Delivering on
our strategy
ANNUAL REPORT 2024
Hochschild Mining PLC is a leading precious metals company
listed on the London Stock Exchange with a primary focus on
the exploration, mining, processing and sale of silver and gold.
We have over 60 years of experience in the mining of precious
metal epithermal vein deposits and currently operate two
underground epithermal vein mines, one located in southern
Peru and one in southern Argentina as well as the Mara Rosa
open-pit mine in Brazil. We also have numerous long-term
projects throughout the Americas.
STRATEGIC REPORT
Hochschild at a glance
02
Operational highlights
04
Mara Rosa feature
06
Senior leadership team
08
Market review
10
Chair’s statement
16
Chief Executive Officer’s statement
18
Business model
22
Our strategy
24
Key performance indicators
26
Operating review
29
Financial review
48
Stakeholder engagement
56
Sustainability report
60
Climate-related financial disclosures
80
Risk management
96
Viability statement
110
Group non-financial and sustainability
information statement
112
GOVERNANCE
Board of Directors
114
Directors’ report
116
Corporate governance report
118
Directors’ remuneration report
142
Supplementary information
154
Statement of Directors’ responsibilities
157
Mara Rosa feature
CEO statement
06
18
FINANCIAL STATEMENTS
Independent Auditor’s report
158
Consolidated income statement
166
Consolidated statement of
comprehensive income
167
Consolidated statement of
financial position
168
Consolidated statement of cash flows
169
Consolidated statement of
changes in equity
170
Notes to the consolidated
financial statements
171
Parent company statement of
financial position
227
Parent company statement of
cash flows
228
Parent company statement of
changes in equity
229
Notes to the parent company
financial statements
230
FURTHER INFORMATION
Profit by operation
241
Reserves and resources
242
Shareholder information
245
Forward looking statements
246
READ MORE
Visit our website hochschildmining.com
Non-IFRS Financial Performance Measures
The Company has included certain non-IFRS measures in this report.
The Company believes that these measures, in addition to conventional
measures prepared in accordance with IFRS, provide investors with 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.
Market listing
Market:
Main Market (FTSE 250)
ISIN:
GB00B1FW5029
Market segment:
STMM
SEDOL:
B1FW502
Issue date:
18 December 2006
Year-end:
31 December 2024
Operating review
60
29
Sustainability
ANNUAL REPORT 2024
1
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
10.5m
oz
TOTAL SILVER PRODUCTION 2024
281koz
TOTAL GOLD PRODUCTION 2024
HOCHSCHILD MINING PLC
2
PERU
221koz Au Eq
Inmaculada is a 20,000
hectare gold-silver
underground mine.
The mine consists of
40 mining concessions
and is located in the
Ayacucho Department
in southern Peru.
READ MORE on page 32
3,630 Employees & contractors
$57.3m Wages paid
$8.3m Taxes & royalties
$48.9m Local procurement
Inmaculada
Hochschild at a glance
Project pipeline
Hochschild currently has
a strong project pipeline with
assets based in Peru, Brazil
and Chile. These include the
new development project,
Monte Do Carmo in Brazil, as
well as former operations that
still have strong geological
potential and regional targets
close to our current mines.
DEVELOPMENT PROJECTS
1 Monte Do Carmo (Brazil)
2 Royropata (Peru)
3 Volcan (Chile)
EXPLORATION PROJECTS
4 Ares (Peru)
2
1
3
4
ARGENTINA 124koz Au Eq
San Jose is a gold-silver
underground mine located
in the Santa Cruz province,
1,750km southwest of
Buenos Aires.
READ MORE on page 44
1,788 Employees & contractors
$68.9m Wages paid
$0.1m Taxes & royalties
$82.8m Local procurement
San Jose
BRAZIL
64koz Au
Mara Rosa is an open pit
gold mine located in the
mining-friendly jurisdiction
of Goias State.
READ MORE on page 6
841 Employees & contractors
$7.6m Wages paid
$– Taxes & royalties
$62.1m Local procurement
Mara Rosa
ANNUAL REPORT 2024
3
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Since the Company’s inception, we have
endeavoured to maintain and reinforce our
corporate values of respecting the well-being
of our employees, the environment and the
communities in which we operate.
OUR VALUES
Innovation
Inspiring others
Recognising talent
Seeking efficiencies
Demonstrating responsibility
OUR PURPOSE
Responsible and
innovative mining
committed to a
better world.
Dedicated to
a sustainable
future
Silver
Silver has tended to perform in line with gold
demonstrating its store-of-value characteristics
although with over 50% of silver demand
coming from industrial uses, the metal can
also move with other industrial metals in line
with global growth expectations.
$28.5/oz
AVERAGE PRICE FOR 2024
READ MORE
on page 14
Gold
Over the past several decades, the price of gold has
been influenced by many different factors such as
central bank buying, inflation, geopolitics, monetary
policy and equity markets.
$2,406/oz
AVERAGE PRICE FOR 2024
READ MORE
on page 12
READ MORE
on page 60
Our achievements
and future outlook
OPERATIONAL HIGHLIGHTS
Over the last few years, we have transformed the
Hochschild Mining portfolio with the result that we now
have a balanced business with mines and projects
spread across South America that are delivering
substantial low-cost growth. There have also been
a number of changes to our leadership team with
several new appointments including Chief Financial
Officer, Chief Operating Officer and, most importantly,
Eduardo Landin’s promotion to Chief Executive Officer
in August 2023.
Our Company explores, develops, mines and
processes, and our ambition continues to be a
business with a responsible and innovative approach
committed to a better world. But we cannot do it on
our own. So we strive to create partnerships that solve
problems and create solutions with lower societal and
environmental impact. The approach applies as much
to community and employee relations as it does to
incremental everyday progress, such as our safety and
operational performance.
The Future
We now have two projects that are set to deliver long-
term growth in gold and silver production. The first is the
revival of our Pallancata/Selene district in southern Peru
with the new Royropata zone which we believe will deliver
a major new silver mine in the next four years. The
second is the recently acquired Monte Do Carmo gold
project in the Tocantins state in Brazil, not far from our
Mara Rosa mine and expected to reach a construction
decision sometime in the second half of 2025.
KEY HIGHLIGHTS
READ MORE on page 48
347.4koz
TOTAL GOLD EQUIVALENT
PRODUCTION 2024
2023: 366.5 KOZ
1.94c /
share
DIVIDEND PER SHARE
2023: NIL
$421m
ADJUSTED EBITDA 2024
2023: $274M
1,709m
oz
RESOURCE BASE
(AG EQUIVALENT)
2023: 1,506 MOZ
HOCHSCHILD MINING PLC
4
Low-cost precious metal growth potential
in key jurisdictions in the Americas.
OUR INVESTMENT CASE
Dividend restored
We have restored the dividend and instituted a
dividend policy to provide predictability going forward.
Brownfield programme
Our successful programme continues to add
low-cost high-grade resources at all our operations
and projects.
Transformational
opportunity
We have made strong strategic progress over the
last few years and transformed the business.
Strong ESG performance
We have a strong ESG track record and seek to
create long-term value through safe, innovative and
environmentally sound operations.
Strong profitability and
balance sheet position
Our 2024 Adjusted EBITDA was up 54% at
$421 million whilst our cash balance is $97 million
as at 31 December 2024.
Growth options
in the Americas
Monte Do Carmo and Royropata are expected to
deliver additional growth from 2028.
READ MORE on page 55
READ MORE on page 46
READ MORE on page 24
READ MORE
on page 60
READ MORE on page 48
READ MORE on page 34
ANNUAL REPORT 2024
5
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Unveiling our
jewel in Brazil
In April 2022, Hochschild acquired the
Mara Rosa project, located in the mining-
friendly jurisdiction of Goias State, Brazil.
This high-quality asset plays to the
Company’s strengths as a South American
precious metals specialist. Following almost
two years of construction, first gold pour was
achieved in February 2024 and Mara Rosa
achieved commercial production in May.
Mara Rosa demonstrates our ability to
develop and operate high-quality, low-cost
assets in mining-friendly jurisdictions.
As the Company’s first Brazilian asset,
located only 350km from Brasilia, Mara Rosa
benefits from excellent local infrastructure
and connection to the national power grid.
The Mara Rosa team was pleased to
host a group of analysts and investors
at the site in October 2024 to showcase
the progress made so far, and the
opportunities ahead.
Powered by renewables
The solar plant at Mara Rosa,
constructed in partnership with Solatio
Energia, will supply renewable energy
for Mara Rosa’s operations. All energy
to be produced by the solar plant is
fed into the National Interconnected
System, offsetting the total volume of
energy consumed by the operations in
Mara Rosa and supporting Hochschild’s
commitment to minimising its
environmental footprint.
Growth potential
With an initial mine life of 10 years and
strong geological potential, Mara Rosa is
a long-term component in Hochschild’s
continued growth and value creation
strategy. Production has ramped up
fully and we expect to deliver 94,000 –
104,000 ounces of gold in 2025.
READ MORE
about Mara Rosa on page 38
Mara Rosa
Brasilia
Mara Rosa
HOCHSCHILD MINING PLC
6
Driving GDP in Goias
Local communities in
Goias, a mining-friendly
jurisdiction just 350km from
Brasilia, have been critical
in the development of
Mara Rosa, with Hochschild
investing significantly in
local procurement for
the mine to date.
Site visit
Analysts and investors attended a
site visit at Mara Rosa in October
2024, seeing in person the progress
that has been made at the asset
and the clear opportunities for
significant growth in the future.
1,400
LOCAL WORKERS TRAINED
81 %
OF MARA ROSA EMPLOYEES ARE FROM GOIAS
40 %
OF MARA ROSA EMPLOYEES FROM NEARBY
CITIES OF MARA ROSA AND AMARALINA
Mara Rosa Control Room
State-of-the-art operation
monitoring systems ensure
safe working conditions and
maximise efficiency.
TIMELINE
November 2021
Announcement of Amarillo
Gold acquisition with measured
and inferred resource of
32 million tonnes
2022
Environmental permits obtained,
commencement of various
workstreams including ESG
programmes, powerline construction,
processing plant construction.
Work on reservoir completed
May 2023
Detailed engineering work
reached 99% completion
July 2023
Total project progress reached
88% completion
October 2023
Solar plant construction began in
partnership with Solatio Energia
December 2023
Construction of dry stack completed
February 2024
Operating License received
from environmental agency
of Goias (SEMAD)
20 February 2024
First gold pour
13 May 2024
Commercial production achieved
ANNUAL REPORT 2024
7
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
An experienced team
implementing our strategy
SENIOR LEADERSHIP TEAM
Eduardo Landin
Chief Executive Officer
Eduardo Landin was appointed CEO on 26 August 2023. Eduardo previously
served as Hochschild’s COO for over 10 years.
He joined the Group in January 2008 as General Manager of the
Company’s operations in Argentina. In 2011 he became General Manager of
Projects with direct responsibility over the development of the Inmaculada
and Crespo Advanced Projects. Before joining Hochschild, Eduardo held
the position of Corporate Development Manager at Cementos Pacasmayo
and, prior to that, he worked in the Peruvian Ministry of Energy and Mines.
Eduardo began his career at Repsol S.A. where he worked for over 10 years
in England, Spain and Peru. Eduardo is a Chartered Mechanical Engineer
and holds a B.Eng (Honours) in Mechanical Engineering from Imperial
College, London and an Executive MBA from the Universidad de Piura,
Peru. He is a Fellow of the British Institution of Mechanical Engineers.
Eduardo Noriega
Chief Financial Officer
Eduardo Noriega was appointed Chief Financial Officer of Hochschild
Mining on 10 December 2021 having joined the Company in March 2007.
Eduardo previously served as Head of Group Finance with responsibility
for financial planning and controls, treasury, corporate finance, tax and
accounting. Prior to joining Hochschild, Eduardo worked in various finance
roles for Dell Inc., Union de Cervecerías Peruana Backus & Johnston
and Del Mar Fishing Company. Eduardo is a graduate in Business
Administration from Universidad del Pacifico and holds an MBA from the
University of Texas.
Rodrigo Nunes
Chief Operating Officer
Rodrigo Nunes was appointed Chief Operating Officer of Hochschild
Mining in August 2023 having joined the Company in 2021 as Corporate
Director, Technical Services & Projects, covering the Company’s operations,
development projects and M&A efforts globally. Prior to that, he was Vice
President of Mining for Optimize Group, a consulting engineering company
based in Toronto. Rodrigo also held key technical and leadership roles in
global mining companies including Yamana Gold, Vale and ArcelorMittal.
He holds a Mining Engineering degree from the Universidade Federal de
Minas Gerais, an MBA, Project Management degree from the Fundacao
Getulio Vargas and a Master of Science, Mining and Mineral Engineering
degree from the Universidade de Sao Paulo.
HOCHSCHILD MINING PLC
8
Oscar Garcia
Vice President, Brownfield Exploration
Oscar Garcia was promoted to the position of VP, Brownfield Exploration on
1 January 2019 having joined Hochschild Mining in 2007 as an Ore Control
geologist. He has previously worked at Hochschild as Corporate Manager
for Underground Geology, Ore Control and Brownfield Exploration. Prior to
Hochschild Mining, Oscar worked as a geologist at Barrick Gold, Lonrho
Mining Group and Compania Minera Aguilar. Oscar qualified as a geologist
at the Universidad Nacional de Cordoba in 1981.
