US$9,460,000, finance income of US$7,473,000, finance
expense of US$18,199,000, and foreign exchange loss of
US$15,620,000.
3 Includes depreciation capitalised in the Crespo
project (US$334,000), San Jose unit (US$3,025,000), Mara Rosa
project (US$194,000), products in process (US$316,000) and
recognised against the mine rehabilitation provision
(US$2,712,000).
4 Not reportable assets are comprised of financial
assets at fair value through OCI of US$460,000, other receivables
of US$63,473,000, income tax receivable of US$4,713,000, deferred
income tax asset of US$763,000, investment in associates
US$22,927,000, derivative financial assets of US$846,000, other
financial assets of US$2,264,000, assets held for sale of
US$2,418,000, and cash and cash equivalents of
US$89,126,000.
(b)
Geographical information
The revenue for the period based
on the country in which the customer is located is as
follows:
|
|
Year
ended 31 December
|
|
|
2024
US$000
|
2023
US$000
|
|
Switzerland
|
246,763
|
278,076
|
|
Canada
|
363,922
|
157,131
|
|
South Korea
|
53,527
|
101,331
|
|
Germany
|
20,754
|
74,220
|
|
Japan
|
4,364
|
8
|
|
Chile
|
30,696
|
-
|
|
Finland
|
18,527
|
3,128
|
|
USA
|
172,082
|
50,036
|
|
Luxembourg
|
2,486
|
-
|
|
Bulgaria
|
8,369
|
-
|
|
Peru
|
54,110
|
21,940
|
|
Total
revenue1
|
975,600
|
685,870
|
|
Inter-segment
|
|
|
|
Peru
|
3,975
|
9,609
|
|
Total
|
979,575
|
695,479
|
|
(Loss)/gain on realised
hedges
|
|
|
|
United Kingdom
|
(18,010)
|
7,846
|
|
Brazil
|
(9,894)
|
-
|
|
Total
|
951,671
|
703,325
|
1 Includes revenue from customers and provisional pricing
adjustments of US$8,209,000 (2023: US$1,174,000).
In the periods set out below,
certain customers accounted for greater than 10% of the Group's
total revenues as detailed in the following table:
|
|
Year
ended 31 December 2024
|
Year
ended 31 December 2023
|
|
|
US$000
|
%
Revenue
|
Segment
|
US$000
|
%
Revenue
|
Segment
|
|
Asahi Refining Canada
Ltd.
|
363,922
|
38%
|
Inmaculada, Mara Rosa and San Jose
|
157,149
|
23%
|
Inmaculada and San Jose
|
|
Auramet International
Inc.
|
132,284
|
14%
|
Inmaculada
|
40,470
|
6%
|
Inmaculada
|
|
Argor Heraus S.A.
|
125,655
|
13%
|
Inmaculada and San Jose
|
157,580
|
23%
|
Inmaculada and San Jose
|
|
MKS Switzerland S.A.
|
121,108
|
13%
|
Inmaculada
|
120,496
|
17%
|
Inmaculada
|
|
LS MnM (formerly LS
Nikko)
|
53,680
|
6%
|
Pallancata and San Jose
|
97,020
|
14%
|
Pallancata and San Jose
|
|
Aurubis AG
|
20,754
|
2%
|
Pallancata, San Jose and Mara Rosa
|
74,220
|
11%
|
Pallancata and San Jose
|
Non-current assets, excluding
financial instruments, investment in associates, other receivables
and deferred income tax assets, were allocated to the geographical
areas in which the assets are located as follows:
|
|
As at 31
December
|
|
|
2024
US$000
|
2023
US$000
|
|
Peru
|
647,416
|
589,133
|
|
Brazil
|
435,195
|
349,920
|
|
Argentina
|
132,716
|
135,680
|
|
Chile
|
37,366
|
41,425
|
|
Total non-current segment
assets
|
1,252,693
|
1,116,158
|
|
Financial assets at fair value
through OCI
|
475
|
460
|
|
Investment in
associates
|
15,811
|
22,927
|
|
Other receivables
|
18,316
|
12,438
|
|
Deferred income tax
assets
|
27,677
|
763
|
|
Total non-current
assets
|
1,314,972
|
1,152,746
|
4 Acquisition
of Monte do Carmo ("MdC")
In March 2024, the Group, through
its wholly-owned subsidiary Amarillo Mineração do Brasil Ltda.
("Amarillo"), entered into an option agreement with Cerrado Gold
Inc. ("Cerrado") to acquire a 100% interest in Cerrado's Monte Do Carmo Project (the "Project") located
in the mining-friendly state of Tocantins, Brazil.
The payment for the option
amounted to US$15,000,000 by way of 10% interest-bearing secured
loan. Upon obtaining the Cerrado Shareholder Approval ("Cerrado´s
Shareholder Approval"), on 27 June 2024, the loan of US$15,000,000
was deemed to be repaid in full by Cerrado by the concurrent set
off of an amount equal to the loan due by Amarillo as part of the
purchase price. Through US$30,000,000 in additional phased payments
(the "Exercise Consideration"), the Company was able to complete
the acquisition of 100% of the project on 7 November, 2024
("Closing"). The Exercise Consideration is
in addition to the US$15,000,000 which has been deemed paid, and a
further US$15,000,000 payable at certain milestones following
Closing, giving a total consideration of US$60,000,000:
• US$10,000,000 payable within 14
days of the second anniversary of the date of the Cerrado´s
Shareholder Approval (27 June 2024); and
• US$5,000,000 within 14 days of
the earlier of (i) the commencement of commercial production from
the Project, and (ii) 31 March 2027.
At Closing, Amarillo acquired all
of the outstanding equity interests in Serra Alta Mineração Ltda.
("Serra Alta"), Cerrado´s subsidiary in Brazil which holds the
Monte do Carmo project. In connection with the option agreement,
the Group committed to incur a minimum of US$5,000,000 in
exploration expenditures for Monte do Carmo, which was achieved by
the acquisition date.
The Group applied the
concentration test in accordance with IFRS 3 to determine whether
the acquisition is a business combination or an asset acquisition,
concluding that substantially all of the fair value of the gross
assets acquired is concentrated in a single identifiable asset or a
group of similar assets, being the Monte do Carmo project which is
in a development stage. Since the concentration test was met, the
transaction was accounted as a purchase of assets.
The total consideration amounted
to US$86,556,000 and is comprised of: (i) cash consideration paid
of US$45,000,000, (ii) deferred consideration of US$13,365,000, representing
the present value of the US$15,000,000 remaining payables, (iii)
liabilities assumed by Amarillo in connection with the Sprott
Private Resource Streaming and Royalty Corp. ("Sprott") secured
note and stream agreements ("Stream Agreements) of US$26,159,000
(note 26(a)), net of its deferred income tax asset of US$899,000
(iv) additional expenditure assumed by Amarillo pre-closing of the
acquisition of US$1,180,000, and (v) transaction costs of
US$1,751,000.
In addition, Serra Alta
Participações Imobiliárias S.A. ("SAPI") - entity owned by Amarillo
and Serra Alta, has a contractual obligation to make payment of
royalties in favour of the former landowners of the Bortolotti
Property corresponding to 50% of the amount due to the Brazilian
authorities as statutory tax (Compensação Financeira pela
Exploração Mineral ("CFEM")). According to the most recent
estimates available to the Company, approximately 25% of the gold
reserves of the Project are located within the area comprised by
the Bortolotti Property and would accordingly be subject to the
payment of such royalties.
Monte do Carmo consolidates its
financial information with the Group from 7 November 2024, being
the date on which the Group obtained control.
The fair value of assets acquired
and liabilities assumed as at 7 November 2024 comprise the
following:
|
|
US$000
|
|
Cash and cash
equivalents
|
8
|
|
Other receivables
|
10
|
|
Evaluation and exploration assets
(note 17)
|
82,725
|
|
Property, plant and equipment
(note 16)
|
3,988
|
|
Deferred income tax
asset
|
1,918
|
|
Total assets
|
88,649
|
|
Accounts payable and other
liabilities
|
(2,093)
|
|
Total liabilities
|
(2,093)
|
|
Net assets acquired
|
86,556
|
|
Consideration for the acquisition
of Serra Alta Mineracao Ltda shares
|
|
|
Cash consideration
|
45,000
|
|
Deferred consideration
|
13,365
|
|
Secured note and stream contracts
transferred to Amarillo, net of deferred tax asset
|
25,260
|
|
Expenditure assumed by
Amarillo
|
1,180
|
|
Transaction costs
|
1,751
|
|
Total consideration
|
86,556
|
|
|
|
|
Cash paid
|
47,931
|
|
Less cash acquired with the
subsidiary
|
(8)
|
|
Net cash flow on
acquisition
|
47,923
|
The Group recognises individual
identifiable assets (and liabilities) by allocating the cost of
acquisition on the basis of the relative fair values at the date of
purchase:
Step 1: Identify assets and
liabilities acquired, adjusting them to the Group's accounting
policies and presentation
Step 2: Determine the purchase
consideration
Step 3: Purchase Price Allocation:
The consideration paid is allocated to the fair value of the
identifiable assets and liabilities assumed with the remainder
allocated to the mineral property acquired
The fair value at the time of
acquisition is the amount for which an asset could be exchanged, or
a liability settled, between knowledgeable, willing parties in an
arm's length transaction.
5
Revenue
|
|
Year
ended 31 December 2024
|
Year
ended 31 December 2023
|
|
|
Revenue1
|
Revenue1
|
|
|
Goods
sold US$000
|
Shipping
services US$000
|
Total
US$000
|
|
|
Goods
sold US$000
|
Shipping
services US$000
|
Total
US$000
|
|
Gold (from dore bars)
|
556,551
|
731
|
557,282
|
|
|
317,257
|
738
|
317,995
|
|
Silver (from dore bars)
|
221,776
|
485
|
222,261
|
|
|
166,596
|
499
|
167,095
|
|
Gold (from
concentrates)
|
105,192
|
2,610
|
107,802
|
|
|
102,200
|
3,697
|
105,897
|
|
Silver (from
concentrates)
|
71,046
|
1,749
|
72,795
|
|
|
90,224
|
2,920
|
93,144
|
|
Gold (from
precipitates)
|
6,801
|
-
|
6,801
|
|
|
-
|
-
|
-
|
|
Silver (from
precipitates)
|
2
|
-
|
2
|
|
|
-
|
-
|
-
|
|
Services
|
448
|
-
|
448
|
|
|
565
|
-
|
565
|
|
Total revenue from
customers
|
961,816
|
5,575
|
967,391
|
|
|
676,842
|
7,854
|
684,696
|
|
Provisional pricing
adjustments
|
8,209
|
-
|
8,209
|
|
|
1,174
|
-
|
1,174
|
|
Realised (loss)/gain on
hedges
|
(27,904)
|
-
|
(27,904)
|
|
|
7,846
|
-
|
7,846
|
|
Total
|
942,121
|
5,575
|
947,696
|
|
|
685,862
|
7,854
|
693,716
|
|
|
|
|
|
|
|
|
|
| |
1 Includes commercial discounts (refinery treatment
charges, refining fees and payable deductions for processing
concentrate), and are deducted from gross revenue on a per tonne
basis (treatment charge), per ounce basis (refining fees) or as a
percentage of gross revenue (payable deductions). In 2024, the
Group recorded commercial discounts of US$22,720,000 (2023:
US$20,299,000).
6 Cost of
sales
Cost of sales
comprises:
|
|
Year
ended 31 December
|
|
|
2024
US$000
|
2023
US$000
|
|
Direct production costs excluding
depreciation and amortisation
|
454,006
|
362,980
|
|
Depreciation and amortisation in
production costs
|
157,165
|
144,812
|
|
Workers profit sharing
|
3,145
|
1,862
|
|
Fixed costs during operational
stoppages and reduced capacity
|
1,071
|
3,314
|
|
Change in inventories
|
(10,124)
|
(4,754)
|
|
Cost of sales
|
605,263
|
508,214
|
1 Included in production cost there are stripping costs
amounting to US$7,449,000 in Mara Rosa and US$2,653,000 in San Jose
(2023: US$Nil).
The main components included in
cost of sales are:
|
|
Year
ended 31 December
|
|
|
2024
US$000
|
2023
US$000
|
|
Depreciation and amortisation in
cost of sales1
|
156,785
|
143,171
|
|
Personnel expenses (note
10)2
|
132,412
|
121,938
|
|
Mining royalty (note
38)
|
9,694
|
6,267
|
|
Change in products in process and
finished goods
|
(10,124)
|
(4,754)
|
|
Fixed costs at the operations
during stoppages and reduced capacity3
|
1,071
|
3,314
|
1 The depreciation and amortisation in production cost
is US$157,165,000 (2023: US$144,812,000). The difference with the
depreciation and amortisation in cost of sales is considered in
inventory.
2 Includes workers profit sharing of US$3,145,000 (2023:
US$1,862,000) and excludes personnel expenses of US$712,000 (2023:
US$3,032,000) included within unallocated fixed cost at the
operations (see below).
3 Corresponds to the unallocated fixed cost accumulated
as a result of idle capacity during stoppages. These costs mainly
include personnel expenses of US$712,000 (2023: US$3,032,000),
third party services of US$301,000 (2023: US$865,000), supplies of
US$33,000 (2023: US$34,000), depreciation and amortisation of
US$Nil (2022: US$Nil) and other costs of US$25,000 (2023: income of
US$617,000).
7
Administrative expenses
|
|
Year
ended 31 December
|
|
|
2024
US$000
|
2023
US$000
|
|
Personnel expenses (note
10)
|
28,586
|
25,633
|
|
Professional
fees1
|
7,088
|
7,946
|
|
Donations
|
1,235
|
1,075
|
|
Lease rentals
|
1,583
|
1,399
|
|
Third party services
|
522
|
948
|
|
Communications
|
153
|
128
|
|
Indirect taxes
|
1,986
|
2,085
|
|
Depreciation and
amortisation
|
2,588
|
1,716
|
|
Depreciation of right-of-use
assets
|
147
|
167
|
|
Technology and systems
|
1,156
|
822
|
|
Security
|
830
|
858
|
|
Other2
|
4,358
|
4,415
|
|
Total
|
50,232
|
47,192
|
1 Corresponds to audit fees of US$1,934,000 (2023:
US$1,768,000), legal fees of US$1,030,000 (2023: US$914,000), tax
and advisory fees of US$2,670,000 (2023: US$2,507,000), and other
professional fees of US$1,454,000 (2023: US$2,757,000).
2 Predominantly relates to advertising costs of
US$245,000 (2023: US$289,000), insurance fees of US$1,066,000
(2023: US$548,000), repair and maintenance of US$328,000 (2023:
US$344,000), supplies costs of US$135,000 (2023: US$109,000),
travel expenses of US$932,000 (2023: US$1,065,000) and personnel
transportation of US$204,000 (2023: US$127,000).
8 Exploration
expenses
|
|
Year
ended 31 December
|
|
|
2024
US$000
|
2023
US$000
|
|
Mine site
exploration1
|
|
|
|
Arcata
|
93
|
63
|
|
Ares
|
300
|
407
|
|
Inmaculada
|
4,423
|
1,371
|
|
Pallancata
|
2,106
|
1,070
|
|
San Jose
|
9,821
|
8,233
|
|
Mara Rosa
|
1,278
|
5
|
|
|
18,021
|
11,149
|
|
Prospects2
|
|
|
|
Peru
|
193
|
143
|
|
USA
|
-
|
63
|
|
Chile
|
40
|
(62)
|
|
Canada4
|
-
|
2,176
|
|
Brazil
|
1,581
|
-
|
|
|
1,814
|
2,320
|
|
Generative3
|
|
|
|
Peru
|
1,317
|
456
|
|
USA
|
-
|
1
|
|
Mexico
|
-
|
7
|
|
Brazil
|
-
|
1,916
|
|
Chile
|
-
|
(1)
|
|
|
1,317
|
2,379
|
|
Personnel (note 10)
|
5,550
|
4,759
|
|
Others
|
70
|
638
|
|
Depreciation right-of-use
assets
|
82
|
52
|
|
Total
|
26,854
|
21,297
|
1 Mine-site exploration is performed with the purpose of
identifying potential minerals within an existing mine-site, with
the goal of maintaining or extending the mine's life.
2 Prospects expenditure relates to detailed geological
evaluations in order to determine zones, which have mineralisation
potential that is economically viable for exploration. Exploration
expenses are generally incurred in the following areas: mapping,
sampling, geophysics, identification of local targets and
reconnaissance drilling.
3 Generative expenditure is early stage exploration
expenditure related to the basic evaluation of the region to
identify prospects areas that have the geological conditions
necessary to contain mineral deposits. Related activities include
regional and field reconnaissance, satellite images, compilation of
public information and identification of exploration
targets.
4 Corresponds to the SNIP project which was managed by
Hochschild Mining Canada Corp.
9 Selling
expenses
|
|
Year
ended 31 December
|
|
|
2024
US$000
|
2023
US$000
|
|
Personnel expenses (note
10)
|
200
|
165
|
|
Warehouse services
|
1,569
|
1,614
|
|
Taxes1
|
13,034
|
11,227
|
|
Other2
|
2,686
|
1,856
|
|
Total
|
17,489
|
14,862
|
1 Corresponds to the export duties in
Argentina.
2 Mainly corresponds to insurance expenses of US$293,000 (2023:
US$250,000), other professional fees of US$512,000 (2023:
US$514,000), analysis services of US$461,000 (2023: US$457,000),
and consumption of supplies of US$330,000 (2023:
US$293,000).
10 Personnel
expenses
|
|
Year
ended 31 December
|
|
|
2024
US$000
|
2023
US$000
|
|
Salaries and wages
|
124,828
|
119,621
|
|
Workers' profit sharing (note
29)
|
6,590
|
3,207
|
|
Other legal
contributions
|
30,056
|
27,808
|
|
Statutory holiday
payments
|
10,317
|
8,832
|
|
Long-Term Incentive
Plan
|
3,562
|
2,675
|
|
Termination
benefits1
|
4,861
|
10,991
|
|
Other2
|
1,017
|
1,074
|
|
Total
|
181,231
|
174,208
|
1 Includes exceptional personnel expenses amounting to
US$Nil (2023: US$8,960,000) (refer to note 11(1)). The Group's
previously operating Pallancata mine went into care and maintenance
in November 2023 and consequently 463 employees were terminated in
2023.
2 Mainly includes training expenses of US$780,000 (2023:
US$725,000).
Personnel expenses are distributed
as follows:
|
|
Year
ended 31 December
|
|
|
2024
US$000
|
2023
US$000
|
|
Cost of
sales1
|
133,124
|
124,970
|
|
Administrative expenses
|
28,586
|
25,633
|
|
Exploration expenses
|
5,550
|
4,759
|
|
Selling expenses
|
200
|
165
|
|
Other
expenses2
|
9,492
|
13,194
|
|
Capitalised as property, plant and
equipment
|
4,279
|
5,487
|
|
Total
|
181,231
|
174,208
|
1 Personnel expenses related to unallocated fixed cost
accumulated as a result of excess absenteeism and idle capacity
included in cost of sales amount to US$712,000 (2023:
US$3,032,000).
2 Exceptional personnel expenses included in other expenses
amount to US$Nil (2023: US$8,960,000).
The average number of employees
for 2024 and 2023 were as follows:
|
|
Year
ended 31 December
|
|
|
2024
US$000
|
2023
US$000
|
|
Peru
|
1,492
|
1,915
|
|
Argentina
|
1,444
|
1,432
|
|
Chile
|
5
|
3
|
|
Brazil
|
343
|
127
|
|
Canada
|
-
|
2
|
|
United Kingdom
|
11
|
12
|
|
Total
|
3,295
|
3,491
|
11 Exceptional
items
Exceptional items are those
significant items which, due to their nature or the expected
infrequency of the events giving rise to them, need to be disclosed
separately on the face of the income statement to enable a better
understanding of the financial performance of the Group and
facilitate comparison with prior years. Unless stated, exceptional
items do not correspond to a reporting segment of the
Group.
|
|
Year
ended 31 December
|
|
|
2024
US$000
|
2023
US$000
|
|
|
|
|
|
Restructuring of the Pallancata
mine unit 1
|
-
|
(8,960)
|
|
Sub total
|
-
|
(8,960)
|
|
Impairment and write-off of
non-current assets, net
|
|
|
|
Impairment of non-current
assets2
|
(13,732)
|
(80,843)
|
|
Write-off of non-current
assets3
|
(3,037)
|
-
|
|
Sub total
|
(16,769)
|
(80,843)
|
|
Share of loss on an
associate
|
|
|
|
Impairment of Aclara Resources
Inc. 4
|
(5,081)
|
(7,183)
|
|
Sub total
|
(5,081)
|
(7,183)
|
|
Income tax
benefit5
|
2,088
|
27,448
|
|
Sub total
|
2,088
|
27,448
|
|
Total
|
(19,762)
|
(69,538)
|
1 Corresponds to the restructuring charges in Pallancata
mine unit resulting from placing the operation in care and
maintenance in 2023.