Jose Enrique Frias
Vice President, Legal & Public Affairs
Jose Enrique Frías joined Hochschild Mining as Vice President of Legal and
Public Affairs in June 2024. Previously, he was Corporate Legal Manager
and Associate General Counsel at Grupo Intercorp, a Peruvian business
conglomerate with regional reach and investments in the financial, retail,
and education sectors. Jose Enrique has also worked at law firms such as
Miranda & Amado (Peru) and Simpson Thacher & Bartlett (New York). He
holds a law degree from the Pontificia Universidad Catolica del Peru and
an LLM from Columbia University.
Eduardo Villar
Vice President, People & Corporate Affairs
Eduardo Villar has been with the Group since 1996. Prior to his current
position, he served as Human Resources Manager, Deputy HR Manager
and Legal Counsel. Eduardo holds a law degree from the Universidad de
Lima and an MBA from the Universidad Peruana de Ciencias Aplicadas. In
addition, Eduardo has postgraduate qualifications in Business from IESE
Business School and Harvard Business School and in Human Resources
from London Business School and the University of Michigan.
ANNUAL REPORT 2024
9
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
HOCHSCHILD MINING PLC
10
Our markets and
their key drivers
Hochschild is subject to external market dynamics
associated with the precious metals industry that inform
decision-making and influence our business performance.
Gold and silver prices in 2024 (indexed)
MARKET REVIEW
Jan 24
Feb 24
Mar 24
Apr 24
May 24
Jun 24
Jul 24
Aug 24
140
130
120
110
100
90
80
Gold (NYM $/ozt) Continuous (GC00-USA)
Silver (NYM $/ozt) Continuous (SI00-USA)
Source: Nasdaq
ANNUAL REPORT 2024
11
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Gold
The gold price ended 2024 at $2,641/oz,
another record high year-end close and
increasing by 27% year-on year.
$2,641/oz
2024 YEAR-END PRICE
The average 2024 gold price of $2,406/oz –
also a record – was 23% higher than 2023.
+23%
AVERAGE PRICE VERSUS 2023
Silver
The silver price ended 2024 at $29.2/oz which
is a 21% increase on the 2023 closing price.
$29.2/oz
2024 YEAR-END PRICE
The average 2024 silver price of $28.5/oz
was also 21% higher than 2023.
+21%
AVERAGE PRICE VERSUS 2023
4
Sep 24
Oct 24
Nov 24
Dec 24
Gold
2024 was a year featuring significant
global economic shifts and geopolitical
uncertainties and gold was one of the
top performers amongst most asset
classes, outperforming stocks, bonds,
and other commodities.
Summary
Gold is a precious metal bought by people
across the world for different reasons, often
influenced by socio-cultural factors, market
conditions, and macro-economic drivers in
their country.
Average 2024 price
$2,406/oz
Supply
Recycled gold
27%
Mine production
73%
Demand
Jewellery
44%
Central banks
23%
Investment
26%
Technology
7%
HOCHSCHILD MINING PLC
12
MARKET REVIEW
CONTINUED
After starting the year at around $2,070 per ounce, the precious
metal delivered a 27% return that was better than both
equity and fixed-income investments. Despite a tough start
that saw prices dip to the $2,000 level in mid-February, gold
demonstrated remarkable resilience. The precious metal not
only recovered but surged to reach a historic high of $2,800 in
October, before settling around $2,650 in December. Three key
factors have driven this performance in 2024. First, persistent
inflation concerns, particularly in emerging markets, have
reinforced gold’s role as a hedge against currency devaluation.
Second, central banks have continued to be strong buyers,
with record purchases reflecting a potential long-term shift
away from the U.S. dollar. Finally, the U.S. Federal Reserve’s pivot
toward rate cuts has made non-yielding assets like gold more
attractive compared to fixed-income investments.
Total gold demand rose to a record annual total of 4,974t.
Central banks continued their very strong purchases,
exceeding 1,000t for the third year in a row. Annual investment
reached a four-year high of 1,180t (+25%) and gold Exchange
Traded Funds (ETF) had a sizeable impact with 2024 being
the first year since 2020 in which holdings were essentially
unchanged. Full-year bar/coin demand was in line with 2023
at 1,186t although the composition shifted as bar investment
grew and coin buying reduced. Annual technology demand
grew by 21t (+7%) in 2024, largely driven by continued growth
in AI adoption. Conversely, gold jewellery demand declined –
annual consumption dropped 11% to 1,877t as consumers could
only afford to buy in lower quantities although spend on gold
jewellery did rise 9% to $144bn.
Annual gold investment grew 25% – the strongest annual
growth rate since 2020 and was concentrated in the second
half of the year as rate cuts, geopolitical uncertainty and gold’s
price performance attracted inflows into gold ETFs. After
sinking to a four-year low of 3,080t in April, global holdings
recovered throughout the remainder of 2024, ending the year
very close to where they had started.
Total gold supply in 2024 increased 1% to 4,974t, driven by
higher mine production and recycling supply. Potentially,
2024 mine production may have reached an all-time high of
3,661t although this estimate may be revised at a later date.
Early estimates also suggest that hedging fell during the
year as companies delivered into maturing contracts
and bought back some longer-dated hedges.
Possible drivers
for gold in 2025
Central bank purchases are expected to remain a
consistent source of gold demand.
Additional demand could come from investors
seeking a hedge against still-high inflation or higher-
risk investment in AI as well as further demand from
Chinese investors capitalising on China’s continued
economic downturn and the government’s expressed
desire to depreciate the Renminbi.
A reduction in geopolitical risk, which could lower
investment appetite for gold as a crisis hedge. For
example, the suggestion of a possible deal between
Russia and Ukraine could lead to gold seeing less “safe
haven” demand in 2025.
The new Trump administration policies are not
totally fixed, but tariffs are expected to ratchet up
and the federal deficit is going to continue to widen
significantly – both these being inherently inflationary
which could increase investor appetite for gold.
Sources: World Gold Council, Metals Focus
ANNUAL REPORT 2024
13
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Silver
Silver has tended to perform in line with
gold, demonstrating its store-of-value
characteristics although with over 50%
of silver demand coming from industrial
uses, the metal can also move with other
industrial metals in line with global
growth expectations.
Average 2024 price
$28.5/oz
Supply
Demand
Recycling
18%
Mine production
82%
Industrial uses
58%
Net physical
investment
18%
Jewellery and
Silverware
22%
Photography
2%
Summary
Silver is known for its lustrous appearance,
malleability and conductivity and has been
prized for centuries in jewellery, currency, and
industrial applications. With a rich history tied
to wealth and craftsmanship, silver plays a
vital role in various sectors, from technology
to medicine.
HOCHSCHILD MINING PLC
14
CONTINUED
MARKET REVIEW
CONTINUED
Silver prices were very strong in 2024, with the silver spot price
increasing 21%, climbing from $24.1 to $29.2 per ounce and
reaching a twelve-year high in October 2024 at almost $35 per
ounce. Several key factors helped silver in 2024, including strong
industrial demand in the face of persistent supply deficits and
increased investment interest amid economic uncertainty in
line with the performance of gold.
The global silver market is expected to have recorded a
physical deficit for the fourth consecutive year. Record
industrial demand and a recovery in jewellery/silverware will
have lifted demand to approximately 1.2 billion ounces, while
mine supply will have risen by just 1%. Physical investment is the
only key demand component to post a material decline whilst
industrial demand is forecast to have risen by 7% to surpass
700 million ounces for the first time.
Increased demand is also expected to have come from
automotives, as silver benefits from the rising electrification
of powertrains and ongoing investments in charging
infrastructure. While a tough global macroeconomic backdrop
has weighed on sales of consumer electronics, the rapid
adoption of AI technology has resulted in a growing need for
technological upgrades, replacements and new infrastructure
investment, assisting silver demand.
Silver jewellery and silverware are both projected to have risen
by 5% in 2024. For each segment, India has been key, with
particularly strong sales between July and September when the
import duty cut coincided with a pullback in the silver price.
Physical investment is forecast to fall by 15% to a four-year
low of 208 million ounces with losses mostly in the US where
coin/bar sales could decline by 40% to their lowest level since
2019. This may be due to the absence of a major new political
crisis in 2024 which affected precious metal retail investment
across the board. ETF products are on track for their first
annual inflows in three years with reasons given being the
expectations of US rate cuts, periods of dollar weakness and
falling yields which raised silver’s investment appeal.
On the 2024 supply side, mined silver production is estimated to
have risen by 1% to 837 million ounces with growth from Mexico,
Chile and the US expected to have offset lower output from
Peru, Argentina and China. Production from Mexico is forecast
to increase by 10 million ounces to 209 million ounces, driven
by Pan American Silver’s La Colorada operation as well as
a recovery from Newmont’s Penasquito mine.
Possible drivers
for silver in 2025
Concerns about President Trump’s tariffs may
continue to fuel short covering and deliveries of silver
into Chicago Mercantile Exchange warehouses as has
been the case since late last year. Along with rising
economic and geopolitical uncertainties this could
continue to underpin the healthy recovery in the
price since the start of 2025.
Global silver demand is expected to remain broadly
stable in 2025 at 1.2 billion ounces, as gains in industrial
applications and retail investment will be mitigated
by weaker jewellery/silverware demand.
Total global silver supply is forecast to grow by
3% in 2025 to an 11-year high of 1.05 billion ounces.
Silver mine production is expected to rise by 2% to
844 million ounces. In China, growth will come from
base metal and gold operations, whilst the ongoing
ramp-up of Hecla’s Keno Hill (Canada), Gold Fields’
Salares Norte (Chile) and Aya Gold and Silver’s
Zgounder (Morocco) will contribute to rising output.
The silver market is forecast to remain in a deficit
in 2025 for the fifth year running.
Sources: Silver Institute, Metals Focus
ANNUAL REPORT 2024
15
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Another important year
for strategic development
CHAIR’S STATEMENT
$948m
REVENUE
2023: $694m
Eduardo Hochschild
Company Chair
$421m
ADJUSTED EBITDA
2023: $274m
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.
HOCHSCHILD MINING PLC
16
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 stand-out 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.
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
Company Chair
11 March 2025
2024 was a year of solid financial
discipline and progress, as we made
significant strides in achieving our
medium-term financial targets.
ANNUAL REPORT 2024
17
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
An exciting future
for growth in
the Americas
CHIEF EXECUTIVE OFFICER’S STATEMENT
READ MORE ABOUT
EDUARDO LANDIN
on page 8
Eduardo Landin
Chief Executive Officer
HOCHSCHILD MINING PLC
18
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 gold equivalent ounces in 2024 (2023: 134,264 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.
Gold production koz attributable
Silver production koz attributable
2024
245
2024
8,496
2023
186
2023
9,517
ANNUAL REPORT 2024
19
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
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 stand-out 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.
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.
HOCHSCHILD MINING PLC
20
Chief Executive Officer's statement
CONTINUED
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
ANNUAL REPORT 2024
21
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
HOCHSCHILD MINING PLC
22
Creating sustainable value
BUSINESS MODEL
to create
value…
Mineral
Our high-quality mineral
resource base allows us to
manage the business for
the long term.
Natural
We aim to effectively manage
the water and energy
requirements of our mining
and processing activities.
Human
Our talented people use
industry-leading technical,
market and sustainability
expertise to generate value
from our assets.
Physical
Strong relationships with
our suppliers across the
world enable us to deliver
tailored equipment and
operating solutions.
Financial
Our focus on cost efficiency
and disciplined capital
allocation help deliver
sustainable cashflow and
improve stakeholder returns.
Responsible
and innovative
mining
committed to
a better world
We always aim to maintain
and reinforce our corporate
values of respecting
the well-being of our
employees, the environment
and the communities in
which we operate whilst
providing an attractive
investment proposition for
our shareholders.
READ MORE IN OUR
SUSTAINABILITY REPORT
on page 60
Underpinned by our
strategic pillars and
our sustainability areas
of focus
1
2
Disciplined
capital
allocation
Brownfield
Operational
efficiency
We are guided by
our purpose…
We use these
resources…
and respond to the
world around us.
Protecting the
environment
page 66
Empowering
our people
page 74
Being a responsible
business
page 78
Ensuring health
& safety
page 72
ESG
Serving our
communities
page 64
ANNUAL REPORT 2024
23
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
1. Discover
We have strong expertise in discovering geological districts
and our experienced exploration team believes that there
is potential to continue to generate strong returns from the
Company’s existing resource base.
2. Develop
We progress our projects quickly and efficiently and the
ability to operate in remote locations remains a core
competitive advantage along with our extensive knowledge
of the key mining jurisdictions throughout the Americas.
3. Extract
Our extensive knowledge base of different ore bodies as well
as a variety of environments has resulted in us consistently
meeting annual operational targets, implementing cost
efficiency programmes and adding to our resource base.
4. Restore
The future use of our land has always been a fundamental
consideration and we have a long track record of restoring
our areas to a safe and stable physical condition in
accordance with the surrounding landscape.
4
Communities
Local programmes focus on
our core themes of education,
health and socio-economic
development, allowing us to
operate collaboratively with
communities across our regions.
Employees
We aim to provide our people
with personal development
and competitive compensation
whilst empowering them with
learning opportunities and new
challenges in a healthy and
safe work environment.
Customers
As we have relatively few
customers, successful relations
are of critical importance and our
sales and logistics teams oversee
a relationship of co-operation
and constant dialogue.
Suppliers
As a key influence on how
we operate our business, we
seek a relationship of mutual
benefit while requiring high
standards of conduct.
Governments
It is our aim to maintain a
constructive relationship and
open dialogue with the various
governmental authorities
we interact with through
direct engagement and also
through various national
mining associations.
Shareholders
We are committed to the
principle of capital return
and have announced the
resumption of dividends along
with a new dividend policy to
provide more certainty through
the investment cycle.
$194m
LOCAL
PROCUREMENT
IN 2024
3,309
NUMBER OF
EMPLOYEES
IN 2024
12
TOTAL NUMBER
OF CUSTOMERS
160,111
TOTAL NUMBER
OF SUPPLIERS
$8.3m
TAXES AND
ROYALTIES PAID
IN 2024
$126m
DIVIDENDS PAID
SINCE 2016
MARKET
3
for all our
stakeholders.
Strategic pillars
Key priorities
2024 activities
2025 priorities
Brownfield
Extending
life-of-mine
Generating
long-term value
Focused on
mineable resources
– Inmaculada exploration added
approximately 1.0 million gold
equivalent ounces of inferred
resources including the high-grade
Tesoro vein
– Approximately 1.3 million ounces
gold equivalent of resource
additions also achieved
at Royropata
– Over 200,000 ounces of gold
added at Mara Rosa
– Resources replaced at San Jose
– Exploration of eastern side of Eduardo
belt at Inmaculada to assess continuity
of structures in the northeast
– Ongoing baseline studies to be
carried out for Royropata modified
Environmental Impact Assessment
– Further exploration of the Royropata/
Marco belt
– Mara Rosa programme to focus on
Pastinho, Estrella, Morro Redondo and
Serra Bom Jesus targets
– Mapping and sampling to continue at
Monte Do Carmo
READ MORE
on page 46
Operational
efficiency
Lean philosophy
Process
optimisation
Proven development
record
On-Time On-Budget
– Mara Rosa mine completed on time
and on budget
– Successful project at Inmaculada
to increase tonnage delivers
efficiencies in ventilation, mine
support, ore control and blast length
– San Jose plant expansion project
completed
– Achieve production targets across the
Company including first full year at
Mara Rosa
– Minimise impact of cost inflation,
care and maintenance costs and
macroeconomic volatility
– Complete reverse osmosis plant and
tailings dam projects at Inmaculada
READ MORE
on page 19
ESG
Driving
responsibility
& respect
World class safety
performance
2030 ESG KPIs
in place
Net Zero emissions
by 2050
– Received 2024 SEAL Business
Sustainability Award for our ECO
Score system
– 5.58/6 in ECO Score, reflecting
an excellent environmental
performance
– All-time low potable water
consumption of 138l/person/day
– Low Lost Time Injury Frequency
Rate of 1.25 and zero fatal accidents
– 29% of corporate procurement
is local
– Very low voluntary turnover of 4.9%
– Complete 2025 Sustainability Report
– Conduct climate change financial
quantification
– Commence Human Rights assessment
– Commence biodiversity-related
assessments to ultimately align with
Taskforce on Nature-related Financial
Disclosures (TNFD)
READ MORE
on page 60
Disciplined
capital
allocation
Funding organic
growth
Debt repayment
Capital return
Value accretive
M&A
– Monte Do Carmo project in
Tocantins, Brazil, acquired for a total
of $60 million
– Dividend reinstated and dividend
policy announced
– Continue to reduce net debt
– Prepare balance sheet to finance future
growth projects
– Assess additional medium-term
acquisition and disposal opportunities
– Dispose of non-core assets
READ MORE
on page 48
Strategy for delivery
and growth
OUR STRATEGY
HOCHSCHILD MINING PLC
24
Key metrics
Risks
Case studies
+5 moz
AU EQ TOTAL RESOURCES
DISCOVERED SINCE 2006
– Political, legal and
regulatory
– Community relations
– Exploration and
reserve and resource
replacement
PERU
Inmaculada
We have been highly successful in finding additional ounces in
the rich Inmaculada district since the mine’s first production in
2015 and we believe there is strong potential to identify more
resources in the next decade.
$1,638/oz
Au Eq
2024 OPERATIONS AISC
– Operational
performance
BRAZIL
Mara Rosa
Construction of Mara Rosa commenced on completion of the
Amarillo Gold acquisition in April 2022 and was completed on
time and on budget. The project benefited from significant local
industry know-how, strong support from the local community
and government as well as excellent existing infrastructure.
1.25
LTIFR IN 2024
– Political, legal and
regulatory
– Community relations
– Personnel:
recruitment and
retention
– Health & Safety
– Environmental
– Climate Change
ARGENTINA
San Jose
Initiatives at San Jose seek to promote the economic and
social development of neighbouring communities as well
as creating jobs and promoting long-term sustainable
initiatives. Key projects include the “Perito Moreno Textile
Entrepreneurs” programme and “Frutillas Peritenses”,
a local fruit farming initiative.
$60 million
TOTAL CONSIDERATION FOR
MONTE DO CARMO ACQUISITION
– Commodity price
– Operational
performance
BRAZIL
Monte Do Carmo
Our acquisition of the Monte Do Carmo gold project for a total
of $60 million was completed in November 2024 and gives the
Company another exciting project in the mining friendly state
of Tocantins which is adjacent to Goias where our recently
competed Mara Rosa mine is located.
READ MORE
on page 32
READ MORE
on page 38
READ MORE
on page 44
READ MORE
on page 40
ANNUAL REPORT 2024
25
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Measuring our performance
KEY PERFORMANCE INDICATORS
We made substantial progress in all areas of operations.
FINANCIAL MEASURES
PRODUCTION
33.9
MOZ AG EQUIVALENT
24
23
22
21
20
33.9
30.4
33.9
37.3
29.6
Links to strategy:
1 2 3 4
Links to remuneration:
Yes (Page 142)
Risks
Operational performance
Definition
Total silver equivalent
production equals total
gold production multiplied
by a gold/silver ratio for
2022-2024 of 83x, 2020-
2021 of 86x and added to
the total attributable
silver production.
Performance
Total silver equivalent
production increased by
15% versus 2023 due to the
increase in production from
Inmaculada and the first
contribution from the new
Mara Rosa mine in Brazil.
Outlook
Total silver equivalent
production is forecast to
be 29.0 – 31.0 million silver
equivalent ounces in 2025.
REVENUE
948
$M
24
23
22
21
20
948
693
736
811
622
Links to strategy:
1 2 4
Links to remuneration:
Yes (Page 142)
Risks
Operational performance
and commodity prices
Definition
Revenue presented in the
financial statements is
disclosed as net revenue
and is calculated as gross
revenue less commercial
discounts.
Performance
Total revenue increased by
37% versus 2023 due to the
increase in production at
Inmaculada, first production
from Mara Rosa and the
rise in precious metal prices
offset by the absence
of production from the
Pallancata mine.
Outlook
Attributable silver equivalent
production is forecast to
rise to between 29.0 and
31.0 million silver equivalent
ounces in 2025 assuming
a gold/silver conversion
ratio of 83x.
ADJUSTED EBITDA
421
$M
24
23
22
21
20
421
273
255
383
271
Links to strategy:
1 2 4
Links to remuneration:
Yes (Page 142)
Risks
Operational performance,
precious prices
Definition
Calculated as profit from
continuing operations
before exceptional items,
net finance costs, foreign
exchange loss and income
tax plus depreciation, and
exploration expenses other
than personnel and other
exploration related fixed
expenses and other non-
cash (income)/expenses.
Performance
Adjusted EBITDA increased
by 54% versus 2023 due to
the first contribution from
the new Mara Rosa mine
and a strong performance
from Inmaculada which was
impacted in 2023 due to
permit delays.
Outlook
Adjusted EBITDA for 2025 will
depend on precious metal
prices and cost control,
along with the ability of
the operations to operate
normally.
HOCHSCHILD MINING PLC
26
BASIC EARNINGS PER SHARE
0.23
$PRE-EXCEPTIONAL
24
23
22
21
20
0.23
0.02
0.01
0.14
0.06
Links to strategy:
1 2 4
Links to remuneration:
No
Risks
Operational performance,
commodity prices
Definition
The per-share profit
(using the weighted
average number of
shares outstanding for
the period) available to
equity shareholders of the
Company from continuing
operations before
exceptional items.
Performance
Pre-exceptional earnings
per share increased by
1,050% at $0.23 due to
the substantial rise in
Adjusted EBITDA.
Outlook
Pre-exceptional earnings
per share will depend on
EBITDA performance and
the effective tax rate which
may be impacted if local
currencies including the
Peruvian sol, Argentinian
peso and Brazilian real
continue to depreciate
versus the US dollar.
DIVIDEND PER SHARE
1.94
US CENTS PER SHARE
24
23
22
21
20
1.94
–
2.0
4.3
4.0
Links to strategy:
2 4
Links to remuneration:
No
Risks
Operational performance,
commodity prices
Definition
The per-share (using the
weighted average number
of shares outstanding for
the period) dividend paid to
equity shareholders of the
Company as recommended
by the Board.
Performance
The Board has announced
a final dividend of $10 million
for 2024.
Outlook
Dividend per share for
2025 will depend on the
level of free cashflow of
the Company, and is at the
discretion of the Board
and in accordance with
the new implemented
dividend policy.
ALL-IN SUSTAINING COSTS
19.7
$/OZ AG EQUIVALENT
24
23
22
21
20
19.7
17.5
18.9
16.0
12.9
Links to strategy:
1 2
Links to remuneration:
Yes (Page 142)
Risks
Operational performance,
local cost inflation, increases
in brownfield exploration
investment
Definition
Calculated before
exceptional items and
includes cost of sales less
depreciation and change in
inventories, administrative
expenses, brownfield
exploration, operating capex
and royalties divided by
silver equivalent ounces
produced using a gold/silver
ratio of 83:1.
Performance
All-in sustaining costs
from operations rose
versus 2023 mainly due
to higher-than-expected-
inflation in Argentina,
delayed 2022/2023 capex at
Inmaculada and a slower-
than-expected ramp-up of
the new Mara Rosa mine.
Outlook
The all-in sustaining cost
from operations in 2025
is expected to be between
$19.1 and $20.3 per silver
equivalent ounce (or
between $1,587 and $1,687
per gold equivalent ounce).
STRATEGIC PILLARS:
1 Brownfield
2 Operational efficiency
3 ESG
4 Disciplined capital allocation
ANNUAL REPORT 2024
27
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
KEY PERFORMANCE INDICATORS
CONTINUED
STRATEGIC PILLARS:
1 Brownfield
2 Operational efficiency
3 ESG
4 Disciplined capital allocation
FINANCIAL MEASURES CONTINUED
TOTAL SILVER CASH COSTS
14.4
$/OZ AG EQUIVALENT
24
23
22
21
20
14.4
13.0
12.6
11.0
9.3
Links to strategy:
1 2
Links to remuneration:
No
Risks
Operational performance
including dilution, grade
and tonnage control and
local inflation
Definition
Cash costs are calculated
based on pre-exceptional
figures. 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.
Performance
Total silver cash costs for
the Company increased
by 11% versus 2023 due
to increases in unit costs
in Argentina.
Outlook
Cash costs performance
in 2025 is expected to be
dependent on operational
performance, local cost
inflation and local currency
devaluation in Argentina,
Brazil and Peru.
NON-FINANCIAL MEASURES
LTIFR
1.25
24
23
22
21
20
1.25
0.99
1.37
1.26
1.38
Links to strategy:
2 3
Links to remuneration:
Yes (Page 142)
Risks
Health and safety risks
Definition
Calculated as total number
of accidents per million
labour hours.
Performance
LTIFR increased by
26% vs 2023.
Outlook
The Company
remains focused on
its “Safety 2.0” plan.
RESOURCE BASE
1,708
M OZ AG EQUIVALENT
24
23
22
21
20
1,708
1,506
1,542
1,273
1,425
Links to strategy:
1 4
Links to remuneration:
Yes (Page 142)
Risks
Exploration and revenue
and resource replacement,
political, legal and regulatory
and community relations
Definition
Total attributable silver
equivalent metal resources
as at 31 December 2024.
Performance
Total attributable silver
equivalent metal resources
increased by 13% in 2024
due to the addition of
inferred resources drilled
at all operations.
Outlook
Resource increases
in 2025 will depend on the
ability to secure permits
in Peru and the level of
ongoing success in finding
potential resources and
the ability to convert these
resources into the inferred
and Measured and Indicated
categories through drilling.
HOCHSCHILD MINING PLC
28
OPERATING REVIEW
10,530k
oz
TOTAL GROUP PRODUCTION OF SILVER
2023: 11,683koz
281.14k
oz
TOTAL GROUP PRODUCTION OF GOLD
2023: 225.77koz
10,643k
oz
TOTAL GROUP SILVER PRODUCTION SOLD
2023: 11,547koz
281.46k
oz
TOTAL GROUP GOLD PRODUCTION SOLD
2023: 221.40koz
Operations
Note: 2025, 2024 and 2023 equivalent figures calculated using
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.
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.
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 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
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.
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
ANNUAL REPORT 2024
29
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
OPERATING REVIEW
CONTINUED
Peru
Hochschild operates one underground mine
in southwest Peru, Inmaculada, as well as a
nearby development project, Royropata.
Royropata
Inmaculada
READ MORE
on page 32
READ MORE
on page 34
30
30
HOCHSCHILD MINING PLC
50km
Sofía
Mine
Project
Property area
WESTERN CLUSTER
EASTERN CLUSTER
APURÍMAC
CUSCO
AREQUIPA
AYACUCHO
Selene
Ares
Pallancata
Inmaculada
Introduction
Hochschild Mining’s base is in Peru where we control
and plan operations at our head office in Lima. Our
origins can be traced back to the original group of
companies founded in 1911 by Mauricio Hochschild.