2 Corresponds to the impairment related to the Azuca
project of US$13,732,000 (2023: corresponds to the impairment
related to the Azuca project of US$16,673,000, the impairment of
the Crespo project of US$46,772,000 and the San Jose mine unit of
US$17,398,000) (refer to notes 16, 17, 18 and 25).
3 Corresponds to the write-off of construction in
progress stopped as the assets would be used by Azuca and Arcata
units and they were sold (refer to note 16 and 25).
4 Corresponds to the impairment charge of US$5,081,000
(2023: US$7,183,000) based on the valuation of the investment in
Aclara Resources Inc. as at 31 December 2024 (refer to note
19).
5 Corresponds to the current tax credit generated by the
impairment of Azuca of US$1,192,000 and the deferred tax credit
generated by the write-off of constructions in progress of
US$896,000 (2023: the current tax credit generated by the
restructuring of the Pallancata mine unit of US$2,643,000 and the
deferred tax credit generated by the impairment of the Azuca
project of US$4,918,000, the impairment of the Crespo project of
US$13,798,000, and the impairment of the San Jose mine unit of
US$6,089,000).
12 Other income and
other expenses before exceptional items
|
|
Year
ended
31
December 2024
|
Year
ended
31
December 2023
|
|
|
Before
exceptional
items
US$000
|
Before
exceptional
items
US$000
|
|
Other income
|
|
|
|
Gain on sale of property, plant
and equipment
|
656
|
142
|
|
Logistic services
|
1,704
|
1,704
|
|
Income on recovery of
expenses
|
-
|
2,064
|
|
Sale of mine
concessions
|
-
|
1,150
|
|
Tax benefit in
Canada1
|
548
|
3,190
|
|
Income from export programme in
Argentina2
|
15,996
|
21,164
|
|
Other3
|
2,051
|
847
|
|
Total
|
20,955
|
30,261
|
|
Other expenses
|
|
|
|
Increase in provision for mine
closure (note 29(1))
|
(14,717)
|
(28,365)
|
|
Provision of obsolescence of
supplies (note 23)
|
(864)
|
(1,586)
|
|
Write-off of value added
tax
|
(113)
|
(184)
|
|
Corporate social responsibility
contribution in Argentina4
|
(4,396)
|
(3,637)
|
|
Care and maintenance expenses of
Pallancata mine unit
|
(8,320)
|
(2,463)
|
|
Care and maintenance expenses of
Arcata mine unit
|
(3,033)
|
(3,178)
|
|
Care and maintenance expenses of
Ares mine unit
|
(2,365)
|
(2,788)
|
|
Care and maintenance expenses of
Selene mine unit
|
(350)
|
(202)
|
|
Termination benefits in Minera
Santa Cruz
|
(2,704)
|
-
|
|
Contingencies5
|
(1,332)
|
(817)
|
|
Depreciation right-of-use
assets
|
(315)
|
(192)
|
|
Other6
|
(4,736)
|
(4,141)
|
|
Total
|
(43,245)
|
(47,553)
|
1 British Columbia exploration tax credit generated in
Hochschild Mining Canada, a Canadian subsidiary of the
Group.
2 Benefit arising from being able to access the
Argentina government's Export Incentive Programme, allowing certain
companies to exchange a certain proportion of US dollar sales at a
preferential market exchange rate.
3 Includes the gain on sale of supplies of US$229,000
(2023: US$201,000), lease rentals of US$165,000
(2023:US$6000), and sale of concentrate of copper of US$493,000
(2023: US$Nil)
4 Relates to a contribution in Argentina to the Santa
Cruz province calculated as a proportion of sales.
5 Mainly related to contingencies in Minera Santa Cruz
related to labour lawsuits.
6 Includes the cost of recovery of expenses of
US$1,860,000 mainly due to transactions with contractors (2023:
US$Nil), and expenses due to penalties in CMA of US$Nil (2023:
US$2,428,000).
13 Finance income,
finance costs and foreign exchange loss
|
|
Year
ended
31
December 2024
|
Year
ended
31
December 2023
|
|
|
US$000
|
US$000
|
|
Finance income
|
|
|
|
Interest on deposits and liquidity
funds1
|
2,382
|
4,580
|
|
Interest on loans
|
590
|
312
|
|
Total interest income
|
2,972
|
4,892
|
|
Changes in the fair value of
financial instruments through profit or loss2
|
6,887
|
1,541
|
|
Debit valuation adjustment (DVA)
of hedges
|
866
|
593
|
|
Unrealised change in fair value of
financial liability through profit or loss (note 26(a))
|
233
|
-
|
|
Other3
|
2,139
|
447
|
|
Total
|
13,097
|
7,473
|
|
Finance costs
|
|
|
|
Interest on secured bank loans
(note 28)
|
(15,425)
|
(9,520)
|
|
Other interest
|
(3,123)
|
(2,701)
|
|
Total interest expense
|
(18,548)
|
(12,221)
|
|
Loss on discount of other
receivables4
|
-
|
(893)
|
|
Loss from changes in the fair
value of financial instruments5
|
(2,973)
|
(1,821)
|
|
Unwinding of discount on mine
rehabilitation (note 29)
|
(3,110)
|
(1,703)
|
|
Other
|
(2,297)
|
(1,561)
|
|
Total
|
(26,928)
|
(18,199)
|
|
Foreign exchange loss,
net
|
|
|
|
Argentina
|
(9,133)
|
(16,020)
|
|
Peru
|
187
|
81
|
|
Brazil6
|
(2,272)
|
-
|
|
Others
|
802
|
319
|
|
Total
|
(10,416)
|
(15,620)
|
1 Interest on deposits and liquidity funds of US$296,000 (2023:
US$471,000) that is directly attributable to the construction of
Mara Rosa has been recognised in property, plant and equipment as a
reduction to construction in progress and capital advances and
mining properties and development costs, and evaluation and
exploration assets.
2
Gain on Argentinian mutual funds held since
September 2023.
3
Mainly includes interest income related to tax
claims resolved in favour of Compania Minera Ares (Minera Ares) of
US$1,142,000 (2023:$Nil).
4 Mainly related to the effect of the discount of tax credits
in Argentina and Peru.
5 Corresponds to the foreign exchange effect of US$2,973,000
related to the bonds in San Jose (2023: Represents the loss on sale
of the C3 Metals Inc shares of US$292,000 (note 21) and the foreign
exchange effect of US$1,529,000 related to the bonds in San
Jose).
6 Recognition of the foreign exchange loss in Brazil from date
that Amarillo Mineracao do Brasil started commercial production
and its functional currency changed to US$ dollars..
14 Income tax
expense
|
|
Year
ended 31 December 2024
|
Year
ended 31 December 2023
|
|
|
Before
exceptional
items
US$000
|
Exceptional
items
US$000
|
Total
US$000
|
Before
exceptional
items
US$000
|
Exceptional
items
US$000
|
Total
US$000
|
|
Current corporate income
tax
|
|
|
|
|
|
|
|
Corporate income tax
expense
|
35,735
|
-
|
35,735
|
16,319
|
(2,643)
|
13,676
|
|
Withholding tax
|
(835)
|
-
|
(835)
|
609
|
-
|
609
|
|
|
34,900
|
-
|
34,900
|
16,928
|
(2,643)
|
14,285
|
|
Deferred taxation
|
|
|
|
|
|
|
|
Origination and reversal of
temporary differences (note 31)
|
16,497
|
(2,088)
|
14,409
|
20,245
|
(24,805)
|
(4,560)
|
|
Corporate income tax
|
51,397
|
(2,088)
|
49,309
|
37,173
|
(27,448)
|
9,725
|
|
Current mining
royalties
|
|
|
|
|
|
|
|
Mining royalty charge (note
38)
|
7,108
|
-
|
7,108
|
4,520
|
-
|
4,520
|
|
Special mining tax charge (note
38)
|
7,051
|
-
|
7,051
|
2,307
|
-
|
2,307
|
|
Total current mining
royalties
|
14,159
|
-
|
14,159
|
6,827
|
-
|
6,827
|
|
Total taxation expense/(benefit)
in the income statement
|
65,556
|
(2,088)
|
63,468
|
44,000
|
(27,448)
|
16,552
|
The weighted average statutory
income tax rate was 33.1% for 2024 and 27.2% for 2023. This is
calculated as the average of the statutory tax rates applicable in
the countries in which the Group operates, weighted by the
profit/(loss) before tax of the Group companies in their respective
countries as included in the consolidated financial statements. The
statutory tax rate in Argentina is 35%, in Peru 29.5%, in Brazil
34% and in the UK 25%.
The change in the weighted average
statutory income tax rate is due to a change in the weighting of
profit/(loss) before tax in the various jurisdictions in which the
Group operates.
There were tax credits in relation
to the cash flow hedge losses (2023: charges) recognised in equity
during the year ended 31 December 2024 of US$28,473,000 (2023:
US$6,617,000).
The total taxation charge on the
Group's profit before tax differs from the theoretical amount that
would arise using the weighted average tax rate applicable to the
consolidated profits of the Group companies as follows:
|
|
Year
ended 31 December
|
|
|
2024
US$000
|
2023
US$000
|
|
Profit/(loss) from operations
before income tax
|
177,217
|
(43,481)
|
|
At average statutory income tax
rate of 33.1% (2023: 27.2%)
|
58,618
|
(11,818)
|
|
Expenses not deductible for tax
purposes
|
1,888
|
2,987
|
|
Taxable income on local currency
(pesos) related to AL41 Bond Argentina
|
-
|
961
|
|
Permanent differences arising on
special investment regime1
|
(3,669)
|
(1,567)
|
|
Movement in previously
unrecognised deferred tax2
|
10,666
|
10,249
|
|
Special mining tax and mining
royalty deductible for corporate income tax
|
(4,177)
|
(2,014)
|
|
Other
|
(2,353)
|
1,252
|
|
Corporate income tax at average
effective income tax rate of 34.4% (2023: -0.1%) before foreign
exchange effect and withholding tax
|
60,973
|
50
|
|
Foreign exchange rate
effect4
|
(10,829)
|
9,066
|
|
Corporate income tax at average
effective income tax rate of 28.3% (2023: -21.0%) before
withholding tax
|
50,144
|
9,116
|
|
Special mining tax and mining
royalty3
|
14,159
|
6,827
|
|
Corporate income tax and mining
royalties at average effective income tax rate of 36.3% (2023:
-36.7%) before withholding tax
|
64,303
|
15,943
|
|
Withholding tax
|
(835)
|
609
|
|
Total taxation charge in the
income statement at average effective tax rate 35.8% (2023: -38.1%)
from operations
|
63,468
|
16,552
|
1
Argentina benefits from a special investment
regime that allows for a super (double) deduction in calculating
its taxable profits for all costs relating to prospecting,
exploration and metallurgical analysis, pilot plants and other
expenses incurred in the preparation of feasibility studies for
mining projects.
2
Includes the income tax charge on mine closure
provision of US$5,981,000 (2023: US$5,742,000), the tax charge
related to the Inmaculada mine unit depreciation of US$748,000
(2023: US$2,667,000), and the effect of not recognised tax losses
of US$3,937,000 (2023: US$2,146,000).
3
Corresponds to the mining royalty and special
mining tax in Peru (note 38).
4
The foreign exchange effect is composed of
US$7,359,000 profit (2023: US$7,107,000 loss) from Argentina and a
loss of US$676,000 (2023: US$948,000 profit) from Peru and a profit
of US$4,151,000 (2023: US$2,914,000 loss) from Brazil. This mainly
corresponds to the foreign exchange effect of converting tax bases
and monetary items from local currency to the corresponding
functional currency. The main contributor of the foreign exchange
effect on the tax charge in 2024 is the inflation of the
Argentinian pesos (2023: Argentinian pesos).
The amounts after offset, as
presented on the face of the statement of financial position, are
as follows:
|
|
As at
31 December
|
|
|
2024
US$000
|
2023
US$000
|
|
Income tax
receivable1
|
186
|
4,713
|
|
Income tax
payable2
|
(21,205)
|
(2,979)
|
|
Total
|
(21,019)
|
1,734
|
1 Mainly corresponds to the tax credit of Empresa de
Transmision Aymaraes of US$103,000 (2023: Mainly corresponds to the
tax credit of Compañia Minera Ares of US$4,280,000 and Minera Santa
Cruz of US$118,000).
2 Mainly corresponds to the corporate income tax payables of
Compañia Minera Ares of US$10,664,000, Minera Santa Cruz of
US$5,353,000 and Amarillo Mineracao do Brasil of US$1,688,000
and mining royalties payables of Compañia Minera Ares of
US$3,459,000 (2023: Mainly corresponds to the mining royalties
payables of Compañia Minera Ares of US$2,479,000).
15 Basic and diluted
earnings per share
Earnings per share (EPS) is
calculated by dividing profit for the year attributable to equity
shareholders of the Parent by the weighted average number of
ordinary shares issued during the year.
The Company does not have dilutive
potential ordinary shares as at 31 December 2024. The Company had
antidilutive potential ordinary shares as at 31 December
2023.
As at 31 December 2024 and 2023,
EPS has been calculated as follows:
|
|
Year
ended 31 December
|
|
|
2024
|
2023
|
|
Basic earnings per
share
|
|
|
|
Before exceptional items
(US$)
|
0.23
|
0.02
|
|
Exceptional items (US$)
|
(0.04)
|
(0.12)
|
|
Total for the year
(US$)
|
0.19
|
(0.10)
|
|
Diluted earnings per
share
|
|
|
|
Before exceptional items
(US$)
|
0.23
|
0.02
|
|
Exceptional items (US$)
|
(0.04)
|
(0.12)
|
|
Total for the year
(US$)
|
0.19
|
(0.10)
|
Profit before exceptional items
and attributable to equity holders of the Parent is derived as
follows:
|
|
Year
ended 31 December
|
|
|
2024
|
2023
|
|
Profit attributable to equity
holders of the Parent (US$000)
|
97,005
|
(55,006)
|
|
Exceptional items after tax -
attributable to equity holders of the Parent (US$000)
|
19,762
|
63,997
|
|
Profit before exceptional items
attributable to equity holders of the Parent (US$000)
|
116,767
|
8,991
|
|
Profit before exceptional items
attributable to equity holders of the Parent for the purpose of
diluted earnings per share (US$000)
|
116,767
|
8,991
|
The following reflects the share
data used in the basic and diluted earnings per share
computations:
|
|
Year
ended 31 December
|
|
|
2024
|
2023
|
|
Basic weighted average number of
ordinary shares in issue (thousands)
|
514,458
|
514,264
|
|
Effect of dilutive potential
ordinary shares related to contingently issuable shares
(thousands)
|
-
|
-
|
|
Weighted average number of
ordinary shares in issue for the purpose of diluted earnings per
share (thousands)
|
514,458
|
514,264
|
16 Property, plant
and equipment
|
|
Mining
properties and development
costs3
US$000
|
Land and
buildings US$000
|
Plant
and equipment
US$000
1 and 7
|
Vehicles4
US$000
|
Mine
closure
asset
US$000
|
Construction in progress and capital advances US$000 3
and 5
|
Total
US$000
|
|
Year ended 31 December
2024
|
|
|
|
|
|
|
|
|
Cost
|
|
|
|
|
|
|
|
|
At 1 January 2024
|
1,935,106
|
560,135
|
646,582
|
12,240
|
116,887
|
167,295
|
3,438,245
|
|
Additions
|
132,126
|
620
|
24,065
|
7,068
|
-
|
68,931
|
232,810
|
|
Acquisition of assets (note
4)
|
-
|
3,927
|
34
|
27
|
-
|
-
|
3,988
|
|
Change in discount rate (note
29(1))
|
-
|
-
|
-
|
-
|
(3,736)
|
-
|
(3,736)
|
|
Change in mine closure estimate
(note 29(1))
|
-
|
-
|
-
|
-
|
4,097
|
-
|
4,097
|
|
Return of disposal
|
-
|
-
|
845
|
|
|
90
|
935
|
|
Disposals
|
-
|
-
|
(968)
|
-
|
-
|
-
|
(968)
|
|
Write-offs6
|
-
|
-
|
(5,546)
|
(507)
|
-
|
(3,037)
|
(9,090)
|
|
Foreign exchange effect
|
(9,518)
|
(628)
|
(271)
|
(9)
|
(528)
|
(9,101)
|
(20,055)
|
|
Transfer to assets held for
sale
|
(251,992)
|
(31,556)
|
(52,702)
|
(341)
|
(15,792)
|
-
|
(352,383)
|
|
Transfers and other
movements2
|
13,793
|
49,740
|
149,133
|
311
|
-
|
(210,865)
|
2,112
|
|
At 31 December 2024
|
1,819,515
|
582,238
|
761,172
|
18,789
|
100,928
|
13,313
|
3,295,955
|
|
Accumulated depreciation and
impairment
|
|
|
|
|
|
|
|
|
At 1 January 2024
|
1,454,537
|
416,785
|
455,040
|
9,307
|
83,703
|
20
|
2,419,392
|
|
Depreciation for the
year
|
95,136
|
23,865
|
33,825
|
3,512
|
3,403
|
-
|
159,741
|
|
Disposals
|
-
|
-
|
(865)
|
-
|
-
|
-
|
(865)
|
|
Write-offs6
|
-
|
-
|
(4,728)
|
(479)
|
-
|
-
|
(5,207)
|
|
Foreign exchange effect
|
-
|
(3)
|
(101)
|
(1)
|
-
|
-
|
(105)
|
|
Transfer to assets held for
sale
|
(251,992)
|
(31,375)
|
(49,212)
|
(330)
|
(15,306)
|
-
|
(348,215)
|
|
Transfers and other
movements2
|
443
|
21
|
(4)
|
16
|
-
|
(20)
|
456
|
|
At 31 December 2024
|
1,298,124
|
409,293
|
433,955
|
12,025
|
71,800
|
-
|
2,225,197
|
|
Net book value at 31 December
2024
|
521,391
|
172,945
|
327,217
|
6,764
|
29,128
|
13,313
|
1,070,758
|
1 Within plant and equipment, costs of US$557,684,000 are
subject to depreciation on a unit of production basis in line with
accounting policy on note 2(f) for which the accumulated
depreciation is US$291,305,000 and depreciation charge for the year
is US$19,897,000.
2 Mainly includes the transfer of US$1,656,000 from
evaluation and exploration assets (Inmaculada of US$519,000,
Pallancata US$30,000, Mara Rosa of US$867,000 and San Jose of
US$240,000) (note 17) as they are related to conversion of
resources in to reserves.
3 There were borrowing costs capitalised in property,
plant and equipment amounting to US$6,678,000 (2023:
US$18,790,000).
4 Vehicles include US$5,194,000 of right-of-use assets
(note 27).
5 Within construction in progress and capital advances
there are capital advances amounting to US$2,027,000, mainly
related to Compania Minera Ares of US$999,000 (2023: US$8,825,000,
mainly related to Mara Rosa project of US$8,080,000.)
6 Mainly corresponds to the write-off of construction in
progress stopped as the assets would be used by Azuca and Arcata
units and they were sold (refer to notes 16 and 25).
7 Plant and equipment include US$1,564,000 of
right-of-use assets (note 27).
8 Additions of right-of-use assets amounting to
US$7,092,000 (2023: US$3,493,000) (note 27).
9 Lien granted to RG Royalties LLC. over certain Mara
Rosa assets such as mineral interests and surface rights, in
respect of the 1,75% NSR royalty granted over Mara Rosa´s
production. The royalty obligation and the associated lien were
acquired following the Group´s acquisition of Amarillo in April
2022.
|
|
Mining
properties and development
costs
US$0003
|
Land and
buildings US$000
|
Plant
and equipment
US$000
1 and 7
|
Vehicles4
US$000
|
Mine
closure
asset
US$000
|
Construction in progress and capital advances US$000 3
and 5
|
Total
US$000
|
|
Year ended 31 December
2023
|
|
|
|
|
|
|
|
|
Cost
|
|
|
|
|
|
|
|
|
At 1 January 2023
|
1,823,207
|
563,782
|
651,098
|
12,302
|
104,860
|
76,854
|
3,232,103
|
|
Additions
|
162,569
|
962
|
16,422
|
(330)
|
-
|
106,122
|
285,745
|
|
Change in discount rate (note
29(1))
|
-
|
-
|
-
|
-
|
(1,535)
|
-
|
(1,535)
|
|
Change in mine closure estimate
(note 29(1))
|
-
|
-
|
-
|
-
|
13,931
|
-
|
13,931
|
|
Disposals
|
(91)
|
-
|
(1,218)
|
(302)
|
-
|
-
|
(1,611)
|
|
Write-offs6
|
(518)
|
-
|
(14,849)
|
(131)
|
-
|
(958)
|
(16,456)
|
|
Foreign exchange effect
|
9,273
|
498
|
125
|
8
|
323
|
4,672
|
14,899
|
|
Transfer to assets held for sale
(note 25)
|
(61,996)
|
(7,151)
|
(7,423)
|
-
|
(692)
|
(2,463)
|
(79,725)
|
|
Transfers and other
movements2
|
2,662
|
2,044
|
2,427
|
693
|
|
(16,932)
|
(9,106)
|
|
At 31 December 2023
|
1,935,106
|
560,135
|
646,582
|
12,240
|
116,887
|
167,295
|
3,438,245
|
|
Accumulated depreciation and
impairment
|
|
|
|
|
|
|
|
|
At 1 January 2023
|
1,383,600
|
397,531
|
433,720
|
7,460
|
81,722
|
1,157
|
2,305,190
|
|
Depreciation for the
year
|
97,821
|
22,594
|
28,032
|
2,038
|
2,233
|
-
|
152,718
|
|
Disposals
|
-
|
-
|
(128)
|
(321)
|
-
|
-
|
(449)
|
|
Write-offs6
|
-
|
-
|
(13,673)
|
(52)
|
-
|
-
|
(13,725)
|
|
Impairment/(reversal of
impairment) net
|
28,119
|
3,669
|
12,941
|
129
|
258
|
775
|
45,891
|
|
Foreign exchange effect
|
-
|
8
|
(4)
|
1
|
-
|
-
|
5
|
|
Transfer to assets held for sale
(note 25)
|
(55,075)
|
(7,017)
|
(5,796)
|
-
|
(510)
|
(1,912)
|
(70,310)
|
|
Transfers and other
movements2
|
72
|
-
|
(52)
|
52
|
-
|
-
|
72
|
|
At 31 December 2023
|
1,454,537
|
416,785
|
455,040
|
9,307
|
83,703
|
20
|
2,419,392
|
|
Net book value at 31 December
2023
|
480,569
|
143,350
|
191,542
|
2,933
|
33,184
|
167,275
|
1,018,853
|
1 Within plant and equipment,
costs of US$442,677,000 are subject to depreciation on a unit of
production basis in line with accounting policy on note 2(f) for
which the accumulated depreciation is US$309,409,000 and
depreciation charge for the year is US$11,021,000.
2 Mainly includes the
transfer of US$2,499,000 from evaluation and exploration assets
(Inmaculada of US$2,092,000 and San José of US$407,000) (note 17)
as they are related to conversion of resources in to reserves, ,
and the transfer to intangibles of the transmission line of
Amarillo of US$11,801,000.
3 There were borrowing costs
capitalised in property, plant and equipment amounting to
US$18,790,000
4 Vehicles include
US$1,091,000 of right of use assets (note 27).
5 Within construction in progress
and capital advances there are capital advances amounting to
US$8,825,000, mainly related to Mara Rosa project of
US$8,080,000.
6 Corresponds to the write-off of
property, plant and equipment as they will no longer be used in the
Group due to obsolescence.
7 Plant and equipment include
US$3,093,000 of right-of-use assets (note 27).
2024
In December 2024, management
determined that there was a trigger of reversal of impairment in
the San Jose mine unit due to the increase in gold and silver
prices and the increased reserves and resources estimate. The
impairment test resulted in no impairment, or impairment reversal,
being recognised as the positive effect of the increased prices and
additional reserves and resources was mainly offset by higher costs
due to ongoing inflation in Argentina.
The recoverable value of San Jose
was determined using a FVLCD methodology. The key assumptions on
which management has based its determination of FVLCD and the
associated recoverable values calculated for the San Jose CGU are
gold and silver prices, future capital requirements, production
costs, reserves and resources (reflected in the production volume),
and the discount rate.
|
Real prices US$ per oz.
|
2025
|
2026
|
2027
|
2028
|
2029
|
Long-term
|
|
Gold
|
2,663
|
2,466
|
2,438
|
2,248
|
1,894
|
2,100
|
|
Silver
|
32.3
|
32.0
|
32.1
|
28.2
|
23.7
|
25.0
|
|
|
San Jose
|
|
Discount rate
(post-tax)
|
18.3%
|
|
Discount rate (pre.tax)
|
18.8%
|
The period of seven years was used
to prepare the cash flow projections of San Jose mine which is in
line with its life of mine.
No indicators of impairment or
reversal of impairment were identified in the other CGUs which
includes other exploration projects, with the exception of the
Volcan project (refer to note 18).
The estimated recoverable values
of the Group's CGUs are equal to, or not materially different than,
their carrying values.
Sensitivity analysis
Other than as disclosed below,
management believes that no reasonably possible change in any of
the key assumptions above would cause the carrying value of the San
Jose CGUs to exceed its recoverable amount. A change in any of the
key assumptions would have the following impact:
|
US$000
|
San
Jose
|
|
Gold and silver prices (decrease
by 10% and 15%, respectively)
|
(100,684)
|
|
Gold and silver prices (increase
by 10% and 15%, respectively)1
|
28,631
|
|
Production costs (increase by
10%)
|
(55,827)
|
|
Production costs (decrease by
10%)1
|
28,631
|
|
Production volume (decrease by
10%)
|
(74,178)
|
|
Production volume (increase by
10%)1
|
28,631
|
|
Post-tax discount rate (increase
by 3%)
|
(3,084)
|
|
Post-tax discount rate (decrease
by 3%)
|
3,193
|
|
Capital expenditure (increase by
10%)
|
(10,746)
|
|
Capital expenditure (decrease by
10%)
|
10,746
|
1. Represents
the accumulated impairment that would be recognised in San Jose
mine unit as at 31 December 2024, net of the accumulated
depreciation that the impaired assets would have generated as at 31
December 2024.
Prior to classifying Arcata and
Azuca disposal group as assets and liabilities related to asset
held for sale (refer to note 25), the Group recognised an
impairment of US$13,732,000 in evaluation and exploration
assets. The
recoverable value of the Azuca and Arcata project was determined
using a FVLCD methodology, based on the economic terms of the
sale.
2023
In June 2023, management
determined that there was a trigger of impairment in the San Jose
mine unit due to the increase in the discount rate from 19.8% to
21.7% mainly explained by the rise in country risk premium in
Argentina, and higher costs than expected due to local inflation.
The impairment test performed over the San Jose CGU resulted in an
impairment recognised as at 30 June 2023 of US$17,398,000
(US$16,588,000 in property, plant and equipment, US$376,000 in
evaluation and exploration assets and US$434,000 in
intangibles).
As at 30 June 2023, the Group was
conducting a sales process for its Azuca and Crespo projects. This
decision to evaluate the sale of these assets is part of the
Group´s strategy to focus its capital on larger-scale projects.
Based on preliminary discussions with interested parties on the
investment and costs required for these projects, given their
operational capabilities, management determined that there were
triggers of impairment in both the Azuca and Crespo projects. An
impairment test was carried out, adjusting the key inputs used to
determine the projects recoverable value, resulting in an
impairment charge of US$42,321,000 (US$15,898,000 in property,
plant and equipment, US$26,420,000 in evaluation and exploration
assets and US$3,000 in intangibles) for Azuca, and
Crespo.
The recoverable value of the San
Jose, CGU, and the Crespo and Azuca assets was determined using a
fair value less costs of disposal (FVLCD) methodology.
The key assumptions on which
management has based its determination of FVLCD and the associated
recoverable values calculated for the San Jose CGU and Crespo
assets are gold and silver prices, future capital requirements,
production costs, reserves and resources volumes (reflected in the
production volume), and the discount rate.
|
Real prices US$ per oz.
|
2024
|
2025
|
2026
|
2027
|
Long-term
|
|
Gold
|
1,850
|
1,735
|
1,582
|
1,557
|
1,600
|
|
Silver
|
24.3
|
22.6
|
21.4
|
21.8
|
22.0
|
|
|
San Jose
|
Crespo
|
|
Discount rate
(post-tax)
|
21.7%
|
6.0%
|
|
Discount rate (pre-tax)
|
24.2%
|
7.6%
|
The period of five years and nine
years was used to prepare the cash flow projections of San Jose
mine unit and Crespo, respectively, which were in line with their
respective life of mines.
With respect to Azuca, given its
early stage, the Group applied a value-in-situ methodology, which
applies a realisable ´enterprise value´ to unprocessed mineral
resources. The methodology is used to determine the FVLCD of the
Azuca assets. The enterprise value used in the calculation
performed as at 30 June 2023 was US$0.095 per silver equivalent
ounce of resources. The enterprise value figure is based on
observable external market information.
On 28 December 2023, the Group
entered into an agreement with a third party whereby the third
party acquired the assets and liabilities of the Crespo project
from Compañia Minera Ares (refer to note 18). The closing of the
transaction occurred in March 2024, the assets and liabilities were
classified at 31 December 2023 as assets and liabilities related to
assets held for sale, respectively. The Group recognised an
additional impairment of US$21,124,000 (US$13,405,000 in property,
plant and equipment, US$7,718,000 in evaluation and exploration
assets and US$1,000 in intangibles) as at 31 December 2023. The
recoverable amount of the Crespo project was determined using a
FVLCD methodology, based on the economic terms of the sale
agreement.
As at 31 December 2023, no
indicators of impairment or reversal of impairment were identified
in the other CGUs. The estimated recoverable values of the Group's
CGUs are equal to, or not materially different than, their carrying
values.
17 Evaluation and
exploration assets
|
|
Azuca
US$000
|
Crespo
US$000
|
Mara
Rosa US$000
|
Monte do
Carmo
US$000
|
Volcan
US$000
|
Other
US$000
|
Total
US$000
|
|
Cost
|
|
|
|
|
|
|
|
|
Balance at 1 January
2023
|
84,350
|
32,433
|
779
|
-
|
81,866
|
25,478
|
224,906
|
|
Additions
|
367
|
594
|
566
|
-
|
996
|
-
|
2,523
|
|
Foreign exchange effect
|
-
|
-
|
77
|
-
|
(2,043)
|
-
|
(1,966)
|
|
Transfers to property, plant and
equipment (note 16)
|
-
|
-
|
-
|
-
|
-
|
(2,571)
|
(2,571)
|
|
Transfers to asset held for sale
(note 25)
|
-
|
(33,027)
|
-
|
-
|
-
|
-
|
(33,027)
|
|
Other transfers and
adjustments1
|
-
|
-
|
-
|
-
|
(15,000)
|
-
|
(15,000)
|
|
Balance at 31 December
2023
|
84,717
|
-
|
1,422
|
-
|
65,819
|
22,907
|
174,865
|
|
Additions2
|
366
|
-
|
1,351
|
2,891
|
1,073
|
3,344
|
9,025
|
|
Acquisition of
assets2
|
-
|
-
|
|
82,725
|
-
|
-
|
82,725
|
|
Foreign exchange effect
|
-
|
-
|
(83)
|
(2,362)
|
(8,054)
|
-
|
(10,499)
|
|
Transfers to property, plant and
equipment (note 16)
|
-
|
-
|
(1,280)-
|
-
|
-
|
(832)
|
(2,112)
|
|
Transfers to asset held for sale
(note 25)
|
(85,083)
|
-
|
-
|
-
|
-
|
(4,011)
|
(89,094)
|
|
Balance at 31 December
2024
|
-
|
-
|
1,410
|
83,254
|
58,838
|
21,408
|
164,910
|
|
Accumulated impairment
|
|
|
|
|
|
|
|
|
Balance at 1 January
2023
|
50,075
|
9,878
|
-
|
-
|
36,392
|
5,099
|
101,444
|
|
Impairment/(reversal of
impairment) net
|
16,554
|
17,584
|
-
|
-
|
-
|
376
|
34,514
|
|
Foreign exchange effect
|
-
|
-
|
-
|
-
|
(881)
|
-
|
(881)
|
|
Transfers to property, plant and
equipment (note 16)
|
-
|
-
|
-
|
-
|
-
|
(72)
|
(72)
|
|
Transfers to assets held for sale
(note 25)
|
-
|
(27,462)
|
-
|
-
|
-
|
-
|
(27,462)
|
|
Balance at 31 December
2023
|
66,629
|
-
|
-
|
-
|
35,511
|
5,403
|
107,543
|
|
Impairment (note 25)
|
13,732
|
-
|
-
|
-
|
-
|
-
|
13,732
|
|
Foreign exchange effect
|
-
|
-
|
-
|
-
|
(4,253)
|
-
|
(4,253)
|
|
Amortisation
|
-
|
-
|
413
|
-
|
-
|
-
|
413
|
|
Transfers to property, plant and
equipment (note 16)
|
|
-
|
(413)
|
|
|
(43)
|
(456)
|
|
Transfers to assets held for sale
(note 25)
|
(80,361)
|
|
|
|
|
(4,011)
|
(84,372)
|
|
Balance at 31 December
2024
|
-
|
-
|
-
|
-
|
31,258
|
1,349
|
32,607
|
|
Net book value as at 31 December
2023
|
18,088
|
-
|
1,422
|
|
30,308
|
17,504
|
67,322
|
|
Net book value as at 31 December
2024
|
-
|
-
|
1,410
|
83,254
|
27,580
|
20,059
|
132,303
|
1 Corresponds to the adjustment of the cost of
US$15,000,000 related to the Volcan project due to the royalty
agreement with Franco Nevada).
2 From the total additions, the payment in cash amounted
to US$55,629,000..
At 31 December 2024 the Group has
recorded an impairment with respect to evaluation and exploration
assets of the Azuca project of US$13,732,000 (2023: the Group has
recorded an impairment with respect to evaluation and exploration
assets of the San Jose mine unit of US$376,000, the Crespo project
of US$17,584,000 and the Azuca project of US$16,554,000) (refer to
note 25).
There were borrowing costs
capitalised in evaluation and exploration assets of US$38,000
(2023: US$95,000).
18 Intangible
assets
|
|
Transmission
line1
US$000
|
Water
permits2
US$000
|
Software
licences
US$000
|
Legal
rights3
US$000
|
Royalty
intangible assets
US$000
|
Total
US$000
|
|
Cost
|
|
|
|
|
|
|
|
Balance at 1 January
2023
|
22,157
|
21,795
|
2,248
|
10,578
|
-
|
56,778
|
|
Foreign exchange effect
|
984
|
(528)
|
-
|
156
|
-
|
612
|
|
Additions
|
124
|
-
|
-
|
-
|
-
|
124
|
|
Transfers
|
10,907
|
-
|
-
|
(5,507)
|
-
|
5,400
|
|
Balance at 31 December
2023
|
34,172
|
21,267
|
2,248
|
5,227
|
-
|
62,914
|
|
Foreign exchange effect
|
(798)
|
(2,547)
|
-
|
(144)
|
-
|
(3,489)
|
|
Additions
|
-
|
-
|
-
|
19,534
|
-
|
19,534
|
|
Addition of royalty intangible
asset (note 25)
|
-
|
-
|
-
|
-
|
3,967
|
3,967
|
|
Balance at 31 December
2024
|
33,374
|
18,720
|
2,248
|
24,617
|
3,967
|
82,926
|
|
Accumulated amortisation and
impairment
|
|
|
|
|
|
|
|
Balance at 1 January
2023
|
18,270
|
10,402
|
2,046
|
6,732
|
-
|
37,450
|
|
Amortisation for the
year4
|
584
|
-
|
109
|
109
|
-
|
802
|
|
Transfers
|
-
|
-
|
-
|
(5,507)
|
-
|
(5,507)
|
|
Impairment
|
434
|
-
|
-
|
4
|
-
|
438
|
|
Foreign exchange effect
|
-
|
(252)
|
-
|
-
|
-
|
(252)
|
|
Balance at 31 December
2023
|
19,288
|
10,150
|
2,155
|
1,338
|
-
|
32,931
|
|
Amortisation for the
year4
|
1,175
|
-
|
12
|
392
|
-
|
1,579
|
|
Foreign exchange effect
|
-
|
(1,216)
|
-
|
-
|
-
|
(1,216)
|
|
Balance at 31 December
2024
|
20,463
|
8,934
|
2,167
|
1,730
|
-
|
33,294
|
|
Net book value as at 31 December
2023
|
14,884
|
11,117
|
93
|
3,889
|
-
|
29,983
|
|
Net book value as at 31 December
2024
|
12,911
|
9,786
|
81
|
22,887
|
3,697
|
49,632
|
1 The transmission line in San Jose is amortised using
the units of production method. At 31 December 2024 the remaining
amortisation period is approximately 7 years (2023: 6 years) in
line with the life of the mine. The transmission line in Mara Rosa
is amortised using the units of production method.
2 Corresponds to the acquisition of water permits of
Andina Minerals Group ("Andina"). These permits have an indefinite
life according to Chilean law.
3 Legal rights correspond to expenditures required to
give the Group the right to use a property for the surface
exploration work, development and production.
4 The amortisation for the period is included in cost of
sales and administrative expenses in the income
statement.
5 Corresponds to the transfer to assets held for sale of
the Crespo mine unit.
In December 2024, management
determined that there was a trigger of reversal of impairment in
Volcan project due to the increase in gold prices. The impairment
test resulted in no impairment, or impairment reversal being
recognised.
The recoverable value of the
Volcan project was determined using a FVLCD methodology. As of 31
December 2024, the Group used a value in-situ methodology, which
applies a realisable 'enterprise value' to unprocessed mineral
resources per ounce of resources. The FVLCD had been previously
assessed using a discounted cash flow model. The Group has
classified project Volcan as a non-core asset, and is developing
strategic alternatives for the project. The Group determined that a
change in methodology to a market-based approach was appropriate to
better reflect market conditions and investors´ assessment of
risk.
The enterprise value used in the
calculation performed as at 31 December 2024 was a risk adjusted
value per in-situ gold equivalent ounce of US$3.72.
The carrying amount of the Volcan
CGU, which includes the water permits, is reviewed annually to
determine whether it is in excess of its recoverable amount. No
impairments were recognised in 2024 and 2023. The estimated
recoverable amount is not materially different than its carrying
value.
|
US$000
|
As at 31
December 2024
|
As at 31
December 2023
|
|
Current carrying value Volcan
CGU
|
37,366
|
41,425
|
Sensitivity Analysis
Other than as disclosed below,
management believes that no reasonably possible change in any of
the key assumptions above would cause the carrying value
exceed its recoverable amount. A change in the value in situ
assumption could cause an impairment loss or reversal of impairment
to be recognised as follows:
|
|
US$000
|
|
Value in situ per gold equivalent
ounce (10% decrease)
|
(3,987)
|
|
Value in situ per gold equivalent
ounce (10% increase)
|
3,987
|
|
Risk factor (increase by
5%)
|
(4,536)
|
|
Risk factor (decrease by
5%)
|
4,536
|
19 Investment in an
associate
The Group retains a 19.5% interest
in Aclara Resources Inc. ("Aclara") (2023: 20%), a Toronto Stock
Exchange listed company, involved in the development of two
rare-earth metals projects: the Penco Module in the Bio-Bio Region
of Chile and the Carina Project in the State of Goiás,
Brazil.
Upon Aclara´s Initial Public
Offering ('IPO') on 10 December 2021, Hochschild Mining Holdings
Limited ("HM Holdings") retained 20% of Aclara shares. The
investment was recorded at initial recognition at fair value, based
on the IPO offering price, and is accounted for using the equity
method in the consolidated financial statements.