Many of the Company’s precious metals mines
have been in our southern Peru ‘cluster’ and our
first operation there was Arcata which started
production in 1964 and continued until 2019. Our key
current operation is Inmaculada which has been
producing since 2015 and contributes over 50% of
our attributable output and is expected to remain
the Company’s flagship for many years to come.
Although the Pallancata mine was placed on care
and maintenance in 2023, we believe that the nearby
Royropata zone will be a high value successor when
it reaches production in approximately three years.
This development demonstrates that Hochschild’s
extensive land package in Peru still has exciting
geological potential and reinforces our commitment
to our home country.
Sustainability progress
Sustainability in Peru is based around our five
strategic pillars: Serving our Communities;
Protecting the Environment; Promoting Health
& Safety; Empowering our People; and Being a
Responsible Business. With regards to our Peruvian
communities , we have made a large effort to
strengthen our social engagement strategy and
find meaningful ways of supporting them. This
has included increasing local employment and
procurement, supporting local governments with
public infrastructure, and positively engaging local
communities through educational, health and digital
connectivity programmes.
Operations and projects in Peru
4,000+
HOCHSCHILD EMPLOYEES AND CONTRACTORS IN PERU
ANNUAL REPORT 2024
31
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
OPERATING REVIEW
CONTINUED
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: $1,287 per ounce) with the increase
versus 2023 mainly explained by the capex catch-up
versus 2023 when a significant portion was deferred
to 2024/2025 due to the MEIA approval delay
although a portion of this capex was delayed to 2025
which explains the result being lower than guidance.
Inmacul
The 100% owned Inmaculada gold/silver underground
operation is located in the Department of Ayacucho in
southern Peru. It commenced operations in June 2015.
80%
OF THE WATER USED
WAS RECLAIMED
READ MORE
on page 68
Gold and silver production (%)
Gold
67
Silver
33
HOCHSCHILD MINING PLC
32
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Inmaculada summary
Year ended
31 Dec 2024
Year ended
31 Dec 2023
% change
Ore production (tonnes)
1,197,965
1,137,109
5
Average silver grade (g/t)
179
177
1
Average gold grade (g/t)
3.90
4.09
(5)
Silver produced (koz)
6,368
5,515
15
Gold produced (koz)
143.78
137.40
5
Silver equivalent produced (koz)
18,302
16,919
8
Gold equivalent produced (koz)
220.50
203.85
8
Silver sold (koz)
6,342
5,488
16
Gold sold (koz)
143.64
136.66
5
Unit cost ($/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
Inmaculada
PERU
$1,512
/oz
Au Eq
ALL-IN SUSTAINING COST
2023: $1,287/oz Au Eq
220.50k
oz
2024 GOLD EQUIVALENT
PRODUCTION
$143.2 /T
UNIT COST
2023: $142.3/T
Royropata
ada
33
ANNUAL REPORT 2024
ANNUAL REPORT 2024
33
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
to 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.
Advanced project:
Royropata
HOCHSCHILD MINING PLC
34
OPERATING REVIEW
CONTINUED
Royropata
PERU
2028
PRODUCTION EXPECTED TO START
3,162 T
RESOURCES
Inmaculada
FURTHER INFORMATION
FINANCIAL STATEMENTS
GOVERNANCE
STRATEGIC REPORT
35
ANNUAL REPORT 2024
ANNUAL REPORT 2024
35
Brazil
We recently commissioned our first operation in Brazil
and we have now added a new project to our pipeline.
Mara Rosa
Monte
Do Carmo
READ MORE
on page 40
READ MORE
on page 38
36
36
OPERATING REVIEW
CONTINUED
HOCHSCHILD MINING PLC
Introduction
In 2022, we completed the acquisition of Amarillo Gold,
signalling our first move into Brazil. The purchase of this
asset aligned with our core strengths and long-term strategy
of investing in development stage projects in the Americas
and was the result of a long-term Company review process
of a wide range of growth opportunities. The development of
Mara Rosa in the Goias state was completed on time and on
budget with commissioning commencing in February 2024
and commercial production achieved in mid-May 2024.
We have started to generate substantial cashflow from the
mine and 2025 will be the first full year of production.
Furthermore, we have followed up our Brazil investment
with an additional acquisition in the neighbouring business-
friendly state of Tocantins. The Monte Do Carmo project
was optioned from Cerrado Gold in March 2024 and we
exercised the option later in the year for a total investment of
$60 million. The project benefits from significantly advanced
permitting and compelling exploration upside potential and
we have already conducted an extensive exploration and twin
drilling programme which has returned encouraging results.
We believe that we have the right team in place to deliver
another exciting Brazilian opportunity for all stakeholders.
Sustainability progress
Mara Rosa has benefited from a complementary ESG-led
approach with strong local community and government
support and we have continued that focus during 2024.
Our health and safety corporate standards have also been
being implemented at the mine, including the introduction
of the Company’s “Seguscore” safety indicator. We
have also developed “The Knowledge Trail” which is an
environmental and heritage education project and aimed
at the communities of Mara Rosa, Amaralina and the region.
The project is dedicated to Science, Culture and Education,
with the aims of disseminating scientific knowledge, raising
environmental awareness and valuing the region’s
cultural heritage.
840+
HOCHSCHILD EMPLOYEES AND
CONTRACTORS IN BRAZIL
ANNUAL REPORT 2024
37
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
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-$1,120 per ounce mainly
due to the slower-than-expected ramp-up of the
mine (mentioned above), local inflation and the dry
stacking/filtration process costs.
Mara Ro
The 100% owned Mara Rosa open pit gold mine
is located in the mining-friendly jurisdiction of Goias
State in Brazil. Mara Rosa commenced production
in mid-May 2024.
Gold and silver production (%)
Gold
100
HOCHSCHILD MINING PLC
38
OPERATING REVIEW
CONTINUED
Mara Rosa summary
Year ended
31 Dec 2024
Ore production (tonnes)
1,757,955
Average gold grade (g/t)
1.35
Silver produced (koz)
11
Gold produced (koz)
63.64
Silver equivalent produced (koz)
5,293
Gold equivalent produced (koz)
63.77
Silver sold (koz)
11
Gold sold (koz)
63.54
Unit cost ($/t)
48.3
Total cash cost ($/oz Au co-product)
1,304
All-in sustaining cost ($/oz Au Eq)
1,408
$1,408k
oz
ALL-IN SUSTAINING COST
63.77k
oz
2024 GOLD EQUIVALENT
PRODUCTION
$52.1 /T
UNIT COST
BRAZIL
Mara Rosa
Monte
do Carmo
sa
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
ANNUAL REPORT 2024
39
In March 2024, Hochschild announced that it had entered
into an option agreement 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 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.
$60 m
TOTAL COST OF ACQUISITION
1,012koz
Au
AU MEASURED & INDICATED
RESOURCE AT SERRA ALTA DEPOSIT
82,542
HECTARES OF MINERAL
CONCESSIONS
Development project:
Monte Do Carmo
HOCHSCHILD MINING PLC
40
OPERATING REVIEW
CONTINUED
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
under-explored
– 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 study
BRAZIL
Mara Rosa
Monte
do Carmo
ANNUAL REPORT 2024
41
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Argentin
We have been operating in Argentina since
2007 and there remains strong geological
potential in our San Jose land package.
San Jose
READ MORE
on page 44
HOCHSCHILD MINING PLC
42
Chief Executive Officer's statement
CONTINUED
OPERATING REVIEW
CONTINUED
42
Introduction
Our 51%-owned San Jose mine is operated by
Minera Santa Cruz, which was created in 2001,
through a joint venture between Hochschild and
Minera Andes, now known as McEwen Mining,
with the aim of carrying out the exploration and
construction of San Jose. The deposit is epithermal
in origin with low sulfidation quartz veins enriched
with gold and silver. The site is located in the
northwest of the Deseado Massif, around 50km
from the town of Perito Moreno in the province of
Santa Cruz. When it began operations, San Jose
was the first underground mine with on-site mineral
processing in the province.
Sustainability progress
In Argentina, as with the entire Hochschild Group, we
aim to have a positive impact on our region and our
Community Relations office works closely alongside
municipal and provincial authorities to identify the
needs of our communities and thus ensure they get
the benefits. For example, in collaboration with local
technical and agricultural institutions, we created a
strawberry cultivation project in the Perito Moreno
region (‘Frutillas Peritenses’). The project aimed
to optimise agricultural processes by providing
machinery which helped boost efficiency and yield
per hectare.
1,700+
HOCHSCHILD EMPLOYEES IN ARGENTINA
a
ANNUAL REPORT 2024
43
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
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.
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: $1,570 per ounce) with
the increase versus 2023 mainly due to the
significant net inflation in the country in addition
to lower grades and increases in selling expenses,
commercial deductions and export taxes aligned
with higher metal prices.
San Jose
HOCHSCHILD MINING PLC
44
OPERATING REVIEW
CONTINUED
San Jose summary
Year ended
31 Dec 2024
Year ended
31 Dec 2023
% change
Ore production (tonnes)
581,303
579,100
–
Average silver grade (g/t)
253
270
(6)
Average gold grade (g/t)
4.55
5.03
(10)
Silver produced (koz)
4,150
4,422
(6)
Gold produced (koz)
73.73
80.99
(9)
Silver equivalent produced (koz)
10,270
11,144
(8)
Gold equivalent produced (koz)
123.73
134.26
(8)
Silver sold (koz)
4,290
4,274
–
Gold sold (koz)
74.37
77.23
(4)
Unit cost ($/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
ARGENTINA
San Jose
$287.2 /T
UNIT COST
2023: $264.0/T
$1,973
/oz
Au Eq
ALL-IN SUSTAINING COST
2023: $1,570 k/oz Au Eq
FURTHER INFORMATION
FINANCIAL STATEMENTS
GOVERNANCE
STRATEGIC REPORT
45
ANNUAL REPORT 2024
ANNUAL REPORT 2024
45
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: 24.6m @ 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
Brownfield exploration
In the first quarter of 2025, the team is planning 7,500m of
potential drilling to conclude the exploration of the Eduardo,
Kary, Tesoro, Barbara 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
OPERATING REVIEW
CONTINUED
HOCHSCHILD MINING PLC
46
Vein
Results (potential)
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)
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
Vein
Results (potential)
Larry
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.
ANNUAL REPORT 2024
47
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Disciplined capital allocation
is key to driving strategy and
sustaining value creation
FINANCIAL REVIEW
Revenue
Gross revenue1
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.
Eduardo Noriega
Chief Financial Officer
$966m
REVENUE
2023: $711m
$421m
ADJUSTED EBITDA
2023: $274m
$0.23
EARNINGS PER SHARE
2023: $0.02
$216m
NET DEBT
2023: $258m
1
Includes revenue from services. Gross revenue is the net revenue plus commercial discounts.
The reporting currency of Hochschild Mining PLC is US dollars. In discussions of financial performance, the Group removes the effect of exceptional items, unless otherwise
indicated, and in the income statement results are shown both pre and post such exceptional items. Exceptional items are those items, which due to their nature or the
expected infrequency of the events giving rise to them, are disclosed separately on the face of the income statement to enable a better understanding of the financial
performance of the Group and to facilitate comparison with prior years.
HOCHSCHILD MINING PLC
48
Gross average realised sales prices
The following table provides figures for average realised prices (before the deduction of commercial discounts) and ounces sold for
2024 and 2023:
Average realised prices
Year ended
31 Dec 2024
Year ended
31 Dec 2023
% change
Silver ounces sold (koz)
10,643
11,547
(8)
Avg. realised silver price ($/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
ANNUAL REPORT 2024
49
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
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 ($171.1 per tonne).
This was mainly due to the commencement of production in Mara Rosa with a lower cost per tonne than the other operations,
partially offset by ongoing high net inflation in Argentina impacting San Jose.
Unit cost per tonne by operation (including royalties)2:
Operating unit ($/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.
2
Unit cost per tonne is a non-IFRS measure. It is calculated by dividing mine and treatment production costs (excluding depreciation and amortisation) of $214.4 million and
$205.2 million respectively, by extracted and treated tonnage of 3,371k and 3,236k respectively. 2024 excludes Mara Rosa’s pre-commercial production costs of $31.7 million
and other adjustments of $2.6 million.
HOCHSCHILD MINING PLC
50
Financial Review
CONTINUED
Cash cost reconciliation
Year ended 31 December 2024
$000 unless otherwise indicated
Inmaculada
Mara Rosa3
San Jose
Other4
Total
(+) Cost of sales5
271,020
78,992
222,458
84
572,554
(-) Depreciation and amortisation in cost of sales
(94,190)
(15,690)
(46,905)
–
(156,785)
(+) Selling expenses
614
931
15,847
14
17,406
(+) Commercial deductions6
3,436
1,590
17,620
11
22,657
Gold
2,291
1,584
9,872
1
13,748
Silver
1,145
6
7,748
10
8,909
Group cash cost
180,880
65,823
209,020
109
455,832
Gold
324,057
144,836
175,892
(114)
644,671
Silver
180,285
330
117,443
(69)
297,989
Revenue7
504,342
145,166
293,335
(183)
942,660
Ounces sold (000s)
Gold
143.6
61.2
74.4
–
279.1
Silver
6,342
11
4,290
–
10,643
Group cash cost ($/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
$000 unless otherwise indicated
Inmaculada
Pallancata
San Jose
Total
(+) Cost of sales8
234,627
72,118
197,399
504,144
(-) Depreciation and amortisation in cost of sales
(75,306)
(18,964)
(48,901)
(143,171)
(+) Selling expenses
533
461
13,868
14,862
(+) Commercial deductions9
3,057
4,319
12,923
20,299
Gold
2,079
891
6,440
9,410
Silver
978
3,428
6,483
10,889
Group cash cost
162,911
57,934
175,289
396,134
Gold
267,188
14,094
148,600
429,882
Silver
129,456
39,952
93,861
263,269
Revenue7
396,644
54,046
242,461
693,151
Ounces sold (000s)
Gold
136.7
7.5
77.2
221.4
Silver
5,488
1,785
4,274
11,547
Group cash cost ($/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.
3
Excludes Mara Rosa’s pre commercial: cost of sales of $31.6 million, selling expenses of $0.1 million, commercial deductions of $0.1 million, and revenues of $4.6 million.
4 Mainly includes final adjustments to Pallancata’s shipments that occurred in the last quarter of 2023.
5
Does not include fixed costs during operational stoppages and reduced capacity of $1.1 million (2023: $3.3 million).
6
Includes commercial discounts (from the sales of concentrate) and commercial discounts from the sale of dore.
7
Excludes revenue from energy transmission services of $0.4 million (2023: $0.5 million).
8
Does not include fixed costs during operational stoppages and reduced capacity of $1.1 million (2023: $3.3 million).
9
Includes commercial discounts (from the sales of concentrate) and commercial discounts from the sale of dore.
ANNUAL REPORT 2024
51
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
All-in sustaining cost reconciliation10
All-in sustaining cash costs per silver equivalent ounce
Year ended 31 December 2024
$000 unless otherwise indicated
Inmaculada
Mara Rosa11
San Jose
Main
Operations
Corporate
& others
Total
(+) Direct production cost excluding depreciation and amortisation
171,372
106,185
176,365
453,922
84
454,006
(+) Other items and workers profit sharing in cost of sales12
3,145
(30,059)
(14,468)
(41,382)
–
(41,382)
(+) Operating and exploration capex for units13
138,582
5,289
33,035
176,906
2,857
179,763
(+) Brownfield exploration expenses14
4,423
516
9,821
14,760
3,880
18,640
(+) Administrative expenses (excl depreciation and amortisation)
4,639
1,932
6,512
13,083
33,654
46,737
(+) Royalties and special mining tax15
7,108
–
–
7,108
7,051
14,159
Sub-total
329,269
83,863
211,265
624,397
47,526
671,923
Au ounces produced
143,775
61,219
73,730
278,724
–
278,724
Ag ounces produced (000s)
6,368
11
4,150
10,529
–
10,529
Ounces produced (Au Eq oz)
220,501
61,353
123,732
405,586
–
405,586
Ounces produced (Ag Eq 000s oz)
18,302
5,092
10,270
33,664
–
33,664
All-in sustaining costs per ounce produced ($/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
$000 unless otherwise indicated
Inmaculada
Pallancata
San Jose
Main
Operations
Corporate
& others
Total
(+) Direct production cost excluding depreciation and amortisation
162,570
49,940
150,470
362,980
–
362,980
(+) Other items and workers profit sharing in cost of sales16
1,373
489
(21,164)
(19,302)
–
(19,302)
(+) Operating and exploration capex for units17
86,031
2,458
40,834
129,323
57
129,380
(+) Brownfield exploration expenses18
1,371
1,070
8,233
10,674
3,171
13,845
(+) Administrative expenses (excl depreciation and amortisation)
3,498
491
5,433
9,422
36,507
45,929
(+) Royalties and special mining tax19
3,978
542
–
4,520
2,278
6,798
Sub-total
258,821
54,990
183,806
497,617
42,013
539,630
Au ounces produced
137,399
7,390
80,985
225,774
–
225,774
Ag ounces produced (000s)
5,515
1,746
4,422
11,683
–
11,683
Ounces produced (Au Eq oz)
203,845
28,421
134,265
366,531
–
366,531
Ounces produced (Ag Eq 000s oz)
16,919
2,359
11,144
30,422
–
30,422
All-in sustaining costs per ounce produced ($/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
10 Calculated using a gold/silver ratio of 83:1.
11 Excludes non-sustaining capex and pre-commercial production capex of $30.0 million, and pre-commercial production brownfield exploration ($0.8 million), administrative
expenses ($0.8 million), commercial discounts ($0.1 million) and selling expenses ($0.1 million).
12 Other items include production costs incurred before the declaration of commercial production in Mara Rosa of $31.7 million, the gain in San Jose resulting from the
government’s export incentive programme of $16.0 million, and lease expenditure of $1.6 million and $1.5 million in Mara Rosa and San Jose, respectively.
13 Operating capex from San Jose does not include non-sustaining capex and capitalised depreciation resulting from mine equipment utilised for mine developments
totalling $13.1 million.
14 Corporate and others include personnel expenses related to brownfield exploration.
15 Royalties arising from revised royalty tax schemes introduced in 2011 and included in income tax line.
16 Other items include the gain in San Jose resulting from the government’s export incentive programme.
17 Operating capex from San Jose does not include non-sustaining capex and capitalised depreciation resulting from mine equipment utilised for mine developments
totalling $6.9 million.
18 Corporate and others include personnel expenses related to brownfield exploration.
19 Royalties arising from revised royalty tax schemes introduced in 2011 and included in income tax line.
HOCHSCHILD MINING PLC
52
Financial Review
CONTINUED
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, net20
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).
20 Adjusted EBITDA has been presented before the effect of significant non-cash (income)/expenses related to changes in mine closure provisions which were $14.7 million
in 2024 (2023: $28.4 million), and the write-off of property, plant and equipment of $0.9 million in 2024 (2023: $2.7 million).
ANNUAL REPORT 2024
53
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
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 million, 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.
HOCHSCHILD MINING PLC
54
Financial Review
CONTINUED
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 borrowings21
(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
As at
31 December 2024
As at
31 December 2023
Inmaculada
138,582
86,031
Mara Rosa22
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
As at
31 December 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
21 Includes pre-shipment loans and short term interest payables.
22 2023 includes $3.5 million increase due to foreign exchange effect, and $2.5m for the construction of the aggregates project plant.
ANNUAL REPORT 2024
55
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Engaging with
our stakeholders
STAKEHOLDER ENGAGEMENT
We are focused on driving long-term
sustainable performance for the benefit
of our customers, shareholders and wider
stakeholders. Only by fully understanding our
stakeholders’ needs and their expectations
can we measure the extent of our success.
Shareholders
Social
Customers
Government/
Regulators
Employees
Suppliers/
Lenders
HOCHSCHILD MINING PLC
56
Stakeholder group
Engagement activities
Issues raised in 2024
Additional information
Shareholders
Our shareholders are
investors and owners of the
business. We seek to establish
and maintain constructive
relations with all shareholders
through open dialogue and
an ongoing programme
of engagement.
We interact with our shareholders
and seek a better understanding
of their expectations through
various channels during the year
with the participation of the CEO,
CFO, members of the Board, the
Company Secretary and the Head of
Investor Relations. These channels
take different forms and include
participation at sector-specific
conferences, discussions with proxy
agencies as well as direct meetings
with shareholders and through the
Annual General Meeting.
During 2024, our regular calendar was
supplemented by:
– A site visit in October 2024 for
analysts and investors to the Mara
Rosa mine
– The use of the Investor Meet
platform for the second consecutive
year, providing individual
shareholders the opportunity
to receive the H1 2024 results
presentation by the CEO and CFO,
and to participate in a Q&A session
– Ad-hoc interaction with significant
shareholders on governance matters
– Updates on the operation
of the Mara Rosa mine
– Strategy in relation to the
Monte Do Carmo asset
– Permitting progress and
timeline of Royropata
project
– Macro-economic and
political developments in
Argentina
– Revised Directors’
Remuneration Policy
– Chair succession
READ MORE
about shareholder
engagement on pages
124 and 125
READ MORE
about Monte Do Carmo
on pages 40 and 41
READ MORE
about the analysts’ site
visit on pages 7 and 124
Employees
We acknowledge that our
success relies greatly on our
people. We seek to attract,
retain and develop our
people through competitive
remuneration, a positive and
safe working environment and
equal opportunities for all.
Employee engagement generally
takes many forms and includes the
use of surveys, presentations and
Q&A sessions with management.
Our 2024 programme included:
– The continued use of the Brilla
HOC platform to acknowledge the
achievements of our people
– Culture and safety perception
surveys conducted across the three
countries of operation, followed by
in-person workshops to consider
results and action plans
– A working climate survey
– The continuation of the online
forum chaired by Tracey Kerr, the
Non-Executive Director designated
for Workforce Engagement
– A site-visit by Board members
to Mara Rosa
– A workshop led by the taskforce
established for the Group’s goals
on Environmental, Social and
Governance matters (“ESG”) for all
female workers at Mara Rosa
– Regular meetings with labour unions
to negotiate collective agreements
and discuss matters of interest
– The working climate
survey provided detailed
insight into the employees’
perspectives including:
• the potential to further
develop innovation
to address operating
challenges;
• the review of
recognition and
rewards;
• further investment
in professional
development;
• further embedding
of HOC’s core values
within Brazilian
operations
– Progress of the Group’s
strategies on ESG matters
– Promoting cross-
functional collaboration
to facilitate continuous
improvement
– Enhancements to
specific mine-site
conditions
READ MORE
Sustainability Report
(Our people) page 74
Risk Management
(Personnel risks)
page 102
For more information
on the working
climate survey, see
page 76
ANNUAL REPORT 2024
57
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Stakeholder group
Engagement activities
Issues raised in 2024
Additional information
Social
We recognise our social
commitments to (a) produce
the smallest environmental
footprint possible and (b)
understand the needs and
expectations of our local
communities. Through close
collaboration we implement
sustainable development
programmes in our areas
of operations.
We adopt a varied approach to
engaging with local communities
including:
– Direct interaction with local
authorities and residents. During
the year, the Company launched
a toll-free telephone number
and an email address for use by
communities close to Mara Rosa
– Our Permanent Information Offices
at Pallancata, Inmaculada and
Perito Moreno (the town closest to
the San Jose mine) and town
hall meetings
– Participation in formal roundtables
with the participation of community
representatives and national
authorities
– The holding of collaborative events
on a range of themes of local
interest which, in Brazil, included
workshops on cancer prevention
and environmental conservation
– The implementation of local
purchasing and hiring protocols
– Environmental issues
– Local hiring and
purchasing
– Provision of scholarships
for primary, secondary
and technical education
– The development of
programmes for socio-
economic development
in local communities
surrounding San Jose,
aiming to provide
career development
opportunities through
technical and
professional training
– The impact of proposed
projects on the local area
– The Company’s
sustainability
commitments
– Infrastructure projects
READ MORE
Sustainability
Report (Environment
Management &
Communities) from
page 64
Risk Management
(Environmental risks)
page 106
Risk Management
(Community relations)
pages 108 and 109
Government/
Regulators
It is our aim to maintain a
constructive relationship and
open dialogue with the various
governmental authorities we
interact with in each of the
countries where we operate.
The Vice President of Public Affairs
oversees regular interaction with
relevant authorities and regulators
in Peru, both at a Company level but
also through the National Mining
Association. Various teams also
regularly interact with public officials
and regulators as part of their
operational functions.
The equivalent role in our Argentinian
joint venture is undertaken by the
President, General Manager and
General Counsel. The Company also
actively participates in the National
Mining Association.
In Brazil, the General Manager and
General Counsel lead engagement
activities with governmental
authorities.
The Company Secretary is responsible
for engaging with authorities in the
UK resulting from the Company’s
London listing.
– Permitting
– Health, safety and
environmental
performance and
compliance
– Climate Change
reporting
– Contribution to regional
development such
as through local job
creation and investment
in social programmes/
infrastructure
– Enhancements to
financial reporting
disclosures
READ MORE
Risk Management
(Political, Legal &
Regulatory risks) pages
103 and 104
READ MORE
about financial
reporting
enhancements on
page 132
HOCHSCHILD MINING PLC
58
Stakeholder engagement
CONTINUED
STAKEHOLDER ENGAGEMENT
CONTINUED
Stakeholder group
Engagement activities
Issues raised in 2024
Additional information
Suppliers/
Lenders
As a key influence on how
we operate our business, we
seek a relationship of mutual
benefit while requiring high
standards of conduct.
The General Managers of our
Peruvian, Argentinian and Brazilian
operations maintain ongoing dialogue
with suppliers to the mine sites. This is
carried out directly and, in the case of
our joint venture in Argentina, through
organisations representing suppliers
in the Province.
Other suppliers, including lenders, are
managed by the relevant functional
department such as IT, Group
Finance, etc.
With regards to its existing lenders,
the Company maintains an open
dialogue on relevant business
developments.
– Providing suppliers with
access to cost-efficient
financing through a
factoring programme
that leverages HOC’s
risk profile
– The maintenance
of stocks of critical
consumables and spare
parts to mitigate supply
chain risks
– Ongoing discussions
with suppliers due to
inflationary pressures.