The following table summarises the
financial information of the Group's investment in Aclara Resources
Inc:
|
|
As
at
31
December
2024
US$000
|
As
at
31
December
2023
US$000
|
|
Current assets
|
29,821
|
34,945
|
|
Non-current assets
|
123,980
|
112,064
|
|
Current liabilities
|
(6,231)
|
(6,048)
|
|
Non-current liabilities
|
(1,415)
|
(2,600)
|
|
Equity
|
146,155
|
138,361
|
|
Non-controlling
interest1
|
18,603
|
-
|
|
Equity attributable to
shareholders
|
127,552
|
138,361
|
|
Group's share in equity 19.5%
(2023: 20%)
|
24,873
|
27,672
|
|
Fair value adjustment on initial
recognition and accumulated adjustments for non-attributable
changes to equity2
|
13,125
|
12,361
|
|
Accumulated impairment
|
(22,187)
|
(17,106)
|
|
Group's carrying amount of the
investment 19.5% (2023: 20%)
|
15,811
|
22,927
|
|
Summarised consolidated statement
of profit and loss
|
|
|
|
Revenue
|
|
-
|
|
Administrative expenses
|
(8,239)
|
(6,815)
|
|
Exploration expenses
|
(459)
|
(6,991)
|
|
Other income
|
-
|
59
|
|
Share of loss of joint
venture
|
(115)
|
-
|
|
Finance income
|
1,657
|
2,338
|
|
Finance cost
|
(64)
|
(59)
|
|
Foreign exchange
gain/(loss)
|
(193)
|
85
|
|
Loss from operations for the
year
|
(7,413)
|
(11,383)
|
|
Loss from continuing operations
attributable to shareholders
|
(7,223)
|
(2,277)
|
|
Group's share of loss for the
year
|
(1,408)
|
(2,277)
|
|
Other comprehensive profit that
may be reclassified to profit or loss in subsequent periods, net of
tax
|
|
|
|
Exchange differences on
translating foreign operations
|
(12,780)
|
(4,273)
|
|
Total comprehensive loss for the
year
|
(12,780)
|
(4,273)
|
|
Group's share of comprehensive
profit/(loss) for the year
|
(2,492)
|
(855)
|
1
On April 17, 2024 Aclara closed a strategic
financing of US$29,027,000 by the company CAP S.A. in Aclara´s
Chilean subsidiary which owns the Penco Module and all of Aclara´s
mining concessions in Chile in exchange for 20% equity
participation in REE UNO Spa which had a corresponding impact on
the Group's NCI.
2 Includes the 20% of the fair value adjustment,
estimated by the Group, of Aclara´s exploration and evaluation
asset on initial recognition of US$12,307,000, and other
non-attributable changes to equity of US$818,000 (31 December 2023:
US$54,000).
The movement of investment in
associate is as follows:
|
|
Year
ended 31 December
|
|
|
2024
US$000
|
2023
US$000
|
|
Beginning balance
|
22,927
|
33,242
|
|
Impairment
|
(5,081)
|
(7,183)
|
|
Share of loss for the
period
|
(1,408)
|
(2,277)
|
|
Share of comprehensive loss for
the period
|
(2,492)
|
(855)
|
|
Equity gain in Aclara from CAP
strategic financing
|
1,865
|
-
|
|
Ending balance
|
15,811
|
22,927
|
2024
On 23 December 2024, Aclara
announced a US$25,000,000 private placement of common shares at
C$0.7 (US$0.5) per share with new and existing strategic investors:
New Hartsdale Capital Inc., CAP S.A. and the Group. The
subscription price represents a 41% premium over the closing price
of the Common Shares on the Toronto Stock Exchange ("TSX") on the
last trading day prior to the date of the announcement of the
Private Placement. The private placement was completed on 20
February 2025.
Aclara intends to use the net
proceeds from the Private Placement to fund the continued
development of its Carina Project in Brazil, to advance its
integrated supply chain strategy, and for general corporate
purposes.
The Group has reassessed the
recoverable value of its investment in Aclara, adjusting the
carrying amount of the investment to reflect the value of the
shares issued in the private placement. As a result, the Group has
determined an impairment charge of US$5,081,000 as at 31 December
2024.
2023
In July 2023, Aclara announced the
receipt of a notice from the Environmental Service Assessment in
Chile of its decision to terminate the review of Aclara´s
application for an environmental impact assessment of the Penco
Module due to the finding of trees considered as ´vulnerable
species´ in the area of the project.
Aclara´s announcement and the
impact that it could have in the first production date of Penco
project, were considered as indicators of impairment. Therefore, in
compliance with IAS 36, the Group performed a valuation on Aclara,
and determined an impairment charge of US$7,183,000.
The recoverable value of Aclara
was determined using a value-in-use methodology. The key
assumptions on which management has based its valuation of Aclara´s
shares are the independent technical report of Penco module issued
in September 2021, adjusted by: a 3-year delay in the first
production date, local inflation and additional risk impacting
costs; latest forecast prices; and a discount rate of
9.6%.
Sensitivity analysis
An increase of 1% in the discount
rate and a delay of one additional year in the first production
date would have the following impact in the Group´s
investment:
|
|
US$000
|
|
Discount rate (increase by
1%)
|
(3,578)
|
|
Delay in first production date (1
additional year)
|
(2,551)
|
The carrying amount of the
investment recognised the changes in the Group's share of net
assets of the associate since the acquisition date. The balance as
at 31 December 2024, after recognising the changes in the Group's
share of net assets of the associate and the impairment charge is
US$15,811,000 (31 December 2023: US$22,927,000).
The fair value of Aclara shares,
based on the market price per share, as at 31 December 2024
amounted to US$10,173,000 (31 December 2023:
US$12,296,000).
No dividends were received from
the associate during 2024 and 2023.
The associate had no contingent
liabilities or capital commitments as at 31 December 2024 and 31
December 2023.
20 Financial assets
at fair value through OCI
|
|
Year
ended 31 December
|
|
|
2024
US$000
|
2023
US$000
|
|
Beginning balance
|
460
|
509
|
|
Fair value change recorded in
OCI
|
15
|
(49)
|
|
Ending balance
|
475
|
460
|
The Group made the election at
initial recognition to measure the below equity investments at fair
value through OCI as they are not held for trading.
Fair value of the listed shares is
determined by reference to published price quotations in an active
market and they are categorised as level 1. The fair value of
non-listed equity investments is determined based on financial
information available of the companies and they are categorised as
level 3.
21 Financial assets
at fair value through profit and loss
|
|
Year
ended 31 December
|
|
|
2024
US$000
|
2023
US$000
|
|
Beginning balance
|
-
|
1,015
|
|
Fair value change recorded in
profit and loss (note 13(3))
|
-
|
(292)
|
|
Disposals1
|
-
|
(723)
|
|
Ending balance
|
-
|
-
|
1 During 2023, the Group
sold 25,001,540 shares of C3 Metals Inc., classified as financial
assets at fair value through profit and loss, with a fair value at
the date of the sale of US$723,000, generating a loss on disposal
of US$292,000 which was recognised within finance costs.
22 Trade and other
receivables
|
|
As at
31 December
|
|
|
2024
|
2023
|
|
|
Non-current
US$000
|
Current
US$000
|
Non-current
US$00
|
Current
US$000
|
|
Trade
receivables1
|
-
|
37,238
|
-
|
28,051
|
|
Advances to suppliers
2
|
-
|
13,324
|
-
|
2,577
|
|
Funds in escrow
2
|
-
|
14,278
|
-
|
-
|
|
Duties recoverable from exports of
Minera Santa Cruz3
|
272
|
-
|
234
|
-
|
|
Receivables from related parties
(note 33(a))
|
-
|
121
|
-
|
127
|
|
Loans to employees
|
333
|
220
|
358
|
194
|
|
Interest receivable
|
-
|
89
|
-
|
93
|
|
Tax claims
|
8,060
|
7,826
|
1
|
10,399
|
|
Other4
|
2,674
|
11,310
|
452
|
12,791
|
|
Total assets classified as
receivables
|
11,339
|
84,406
|
1,045
|
54,232
|
|
Prepaid expenses
|
2,764
|
11,083
|
1,210
|
6,569
|
|
Value Added Tax
(VAT)5
|
4,213
|
40,325
|
10,183
|
19,655
|
|
Total
|
18,316
|
135,814
|
12,438
|
80,456
|
The fair values of trade and other
receivables approximate their book value.
1 Net of a provision for impairment of trade receivables
from customers in Peru of US$Nil (2023: US$1,370,000).
2 Represents funds held in escrow in connection with
Royropata easements
3 Relates to export benefits through the Patagonian Port and
silver refunds in Minera Santa Cruz.
4 Includes account receivables from contractors for the
sale of supplies of US$1,773,000 (2023: US$1,973,000), loan to
third parties of US$1,381,000 (2023: US$719,000), and claim
receivable of US$Nil (2023: US$345,000), net of a provision for
impairment of receivables of US$1,016,000 (2023:
US$1,033,000).
5 Primarily relates to US$18,277,000 (2023:
US$7,607,000) of VAT receivable related to the San Jose project
that will be recovered through future sales of gold and silver and
also through the sale of these credits to third parties by Minera
Santa Cruz. It also includes the VAT of Compania Minera Ares of
US$6,978,000 (2023: US$5,672,000), and Amarillo Mineracao do Brasil
of US$18,514,000 (2023: US$15,814,000). The VAT is valued at its
recoverable amount.
Movements in the provision for
impairment of receivables:
|
|
Individually impaired
US$000
|
|
At 1 January 2023
|
2,513
|
|
Change for the year
|
3
|
|
Foreign exchange effect
|
73
|
|
At 31 December 2023
|
2,589
|
|
Write off
|
(1,632)
|
|
Foreign exchange effect
|
(3)
|
|
Change for the year
|
245
|
|
At 31 December 2024
|
1,199
|
As at 31 December 2024 and 2023,
none of the financial assets classified as receivables (net of
impairment) were past due.
23
Inventories
|
|
As at
31 December
|
|
|
2024
US$000
|
2023
US$000
|
|
Finished goods valued at
cost
|
1,874
|
4,203
|
|
Products in process valued at
cost
|
23,623
|
10,998
|
|
Products in process accrual valued
at cost1
|
8,152
|
5,930
|
|
Supplies and spare
parts2
|
58,476
|
51,305
|
|
|
92,125
|
72,436
|
|
Provision for obsolescence of
supplies
|
(5,038)
|
(4,175)
|
|
Ending balance
|
87,087
|
68,261
|
1 Corresponds to the estimated production costs from 26
to 31 December 2024 (2023: 26 to 31 December 2023).
2 Includes in transit inventory of
US$689,000 (2023: US$1,485,000).
Finished goods include
concentrate, dore and aggregates. Products in process include
stockpile and precipitates (2023: stockpile and
precipitates).
The Group either sells dore bars
as a finished product or if it is commercially advantageous to do
so, delivers the bars for refining into gold and silver ounces
which are then sold. In the latter scenario, the dore bars are
classified as products in process. At 31 December 2024 and 2023,
the Group had no dore on hand included in products in
process.
Concentrate is sold to smelters,
but in addition could be used as a product in process to produce
dore.
Products in process accrual valued
at cost include stockpile (2023: stockpile).
As part of the Group's short-term
financing policies, it acquires pre-shipment loans which are
guaranteed by the sales contracts. The Group has contracts as at 31
December 2024 of US$Nil (2023: US$3,977,000) (refer to note
28).
The amount of expense recognised
in profit and loss related to the consumption of inventory of
supplies, spare parts and raw materials in 2024 is US$140,623,000
(2023: US$110,752,000).
Movements in the provision for
obsolescence comprise an increase in the provision of US$864,000
(2023: US$1,586,000) and the reversal of US$Nil related to supplies
and spare parts, that had been provided for (2023:
US$Nil).
24 Cash and cash
equivalents
|
|
As at
31 December
|
|
Cash and cash
equivalents
|
2024
US$000
|
2023
US$000
|
|
Cash in hand
|
679
|
782
|
|
Current demand deposit
accounts1
|
94,167
|
40,311
|
|
Time
deposits2
|
2,122
|
37,184
|
|
Mutual
funds3
|
5
|
10,849
|
|
Cash and cash equivalents
considered for the statement of cash flows (note 2(y))
|
96,973
|
89,126
|
1 Relates to bank accounts
which are freely available and bear interest. The balance has
checks in transit. Includes $11,837,000 current demand deposit
accounts restricted to be utilised for advancing the Volcan project
and its related business expenses.2
These deposits
have an average maturity of 4 days (2023: average of 9
days).
3 Corresponds to common
investment funds that are assets that are formed with the
contributions made by the Group, consequently, becoming beneficiary
of the fund in which they decide to invest. As at 31 December 2023
the balance of US$10,849,000 are deposited in Banco Santander and
BBVA in Argentina.
Cash and cash equivalents comprise
cash on hand and deposits held with banks that are readily
convertible into known amounts of cash and which are subject to
insignificant risk of changes in value.
The fair value of cash and cash
equivalents approximates their book value.
25 Assets held for
sale
In November 2024, the Group
entered into an agreement whereby the third party acquired the
assets and liabilities of Arcata and Azuca from Compañia Minera
Ares for US$1,000,000 as a non-refundable cash payment at closing,
and a 1.0% and 1.5% Royalty Net Smelter Return (NSR) for Arcata and
Azuca, respectively. The buyer also took over the environmental
liabilities amounting to US$9,652,000. The Group has provided a
guarantee for the mine closure obligations for up to US$5,778,623
with maturity in January 2026. The closing of the transaction
occurred in February 2025.
Prior to classifying Arcata and
Azuca disposal group as assets and liabilities related to asset
held for sale, the Group recognised an impairment of US$13,732,000.
The recoverable value of the Azuca and Arcata project was
determined using a FVLCD methodology, based on the economic terms
of the sale.
The major classes of assets and
liabilities classified as assets held for sale as at 31 December
2024 are as follows:
|
|
|
US$000
|
|
Assets
|
|
|
|
Transfer from evaluation and
exploration assets, net of impairment
|
|
4,722
|
|
Transfer from property, plant and
equipment
|
|
4,168
|
|
Transfer from deferred tax
asset
|
|
3,409
|
|
Total non-current
assets
|
|
12,299
|
|
Transfer from
inventory-supplies
|
|
361
|
|
Total current assets
|
|
361
|
|
Total assets
|
|
12,660
|
|
Liabilities
|
|
|
|
Transfer from provision for mine
closure (note 29)
|
|
(9,652)
|
|
Total liabilities directly
associated with assets held for sale
|
|
(9,652)
|
|
Net assets directly associated
with assets held for sale
|
|
3,008
|
In 2023, the Group entered into an
agreement with a third party whereby the third party would acquire
the assets and liabilities of the Crespo project from Compañia
Minera Ares which resulted in the assets and liabilities of project
Crespo being classified as held for sale at 31 December 2023.
In March 2024, the Group received US$15,000,000 as a
non-refundable cash payment at closing, and a 1.5% NSR over the
Crespo project, recognised as an intangible asset with a fair value
of US$3,967,000 at initial recognition net of a deferred tax
liability of US$1,170,000. The buyer also took over the
environmental liabilities of the project amounting to US$711,000.
Upon completion of sale, the Group derecognised the asset held for
sales amounting to US$17,398,000 and the liabilities directly
associated with assets held for sale amounting to US$711,000. No
profit or loss was generated on the sale.
The major classes of assets and
liabilities classified as assets held for sale as at 31 December
2023 were as follows:
|
|
|
US$000
|
|
Assets
|
|
|
|
Transfer from evaluation and
exploration assets, net of impairment
|
|
5,565
|
|
Transfer from property, plant and
equipment
|
|
9,415
|
|
Transfer from deferred tax
asset
|
|
2,418
|
|
Total non-current assets
|
|
17,398
|
|
Liabilities
|
|
|
|
Transfer from provision for mine
closure (note 29)
|
|
(711)
|
|
Total liabilities directly associated with assets held for
sale
|
|
(711)
|
|
Net assets directly associated with assets held for
sale
|
|
16,687
|
The net cash received for the sale
of Crespo is as follows:
|
|
|
US$000
|
|
|
|
|
|
Cash received
|
|
15,000
|
|
Transaction costs
|
|
(1,110)
|
|
Net cash received
|
|
13,890
|
|
Contingent consideration net of
deferred tax
|
|
2,797
|
|
Total
|
|
16,687
|
26 Trade and other
payables
|
|
As at
31 December
|
|
|
2024
|
2023
|
|
|
Non-current
US$000
|
Current
US$000
|
Non-current
US$000
|
Current
US$000
|
|
Trade
payables1
|
-
|
126,357
|
-
|
83,418
|
|
Salaries and wages
payable2
|
-
|
37,059
|
-
|
23,476
|
|
Taxes and contributions
|
33
|
10,718
|
55
|
9,295
|
|
Guarantee
deposits3
|
-
|
7,896
|
-
|
7,842
|
|
Accounts payable -
hedges
|
-
|
6,943
|
-
|
348
|
|
Mining royalties (note
38)
|
-
|
1,470
|
-
|
788
|
|
Accounts payable to related
parties (note 33(a))
|
-
|
209
|
-
|
397
|
|
Stream Agreements (note
(a))
|
25,926
|
-
|
-
|
-
|
|
Deferred consideration (note
4)
|
13,500
|
-
|
-
|
-
|
|
Lease liabilities (note
27)
|
3,477
|
3,246
|
1,379
|
2,714
|
|
Other4
|
3,565
|
14,324
|
277
|
7,561
|
|
Total
|
46,501
|
208,222
|
1,711
|
135,839
|
1 Trade payables relate mainly to the acquisition of
materials, supplies and contractors' services. These payables do
not accrue interest and no guarantees have been granted.
2 Salaries and wages payable relates to remuneration
payable. At 31 December 2024, there was Board members' remuneration
payable of US$Nil (2023: US$67,000) and Long-Term Incentive Plan
payable of US$3,764,000 (2023: US$Nil).
3 Guarantee deposits made by the contractors of the
Group to guarantee the fulfilment of their tasks. The guarantee
will be returned to the contractor at the end of the service and
when it is verified that it has been completed
correctly.
4 Current balance includes the accrual of the production
costs corresponding to six days of production from 26 to 31
December of US$7,583,000 (2023: US$4,251,000).
a.
Stream Agreements
On 14 March , 2022, Cerrado,
entered into a US$20,000,000 metals purchase and sale agreement
with Sprott in respect of Monte do Carmo ("Stream Agreement"). The
Stream Agreement provides for the sale and physical delivery to
Sprott of 2.25% of metals produced from the project, for the
duration of the project. The price payable for the metals is
calculated by reference to the LBMA price for gold or silver as
applicable, and amounts to 10% of the reference price.
In connection with the Stream
Agreement, Cerrado issued a US$20,000,000 secured Note to Sprott
that bears interest at a rate of 10% per annum, calculated and
payable quarterly which will mature on the earlier of the
achievement of commercial production or 14 March 2031 ("Secured
Note"). The Stream Agreement and Secured Note (collectively, the
Stream Agreements) were assigned to and assumed by Amarillo at the
acquisition date, and accordingly, any future production will be
subject to the Stream Agreement and the Secured Note.
Under the Stream Agreement, Sprott
will pay Amarillo the US$20,000,000 deposit either in cash or by
issuance of a promissory note, with the option by Sprott to set off
such promissory note against the Secured Note, on the commencement
of production of Monte do Carmo. The security in respect of the
Sprott Note is the assets of Serra Alta, and the shares of
SAPI.
Amarillo has the ability to buy
down up to 50% of the Stream Agreement by exercising its option and
paying the applicable amount below ("Buy-down
Option"):
• From 1 July 2024 - June 30,
2025: US$13,000,000, or
• From 1 July 2025 - June 30,
2026: US$13,500,000
Under the Stream Agreement, if the
Board of Directors approves the construction of a mining operation
with a life-of-mine production of less than 1,049,000 ounces of
payable gold, the stream percentage on Monte do Carmo will increase
linearly from its base value of 2.25% following a formula in the
Stream Agreement. If the Feasibility Study Technical Report filed
in December 2023 were used for a construction decision the stream
percentage would increase to 2.75%. The definitive stream
percentage will be determined upon the Board of Directors' approval
of the construction of the mining operation and will be based on
the then available payable gold ounces in the construction mine
plan.
Management determined that the
Secured Note and Stream Agreement with Sprott are closely
connected, with the option due to the option of
Sprott to set off the $20,000,000 stream payment against the
Secured Note, on the commencement of production of Monte do
Carmo.
The Group has elected to account
for the obligations arising from these agreements at FVTPL. The
Secured Note represents a financial liability for the contractual
obligation to repay the principal of US$20,000,000 and quarterly
interest payments in cash. The Stream Agreement, including the
Buy-down Option, meet the definition of a derivative and is
accounted at FVTPL.
The fair value of the Stream
Agreements was determined using the expected cash flow approach,
which uses multiple, probability-weighted cash flow projections
discounted to present value.
The initial recognition as at 7
November 2024, and subsequent changes in the fair value of the
Stream Agreements as at 31 December 2024 are shown
below:
|
|
|
US$000
|
|
At 7 November 2024
|
|
26,159
|
|
Unrealised change in fair value
(note 13)
|
|
(233)
|
|
At 31 December 2024
|
|
25,926
|
The key assumptions on which
management has based its determination of fair value are gold
prices, reserves and resources (reflected in the production
volume), discount rates for the Secured Note of 8.0% and 7.4% as at
7 November 2024 and 31 December 2024, respectively, and the
discount rate for the Stream Agreement of 9.7% (calculated under
the WACC methodology).
|
Real prices US$ per oz.
|
|
|
|
2028
|
2029
|
Long-term
|
|
Gold
|
|
|
|
2,248
|
1,894
|
2,100
|
Reasonable possible changes to any
of the key assumptions above would increase/(decrease) the fair
value of the Stream Agreements:
|
US$000
|
US$000
|
|
Gold price (decrease by
10%)
|
(1,819)
|
|
Gold price (increase by
10%)
|
1,820
|
|
Discount rate (increase by
1%)
|
(783)
|
|
Discount rate (decrease by
1%)
|
875
|
|
Reserves and resources volume
(decrease by 10%)
|
(818)
|
|
Reserves and resources volume
(increase by 10%)
|
818
|
The fair value of trade and other
payables approximate their book values.
27 Lease
liabilities
The Group has lease contracts for
vehicles and equipment used in its operations and administrative
offices. Leases of motor vehicles generally have lease terms of
three years. The Group's obligations under its leases are secured
by the lessor's title to the leased assets.
The Group also has certain leases
of assets with lease terms of 12 months or less and leases of
office equipment with low value. The Group applies the short-term
lease and lease of low-value assets recognition exemptions for
these leases.
The following are the amounts
recognised in profit or loss related to the leases according IFRS
16 and the other leases that the Group has not
capitalised:
|
|
As at
31 December
|
|
|
2024
US$000
|
2023
US$000
|
|
Depreciation expense for
right-of-use assets (included in cost of sales, administrative,
exploration and other expenses)
|
(4,514)
|
(2,199)
|
|
Interest expense on lease
liabilities (included in finance expenses)
|
(582)
|
(62)
|
|
Expense relating to short-term
leases (included in cost of sales, administrative, exploration and
other expenses)
|
(959)
|
(866)
|
|
Expense relating to leases of
low-value assets (included in cost of sales, administrative,
exploration and other expenses)
|
(769)
|
(743)
|
|
Variable lease payments (included
in cost of sales and exploration expenses)
|
(18,942)
|
(11,422)
|
|
Total amount recognised in profit
or loss
|
(25,766)
|
(15,292)
|
The Group had total cash outflows
for leases of US$25,714,000 in 2024 (2023: US$15,369,000). There
were additions to right-of-use assets and lease liabilities during
the year of US$7,094,000 (2023: US$3,493,000l). The future cash
outflows relating to leases that have not yet commenced are
US$7,716,000 (2023: US$4,777,000). Short-term leases, leases of
low-value assets and variable lease payments are included in the
operating cash flows.
The movement in IFRS 16 lease
liabilities in the years 2024 and 2023 is as follows:
|
|
As
at
1
January
2024
US$000
|
Additions US$000
|
Repayments US$000
|
Interest
expense
US$000
|
As
at
31
December 2024
US$000
|
|
Lease liabilities
|
4,093
|
7,094
|
(5,046)
|
582
|
6,723
|
|
Less: current balance
|
(2,714)
|
|
|
|
(3,246)
|
|
Non-current balance
|
1,379
|
|
|
|
3,477
|
|
|
As
at
1
January
2023
US$000
|
Additions US$000
|
Repayments US$000
|
Interest
expense
US$000
|
As
at
31
December 2023
US$000
|
|
Lease liabilities
|
2,876
|
3,493
|
(2,338)
|
62
|
4,093
|
|
Less: current balance
|
(1,637)
|
|
|
|
(2,714)
|
|
Non-current balance
|
1,239
|
|
|
|
1,379
|
28
Borrowings
|
|
As at
31 December
|
|
|
2024
|
2023
|
|
|
Effective
interest
rate
|
Non-current
US$000
|
Current
US$000
|
Effective
interest
rate
|
Non-current
US$000
|
Current
US$000
|
|
Secured bank loans (a)
|
|
|
|
|
|
|
|
Pre-shipment and other loans in
Minera Santa Cruz (note 23)
|
8.45% to
13%
|
-
|
1,558
|
12% to
15%
|
-
|
3,977
|
|
Short-term bank loans
|
4.58%
and 4.88%
|
-
|
80,210
|
-
|
-
|
-
|
|
Medium-term bank loans
|
6.82% to
10.04%
|
163,333
|
67,481
|
8.91%
and 9.09%
|
234,999
|
106,087
|
|
Other loans (b)
|
|
|
|
|
|
|
|
Stock market promissory note in
Minera Santa Cruz
|
-
|
-
|
-
|
-
|
-
|
2,000
|
|
Total
|
|
163,333
|
149,249
|
|
234,999
|
112,064
|
(a) Secured
bank loans:
Pre-shipment and other loans in
Minera Santa Cruz:
As at 31 December 2024, Minera
Santa Cruz has loans of US$1,486,000 (2023: US$3,870,000) plus
interests of US$72,000 (2023: US$107,000) with a maturity between
January and March 2025.
Short-term bank loans:
- As at 31 December 2024, Minera
Ares has two loans with Interbank amounting to US$45,000,000 plus
interests of U$119,000 (maturity in November 2025) and one loan
with BBVA amounting to US$35,000,000 plus interests of US$91,000
(maturity in February 2025).
Medium-term bank loans:
In December 2019, a five-year
credit agreement was signed between Minera Ares and Scotiabank Peru
S.A.A., The Bank of Nova Scotia and BBVA Securities Inc, with
Hochschild Mining PLC as guarantor. The US$200,000,000 medium-term
loan was payable in equal quarterly instalments from the second
anniversary of the loan with an interest rate of three-month USD
Libor plus 1.15% payable quarterly until maturity on 13 December
2024. In September 2021, the Group negotiated with the same
counterpart a US$200,000,000 loan to replace the original loan,
plus an additional US$100,000,000 optional loan. US$200,000,000 was
withdrawn on 21 September 2021, and the optional US$100,000,000
loan was withdrawn on 1 December 2021 (the Credit Agreement). The
maturity was extended until September 2026, and the interest rate
increased to three-month USD Libor plus a spread of 1.65%. A
structuring fee of US$900,000 was paid to the lender and additional
US$193,000 was incurred as transaction costs. In addition, a
commitment fee of US$120,000 was paid for the period that the
optional US$100,000,000 loan remained undrawn. This was considered
a substantial modification to the terms of the loan, and
consequently, it was treated as an extinguishment of the loan which
resulted in the derecognition of the existing liability and
recognition of a new liability. The associated costs and fees
incurred were recognised as part of the loss on the extinguishment.
From 18 September 2023 the Libor was replaced by the three-month
SOFR plus a spread of 1.91%. The Group repaid US$25,000,000 of the
loan in December 2023, and repaid the remaining balance of
US$275,000,000 during 2024, and the Credit Agreement was
terminated. Financial covenants under the agreement were: (i)
Consolidated Leverage Ratio <= 3 and (ii) Consolidated Interest
Coverage Ratio ≥ 4.00.
In December 2022, a credit
agreement for up to US$200,000,000 was signed between Amarillo
Mineracao do Brasil Ltd. and Compania Minera Ares, and The Bank of
Nova Scotia and BBVA Securities Inc, with Hochschild Mining PLC as
guarantor. The medium-term facility can be withdrawn until December
2024, and is payable in equal quarterly instalments from February
2025 through November 2027, with an interest rate of three-month
SOFR plus a spread of 2.05%. US$60,000,000 was withdrawn in August
2023, US$65,000,000 during the first half of 2024, and the
remaining balance of US$75,000,000 was withdrawn during the last
quarter of 2024. Financial covenants under the agreement are: (i)
Consolidated Leverage Ratio <= 3 and (ii) Consolidated Interest
Coverage Ratio ≥ 4.00.
In October 2024, a credit
agreement for up to US$300,000,000 was signed between Amarillo
Mineracao do Brasil Ltd. and Compania Minera Ares, and The Bank of
Nova Scotia and BBVA Securities Inc, with Hochschild Mining PLC as
guarantor (the New Credit Agreement). The medium-term facility can
be withdrawn until October 2026, and is payable in equal quarterly
instalments from January 2028 through October 2029, with an
interest rate of three-month SOFR plus a spread of 1.95%. A
structuring fee of US$1,950,000 was paid to the lenders and
additional US$225,000 was incurred as transaction costs.
US$30,000,000 was withdrawn in December 2024 to repay the remaining
amount outstanding of the Credit Agreement US$300,000,000 loan, and
the remaining balance of US$270,000,000 was undrawn as at 31
December 2024. Financial covenants under the agreement are: (i)
Consolidated Leverage Ratio <= 3 and (ii) Consolidated Interest
Coverage Ratio ≥ 4.00.
(b) Other
loans:
Stock market promissory
note:
As at 1 January 2023, Minera Santa
Cruz has a balance of stock market promissory notes of
US$14,500,000. From January to May 2023 Minera Santa Cruz signed
four stock market promissory notes with Max Capital, a finance
advisory company located in Argentina, amounting to US$3,907,000.
The expiration date of the notes is from July 2023 to August 2024.
During the year 2023, the Group repaid US$16,407,000. The balance
as at 31 December 2023 is US$2,000,000 that was repaid during
2024.
(c)
Capitalised borrowing costs:
Interest expense of US$7,012,000
that is directly attributable to the construction of Mara Rosa
(US$6,257,000) and Compañía Minera Ares S.A.C. (US$755,000) has
been capitalised and is included in property, plant and equipment
within construction in progress and capital advances (US$4,991,000)
and mining property and development costs (US$1,982,000), and
exploration and evaluation assets (US$39,000) (2023: Interest
expense of US$19,357,000 that is directly attributable to the
construction of Mara Rosa (US$19,178,000) and Compañía Minera Ares
S.A.C. (US$179,000) has been capitalised and is included in
property, plant and equipment within construction in progress and
capital advances (US$8,267,000) and mining property and development
costs (US$10,992,000), and exploration and evaluation assets
(US$98,000)).
The carrying value including
accrued interest payable of the medium-term bank loans as at 31
December 2024 is US$230,814,000 (2023: US$341,086,000). The
maturity of non-current borrowings is as follows:
|
|
As at
31 December
|
|
|
2024
US$000
|
2023
US$000
|
|
Between 1 and 2 years
|
66,667
|
120,001
|
|
Between 2 and 5 years
|
96,666
|
114,998
|
|
Over 5 years
|
-
|
-
|
|
Total
|
163,333
|
234,999
|
The carrying amount of the
pre-shipment, short-term and other loans approximates their fair
value. The carrying amount and fair value of the medium-term bank
loans are as follows:
|
|
Carrying amount
as at
31 December
|
Fair
value
as at
31 December
|
|
|
2024
US$000
|
2023
US$000
|
2024
US$000
|
2023
US$000
|
|
Medium-term bank loans
|
230,814
|
341,086
|
221,560
|
335,899
|
The movement in borrowings during
the years 2024 and 2023 are as follows:
|
|
As
at
1
January
2024
US$000
|
Additions US$000
|
Repayments US$000
|
Reclassifications
and
others US$000
|
As
at
31
December 2024
US$000
|
|
Current
|
|
|
|
|
|
|
Pre-shipment and other loans in
Minera Santa Cruz
|
3,870
|
1,607
|
(3,991)
|
-
|
1,486
|
|
Short-term bank loans
|
-
|
140,000
|
(60,000)
|
-
|
80,000
|
|
Medium-term bank loans
|
100,001
|
8,333
|
(275,000)
|
233,333
|
66,667
|
|
Stock market promissory
note
|
2,000
|
-
|
(2,000)
|
-
|
-
|
|
Accrued interest
|
6,193
|
15,425
|
(27,074)
|
6,552
|
1,096
|
|
|
112,064
|
165,365
|
(368,065)
|
239,885
|
149,249
|
|
Non-current
|
|
|
|
|
|
|
Medium-term bank loans
|
234,999
|
161,667
|
-
|
(233,333)
|
163,333
|
|
Total current and non-current
borrowings
|
347,063
|
327,032
|
(368,065)
|
6,552
|
312,582
|
1 Reclassification and others from non-current of
US$233,333,000 includes transfer from non-current to current
borrowings of US$233,333,000. Reclassifications and others of
accrued interests includes capitalisation of interests of
US$7,012,000 (28(c)), offset by transaction costs of
US$364,000, and foreign exchange effect of US$96,000.
|
|
As
at
1
January
2023
US$000
|
Additions US$000
|
Repayments US$000
|
Reclassifications
and
others1 US$000
|
As
at
31
December 2023
US$000
|
|
Current
|
|
|
|
|
|
|
Pre-shipment and other loans in
Minera Santa Cruz
|
1,693
|
13,506
|
(10,573)
|
(756)
|
3,870
|
|
Medium-term bank loans
|
25,000
|
60,000
|
(85,000)
|
100,001
|
100,001
|
|
Stock market promissory
note
|
14,500
|
3,907
|
(16,407)
|
-
|
2,000
|
|
Accrued interest
|
2,796
|
9,520
|
(24,839)
|
18,716
|
6,193
|
|
|
43,989
|
86,933
|
(136,819)
|
117,961
|
112,064
|
|
Non-current
|
|
|
|
|
|
|
Medium-term bank loans
|
275,000
|
60,000
|
-
|
(100,001)
|
234,999
|
|
Total current and non-current
borrowings
|
318,989
|
146,933
|
(136,819)
|
17,960
|
347,063
|
1 Reclassification and others from non-current of
US$100,001,000 includes transfer from non-current to current
borrowings of US$100,001,000. Current reclassifications and other
of US$99,245,000 includes transfer from non-current borrowings of
US$100,001,000 and foreign exchange effect of US$756,000.
Reclassifications and others of accrued interests includes transfer
of recognition of transaction costs of US$234,000, capitalisation
of interests of US$19,357,000 (28(c)), and foreign exchange effect
of US$407,000.
Additional $105,000,000 short-term
loans were withdrawn in February 2025 of which US$85,000,000 were
used to repay the $200,000,000 medium-term facility and
US$20,000,000 for temporary working capital
changes.
29
Provisions
|
|
Provision
for
mine
closure1
US$000
|
Long-Term Incentive
Plan
US$000
|
Workers
profit sharing US$000
|
Contingencies
US$000
|
Total
US$000
|
|
At 1 January 2023
|
137,000
|
-
|
4,947
|
5,736
|
147,683
|
|
Additions
|
-
|
-
|
3,207
|
3,655
|
6,862
|
|
Accretion (note 13)
|
1,703
|
-
|
-
|
-
|
1,703
|
|
Change in discount rate
|
(2,543)
|
-
|
-
|
-
|
(2,543)
|
|
Change in estimates
|
43,304
|
-
|
-
|
-
|
43,304
|
|
Foreign exchange effect
|
-
|
-
|
77
|
(916)
|
(839)
|
|
Transfers to assets held for sale
(note 25)
|
(711)
|
-
|
-
|
-
|
(711)
|
|
Utilisation
|
(2,712)
|
-
|
-
|
-
|
(2,712)
|
|
Payments
|
(13,325)
|
-
|
(4,805)
|
(504)
|
(18,634)
|
|
At 31 December 2023
|
162,716
|
-
|
3,426
|
7,971
|
174,113
|
|
Less: current portion
|
(19,056)
|
-
|
(3,426)
|
(4,259)
|
(26,741)
|
|
Non-current portion
|
143,660
|
-
|
-
|
3,712
|
147,372
|
|
At 1 January 2024
|
162,716
|
-
|
3,426
|
7,971
|
174,113
|
|
Additions
|
-
|
3,231
|
6,590
|
6,153
|
15,974
|
|
Accretion (note 13)
|
3,110
|
(87)
|
-
|
-
|
3,023
|
|
Change in discount rate
|
(3,727)
|
-
|
-
|
-
|
(3,727)
|
|
Change in estimates
|
18,805
|
-
|
-
|
-
|
18,805
|
|
Foreign exchange effect
|
-
|
-
|
-
|
(608)
|
(608)
|
|
Transfers to assets held for sale
(note 25)
|
(9,652)
|
-
|
-
|
-
|
(9,652)
|
|
Transfer to other
payables
|
-
|
(7,161)
|
-
|
-
|
(7,161)
|
|
Transfer from other
reserves
|
-
|
7,954
|
-
|
-
|
7,954
|
|
Payments
|
(11,833)
|
-
|
(3,210)
|
(1,815)
|
(16,858)
|
|
At 31 December 2024
|
159,419
|
3,937
|
6,806
|
11,701
|
181,863
|
|
Less: current portion
|
(22,799)
|
-
|
(6,806)
|
(5,477)
|
(35,082)
|
|
Non-current portion
|
136,620
|
3,937
|
-
|
6,224
|
146,781
|
1
Provision for mine closure
The provision
represents the discounted values of the estimated cost to
decommission and rehabilitate the mines at the expected date of
closure of each of the mines. The present value of the provision
has been calculated using a real pre-tax annual discount rate,
based on a US Treasury bond of an appropriate tenure adjusted for
the impact of inflation as at 31 December 2024 and 2023
respectively, and the cash flows have been adjusted to reflect the
risk attached to these cash flows. Uncertainties on the timing for
use of this provision include changes in the future that could
impact the time of closing the mines, as new resources and reserves
are discovered, technological changes, regulatory changes, cost
increases, changes in discount rates. Those uncertainties may
result in future actual expenditure differing from the amounts
currently provided. The discount rate used was 2.00% (2023: 1.84%).
Expected cash flows will be over a period from one to 25 years
(2023: over a period from one to 21 years).
Based on the
internal and external reviews of mine rehabilitation estimates, the
provision for mine closure increased by US$18,805,000 and decreases
for the change in discount rate of US$3,727,000 as
follows:
|
|
Change
in estimate
|
Change
in discount rate
|
|
|
31
December 2024
|
31
December 2023
|
31
December 2024
|
31
December
2023
|
|
Arcata
|
(1)
|
(321)
|
(7)
|
(109)
|
|
Ares
|
10,323
|
20,297
|
99
|
(273)
|
|
Sipan
|
4,242
|
52
|
25
|
(412)
|
|
Selene
|
144
|
9,345
|
(108)
|
(214)
|
|
Recognised in the consolidated income
statement
|
14,708
|
29,373
|
9
|
(1,008)
|
|
Pallancata
|
(789)
|
2,465
|
(417)
|
(301)
|
|
Matarani
|
(30)
|
21
|
(10)
|
(4)
|
|
Azuca
|
-
|
1
|
(2)
|
(5)
|
|
Crespo
|
-
|
(3)
|
-
|
5
|
|
Inmaculada
|
3,229
|
7,691
|
(2,126)
|
(398)
|
|
San Jose
|
419
|
(835)
|
(613)
|
(555)
|
|
Mara Rosa
|
1,268
|
4,591
|
(568)
|
(277)
|
|
Recognised in property, plant and equipment
|
4,097
|
13,931
|
(3,736)
|
(1,535)
|
|
Total
|
18,805
|
43,304
|
(3,727)
|
(2,543)
|
The increase in the
accretion from 2023 (US$1,703,000) to 2024 (US$3,110,000) is
explained because the Group is closer to the budget execution
periods and the discount rates used for 2023 were lower than those
of 2024.
A change in any of
the following key assumptions used to determine the provision would
have the following impact:
As at 31 December
2024
|
|
US$000
|
|
Closure costs (increase by 10%)
increase of provision
|
16,907
|
|
Discount rate (increase by 0.5%)
(decrease of provision)
|
(12,621)
|
As at 31 December 2023
|
|
US$000
|
|
Closure costs (increase by 10%)
increase of provision
|
16,300
|
|
Discount rate (increase by 0.5%)
(decrease of provision)
|
(10,051)
|
An element of mine closure planning can be water management,
which relates to the treatment of contact water. The cost of this
water processing could continue for a number of years after closure
activities have been completed and is therefore, potentially,
exposed to long-term climate change. Mine planning for Hochschild's
operating assets takes into account mine-closure activities. In the
case of the now-closed Sipan mine, due to the specific
characteristics of the closed mine components, contact water
treatment is ongoing. According to our most recent approved Mine
Closure Plan (July 2021), Sipan will be the subject of ongoing
treatment until 2030 or until baseline water quality conditions
have been met. As at the date of approval of these financial
statements, the impact of climate change on Sipan's mine closure
planning is not expected to be material.
2
Long-term incentive plan
Corresponds to the
provision related to awards granted under the Long-Term Incentive
Plan (LTIP) to designated personnel of the Group, and includes the
2023 awards, granted in April 2023, payable in April 2026 and the
2024 awards, granted in March 2024, payable in March 2027. The 2022
awards which are payable in 2025 have a value of US$3,764,000 and
are included in trade and other payables. The effect has been
recorded as administrative expenses.
The following tables
list the inputs to the last Monte Carlo model used for the LTIPs as
at 31 December 2024:
|
|
31
December 2024
|
|
|
LTIP
2023
US$000
|
LTIP
2024
US$000
|
|
Dividend yield (%)
|
0
|
0
|
|
Expected volatility (%)
|
2.99
|
2.99
|
|
Risk-free interest rate
(%)
|
4.77
|
4.77
|
|
Expected life (years)
|
1
|
2
|
|
Weighted average share price
(pence £)
|
63.9
|
96.51
|
On 22 May 2024, beneficiaries of LTIPs were communicated of a
change in the payment mechanism resulting in a modification of the
LTIP from an equity settled to a cash settled transaction. This
resulted in a recognition of liability based on the fair valuation
of the cash settled LTIPs as at the date of modification and
reversal of the share-based payment reserves. The effect at the
date of the modification was an additional expense of
US$419,000.