This resulted, among
other things, in
renegotiation of terms
and the adoption of long-
term agreements with
fixed or tiered-pricing
– Discussions with the
lenders of the Group’s
Medium-Term facilities
(“MTFs”) on the
Group’s sustainability
performance
– This resulted in the
refinancing of the $300m
MTF with an interest
rate that is subject to
a reduction in line with
HOC’s environmental
performance
READ MORE
Risk Management
(Business Interruption/
Supply Chain risks)
page 100
Customers
Due to the nature of what
we produce, Hochschild
has relatively few customers.
As a result, successful
relations with our customers
are of critical importance
to our business.
Our sales and logistics teams oversee
a relationship of co-operation and
constant dialogue. During the year,
the Company continued to establish
new commercial relationships to
mitigate the risk of a concentrated
customer base and its vulnerability
to geopolitical developments.
In addition to usual relationship
management, Hochschild attended
LME Week in London and CESCO
Week in Chile for customer
engagement.
– Discussions on
commercial terms in light
of fluctuations in the
supply of concentrate
– The cost of shipping
product from San Jose
in Argentina due to
inflationary pressures
READ MORE
Risk Management
(Commercial
Counterparty risk)
page 99
ANNUAL REPORT 2024
59
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Responsibility is at the core
of our corporate values and
sustainability ambition
Dear shareholder
Our purpose at Hochschild is responsible and innovative
mining committed to a better world. Sustainability is
fundamental to this purpose, underlying how we operate as
a business; it forms our culture and how we work in our day-to-
day. It forms our relationships with our communities, our people,
and local governments, and it underpins how we interact with
the environment and the physical landscape
in which we operate.
In the next sections of this report, I am pleased to share
our sustainability-related milestones from 2024. One of our
most notable achievements was completing a materiality
assessment update, building on the last assessment
conducted in 2021. This update allowed us to incorporate one
critical new topic – biodiversity and ecosystem services –
alongside our existing material topics of water management,
climate change, management of waste and tailings, local
communities and socio-economic development, and
occupational health and safety. This update reflects our
evolving understanding of sustainability priorities and our
commitment to addressing them.
Following the approval of our 16 ESG KPIs in 2023, and their
respective 2030 ambitions, we have started to internally
monitor progress on a quarterly basis and have established
internal annual action plans and targets and action plans
aligned with our 2030 ambition, with support from across our
sites in Peru, Argentina, and Brazil. Performance against our
ESG KPIs is reflected on the Long-Term Incentive Plan (LTIP),
strengthening the importance of ESG as a strategic pillar of the
Company.
We are also proud to have signed a second sustainable
corporate loan with an interest rate that is adjusted in line
with our performance in three distinct areas: safety, freshwater
consumption, and recycled waste.
The safety of our people is an integral measure of our
corporate success and remains our highest priority. In 2024, we
achieved a LTIFR of 1.25, only two High Potential Events (HPEs),
and maintained our ongoing target of Zero Fatalities. We are
also proud to be the only company to hold the Det Norske
Veritas (DNV) level 8 certification, reflecting the strength of our
safety management information systems.
We achieved an excellent performance in our ECO Score,
exceeding this year’s target range, the most ambitious to date.
Since 2015, we have reduced our potable water consumption
by 66% to an all-time low result of 138 litres/person/day. On
the strength of our ECO Score performance, Hochschild was
granted this year - alongside other world-class companies
- the 2024 Sustainability, Environmental Achievement and
Leadership (SEAL) Business Sustainability Award in the
environmental initiatives category.
Biodiversity remains a top priority for our business, as reflected
in its inclusion in our material topics this year. In that sense, we
have continued our focus on monitoring biodiversity levels in
our areas of direct influence and continue to raise awareness
of the biodiversity in our local communities through initiatives
such as the Knowledge Trail at Mara Rosa. In addition, we
published a book on the biodiversity, social, and historical
importance of the Terra Ronca State Park, where the Mara
Rosa mine compensated its footprint. We look forward to
implementing our Andean wetland compensation plan at
Inmaculada together with the Smithsonian Institute, and we
are planning a gap analysis on the Company’s nature data
maturity and preparedness to meet the Taskforce on Nature-
related Financial Disclosures (TNFD) and the Carbon Disclosure
Project (CDP) nature disclosures.
Achieving Net Zero by 2050 and our ambition of reducing
scope 1 and 2 Greenhouse Gas (GHG) emissions by 30% by 2030
(in comparison to our 2021 emissions) remains central to our
climate strategy. Because of this ambition, we are continuing
our focus on driving operational efficiency at existing mines and
increasing the procurement of green electricity. In 2025, we will
conduct a financial quantification of climate-related risks.
Tracey Kerr
Chair, Sustainability
Committee
SUSTAINABILITY REPORT
HOCHSCHILD MINING PLC
60
This year, we made meaningful progress in supporting
our local communities. We have worked to strengthen our
social engagement strategy and identify numerous ways
of supporting them. This included increasing levels of local
procurement, supporting local governments with public
infrastructure, and positively engaging through educational,
health, and socio-economic development programmes.
These efforts are reflected in the increase in local procurement
to 26.1% (as opposed to 17.4% in 2023) and the increase in
the proportion of net revenue used for social investment
purposes, at 1.22%. Additionally, we had zero days of operational
disruption caused by social factors in 2024.
Driving gender diversity within our own workforce remains a
top priority for Hochschild and is reflective of the challenges
faced by the industry. In 2024, the proportion of women in our
workforce increased from 9.62% in 2023 to 10.00%. Initiatives
such as the Future Women Scholarships (Beca Futuro Mujer)
and our partnership with Harassment-Free Workplaces
(Espacios Laborales Sin Acoso – ELSA) are key components of
our efforts to create a more inclusive workplace.
We remain committed to strengthening our approach
to responsible business practices. This is reflected in the
development of our first Modern Slavery Statement, to be
published, on a voluntary basis, alongside our standalone
Sustainability Report. We also look forward to performing a gap
assessment on human rights in 2025, laying the groundwork for
a comprehensive human rights due diligence framework.
As we look ahead, our strategic focus over the next three – five
years will continue to be guided and informed by the progress
against our ESG KPIs within our 2030 ambition areas.
* The Merco Talento ranking evaluates
companies’ talent retention and attraction
efforts in comparison to peers.
Sustainability highlights
All community-related
and environment-related
KPIs exclude Brazil due to
Mara Rosa construction
and commissioning
activities. Mara Rosa will be
included from 2025 which
will be the first full year of
mining operations.
26.1%
LOCAL PROCUREMENT
2023: 17.4%
138
LITRES/PERSON/DAY OF POTABLE
WATER CONSUMPTION
2023: 163 litres/person/day
3rd
2024 MERCO TALENTO RANKING*
(OUT OF 18 MINING COMPANIES IN PERU)
2023: 4th place out of 16 companies
5.58/6
ECO SCORE (VS TARGET OF 5.5/6)
2023: 5.76/6
1.22%
% OF NET REVENUE FOR
SOCIAL INVESTMENT
2023: 1.18%
0
WORK-RELATED FATALITIES
2023: 0
ANNUAL REPORT 2024
61
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Our approach to sustainability
This section of our report details our sustainability
performance in 2024, against the topics identified in our
materiality assessment. It therefore seeks to provide an update
on those areas of focus that are of significant interest to our
stakeholders and our business.
The materiality update, which included desktop research, peer
reviews, and extensive engagement with our senior leadership,
suppliers, investors, industry associations, customers, and
NGOs, was supported by ERM, a sustainability-consulting
firm. To ensure that our insights considered the evolving
sustainability landscape in which we operate, we also reviewed
key sustainability trends emerging in the mining and metals
industry, using a range of published sources and reports.
The findings, which will be published in our 2024 standalone
Sustainability Report, provide a developed understanding of
the most material impacts, risks, and opportunities that we face
relating to sustainability, within our business, and broader value
chain. They also feed directly into our strategic focus, which can
be found below. Going forward, we will undertake a materiality
update every two years. Our previous materiality assessment
took place in 2021.
Sustainability
strategy
Our areas
of focus
Serving our
Communities
Protecting the
Environment
Be
st
in
cl
as
s
Ro
bu
st
cu
lt
ur
e
Tr
an
sp
ar
en
cy
Ma
xi
mi
sin
g i
nn
ov
at
io
n
Mi
ni
mi
sin
g f
oo
tp
rin
t
Ensuring Health
and Safety
READ MORE
on page 72
Empowering
our People
READ MORE
on page 74
READ MORE
on page 64
READ MORE
on page 66
Ensuring we are
a Responsible
Business
READ MORE
on page 78
HOCHSCHILD MINING PLC
62
Sustainability report
CONTINUED
Governance
Our Board of Directors is responsible for adopting policies
on sustainability, ensuring that the Company adheres to
both international and national regulations, and establishing
sustainability as a source of lasting competitive advantage.
The Sustainability Committee is responsible for overseeing
and making all necessary recommendations to the Board in
connection with sustainability matters. The committee consists
of the CEO and two Independent Directors, and is an official
sub-committee of the Board. The COO, Vice Presidents of
People Management and Corporate Affairs, and Legal and
Public Relations are regular attendees. Progress against
the Company’s climate change strategy is presented to the
Sustainability Committee every quarter and reported to the
Board. This supports the management of and reporting against
CDP and the Climate-related Financial Disclosures (CFD).
The Sustainability Committee ensures that effective
standards, procedures, and practices are in place at each
of the Company’s operations and comply with national and
international standards. The Committee is also responsible for
reviewing management’s investigation of incidents or accidents
that occur in order to assess if improvements, whether of
practice or policy, are required.
The committee is chaired by Tracey Kerr, who has Board-
level responsibility for sustainability matters. She is also the
designated Non-Executive Director for Workforce Engagement.
Sustainability reporting
Hochschild is pleased to report that our external sustainability
ratings have gradually improved over the course of 2024,
namely FTSE4Good, Sustainalytics, and MSCI benchmarks, and
are proud of the Company’s inclusion in the FTSE4Good Index.
Starting in 2025, results from rating agencies will form a part
of the Company’s performance goals, thereby feeding into the
annual review and bonus schemes. ESG-related matters have a
25% weighting overall, which is broken down to a 15% weighting
related to safety, 5% weighting for environmental results, and a
5% weighting with respect to Hochschild’s external ESG ratings.
For climate-specific disclosure, we developed our 2024 report
based on the CFD framework; details of which can be found on
our website: https://www.hochschildmining.com/sustainability/
sustainability-reports-and-policies/
Through these external disclosure frameworks, we are
committed to providing our stakeholders an ongoing
and transparent account of the material topics and to
outline the steps we are continually taking to improve our
sustainability performance.
Going forward, we will publish a standalone Sustainability
Report every two years, which covers, in detail, the sustainability
activities and performance of Hochschild. In the years we do
not publish such a report, a detailed sustainability section
will be included within our Annual Report. Our last standalone
report was published in 2021, in accordance with the ‘Core’
option of the Global Reporting Initiative (GRI). Our sustainability
reporting can be found at: https://www.hochschildmining.com/
sustainability/sustainability-reports-and-policies/
Our 2030 ambitions
After the setting of the ESG KPIs, their respective 2030
ambitions, and their approval by the Board of Directors in 2023,
this year we established a multidisciplinary team to set yearly
interim targets with corresponding action plans. Any costs
associated to implement the ESG action plans are incorporated
into our operating budgets. This team collaborates across all
departments to ensure we stay on track to meet our yearly
targets and ultimately achieve our 2030 ambitions.
Serving our communities
2030 Ambition
Local workforce vs total workforce (%)
60%
Local procurement vs total procurement (%)
20%
Social investment vs revenue (%)
0.90%
Protecting the environment
2030 Ambition
GHG scope 1+2 emissions reduction (%) 1
-30%
Fresh water utilised per ore processed (m3/ tonne)
0.22%
Recycled waste vs waste generated (%)
80%
Domestic waste landfilled (kg/person/day)
0.90
Potable water consumption (l/person/day)
174
Ensuring health and safety
2030 Ambition
Fatal accidents
0
Lost time injury frequency (LTIFR)2
1.20
Empowering our people
2030 Ambition
Women in the workforce (%)
11%
Women in leadership roles (%)
20%
Voluntary turnover (%)
<5%
Ensuring we are a responsible business
2030 Ambition
Women on Board seats (%)3
40%
Board considered by investors to be independent (%)
(excl. Chair)
>50%
Average tenure of Non-executive Directors (excl. Chair)
6 years
1
Measured as a reduction against the 2021 baseline.
2 Calculated as total number of accidents per million labour hours.
3 Previously under the category “Empowering our people”, re-classified for
consistency between employee-related and Board-related KPI’s.
These KPIs can also be found on our website: https://www.
hochschildmining.com/sustainability/sustainability-reports-
and-policies/
We will review the continued relevance of these indicators and
will supplement them as appropriate.
Quarterly performance will be published on our website and
yearly performance will be published in our Sustainability and
Annual Reports.
ANNUAL REPORT 2024
63
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Our approach to serving our communities
The focus of our social engagement strategy is on generating
a positive impact. We do this by building long-lasting
partnerships with local communities and through implementing
initiatives that aim to address their needs. Our initiatives
cover a wide range of development areas, from the provision
of medical support and digital facilities to the coaching of
female entrepreneurs and mining students. To ensure that our
programmes address the specific needs and expectations of
our communities, we invest resources to understand what these
needs are, and maintain open and transparent dialogue in our
engagement. We also keep our communities informed of any
relevant developments at Hochschild that may affect them and
actively engage with them in these decision-making processes.
Our approach to generating positive impact is guided by our
Community Relations Policy, which emphasises our dedication
to building trust and listening to community concerns. At
Hochschild, we consider how our operations may affect the
local community, either directly or indirectly; this consideration
is formally included within our application for environmental
permits, under the Free Prior Informed Consent (FPIC) process.
This year, local workers made up 59.3% of our total workforce,
which represents a slight improvement against 2023. On the
other hand, local procurement made up 26.1% of our total
procurement and social investments represented 1.22% of our
net revenue. We are very pleased to report that these exceed
our 2030 ambitions of 20% and 0.90%, respectively. However, it
is important to recognise that achieving these ambitions today
does not guarantee similar performance in the years ahead,
as mine sites cease operations and new ones are incorporated
over time. As such, continuing to meet these ambitions will
require a sustained effort and careful management as we
adapt to change.
Highlights
Alignment to UN SDGs
Serving our
Communities
A core commitment at Hochschild is the social and economic
development of our local communities. Within this strategic
pillar, we have identified the following material topic: Local
communities and socio-economic development. Alongside this,
we also continue to monitor the topic of fair and transparent
land acquisition and resettlement.
26.1%
LOCAL PROCUREMENT1
2023: 17.4%
1.22%
SOCIAL INVESTMENT
VS NET REVENUE
2023: 1.18%
1
Local refers to people working at the mines or businesses that belong to the
regions where the Company operates (Peru: Apurimac, Arequipa, Ayacucho
and Cajamarca; Argentina: Santa Cruz; Brazil: Goias).
Community-related KPIs exclude Brazil due to Mara Rosa construction and
commissioning activities. Mara Rosa will be included from 2025 which will be
the first full year of mining operations.
Sustainability report
CONTINUED
HOCHSCHILD MINING PLC
64
64
Progress against our 2030 ambitions
2021 Baseline
2022
2023
2024
2030 Ambition
Local workforce vs total workforce (%)
51.2%
52.6%
59.1%
59.3%
60%
Local procurement vs total procurement (%)
12.2%
15.3%
17.4%
26.1%
20%
Social investment vs revenue (%)
0.84%
0.94%
1.18%
1.22%
0.90%
Community-related KPIs exclude Brazil due to Mara Rosa construction and commissioning activities. Mara Rosa will be included from 2025 which will be the first full year of
mining operations.
The figures include both Hochschild’s direct employees and permanent contractors in our mine sites in Peru and Argentina.
Key achievements 2024
– Education: We are proud to support our local students by
providing academic support, entrepreneurial training, and
career guidance through a range of initiatives. This includes
sponsoring higher education scholarships in technical
subjects relevant to mining through our ongoing “Quri
Yachay” scholarship programme (Golden Knowledge in
Quechua). In 2024, a new cohort of 37 students successfully
graduated from the programme as drilling assistants.
In November 2024, we also launched a new programme
in Peru, “Comunidad de Becarios HOC” (HOC Scholar
Community). This aims to enhance education, provide
vocational guidance, and offer emotional support to
technical and university students in the areas surrounding
the Inmaculada, Pallancata, Arcata, and Selene mines.
– Future Women Scholarship: In 2024, we launched the second
cohort of the Future Women Scholarship, an initiative
started in 2021 aimed at developing women’s technical
skills and enhancing the employability of women from
local communities. Hochschild recognises that there is a
gap in employment opportunities for women, particularly
in technical roles within the mining sector. Our training
programme focuses on key technical areas for the mining
industry such as in the processing plant, laboratory, and
infrastructure, seeking to develop skills that empower women
to access better job opportunities. Since the programme’s
inception three years ago, 23 women have been trained, and
52% of them have successfully secured employment within
our organisation or with partner companies. This year, 10
participants were trained as processing plant and laboratory
assistants, reaffirming our commitment to inclusion and
equity in the mining sector.
– Mining Partner Programme: In May 2024, Hochschild
launched its “Programa del Colaborador Minero” (Mining
Partner Programme). Thirty residents of Perito Moreno, the
town located closest to the San Jose mine, participated
seeking to benefit from professional and career development
opportunities within the mining sector. Those who
successfully completed the programme were offered the
opportunity to work at San Jose. The programme lasted five
months and consisted of two months of virtual theoretical
training, followed by three months of practical experience at
San Jose. Twenty-eight participants successfully completed
the course and joined the workforce in October 2024.
– Professional courses in Brazil: In partnership with the
National Rural Apprenticeship Service of Brazil (SENAR)
we developed technical and professional courses for the
local community of Mara Rosa. Seeking to diversify the
local economy, nine courses were held on the topics of: first
aid, production of cleaning and hygiene products, candy
production, bakery, brown sugar production, production
of milk derivatives, chocolate production, processing of
Brazilian Savannah, and tropical fruits and gardening.
Additional details and achievements will be included in the
standalone 2024 Sustainability Report.
Material topics in serving our communities
Local communities and socio-economic development
We are proud to run a range of short and long-term initiatives
in our local communities focused around the core themes:
connectivity, education, health and nutrition, and socio-
economic development.
Through focus groups, site visits, and meetings with authorities,
we continuously engage with our community members and
gather detailed feedback. These help us understand the needs
of our communities and the social impact that we can have
through our operations. Our Permanent Information Offices,
which serve the Inmaculada, Pallancata and San Jose mines,
provide a central point of contact for communities to ask
questions or express concerns about our activities. In 2024 we
received 17 grievances and responded to 13, with the remaining
in process at the time of publication, with an average response
time of 21.8 days.
Hochschild made social investments of approximately
$9.7 million in 2024 in Peru and Argentina, including ad-hoc
philanthropic campaigns and the provision of technical
assistance to municipalities.
Education
$741,000
Health and nutrition
$663,000
Socio-economic development
$2,519,000
Philanthropic campaigns
$234,000
Culture and communication
$152,000
Donations
$1,016,000
Local government support
$4,404,000
We invested approximately $2.56 million at Mara Rosa in
2024. With the first full year of operations, detailed social
statistics relating to our Mara Rosa mine will be included in
next year’s report.
ANNUAL REPORT 2024
65
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Our approach to protecting the environment
Our Environmental Policy aims to address our most material
environmental impacts. Among others, the policy includes
measures to reduce our water usage, improve our energy efficiency,
and increase the use of recycled waste. In 2025, we will work on
our biodiversity strategy aligned with TNFD.
We reduced our potable water consumption in 2024 by 15% in
comparison to 2023 levels and exceeded our 2030 ambition for
the second consecutive year. Additionally, we have continued
to reduce levels of domestic waste sent to landfill, achieving a
reduction of 0.3% in 2024 in comparison with 2023. While we are
pleased with these achievements, it is important to acknowledge
that maintaining this performance will be a challenge as mine
sites cease operations and new ones are incorporated over time.
We will need to continue focused efforts to sustain these positive
trends as we adapt to evolving circumstances.
The increase in GHG emissions can be mainly attributed to the
Mara Rosa mine, an open-pit operation, being incorporated
into the calculation. Without the inclusion of Mara Rosa into the
corporate result, we estimate that our scope 1 and 2 (market-
based) emissions would have decreased approximately 5.6%
as compared with the 2021 GHG emissions.
Key achievements 2024
– We received the 2024 SEAL Business Sustainability Award
in the category of environmental initiatives, in recognition of
the ECO Score.
– Environmental Management System (EMS): As part of
the development of the EMS, several processes were
strengthened in the mines during 2024, with an emphasis on:
compliance with legal commitments and other obligations
assumed by the Company, environmental risk assessment,
leadership, operational control, communication, and skills
training. Regarding the latter, environmental personnel in
the mine sites have received training on ISO 14001 standards
and internal auditing. In 2025, we will focus on reinforcing the
preventive vision of environmental management and the
development of EMS processes, with a focus on document
management, change management, and the measurement
and monitoring of results.
Highlights1
Alignment to UN SDGs
Hochschild is committed to producing metals with the lowest
possible environmental footprint. We monitor our environmental
impact through the following material topics: Climate change,
water management, management of waste and tailings, and
biodiversity and ecosystem services.
5.58
2023 ECO SCORE
(VS TARGET OF 5.5)
2023: 5.76
66%
REDUCTION IN POTABLE WATER
CONSUMPTION COMPARED WITH 2015
2023: 60%
1
Environment-related KPIs (except GHG scope 1+2 emissions reduction (%)
in 2024) exclude Brazil due to Mara Rosa construction and commissioning
activities. Mara Rosa will be included from 2025 which will be the first full
year of mining operations.
Protecting the
Environment
Sustainability report
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66
HOCHSCHILD MINING PLC
HOCHSCHILD MINING PLC
66
Environmental Culture Transformation Plan (ECTP)
In 2024, we reviewed the structure of the ECTP in line with our updated EMS processes. Our key activities in 2024 for each segment
were the following:
Leadership
We launched the ECOHOC Podcast, developed a leadership recognition program, and created
an environmental induction training programme to be launched in early 2025.
Innovation
We developed a cloud-based ECO Score platform, launched the Innova platform in Brazil, and
developed the Innova campaign for Environmental Ambassadors (see page 76 for more details
on Innova).
Responsibility
We organised activities to promote an environmental culture among workers and their families,
such as the Mining Partner Programme in Argentina, FLICMA in Brazil, and “Conversemos en
Familia” (Conversations as a family) in Peru.
Communication
We continued working with our Environmental Ambassadors.
Training
We prepared and distributed training material across all countries, such as courses on
environmental compliance and environmental induction for leaders, all aligned with the EMS and
country-specific regulations.
2024 ACTIVITIES
2024 ACTIVITIES
Progress against our 2030 ambitions
2021 Baseline
2022
2023
2024
2030 Ambition
GHG Scope 1 and 2 emissions reduction (%)
0%
-0.7%
-5.6%1
+51.1%
-30%
Fresh water utilised per ore processed (m3/ tonnes)
0.24
0.27
0.27
0.31
0.22
Recycled waste (%)
72.5%
68.8%
63.3%
57.3%
80%
Domestic waste landfilled (kg/person/day)
1.001
1.052
0.931
0.928
0.90
Potable water consumption (l/person/day)
193
171
163
138
174
KPIs (except GHG Scope 1 and 2 emissions reduction (%) in 2024) exclude Brazil due to Mara Rosa construction and commissioning activities. Mara Rosa will be included from
2025 which will be the first full year of mining operations. GHG emissions from Mara Rosa and the Belo Horizonte office prior to 2024 are not included in the results are they
were immaterial to that produced by the operating mines.
1
The 2023 result of GHG emissions reduction restates the value disclosed in the 2023 Annual Report (-5.1%) following the carbon footprint’s independent assurance performed
in 2024.
ANNUAL REPORT 2024
67
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Country-specific case-studies that help promote a culture of
environmental responsibility:
– 2nd edition of FLICMA: The 2nd edition of FLICMA (Mara
Rosa and Amaralina Literature, Culture, and Art Festival),
which was promoted by the Mara Rosa mine, was an
event with a major cultural and educational impact on
the communities closest to the mine, Mara Rosa and
Amaralina. Attracting almost 2,500 participants, including
students, educators and local leaders, the diverse
programme provided an immersion in cultural, literary,
and educational activities.
– Environmental Ambassadors: To fully embed the ECTP into
our everyday operations, we invite employees across all levels
to be part of our Environmental Ambassador programme.
The programme’s main objective is to train agents of change
who strengthen the culture and environmental awareness
within the Company. In 2024, we equipped ambassadors with
the soft skills and environmental knowledge to drive projects
that improve waste management, water use, energy savings,
and environmental culture.
– ECO Score Platform: The ECO Score is a scoring
framework that allows Hochschild to quantify the
business’s environmental performance within a single
metric, expressing environmental management in a way
that is easily understood. It was implemented in 2015, and
since then, has served as a powerful and innovative tool
for managing environmental issues, holding employees
accountable, and generating value for our stakeholders.
In 2024, we reviewed our ambition level and received Board
approval to increase our ECO Score target range from 5.25
to 5.5 out of 6. We are pleased to report that, in 2024, we
achieved a score of 5.58. Since the tool’s inception in 2015,
we have met our target every year and have improved our
environmental performance score by 68%.
In 2024, a cloud-based interactive platform was developed
alongside the Technology department to automate the
data collection and the calculation of the monthly ECO
Score, with the objective of enhancing the accuracy and
efficiency of environmental performance monitoring
across all mine sites, supporting data-driven sustainability
strategies. By automating the process, the platform reduces
calculation errors and the manual workload at the mine sites,
and enables more precise, data-driven decision-making.
The platform also enables real-time tracking and analysis
of environmental performance across operations.
Additional details and achievements will be presented in the
standalone 2024 Sustainability Report.
Material topics in protecting the environment
Climate change
Our aim is to reach Net-Zero GHG emissions by 2050. Our
interim 2030 ambition is to reduce our GHG Scope 1 and 2
emissions by 30% against a 2021 baseline (we recognise that we
may need to rebaseline our emissions in 2025 to account for the
inclusion of Mara Rosa). To achieve this ambition, our efforts
are focused on sourcing renewable electricity and transitioning
towards low-emission vehicles once these become readily
available within the next four years. Any costs associated to
implement our climate change strategy will be included into
our operating budgets. In 2024, we sourced 17% of energy from
renewable sources. Since 2023, we have also worked to procure
renewable energy from the Mara Rosa Green Energy project.
Detailed below, we expect this initiative to play an increasing
role in reducing our GHG Scope 1 and 2 emissions.