3 Contingencies
The non-current balance of
US$6,224,000 (2023: US$3,712,000) corresponds to labour lawsuits in
Minera Santa Cruz that the Group expect to resolve in a period of
more than one year. Current contingencies mainly represents
the balance of Ares of US$3,002,000 (2023: US$4,180,000). The main
contingency in Ares is related to the OEFA.
30 Equity
(a) Share
capital and share premium
Issued share capital
The issued share capital of the
Company as at 31 December 2024 is as follows:
|
|
Issued
|
|
Class of shares
|
Number
|
Amount
|
|
Ordinary shares (1 pence per
share)
|
514,458,432
|
£5,144,584
|
The movement in share capital of
the Company from 1 January 2023 to 31 December 2024 is as
follows:
|
|
Number
of ordinary shares
|
Share
capital US$000
|
|
Shares issued as at 1 January
2023
|
513,875,563
|
9,061
|
|
Issuance of shares for bonus
payment on 12 May 2023
|
582,869
|
7
|
|
Shares issued as at 31 December
2023
|
514,458,432
|
9,068
|
|
Shares issued as at 31 December
2024
|
514,458,432
|
9,068
|
Rights attached to ordinary
shares
At general meetings of the
Company, on a show of hands and on a poll, every member who is
present in person or subject to the below, by proxy, has one vote
for every share of which they are the holder/proxy. However, in the
case of a vote on a show of hands where a proxy has been appointed
by more than one member, the proxy has one vote for and one vote
against if the proxy has been instructed by one or more members to
vote for the resolution and by one or more members to vote against
the resolution.
(b) Other
reserves
Fair value reserve of financial
assets at fair value through OCI
In accordance with IFRS 9, the
Group made the decision to classify its investments in listed and
unlisted companies as financial assets at fair value through OCI.
The increase/decrease in the fair value, net of the related
deferred tax liability, is taken directly to this account where it
will remain until disposal, when the cumulative unrealised gains
and losses are recycled through retained earnings.
Cumulative translation
adjustment
The cumulative translation
adjustment account is used to record exchange differences arising
from the translation of the financial statements of subsidiaries
with a functional currency different to the reporting currency of
the Group.
Merger reserve
The merger reserve represents the
difference between the value of the net assets of the Cayman
Holding Companies (Ardsley, Garrison, Larchmont and Hochschild
Mining (Peru)) acquired under the Share Exchange Agreement and the
nominal value of the shares issued in consideration of such
acquisition. In addition, a merger reserve was generated by certain
share placing transactions made by the Group after the IPO. The
merger reserve available for distribution is disclosed within
retained earnings.
Cash flow hedges
Changes in the fair value of
derivatives designated as cash flow hedges, which are held to hedge
the exposure to variability in cash flows of the hedged items, are
recognised in other components of equity until changes in the fair
value of the hedged item are recognised in profit or loss. The
Group uses cash flow hedges for hedging the exposure to variability
in gold and silver prices.
Share-based payment
reserve
The share-based payment reserve is
used to recognise the value of equity-settled share-based payment
transactions provided to employees, as a part of their
remuneration. In May 2024 the award changed from an equity-settled
benefit to a cash settled benefit, and the balance recorded in
other reserves was transferred to provisions (refer to note 29). As
at 31 December 2024 the balance is US$Nil.
31 Deferred income
tax
The net deferred income tax
assets/(liabilities) are as follows:
|
|
As at
31 December
|
|
|
2024
US$000
|
2023
US$000
|
|
Beginning of the year
|
(66,276)
|
(75,832)
|
|
Income statement benefit/(expense)
(note 14)
|
(14,409)
|
4,560
|
|
Deferred tax recognised on items
in other comprehensive income1
|
27,620
|
7,414
|
|
Deferred tax recognised related to
Monte do Carmo acquisition (note 4)
|
2,817
|
-
|
|
Reclassification of deferred tax
to assets held for sale (note 25)
|
(3,409)
|
(2,418)
|
|
Deferred tax recognised on
disposition of Crespo(note 17)
|
(1,170)
|
-
|
|
End of the year
|
(54,827)
|
(66,276)
|
1 The deferred tax recovery for
items that will be subsequently reclassified to profit and loss is
US$28,473,000 (2023: US$6,617,000).
Deferred income tax assets and
liabilities are offset when there is a legally enforceable right to
offset current tax assets against current tax liabilities and when
the deferred income tax assets and liabilities relate to the same
fiscal authority.
The movement in deferred income
tax assets and liabilities before offset during the year is as
follows:
|
|
PP&E
US$000
|
Mine
development US$000
|
Provisional pricing adjustment US$000
|
Others
US$000
|
Total
US$000
|
|
Deferred income tax
liabilities
|
|
|
|
|
|
|
At 1 January 2023
|
47,272
|
89,515
|
303
|
4,779
|
141,869
|
|
Income statement
(expense)/benefit
|
(108)
|
(8,248)
|
(303)
|
3,673
|
(4,986)
|
|
Reclassification to assets held
for sale
|
(52)
|
(2,840)
|
-
|
-
|
(2,892)
|
|
At 31 December 2023
|
47,112
|
78,427
|
-
|
8,452
|
133,991
|
|
Income statement
(expense)/benefit
|
7,895
|
14,797
|
19
|
(2,077)
|
20,634
|
|
At 31 December 2024
|
55,007
|
93,224
|
19
|
6,375
|
154,625
|
|
|
PP&E
US$000
|
Provision
for
mine
closure
US$000
|
Mine
development US$000
|
Tax
losses US$000
|
Others1
US$000
|
Total
US$000
|
|
Deferred income tax
assets
|
|
|
|
|
|
|
|
At 1 January 2023
|
14,544
|
31,514
|
721
|
4,338
|
14,920
|
66,037
|
|
Income statement
benefit/(expense)
|
8,045
|
3,260
|
(8,818)
|
3,064
|
(5,977)
|
(426)
|
|
Reclassification to assets held
for sale
|
(5,310)
|
-
|
-
|
-
|
-
|
(5,310)
|
|
Deferred tax recognised on items
in other comprehensive income
|
-
|
-
|
-
|
-
|
7,414
|
7,414
|
|
At 31 December 2023
|
17,279
|
34,774
|
(8,097)
|
7,402
|
16,357
|
67,715
|
|
Income statement
benefit/(expense)
|
(4,261)
|
(8,306)
|
1,973
|
(2,933)
|
18,582
|
5,055
|
|
Reclassification to assets held
for sale
|
(147)
|
-
|
(3,262)
|
-
|
-
|
(3,409)
|
|
Deferred tax recognised related to
the Monte do Carmo acquisition
|
-
|
-
|
1,918
|
-
|
899
|
2,817
|
|
Deferred tax recognised on items
in other comprehensive income
|
-
|
-
|
-
|
-
|
27,620
|
27,620
|
|
At 31 December 2024
|
12,871
|
26,468
|
(7,468)
|
4,469
|
63,458
|
99,798
|
1 Credit/(charge) in the year mainly related to the
balance of hedges of US$34,445,000 (2023 hedges of US$5,908,000),
exchange difference credit on cash basis of US$13,239,000 (2023:
charge of US$1,114,000, statutory holiday provision of US$875,000
(2023: US$943,000) and Long-Term Incentive Plan of US$2,065,000
(2023: US$1,909,000).
The amounts after offset, as
presented on the face of the statement of financial position, are
as follows:
|
|
As at
31 December
|
|
|
2024
US$000
|
2023
US$000
|
|
Deferred income tax
assets
|
27,677
|
763
|
|
Deferred income tax
liabilities
|
(82,504)
|
(67,039)
|
|
Total
|
(54,827)
|
(66,276)
|
Unrecognised tax losses expire in
the following years:
|
|
As at
31 December
|
|
|
2024
US$000
|
2023
US$000
|
|
Recognised
|
|
|
|
Expire after four years
|
13,145
|
19,651
|
|
|
13,145
|
19,651
|
|
Unrecognised
|
|
|
|
Expire in one year
|
1,040
|
97
|
|
Expire in two years
|
766
|
1,040
|
|
Expire in three years
|
1,196
|
766
|
|
Expire in four years
|
43
|
1,196
|
|
Expire after four years
|
200,155
|
191,764
|
|
|
203,200
|
194,863
|
|
Total
|
216,345
|
214,514
|
Other unrecognised deferred income
tax assets comprise (gross amounts):
|
|
As at
31 December
|
|
|
2024
US$000
|
2023
US$000
|
|
Provision for mine
closure1
|
16,633
|
10,990
|
1 This relates to provision for mine closure expenditure
which is expected to be incurred in periods in which taxable
profits are not expected to be available to offset the
expenditure.
Unrecognised deferred tax
liability on retained earnings
At 31 December 2024 and 2023,
there was no recognised deferred tax liability for taxes that would
be payable on the unremitted earnings of certain of the Group's
subsidiaries as the intention is that these amounts are permanently
reinvested.
32
Dividends
|
|
2024
US$000
|
2023
US$000
|
|
Dividends paid and proposed during
the year
|
|
|
|
Proposed dividends on ordinary
shares:
|
|
|
|
Final dividend for 2024: 1.94 US$
cents per share (2023: Nil US$ cents per share)
|
10,000
|
-
|
|
Dividends declared to
non-controlling interests: 0.002 US$ per share (2023: 0.002 US$ per
share)
|
388
|
326
|
|
Total dividends declared to
non-controlling interests
|
388
|
326
|
Dividends paid in 2024 to
non-controlling interests amounted to US$388,000 (2023:
US$326,000).
Dividends per share
There was no final dividend paid
for 2023. And there was no interim dividend paid during 2024. The
proposed final dividend in respect of the year ending 31 December
2024 is 1.94 US$ cents per share (2023: US$Nil).
33 Related-party
balances and transactions
(a)
Related-party accounts receivable and payable
The Group had the following
related-party balances and transactions during the years ended 31
December 2024 and 2023. The related parties are companies owned or
controlled by the main shareholder of the Parent company or
associates.
|
|
Accounts receivable
as at
31 December
|
Accounts payable
as at
31 December
|
|
|
2024
US$000
|
2023
US$000
|
2024
US$000
|
2023
US$000
|
|
Current related party
balances
|
|
|
|
|
|
Cementos Pacasmayo
S.A.A.1
|
73
|
114
|
60
|
80
|
|
Tecsup2
|
30
|
-
|
149
|
315
|
|
REE UNO SpA3
|
18
|
-
|
-
|
2
|
|
Aclara Resources Inc.
3
|
-
|
13
|
-
|
-
|
|
Total
|
121
|
127
|
209
|
397
|
1 The account receivable relates to reimbursement of
expenses paid by the Group on behalf of Cementos Pacasmayo S.A.A,
an entity controlled by Eduardo Hochschild. The account payable
relates to the rentals payments.
2 Peruvian not-for-profit educational institutions
controlled by Eduardo Hochschild.
3 Associated companies of the Aclara Group (refer to
note 19).
As at 31 December 2024 and 2023,
all accounts are, or were, non-interest bearing.
No security has been granted or
guarantees given by the Group in respect of these related party
balances.
Principal transactions between
affiliates are as follows:
|
|
Year
ended 31 December
|
|
|
2024
US$000
|
2023
US$000
|
|
Expenses
|
|
|
|
Expense recognised for the rental
and services paid to Cementos Pacasmayo S.A.A.
|
(505)
|
(473)
1
|
|
Expense donation to UTEC
scholarships
|
(371)
|
(931)
1
|
|
Expense research project with
UTEC2
|
(19)
|
-
|
|
Expense donation Asociacion
Amanatari3
|
(80)
|
-
|
|
Expense technical services from
Tecsup
|
(159)
|
(365)
1
|
|
Income from reimbursement of
security costs of Cementos Pacasmayo S.A.A.
|
676
|
541
|
|
Income from administrative
services to REE UNO SpA
|
40
|
42
|
|
Income from administrative
services to Aclara Resources Peru
|
11
|
141
|
|
Revenue from sale of dore to
Farragut Holdings Inc.
|
72
|
-
|
1 While reflected in the
Consolidated Income Statement, these items were omitted from the
2023 table of principal transactions between affiliates.
2 Peruvian non-for-profit
educational institution controlled by Eduardo
Hochschild..
Peruvian
non-for-profit institution controlled by Eduardo
Hochschild..
Transactions between the Group and
these companies are at an arm's length basis.
(b)
Compensation of key management personnel of the
Group
|
|
Year
ended 31 December
|
|
Compensation of key management
personnel (including Directors)
|
2024
US$000
|
2023
US$000
|
|
Short-term employee
benefits
|
6,570
|
6,259
|
|
Long-Term Incentive
Plans
|
1,714
|
1,157
|
|
Total compensation paid to key
management personnel
|
8,284
|
7,416
|
This amount includes the
remuneration paid to the Directors of the Parent Company of the
Group of US$3,482,000 (2023: US$3,555,000).
34 Auditor's
remuneration
The auditor's remuneration for
services provided to the Group during the years ended 31 December
2023 and 2022 is as follows:
|
|
Amounts
paid to
Ernst
& Young
in the
year ended
31
December
|
|
|
2024
US$000
|
2023
US$000
|
|
Audit fees pursuant to
legislation1
|
1,561
|
1,342
|
|
Audit related assurance
services
|
150
|
133
|
|
Other assurance
services
|
24
|
12
|
|
Total
|
1,735
|
1,487
|
1 The total fee includes statutory audit fee of
US$560,000 in respect of local statutory audits of subsidiaries
(2023: US$390,000) and additional 2023 fees amounting to
US$111,000.
In 2024 and 2023, all fees are
included in administrative expenses.
35 Notes to the
statement of cash flows
|
|
As at
31 December
|
|
|
2024
US$000
|
2023
US$000
|
|
Reconciliation of loss for the
year to net cash generated from operating activities
|
|
|
|
Profit/(loss) for the
year
|
113,749
|
(60,033)
|
|
Adjustments to reconcile Group
loss to net cash inflows from operating activities
|
|
|
|
Depreciation (note
3(a))
|
158,649
|
146,137
|
|
Amortisation of intangibles (note
18)
|
1,579
|
802
|
|
Write-off of assets (note
16)
|
3,883
|
2,731
|
|
Provision of doubtful
receivable
|
245
|
3
|
|
Impairment of assets (note
11)
|
13,732
|
80,843
|
|
Loss from changes in the fair
value of financial assets at fair value through profit and loss
(note 21)
|
-
|
292
|
|
Share of post-tax losses and
impairment of associates (note 19)
|
6,489
|
9,460
|
|
Gain on sale of property, plant
and equipment (note 12)
|
(656)
|
(142)
|
|
Provision for obsolescence of
supplies (notes 12 and 23)
|
864
|
1,586
|
|
Increase of provision for mine
closure (note 12)
|
14,717
|
28,365
|
|
Finance income (note
13)
|
(13,097)
|
(7,473)
|
|
Finance costs (note 13)
|
26,928
|
18,199
|
|
Income tax expense (note
14)
|
63,468
|
16,552
|
|
Other
|
3,351
|
(3,342)
|
|
Increase/(decrease) of cash flows
from operations due to changes in assets and liabilities
|
|
|
|
Trade and other
receivables
|
(79,788)
|
(8,520)
|
|
Income tax receivable
|
(2,813)
|
2,624
|
|
Other financial assets and
liabilities
|
(2,410)
|
(2,856)
|
|
Inventories
|
(21,161)
|
(8,091)
|
|
Trade and other
payables
|
70,282
|
1,877
|
|
Provisions
|
7,029
|
(1,998)
|
|
Cash generated from
operations
|
365,040
|
217,016
|
36
Commitments
(a) Mining
rights purchase options
During the ordinary course of
business, the Group enters into agreements to carry out exploration
under concessions held by third parties. Generally, under the terms
of these agreements, the Group has the option to acquire the
concession or invest in the entity holding the concession. In order
to exercise these options the Group must satisfy certain financial
and other obligations during the term of the agreement. The options
lapse in the event that the Group does not meet its financial
obligations. At any point in time, the Group may cancel the
agreements without penalty, except where specified below. These
agreements are not under non-cancellable/irrevocable clauses. The
Group has no commitments as at 31 December 2024 and 31 December
2023.
(b) Capital
commitments
|
|
As
at
31
December
|
|
|
2024
US$000
|
2023
US$000
|
|
Peru
|
26,527
|
25,911
|
|
Argentina
|
1,733
|
1,049
|
|
Brazil
|
-
|
16,000
|
|
|
28,260
|
42,960
|
37
Contingencies
As at 31 December 2024 the Group
is subject to various claims which arise in the ordinary course of
business. No provision has been made in the financial statements
and none of these claims are currently expected to result in any
material loss to the Group.
(a)
Taxation
Fiscal periods remain open to
review by the tax authorities for four years in Peru, five years in
Argentina and Mexico, ten years in Brazil and three years in Chile,
preceding the year of review. During this time the authorities have
the right to raise additional tax assessments including penalties
and interest. Under certain circumstances, reviews may cover longer
periods.
Because a number of fiscal periods
remain open to review by the tax authorities, coupled with the
complexity of the Group and the transactions undertaken by it,
there remains a risk that significant additional tax liabilities
may arise. As at 31 December 2024, the Group had exposures
totalling US$17,077,000 (2023: US$19,885,000).
When the Tax authority challenges
the deductibility of certain expenses the Group reassesses the case
internally and externally, with the support of a third party
professional to determine the probability of success and, depending
on the result, makes the decision whether or not to continue with
the claim. Notwithstanding this risk, the Directors believe that
management's interpretation of the relevant legislation and
assessment of taxation is appropriate and that it is probable that
the Group's tax and customs positions will be sustained in the
event of a challenge by the tax authorities. Consequently, the
Directors consider that no tax liability is required to be
recognised in respect of these claims or risks.
(b)
Guarantees
The Group is required to provide
guarantees in Peru in respect of environmental restoration and
decommissioning obligations. The Group has provided for the
estimated cost of these activities (see note 29(1)).
38 Mining
royalties
Peru
In accordance with Peruvian
legislation, owners of mining concessions must pay a mining royalty
for the exploitation of metallic and non-metallic resources. Mining
royalties have been calculated with rates ranging from 1% to 3% of
the value of mineral concentrate or equivalent sold, based on
quoted market prices.
In October 2011, changes came into
effect for mining companies, with the following
features:
(a)
Introduction of a Special Mining Tax (SMT), levied on mining
companies at the stage of exploiting mineral resources.
(b)
Modification of the mining royalty calculation, which
consists of applying a progressive scale of rates ranging from 1%
to 12%, of the quarterly operating profit. The former royalty was
calculated on the basis of monthly sales value of mineral
concentrates. The SMT and modified mining royalty are accounted for
as an income tax in accordance with IAS 12 Income Taxes.
As at 31 December 2024, the amount
payable as under the new mining royalty and the SMT amounted to
US$1,717,000 (2023: US$1,298,000) and US$1,742,000 (2023:
US$1,181,000) respectively. The new mining royalty and SMT are
reported as "Income tax payable" in the Statement of Financial
Position. The amount recorded in the income statement was
US$7,108,000 (2023: US$4,520,000) of new mining royalty and
US$7,051,000 (2023: US$2,307,000) of SMT, both classified as income
tax.
Argentina
In accordance with Argentinian
legislation, Provinces (being the legal owners of the mineral
resources) are entitled to collect royalties from mine operators.
For San Jose, the mining royalty applicable to dore and concentrate
is 3% of the pit-head value. As at 31 December 2024, the amount
payable as mining royalties amounted to US$970,000 (2023:
US$788,000). The amount recorded in the income statement as cost of
sales was US$7,331,000 (2023: US$6,267,000).
Brazil
Under Brazilian law, the
Government has the right to collect royalties from mine operators.
For Mara Rosa, the mining royalty applicable to the dore is 1.5% on
the sales made. As of 31 December 2024, the amount payable as
mining royalties is US$500,000 (2023: US$Nil). The amount recorded
in the income statement as cost of sales was US$2,363,000 (2023:
US$Nil).
39 Financial risk
management
The Group is exposed to a variety
of risks and uncertainties which may have a financial impact on the
Group and which also impact the achievement of social, economic and
environmental objectives. These risks include strategic,
commercial, operational and financial risks and are further
categorised into risk areas to facilitate consolidated risk
reporting across the Group.
The Group has made significant
developments in the management of the Group's risk environment
which seeks to identify and, where appropriate, implement the
controls to mitigate the impact of the Group's significant risks.
This effort is supported by a Risk Committee with the participation
of the CEO, the Vice Presidents, and the head of the internal audit
function. The Risk Committee is responsible for implementing the
Group's policy on risk management and internal control in support
of the Company's business objectives, and monitoring the
effectiveness of risk management within the
organisation.
(a) Commodity
price risk
Silver and gold prices have a
material impact on the Group's results of operations. Prices are
significantly affected by changes in global economic conditions and
related industry cycles. Generally, producers of silver and gold
are unable to influence prices directly; therefore, the Group's
profitability is ensured through the control of its cost base and
the efficiency of its operations.
Management continuously monitors
silver and gold prices and reserves the right to take the necessary
action, where appropriate and within Board approved parameters, to
mitigate the impact of this risk.
Derivative financial assets -
Silver and gold forwards and zero cost collars
On 10 November 2021, the Group
signed agreements to hedge the sale of 3,300,000 ounces of silver
at US$25.0 per ounce for 2023.
On 12 April 2023, the Group signed
agreements to hedge the sale of 27,600 ounces of gold at US$2,100
per ounce for 2024.
On 20 April 2023, the Group signed
agreements to hedge the sale of 29,250 ounces of gold at US$2,047
per ounce for 2023.
On 19 June 2023, the Group signed
agreements to hedge the sale of 150,000 ounces of gold (50,000
ounces per year) at US$2,117.05, US$2,166.65 and US$2,205.50 per
ounce in 2025, 2026 and 2027 respectively.
On 14 December 2023, the Group
signed a gold collar agreement of 99,999.96 ounces of gold at
strike put of US$2,000 and strike call of US$2,252 per ounce for
2024.
On 14 February 2024, the Group
signed a gold collar agreement of 60,000 ounces of gold at strike
put of US$2,000 and strike call of US$2,485 per ounce for
2025.
The forwards and zero cost collars
are being used to hedge exposure to changes in cash flows from gold
and silver commodity prices. There is an economic relationship
between the hedged item and the hedging instruments due to a common
underlying. In accordance with IFRS 9, the derivative instruments
are categorised as cash flow hedges at the inception of the hedging
relationship and, on an ongoing basis, the Group assesses whether a
hedging relationship meets the hedge effectiveness requirements.
The Group has established a hedge ratio of 1:1 for the hedging
relationships as the underlying risk of the silver and gold
forwards and zero cost collars is identical to the hedged risk
components. To test the hedge effectiveness, the Group uses the
hypothetical derivative method and compares the changes in the fair
value of the gold and silver forwards against the changes in fair
value of the hedged item attributable to the hedged risk. That
said, it is observed that the effectiveness tests comply with the
requirements of IFRS 9 and that the hedging strategy is highly
effective.
The fair values of the gold and
silver forwards and zero cost collars were calculated using a
discounted cash flow model applying a combination of level 1 (USD
quoted market commodity prices) and level 2 inputs. The models used
to value the commodity forward contracts are standard models that
calculate the present value of the fixed-legs (the fixed gold and
silver leg) and compare them with the present value of the expected
cash flows of the flowing legs (the London metal exchange "LME"
gold and silver fixing). In the case of the commodity forward
contracts, the models use the LME AU and AG forward curve and the
US LIBOR swap curve for discounting.
This approach results in the fair
value measurement categorised in its entirety as level 2 in the
fair value hierarchy. The fair values of the silver and gold
forwards as at 31 December 2024 and 31 December 2023 are as
follows:
|
|
As at 31
December 2024
|
As at 31
December 2023
|
|
|
US$000
|
|
Current assets
|
-
|
846
|
|
Current liabilities
|
(40,276)
|
(1,190)
|
|
Non-current liabilities
|
(61,343)
|
(16,581)
|
|
|
(101,619)
|
(16,925)
|
The effect recorded is as
follows:
|
|
Year
ended 31 December 2024
|
Year
ended 31 December 2023
|
|
|
US$000
|
|
Income statement - revenue
(loss)/income
|
(27,903)
|
7,846
|
|
Income statement - finance
income
|
866
|
593
|
|
Equity - Unrealised loss on
hedges
|
85,560
|
19,704
|
The sensitivity of the fair value
of the current hedges outstanding at 31 December 2024 to a
reasonable movement in gold prices, with all other variables held
constant, determined as a +/-10% change in gold prices
-US$50,554,000/US$46,192,000 effect on OCI.
The Group has price adjustments
arising from the sale of concentrate and dore which were
provisionally priced at the time the sale was recorded (refer to
note 5). The Group's exposure to reasonably possible changes in
gold and silver prices (assuming all other variables remain
constant) are not material to the fair value of trade
receivables.
The sensitivity of the fair value
to an immediate 10% favourable or adverse change in the price of
gold and silver (assuming all other variables remain constant), is
as follows:
|
|
Increase/
decrease
in price of
ounces
of:
|
Effect
on
profit
before tax
US$000
|
|
2024
|
Gold
+/-10%
Silver+/-10%
|
+/-530
+/-302
|
|
2023
|
Gold
+/-10%
Silver+/-10%
|
+/-127
+/-45
|
(b) Foreign
currency risk
The Group produces silver and gold
which are typically priced in US$ dollars. A proportion of the
Group's costs are incurred in Peruvian nuevos soles, Argentinian
pesos, Brazilian reais, sterling pounds, Canadian dollars, Chilean
pesos, and Mexican pesos. Accordingly, the Group's financial
results may be affected by exchange rate fluctuations between the
US dollar and the local currency. The long-term relationship
between commodity prices and currencies in the countries in which
the Group operates provides a certain degree of natural protection.
The Group does not use derivative instruments to manage its foreign
currency risks.
The following table demonstrates
the sensitivity of financial assets and liabilities, at the
reporting date, denominated in their respective currencies, to a
reasonably possible change in the US$ dollar exchange rate, with
all other variables held constant, of the Group's profit before tax
and the Group's equity.
|
Year
|
Increase/
decrease in US$/other
currencies'
rate
|
Effect
on profit
before tax
US$000
|
Effect
on OCI
US$000
|
|
2024
|
|
|
|
|
Argentinian pesos
|
+/-10%
|
-/+7,140
|
-
|
|
Mexican pesos
|
+/-10%
|
+/-47
|
-
|
|
Peruvian nuevos soles
|
+/-10%
|
-/+26,497
|
-
|
|
Reais
|
+/-10%
|
-/+10,035
|
-
|
|
Pounds sterling
|
+/-10%
|
-/+94
|
-
|
|
Canadian dollars
|
+/-10%
|
-/+518
|
+/-26
|
|
Chilean pesos
|
+/-10%
|
+/-862
|
-
|
|
2023
|
|
|
|
|
Argentinian pesos
|
+/-10%
|
-/+2,206
|
-
|
|
Mexican pesos
|
+/-10%
|
+/-1,843
|
-
|
|
Peruvian nuevos soles
|
+/-10%
|
-/+19,384
|
-
|
|
Reais
|
+/-10%
|
-/+21,718
|
-
|
|
Pounds sterling
|
+/-10%
|
-/+93
|
-
|
|
Canadian dollars
|
+/-10%
|
-/+450
|
+/-16
|
|
Chilean pesos
|
+/-10%
|
+/-70
|
-
|
(c) Credit
risk
Credit risk arises from debtors'
inability to make payment of their obligations to the Group as they
become due (without taking into account the fair value of any
guarantee or pledged assets). The Group is primarily exposed to
credit risk as a result of commercial activities and noncompliance,
by counterparties, in transactions in cash which are primarily
limited to cash balances deposited in banks and accounts receivable
at the statement of financial position date.
Counterparty credit exposure based
on commercial activities, including trade and other receivables,
embedded derivatives, hedge instruments and cash balances in banks
as at 31 December 2024 and 31 December 2023:
|
Summary commercial
partners
|
As
at
31
December 2024
US$000
|
%
collected as at 11 March 2025
US$000
|
As
at
31
December 2023
US$000
|
%
collected as at 11 March 2024
US$000
|
|
Trade receivables
|
37,238
|
66%
|
29,421
|
72%
|
Other receivables include advances
to suppliers and receivables from contractors for the sale of
supplies. There is limited credit risk on these amounts as the
Group can withhold the balances that it owes the suppliers or
contractors for their services.
|
Cash and cash equivalents -
Credit/rating1
|
As
at
31
December
2024
US$000
|
As
at
31
December
2023
US$000
|
|
A+
|
-
|
40,759
|
|
A
|
343
|
-
|
|
A-
|
19,177
|
12,955
|
|
A2
|
-
|
27,205
|
|
BBB+
|
71,810
|
-
|
|
BBB-
|
-
|
5,172
|
|
Not available
|
5,643
|
3,035
|
|
Total
|
96,973
|
89,126
|
1 Represents the long-term credit rating as at 3 January
2025 (2023: 3 January 2024).
As at 31 December 2024, the credit
rating of the counterparties of the gold forward hedges is A- and
BBB+ (31 December 2023 is A- and A+).
To manage the credit risk
associated with commercial activities, the Group took the following
steps:
Active use of prepayment/advance
clauses in sales contracts
Delaying delivery of title and/or
requiring advance payments to reduce exposure timeframe (potential
delay in sales recognition)
Maintaining as diversified a
portfolio of clients as possible
To manage credit risk associated
with cash balances deposited in banks, the Group took the following
steps:
Increasing banking relationships
with large, established and well-capitalised institutions in order
to secure access to credit and to diversify credit risk
Limiting exposure to financial
counterparties according to Board approved limits
Investing cash in short-term,
highly liquid and low risk instruments (term deposits
mainly)
Increase the utilisation of UK
bank accounts
Receivable balances are monitored
on an ongoing basis and the result of the Group's exposure to bad
debts is recognised in the consolidated income statement. The
maximum exposure is the carrying amount as disclosed in notes 22,
24 and 39(e).
The Group's risk assessment
procedures includes customer analysis and reviewing financial
counterparties. For further details refer to the Commentary section
of the Commercial Counterparty risk in the Risk management and
Viability Statement.
(d) Equity
risk on financial instruments
The Group acquires financial
instruments in connection with strategic alliances with third
parties. The Group constantly monitors the fair value of these
instruments in order to decide whether or not it is convenient to
dispose of these investments. The disposal decision is also based
on management's intention to continue with the strategic alliance,
the tax implications and changes in the share price of the
investee.
The Group is not sensitive to
reasonable movements in the share price of financial assets at fair
value through OCI.
(e) Fair value
hierarchy
The Group uses the following
hierarchy for determining and disclosing the fair value of
financial instruments by valuation technique:
Level 1: quoted (unadjusted)
prices in active markets for identical assets or
liabilities.
Level 2: other techniques for
which all inputs which have a significant effect on the recorded
fair value are observable, either directly or
indirectly.
Level 3: techniques which use
inputs which have a significant effect on the recorded fair value
that are not based on observable market data.
As at 31 December 2024 and 2023,
the Group held the following financial instruments measured at fair
value:
|
|
31
December 2024
US$000
|
Level
1
US$000
|
Level
2
US$000
|
Level
3
US$000
|
|
Assets and liabilities measured at
fair value
|
|
|
|
|
|
Equity shares (note 20)
|
475
|
475
|
|
|
|
Trade receivables (note
22)
|
37,238
|
|
|
37,238
|
|
Mutual funds
|
5
|
5
|
|
|
|
Bonds in Minera Santa Cruz
S.A.
|
2,474
|
2,474
|
|
|
|
Stream Agreements (note
26(a))
|
25,926
|
|
|
25,926
|
|
Derivative financial
liabilities
|
(101,619)
|
|
(101,619)
|
|
|
|
31
December 2023
US$000
|
Level
1
US$000
|
Level
2
US$000
|
Level
3
US$000
|
|
Assets and liabilities measured at
fair value
|
|
|
|
|
|
Equity shares (note 20)
|
460
|
460
|
|
|
|
Trade receivables (note
22)
|
29,421
|
|
|
29,421
|
|
Derivative financial
assets
|
846
|
|
846
|
|
|
Mutual funds
|
10,849
|
10,849
|
|
|
|
Other financial assets
|
2,264
|
2,264
|
|
|
|
Derivative financial
liabilities
|
(17,771)
|
|
(17,771)
|
|
During the period ending 31
December 2024 and 2023, there were no transfers between these
levels.
The reconciliation of the trade
receivables categorised as level 3 is as follows:
|
|
Trade
receivables/
price
adjustments
US$000
|
|
Balance at 1 January
2022
|
42,364
|
|
Net change in trade receivables
from goods sold
|
(8,644)
|
|
Changes in fair value of price
adjustments (note 5)
|
1,174
|
|
Realised price adjustments during
the year
|
(5,473)
|
|
Balance at 31 December
2023
|
29,421
|
|
Net change in trade receivables
from goods sold
|
11,892
|
|
Changes in fair value of price
adjustments (note 5)
|
8,209
|
|
Realised price adjustments during
the year
|
(12,284)
|
|
Balance at 31 December
2024
|
37,238
|
The impact of the hedging
instrument and hedge item on the statement of financial position is
as follows:
|
|
ounces
|
Average
price US$/ounce
|
Line
item in the
statement of
financial position
|
Carrying
amount of hedging instrument
US$000
|
Change
in fair value of hedging instrument used for measuring
ineffectiveness for the period
US$000
|
Change
in fair value of hedged item used for measuring ineffectiveness for
the period
US$000
|
|
2024
|
|
|
|
|
|
|
|
Gold forward and zero cost collar
contracts
|
210,000
|
From
2,000 to 2,485
|
Derivative financial liabilities
|
(101,619)
|
(68,633)
|
(68,633)
|
|
2023
|
|
|
|
|
|
|
|
Gold forward and zero cost collar
contracts
|
277,599.96
|
From
2,100 to 2,252
|
Derivative financial assets and liabilities
|
(16,925)
|
(11,546)
|
(11,546)
|
The hedging gain recognised in OCI
before tax on gold forward hedges and gold zero cost collars is
equal to the change in fair value of the hedged item attributable
to the hedged risk used for measuring effectiveness. There is no
ineffectiveness recognised in profit or loss.
Impact of hedging on
equity
Set out below is the
reconciliation of each component of equity and the analysis of
other comprehensive income:
|
|
Gold
hedges
US$000
|
Silver
hedges
US$000
|
Total
US$000
|
|
Balance at 1 January
2023
|
-
|
1,541
|
1,541
|
|
Reclassification adjustments for
items included in the income statement on realisation:
|
|
|
|
|
Transfer to sales
(revenue)
|
(2,522)
|
(5,324)
|
(7,846)
|
|
Revaluation arising on the
year
|
(14,996)
|
3,138
|
(11,858)
|
|
Movement in deferred
tax
|
5,972
|
645
|
6,617
|
|
Balance at 31 December
2023
|
(11,546)
|
-
|
(11,546)
|
|
Reclassification adjustments for
items included in the income statement on realisation:
|
|
|
|
|
Transfer to sales
(revenue)
|
27,903
|
-
|
27,903
|
|
Revaluation arising on the
year
|
(113,463)
|
-
|
(113,463)
|
|
Movement in deferred
tax
|
28,473
|
-
|
28,473
|
|
Balance at 31 December
2024
|
(68,633)
|
-
|
(68,633)
|
(f) Liquidity
risk
Liquidity risk arises from the
Group's inability to obtain the funds it requires to comply with
its commitments, including the inability to sell a financial asset
quickly enough and at a price close to its fair value. Management
constantly monitors the Group's level of short- and medium-term
liquidity, and their access to credit lines, in order to ensure
appropriate financing is available for its operations.
The table below categorises the
undiscounted cash flows of Group's financial liabilities into
relevant maturity groupings based on the remaining period as at the
statement of financial position to the contractual maturity date.
Interest cash flows have been calculated using the spot rate at
year-end.
|
|
Less
than
1
year
US$000
|
Between
1
and
2
years
US$000
|
Between
2
and
5
years
US$000
|
Over
5
years
US$000
|
Total
US$000
|
|
At 31 December 2024
|
|
|
|
|
|
|
Trade and other
payables
|
189,608
|
17,043
|
5,000
|
-
|
211,651
|
|
Derivative financial
liabilities
|
40,276
|
29,155
|
32,188
|
-
|
101,619
|
|
Borrowings
|
163,558
|
75,865
|
103,307
|
-
|
342,730
|
|
Total
|
393,442
|
122,063
|
140,495
|
-
|
656,000
|
|
At 31 December 2023
|
|
|
|
|
|
|
Trade and other
payables
|
118,702
|
1,656
|
-
|
-
|
120,358
|
|
Derivative financial
liabilities
|
1,190
|
16,581
|
-
|
-
|
17,771
|
|
Borrowings
|
130,946
|
138,875
|
126,303
|
-
|
396,124
|
|
Total
|
250,838
|
157,112
|
126,303
|
-
|
534,253
|
(g) Interest
rate risk
The Group has financial assets and
liabilities which are exposed to interest rate risk. Changes in
interest rates primarily impact loans and borrowings by changing
either their fair value (fixed rate debt) or their future cash
flows (variable rate debt). The Group does not have a formal policy
of determining how much of its exposure should be at fixed or at
variable rates. However, at the time of taking new loans or
borrowings, management applies its judgement to decide whether it
believes that a fixed or variable rate borrowing would be more
favourable to the Group over the expected period until
maturity.
|
|
As at
31 December 2024
|
|
|
Less
than
1
year
US$000
|
Between
1
and
2
years
US$000
|
Between
2
and
5
years
US$000
|
Over
5
years
US$000
|
Total
US$000
|
|
Fixed rate
|
|
|
|
|
|
|
Assets
|
2,122
|
-
|
-
|
-
|
2,122
|
|
Liabilities
|
(81,486)
|
-
|
-
|
-
|
(81,486)
|
|
Floating rate
|
|
|
|
|
|
|
Liabilities
|
(66,667)
|
(66,667)
|
(96,666)
|
-
|
(230,000)
|
|
|
As at
31 December 2023
|
|
|
Less
than
1
year
US$000
|
Between
1
and
2
years
US$000
|
Between
2
and
5
years
US$000
|
Over
5
years
US$000
|
Total
US$000
|
|
Fixed rate
|
|
|
|
|
|
|
Assets
|
37,184
|
-
|
-
|
-
|
37,184
|
|
Liabilities
|
(5,870)
|
-
|
-
|
-
|
(5,870)
|
|
Floating rate
|
|
|
|
|
|
|
Liabilities
|
(106,087)
|
(120,001)
|
(114,998)
|
-
|
(341,086)
|
Interest on financial instruments
classified as floating rate is re-priced at intervals of less than
one year. Interest on financial instruments classified as fixed
rate is fixed until the maturity of the instrument. The other
financial instruments of the Group that are not included in the
above tables are non-interest bearing and are therefore not subject
to interest rate risk.
The sensitivity to a reasonable
movement in the interest rate, with all other variables held
constant, of the financial instruments with a floating rate,
determined as a +/-20bps change in interest rates has a
-/+US$570,000 effect on profit before tax (2023: -/+US$658,000).
The Group is exposed to fluctuations in market interest
rates.
This assumes that the amount
remains unchanged from that in place at 31 December 2024 and 2023
and that the change in interest rates is effective from the
beginning of the year. In reality, the floating rate will fluctuate
over the year and interest rates will change
accordingly.
(h) Capital
risk management
The Group's objectives when
managing capital are to safeguard the Group's ability to continue
as a going concern in order to provide returns for shareholders,
benefits for other stakeholders, and to maintain an optimal capital
structure to reduce the cost of capital. Management considers as
part of its capital, the financial sources of funding from
shareholders and third parties (notes 28 and 30).
In 2024 the Group received
proceeds from borrowings of US$311,607,000 (2023: US$137,413,000)
whilst US$340,991,000 (2023: US$111,980,000) was repaid. In 2024
the Group closed a US$300,000,000 medium-term committed debt
facility with Scotiabank and BBVA and used US$30,000,000 in
2024.
Management also retains the right
to fund operations (fully owned and with joint venture partners)
with a mix of equity and joint venture partners' debt.
40 Subsequent
events
(a)
Aclara
On 23 December 2024, Aclara
announced a US$25,000,000 private placement of common shares at
C$0.7 (US$0.5) per share with new and existing strategic investors:
New Hartsdale Capital Inc., CAP S.A. and the Group. The
subscription price represents a 41% premium over the closing price
of the Common Shares on the Toronto Stock Exchange ("TSX") on the
last trading day prior to the date of the announcement of the
Private Placement. The $25,000,000 private placement was
completed on 20 February 2025, with $5,000,000 invested by the
Group.
(b) Disposal
of Arcata and Azuca
On 27 February 2025, the Group
closed the sale of Arcata and Azuca for US$1,000,000 as a
non-refundable cash payment at closing, and a 1.0% and 1.5% NSR for
Arcata and Azuca, respectively. The buyer also took over the
environmental liabilities amounting to US$9,652,000 (Refer to note
25).
PROFIT BY
OPERATION1
(Segment report reconciliation) as
at 31 December 2024
|
Group (US$000)
|
Inmaculada
|
San
Jose
|
Mara
Rosa
|
Pallancata
|
Consolidation adjustment and others
|
Total/HOC
|
|
Revenue
|
504,342
|
293,335
|
149,822
|
(255)
|
452
|
947,696
|
|
Cost of sales (pre
consolidation)
|
(272,587)
|
(223,394)
|
(107,978)
|
-
|
(1,304)
|
(605,263)
|
|
Consolidation
adjustment
|
1,567
|
(135)
|
(2,652)
|
-
|
1,220
|
|
|
Cost of sales (post
consolidation)
|
(271,020)
|
(223,529)
|
(110,630)
|
-
|
(84)
|
(605,263)
|
|
Production cost excluding
depreciation
|
(171,372)
|
(176,365)
|
(106,185)
|
-
|
(84)
|
(454,006)
|
|
Depreciation in production
cost
|
(92,122)
|
(47,624)
|
(17,419)
|
-
|
-
|
(157,165)
|
|
Workers profit sharing
|
(3,145)
|
-
|
-
|
-
|
-
|
(3,145)
|
|
Other items
|
-
|
(1,071)
|
-
|
-
|
-
|
(1,071)
|
|
Change in inventories
|
(4,381)
|
1,531
|
12,974
|
-
|
-
|
10,124
|
|
Gross profit
|
231,755
|
69,941
|
41,844
|
(255)
|
(852)
|
342,433
|
|
Administrative expenses
|
-
|
-
|
-
|
-
|
(50,232)
|
(50,232)
|
|
Exploration expenses
|
-
|
-
|
-
|
-
|
(26,854)
|
(26,854)
|
|
Selling expenses
|
(614)
|
(15,847)
|
(1,014)
|
(14)
|
-
|
(17,489)
|
|
Other income/(expenses)
|
-
|
-
|
|
-
|
(22,290)
|
(22,290)
|
|
Operating profit before
impairment
|
231,141
|
54,094
|
40,830
|
(269)
|
(100,228)
|
225,568
|
|
Impairment and write-off of
non-current assets, net
|
-
|
-
|
-
|
-
|
(17,615)
|
(17,615)
|
|
Share of post-tax losses from
associate
|
-
|
-
|
-
|
-
|
(6,489)
|
(6,489)
|
|
Finance income
|
-
|
-
|
-
|
-
|
13,097
|
13,097
|
|
Finance costs
|
-
|
-
|
-
|
-
|
(26,928)
|
(26,928)
|
|
Foreign exchange loss
|
-
|
-
|
-
|
-
|
(10,416)
|
(10,416)
|
|
Profit/(loss) from operations
before income tax
|
231,141
|
54,094
|
40,830
|
(269)
|
(148,579)
|
177,217
|
|
Income tax expense
|
-
|
-
|
|
-
|
(63,468)
|
(63,468)
|
|
Profit/(loss) for the year from
operations
|
231,141
|
54,094
|
40,830
|
(269)
|
(212,047)
|
113,749
|
1 On a post-exceptional basis.
RESERVES AND RESOURCES
Ore reserves and mineral resources
estimates
Hochschild Mining PLC reports its
mineral resources and reserves estimates in accordance with the
Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves 2012 edition ("the JORC Code"). This
establishes minimum standards, recommendations and guidelines for
the public reporting of exploration results and mineral resources
and reserves estimates. In doing so it emphasises the importance of
principles of transparency, materiality and confidence. The
information on ore reserves and mineral resources on
86 to 88 were prepared by or
under the supervision of Competent Persons (as defined in the JORC
Code). Competent Persons are required to have sufficient relevant
experience and understanding of the style of mineralisation, types
of deposits and mining methods in the area of activity for which
they are qualified as a Competent Person under the JORC Code. The
Competent Person must sign off their respective estimates of the
original mineral resource and ore reserve statements for the
various operations and consent to the inclusion of that information
in this report, as well as the form and context in which it
appears.
Hochschild Mining PLC employs a
Competent Person who has audited reserves and mineral resource
estimates as at 31 December 2024 for the operating mines as shown
in this report. These audits are conducted by Competent
Persons provided by independent consultants, P&E Consulting.
The frequency and depth of an audit depends on the risks and/or
uncertainties associated with that particular ore reserve and
mineral resource, the overall value thereof and the time that has
lapsed since the previous independent third-party audit.
The JORC Code requires the use of
reasonable economic assumptions. These include long-term commodity
price forecasts (which, in the Group's case, are prepared by
ex-house specialists largely using estimates of future supply and
demand and long-term economic outlooks).
Ore reserve estimates are dynamic
and are influenced by changing economic conditions, technical
issues, environmental regulations and any other relevant new
information and therefore these can vary from year-to-year. Mineral
resource estimates can also change and tend to be influenced mostly
by new information pertaining to the understanding of the deposit
and secondly the conversion to ore reserves.
The estimates of ore reserves and
mineral resources are shown as at 31 December 2024. Mineral
resources that are reported include those mineral resources that
have been modified to produce ore reserves. All tonnage and grade
information has been rounded to reflect the relative uncertainty in
the estimates; there may therefore be small differences.
The prices used for the reserves calculation
were: Au Price: US$1,750 per ounce and Ag Price: US$23.0 per ounce.
The prices used for resources calculation were: Au: $2,100/oz and
Ag: $26.0/oz and Ag/Au ratio of 75x.
ATTRIBUTABLE METAL RESERVES AS AT
31 DECEMBER 2024
|
Reserve category
|
Proved
and probable
(t)
|
Ag
(g/t)
|
Au
(g/t)
|
Ag
(moz)
|
Au
(koz)
|
Ag
Eq
(moz)
|
Au
Eq
(koz)
|
|
OPERATIONS1
|
|
|
|
|
|
|
|
|
Inmaculada
|
|
|
|
|
|
|
|
|
Proved
|
1,894,349
|
120
|
3.03
|
7.3
|
184.6
|
21.1
|
282
|
|
Probable
|
2,629,697
|
92
|
2.38
|
7.8
|
201.5
|
22.9
|
305
|
|
Total
|
4,524,046
|
104
|
2.65
|
15.1
|
386.1
|
44.0
|
587
|
|
San Jose
|
|
|
|
|
|
|
|
|
Proved
|
356,784
|
295
|
4.72
|
3.4
|
54.1
|
7.4
|
99
|
|
Probable
|
224,115
|
272
|
5.50
|
2.0
|
39.7
|
4.9
|
66
|
|
Total
|
580,899
|
286
|
5.02
|
5.3
|
93.8
|
12.4
|
165
|
|
Mara Rosa
|
|
|
|
|
|
|
|
|
Proved
|
5,139,599
|
-
|
1.22
|
-
|
201.8
|
15.1
|
202
|
|
Probable
|
18,169,492
|
-
|
1.13
|
-
|
662.7
|
49.7
|
663
|
|
Total
|
23,309,091
|
-
|
1.15
|
-
|
864.5
|
64.8
|
865
|
|
GROWTH PROJECTS
|
|
|
|
|
|
|
|
|
Monte Do Carmo
|
|
|
|
|
|
|
|
|
Proved
|
2,015,000
|
0
|
1.68
|
0.0
|
109.0
|
8.2
|
109
|
|
Probable
|
14,780,000
|
0
|
1.66
|
0.0
|
787.0
|
59.0
|
787
|
|
Total
|
16,795,000
|
0
|
1.66
|
0.0
|
896.0
|
67.2
|
896
|
|
GRAND TOTAL
|
|
|
|
|
|
|
|
|
Proved
|
9,405,732
|
35
|
1.82
|
10.7
|
549.5
|
51.9
|
692
|
|
Probable
|
35,803,304
|
8
|
1.47
|
9.7
|
1,690.9
|
136.6
|
1,821
|
|
TOTAL
|
45,209,036
|
14
|
1.54
|
20.4
|
2,240.4
|
188.4
|
2,513
|
Note: Where reserves are
attributable to a joint venture partner, reserve figures reflect
the Company's ownership only. Includes discounts for ore loss and
dilution.
1 Operations only were audited by P&E Consulting as
at 31 December 2024.
ATTRIBUTABLE METAL RESOURCES AS AT
31 DECEMBER 2024 1
|
Resource category
|
Tonnes
(t)
|
Ag
(g/t)
|
Au
(g/t)
|
Ag
Eq
(g/t)
|
Ag
(moz)
|
Au
(koz)
|
Ag
Eq
(moz)
|
Au
Eq
(koz)
|
|
OPERATIONS2
|
|
|
|
|
|
|
|
|
|
Inmaculada
|
|
|
|
|
|
|
|
|
|
Measured
|
3,367,000
|
141
|
3.45
|
400
|
15.3
|
373.4
|
43.3
|
578
|
|
Indicated
|
5,883,000
|
107
|
2.76
|
314
|
20.2
|
522.5
|
59.4
|
792
|
|
Total
|
9,250,000
|
119
|
3.01
|
345
|
35.5
|
895.9
|
102.7
|
1,369
|
|
Inferred
|
14,882,000
|
104
|
2.82
|
315
|
49.9
|
1,347.4
|
150.9
|
2,012
|
|
Pallancata
|
|
|
|
|
|
|
|
|
|
Measured
|
1,353,000
|
285
|
1.30
|
383
|
12.4
|
56.6
|
16.7
|
222
|
|
Indicated
|
1,253,000
|
362
|
1.64
|
485
|
14.6
|
65.9
|
19.5
|
260
|
|
Total
|
2,606,000
|
322
|
1.46
|
432
|
27.0
|
122.5
|
36.2
|
482
|
|
Inferred
|
7,911,000
|
453
|
1.87
|
593
|
115.2
|
474.7
|
150.8
|
2,011
|
|
San Jose
|
|
|
|
|
|
|
|
|
|
Measured
|
954,210
|
412
|
6.66
|
911
|
12.6
|
204.2
|
28.0
|
373
|
|
Indicated
|
706,860
|
269
|
5.53
|
684
|
6.1
|
125.7
|
15.5
|
207
|
|
Total
|
1,661,070
|
351
|
6.18
|
815
|
18.8
|
329.9
|
43.5
|
580
|
|
Inferred
|
1,164,840
|
252
|
4.59
|
596
|
9.5
|
171.8
|
22.3
|
298
|
|
Mara Rosa
|
|
|
|
|
|
|
|
|
|
Measured
|
5,713,000
|
-
|
1.15
|
86
|
-
|
211.2
|
15.8
|
211
|
|
Indicated
|
24,721,000
|
-
|
1.03
|
77
|
-
|
820.5
|
61.5
|
821
|
|
Total
|
30,434,000
|
-
|
1.05
|
79
|
-
|
1,031.8
|
77.4
|
1,032
|
|
Inferred
|
5,636,000
|
-
|
1.35
|
101
|
-
|
243.9
|
18.3
|
244
|
|
GROWTH PROJECTS
|
|
|
|
|
|
|
|
|
|
Monte Do Carmo
|
|
|
|
|
|
|
|
|
|
Measured
|
2,056,000
|
-
|
1.73
|
130
|
-
|
115.0
|
8.6
|
115
|
|
Indicated
|
16,302,000
|
-
|
1.71
|
128
|
-
|
897.0
|
67.3
|
897
|
|
Total
|
18,358,000
|
-
|
1.72
|
129
|
-
|
1,012.0
|
75.9
|
1,012
|
|
Inferred
|
1,053,000
|
-
|
1.95
|
146
|
-
|
66.0
|
5.0
|
66
|
|
Azuca
|
|
|
|
|
|
|
|
|
|
Measured
|
191,000
|
244
|
0.77
|
302
|
1.5
|
4.7
|
1.9
|
25
|
|
Indicated
|
6,859,000
|
187
|
0.77
|
244
|
41.2
|
168.8
|
53.8
|
718
|
|
Total
|
7,050,000
|
188
|
0.77
|
246
|
42.7
|
173.5
|
55.7
|
743
|
|
Inferred
|
6,946,000
|
170
|
0.89
|
237
|
37.9
|
199.5
|
52.9
|
705
|
|
Volcan
|
|
|
|
|
|
|
|
|
|
Measured
|
123,979,000
|
-
|
0.700
|
53
|
-
|
2,792.0
|
209.4
|
2,792
|
|
Indicated
|
339,274,000
|
-
|
0.643
|
48
|
-
|
7,013.0
|
526.0
|
7,013
|
|
Total
|
463,253,000
|
-
|
0.658
|
49
|
-
|
9,804.0
|
735.3
|
9,804
|
|
Inferred
|
75,018,000
|
-
|
0.516
|
39
|
-
|
1,246.0
|
93.5
|
1,246
|
|
Arcata
|
|
|
|
|
|
|
|
|
|
Measured
|
834,000
|
438
|
1.35
|
539
|
11.7
|
36.1
|
14.4
|
193
|
|
Indicated
|
1,304,000
|
411
|
1.36
|
512
|
17.2
|
56.9
|
21.5
|
286
|
|
Total
|
2,138,000
|
421
|
1.35
|
523
|
29.0
|
93.0
|
35.9
|
479
|
|
Inferred
|
3,533,000
|
371
|
1.26
|
465
|
42.1
|
142.6
|
52.8
|
704
|
|
GRAND TOTAL
|
|
|
|
|
|
|
|
|
|
Measured
|
138,447,210
|
12
|
0.85
|
76
|
53.6
|
3,793.2
|
338.1
|
4,508
|
|
Indicated
|
396,302,860
|
8
|
0.76
|
65
|
99.3
|
9,670.2
|
824.6
|
10,994
|
|
Total
|
534,750,070
|
9
|
0.78
|
68
|
152.9
|
13,462.4
|
1,162.6
|
15,501
|
|
Inferred
|
116,143,840
|
68
|
1.04
|
146
|
254.5
|
3,891.8
|
546.4
|
7,286
|
1 Tables represents 100% of the Mineral Resources.
Resources are inclusive of Reserves.
2
Operations only were audited by P&E
Consulting.
CHANGE IN ATTRIBUTABLE RESERVES
AND RESOURCES
|
Ag equivalent content (million
ounces)
|
Category
|
Percentage attributable
December
2024
|
December
2023
Att.1
|
December
2024
Att.1
|
Net
difference
|
%
change
|
|
Inmaculada
|
Resource
|
100%
|
190.6
|
253.6
|
63.0
|
33.1%
|
|
|
Reserve
|
|
57.6
|
44.0
|
(13.5)
|
(23.5%)
|
|
Pallancata
|
Resource
|
100%
|
88.7
|
187.0
|
98.3
|
110.8%
|
|
|
Reserve
|
|
-
|
-
|
-
|
-
|
|
San Jose
|
Resource
|
51%
|
60.3
|
65.8
|
5.6
|
9.2%
|
|
|
Reserve
|
|
12.1
|
12.4
|
0.3
|
2.6%
|
|
Mara Rosa
|
Resource
|
100%
|
86.4
|
95.7
|
9.3
|
10.8%
|
|
|
Reserve
|
|
67.6
|
64.8
|
(2.8)
|
(4.2%)
|
|
Monte Do Carmo
|
Resource
|
100%
|
-
|
80.9
|
80.9
|
-
|
|
|
Reserve
|
|
-
|
67.2
|
67.2
|
-
|
|
Azuca
|
Resource
|
100%
|
108.6
|
108.6
|
-
|
-
|
|
|
Reserve
|
|
-
|
-
|
-
|
-
|
|
Volcan
|
Resource
|
100%
|
828.8
|
828.8
|
-
|
-
|
|
|
Reserve
|
|
-
|
-
|
-
|
-
|
|
Arcata
|
Resource
|
100%
|
88.7
|
88.7
|
-
|
-
|
|
|
Reserve
|
|
-
|
-
|
-
|
-
|
|
Total
|
Resource
|
|
1,452.0
|
1,709.0
|
257.0
|
17.7%
|
|
|
Reserve
|
|
137.3
|
188.4
|
51.2
|
37.3%
|
1 Attributable reserves and resources based on the
Group's percentage ownership of its joint venture
projects.
SHAREHOLDER INFORMATION
Company website
Hochschild Mining PLC Interim and
Annual Reports and results announcements are available via the
internet on our website at www.hochschildmining.com. Shareholders
can also access the latest information about the Company and press
announcements as they are released, together with details of future
events and how to obtain further information.
Registrars
The Registrars, MUFG Corporate
Markets (the new name for Link Group), can be contacted as follows
for information about the AGM, shareholdings, dividends and to
report changes in personal details:
By post
MUFG Corporate Markets,
Central Square,
29 Wellington Street,
Leeds LS1 4DL.
By email
Email:
shareholderenquiries@cm.mpms.mufg.com
By telephone
Telephone: (+44 (0)) 371 664
0300
(Calls are charged at the standard
geographic rate and will vary by provider. Calls outside the United
Kingdom will be charged at the applicable international rate. Lines
are open between 9am - 5:30pm, Monday to Friday excluding public
holidays in England and Wales).
Currency option and dividend mandate
Shareholders wishing to receive
their dividend in US dollars should contact the Company's
registrars to request a currency election form. This form should be
completed and returned to the registrars by 23 May 2025 in respect
of the 2024 final dividend. The Company's registrars can also
arrange for the dividend to be paid directly into a shareholder's
UK bank account. This arrangement is only available in respect of
dividends paid in UK pounds sterling. To take advantage of this
facility in respect of the 2024 final dividend, a dividend mandate
form, also available from the Company's registrars, should be
completed and returned to the registrars by 23 May 2025.
Alternatively, you can register your bank details via Investor
Centre, a secure online site where you can manage your shareholding
quickly and easily. To register for Investor Centre just visit
uk.investorcentre.mpms.mufg.com or use the Investor Centre app. All
you need is your investor code, which can be found on your share
certificate or a previous dividend confirmation voucher.
Shareholders who have already completed one or both of these forms
need take no further action.
Dividend information
|
Issuer/Company Name
|
Hochschild Mining PLC
|
|
Security/Securities
|
Ordinary Shares of 1p
each
|
|
ISIN(s)
|
GB00B1FW5029
|
|
TIDM(s)
|
HOC
|
|
Ex-Date
|
8 May 2025
|
|
Record Date
|
9 May 2025
|
|
Pay Date
|
18 June 2025
|
|
Dividend Type
|
Final
|
|
Dividend Amount and Currency
|
US$0.0194 per share
|
|
Currency of Dividend payment
|
GBP
|
|
Is there a Dividend option?
|
Yes
|
|
Type of Election
|
Currency Election to receive
dividend in USD
|
|
Last day for receipt of Elections
|
23 May 2025
|
21 Gloucester Place
London
W1U 8HR
United Kingdom
FORWARD LOOKING
STATEMENTS
The Annual Report contains certain
forward looking statements, including such statements within the
meaning of Section 27A of the US Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. In particular, such forward looking statements may relate
to matters such as the business, strategy, investments, production,
major projects and their contribution to expected production and
other plans of Hochschild Mining PLC and its current goals,
assumptions and expectations relating to its future financial
condition, performance and results.
Forward looking statements
include, without limitation, statements typically containing words
such as "intends", "expects", "anticipates", "targets", "plans",
"estimates" and words of similar import. By their nature, forward
looking statements involve risks and uncertainties because they
relate to events and depend on circumstances that will or may occur
in the future. Actual results, performance or achievements of
Hochschild Mining PLC may be materially different from any future
results, performance or achievements expressed or implied by such
forward looking statements. Factors that could cause or contribute
to differences between the actual results, performance or
achievements of Hochschild Mining PLC and current expectations
include, but are not limited to, legislative, fiscal and regulatory
developments, competitive conditions, technological developments,
exchange rate fluctuations and general economic conditions. Past
performance is no guide to future performance and persons needing
advice should consult an independent financial adviser.
The forward looking statements
reflect knowledge and information available at the date of
preparation of this Annual Report. Except as required by the
Listing Rules and applicable law, Hochschild Mining PLC does not
undertake any obligation to update or change any forward looking
statements to reflect events occurring after the date of this
Annual Report. Nothing in this Annual Report should be construed as
a profit forecast.
Non-IFRS Financial Performance
Measures
The Company has included certain
non-IFRS measures in this news release. The Company believes that
these measures, in addition to conventional measures prepared in
accordance with IFRS, provide investors an improved ability to
evaluate the underlying performance of the Company. The non-IFRS
measures are intended to provide additional information and should
not be considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS. These measures do not
have any standardised meaning prescribed under IFRS, and therefore
may not be comparable to other issuers.