Mara Rosa Green Energy Project
Hochschild continues its offtake agreement with Solatio Energia
(a photovoltaic sector specialist) to implement a solar energy
project that will supply renewable energy to the entire Mara
Rosa mine. The solar plant, with a capacity of 124.6 MW of
energy, will guarantee that the amount produced will meet the
energy demand throughout the mine’s useful life. Production is
scheduled to begin in the second semester of 2025.
Our mining operations in both Peru and Argentina have a lower
GHG emissions intensity compared to the industry average*
(1.95 tCO2e/koz Ag Eq; 0.16 tCO2e/oz Au Eq). This is a result of
the fact that our underground mining operations have lower
emissions compared to open-pit mines, using low-carbon grid-
based electricity, and prioritising the use of renewable energy
where available.
In 2024, we advanced our management of climate change by
completing a phyisical and transition risk assessment and
climate scenario analysis across two scenarios (warming of
1.8°C and 4.4°C by 2100) and a range of time horizons in the
short, medium and long-term. This has supported us to update
our CFD reporting to report our climate-related financial
information.
*
Industry average according to the WGC’s “Gold and climate change:
Current and future impacts” report (published in 2019) corresponds to
38,100 tCO2e/t Au Eq, equivalent to approximately 1.08 tCO2/oz Au.
Water management
Hochschild aims to make optimal use of water resources as a
part of our strategy for responsible water management. The
Inmaculada mine operates in an area with high water stress
as per the World Resources Institute (WRI) aqueduct threshold,
while the former Selene mine is in an area with medium-high
water stress. In 2024, 72% of all water used in processing plants
was reused, maintaining our 2023 level of water reuse and
helping us minimise intake of freshwater.
We have also continued to reduce our potable water
consumption year-on-year, from 163 litres/person/day in 2023
to 138 litres/person/day in 2024. This amounts to an overall 66%
reduction in potable water consumption since 2015. In fact,
potable water consumption in 2024 was the lowest to date.
Freshwater use (m3)
Year
Freshwater used in process plants
2020
454,527
2021
589,904
2022
651,066
2023
578,919
2024
557,3601
1
Please note that the Selene plant was not included in this year’s freshwater
use calculation, having been placed in care and maintenance in October 2023.
The 2024 result also excludes Brazil due to construction and commissioning
activities in Mara Rosa. It will be included from 2025, which will be the first full
year of mining operations.
HOCHSCHILD MINING PLC
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Sustainability report
CONTINUED
GHG footprint annual calculations
Greenhouse gas emissions data1, 2 (tonnes of CO2e)
2024
20233,4
20224
20214
2020
2019
2018
2017
2016
2015
2014
Emissions from combustion of fuel and operation of facilities (tCO2e)
57,674
42,400
45,374
46,339
40,647
39,341
38,939
47,265
46,033
46,892
73,244
Emissions from total purchased electricity (tCO2e)
79,678
64,602
68,116
58,133
41,254
82,833
85,084
94,249
91,893
78,163
69,933
Emissions from purchased electricity – non-renewable sources (tCO2e)5
31,692
13,457
13,389
12,820
6,591
n/a
n/a
n/a
n/a
n/a
n/a
Total Scope 1 & Scope 2 emissions (tCO2e)6
137,352
107,002
113,490
104,472
81,901
122,174
124,023
141,514
137,926
125,055
143,178
Emissions intensity, per thousand ounces of total silver equivalent produced (tCO2e/koz Ag)6,7
4.06
3.52
3.64
3.11
2.76
2.64
2.60
3.16
3.27
3.70
5.08
Scope 3 emissions (tCO2e)
28,506
26,016
29,734
24,8213
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Energy consumption
538,167,973
434,548,301
477,278,230
465,027,594
366,955,382
446,288,131
n/a
n/a
n/a
n/a
n/a
From combustion of fuel (kWh)8
196,815,057
143,520,319
159,336,476
165,114,299
132,414,133
143,763,206
n/a
n/a
n/a
n/a
n/a
From purchased electricity (kWh)
341,352,916
291,027,982
317,941,753
299,913,295
234,541,249
302,524,925
n/a
n/a
n/a
n/a
n/a
1
Method used based on the ISO 14064-1 Standard and GHG Protocol Corporate Accounting and Reporting Standard, using IPCC and Peruvian emission factors. Gases
included in the calculation of all three scopes: CO2, CH4, N2O and tHFC.
2 Includes data for the whole year for Peru (former and current operating assets, warehouses and office locations), Argentina (San Jose and Buenos Aires office) and London
office. The Group’s UK operations consist of a single office with an occupancy of three. Its total Scope 1 and Scope 2 emissions and energy consumption represent less than
0.01% of the Group’s reported totals. Since 2024, the year Mara Rosa began operations and its emissions became materially significant, the data includes Brazil (Mara Rosa
and Belo Horizonte office).
3 The 2023 results restate the values disclosed in the 2023 Annual Report following their independent reasonable assurance performed in 2024.
4 Limited assurance over emissioning from the operating sites was obtained from SGS in 2021 and 2022 and reasonable assurance over emissioning from the operating sites
was obtained from Aenor in 2023, in line with the ISO 14064-1:2018 Standard.
5 Excludes electricity purchased from renewable sources, hydropower in Peru, wind power in Argentina and photovoltaic power in Brazil.
6 Emissions (and intensity) reflect combustion of fuel and operation of facilities (Scope 1) and purchased electricity (Scope 2) – location-based emissions.
7 Total production includes 100% of all production, including that attributable to the joint venture partner at San Jose
8 Collected information has been converted to kWh from gallons of fuel using net calorific values obtained from the Peruvian Ministry of Environment. Corresponds to fuel
calculated for Scope 1.
ANNUAL REPORT 2024
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STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Management of waste and tailings
Effluent quality and any instance of non-compliance with
national standards in respect of our discharges to the
environment are reflected in our ECO Score. To ensure
compliance with national regulations on water discharge, we
closely monitor around 2,000 parameters annually. In 2024,
Hochschild recorded one minor environmental incident at
Inmaculada, against our target of 0. This incident did not
affect the environment due to the timely response and clean-
up measures. Hochschild has no significant air emissions and
air quality is monitored periodically at all mines to ensure
compliance with environmental quality standards.
We also have extensive waste management plans in place
to ensure each specific waste stream is managed in the best
manner possible. We strive to minimise waste that ends up in
landfill and we prioritise recycling/reuse opportunities. This
includes composting at our mining operations. As a result of
these efforts, domestic waste generation has decreased by
52% since 2015.
All waste rock and tailings generated as part of mining and
processing are managed in accordance with our environmental
permits and have purpose-made engineered facilities for each
waste type at all mines.
We use our best efforts to reuse our tailings and waste rock, as
shown by the initiative to sell waste rock from Mara Rosa mine
to a rail company, thus contributing to a circular economy.
Tailings waste generated (million metric tonnes)
2024
Total waste rock generated
8.849
Total waste rock reused
0.610
Total tailings generated
3.512
Total tailings reused
0.290
Tailings and waste rock generated include data from the Inmaculada, San Jose
and Mara Rosa mines.
This year we increased the number of our Tailings Storage
Facilities (TSFs) from 11 to 12, following the implementation of
our new dry stack TSF at Mara Rosa. In 2024, an external audit
was conducted on the three TSFs at San Jose. In conjunction
with auditing, the Sustainability Committee presents regular
updates to the Board on Hochschild’s TSFs’ management.
We fully support the need for greater transparency in the
mining sector and we disclose comprehensive details on
each of our TSFs and their management.
Domestic waste generation (kg/person/day)
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
0.928
0.931
1.052
1.001
1.182
1.041
1.133
1.131
1.327
1.942
Recycled waste (%)
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
57.3%
63.3%
68.8%
72.5%
56.4%
86.6%
53.6%
57.7%
29.5%
45.3%
HOCHSCHILD MINING PLC
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We implement specific measures, including compensation
programmes to minimise the legacy of our operations on the
surrounding area, which helps address or avoid significant
environmental or landscape impact from our mine operations
and closure. In 2023, we received approval of two compensation
plans that will allow us to maintain and improve the ecological
value at sites near Inmaculada. Compensation has also been
embedded into the design of Mara Rosa and, as such, was a
key consideration during its construction process.
In 2025, we will commence to develop our biodiversity strategy
through a gap assessment and peer benchmarking, aiming
to obtain a clear view of our nature data maturity and
preparedness to meet TNFD and CDP nature disclosures.
Mine closure: The future use of the land following a mine
closure is a key consideration in our operations, as well as in the
rehabilitation of affected areas. In line with this objective, we are
committed to restoring these areas to a safe and stable physical
condition in accordance with the surrounding landscape.
Regarding the management of land closure and rehabilitation,
Hochschild has a designated department responsible
for overseeing and ensuring the fulfilment of the closing
commitments of our mine sites and exploration projects. As part
of this process, we set aside sufficient funds to cover closure
and rehabilitation; the closure provision is assessed internally
on an annual basis. Every three to five years, third-party experts
are typically engaged to incorporate changes in scope, cost
estimates, and life of the mine. We report on environmental
and social closure activities for all our current and former
sites according to applicable regulations. In the case of new
operations or expansions, we are committed to adopting and
rigorously applying good environmental management practices
and proper mine closures, which minimise the potential effect
on the surrounding landscape and support our contribution to
future sustainable development.
In 2024, most efforts were focused on the closure planning of
the TSFs of Ares and Selene mines.
As part of our tailings management system, we carry out
external audits every two years. We updated the information
published on our website regarding our TSFs in early 2025,
following the information request from the Church of England
Pensions Board originally made in 2019.
We have a TSF Committee, chaired by the COO, that meets
monthly and includes Superintendents, Unit Managers,
General and Corporate Managers. This committee is
responsible for reviewing the status of all TSFs and progress
on works, and identifying general risks. All our TSFs are
equipped with instruments for topography and water
management controls, which are monitored monthly and
reported to the TSF Committee.
As part of our internal commitment, all new TSF expansions are
designed and built in accordance with the International Council
on Mining and Minerals (ICMM) or Canadian Dam Association
(CDA) standard. For example, in 2024, the expansion of the
Inmaculada TSF was executed based on the ICMM standard.
Also, our two operating wet tail TSFs are aligned with the
International Cyanide Code limit of 50ppm WAD cyanide
concentration in open waters to protect wildlife. Additionally, in
2024, we began developing a management procedure for the
design, construction, and operation of TSFs. This procedure
will be completed in Peru by 2025 and then rolled out to our
operations in Argentina and Brazil.
Biodiversity and ecosystem services
Hochschild will never operate inside the core of a protected
area; however, several of our sites are located inside or near
the buffer zone of such areas such as the Landscape Reserve
Sub Cuenca del Cotahuasi, in the Arequipa region. We annually
monitor biodiversity levels at all sites and regularly conduct
flora and fauna programmes in directly influenced areas.
Our objective is to mitigate the environmental footprint of
our operations, with the aim of returning the environment
to its prior state, to the extent this is possible. We also
invest resources into developing environmental education,
environmental and social awareness, and appreciation of
local cultural heritage.
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GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Our approach to ensuring health and safety
We strive to ensure the health, safety, and well-being of all
our employees and contractors as outlined in our Health
and Safety Policy. Practical measures are adopted, wherever
possible, to avoid workplace accidents, eliminate occupational
health hazards, and support employee well-being. Hochschild
understands that an informed and attentive workforce, where
individuals are engaged with health and safety in a way that
looks out for themselves and others, is vital to managing safety
and health risks.
We are extremely pleased to report that Hochschild is on track to
accomplish our 2030 ambitions and that Hochschild achieved its
Zero Fatalities target in 2024. This marks the third year in a row
that we have achieved this fundamental commitment.
Key achievements 2024
– Safety initiatives: Launched in 2022, the SeguScore is an
in-house safety performance indicator that measures
both proactive and reactive safety metrics. It includes
leading indicators like leadership presence, behavioural
observations, and mini audits, as well as lagging indicators
such as the LTIFR, Lost Time Injury Severity Rate (“LTISR”),
and High Potential Events (“HPEs”). In 2024, we achieved a
corporate annual SeguScore of 8.96 out of 10, compared to
the 2023 result of 9.40.
– Investigating and learning from safety incidents: While we
are proud to report that there were no fatal accidents at
our operations in 2024, there was a serious accident at our
Mara Rosa mine that occurred in December. An electrical
contractor was performing maintenance activities when he
suffered an electric shock resulting in serious injuries. The
employee received immediate emergency care and was
transported to a local specialist hospital. Operations at the
mine unit were suspended and a meeting was organised
for all on-site colleagues to discuss the accident and
to highlight actions to be implemented immediately.
The Company undertook a detailed investigation of the
circumstances leading up to the accident.
Highlights
Alignment to UN SDGs
Employee health and safety is critical to the successful running
of our business. Given the high-risk nature of the mining process,
prioritising health and safety is essential to protecting our people
and ensuring the overall success of our operations. We firmly
believe that a healthy, satisfied, and motivated workforce is key
to driving the growth of our Company. Our material topic
relating to this pillar is: Occupational health and safety.
0
WORK-RELATED FATALITIES
2023: 0
1.25
LTIFR
2023: 0.99
Ensuring Health
and Safety
Sustainability report
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HOCHSCHILD MINING PLC
72
HOCHSCHILD MINING PLC
Progress against our 2030 ambitions
2021 Baseline
2022
2023
2024
2030 Ambition
Fatal accidents
2
0
0
0
0
Lost time injury frequency rate (LTIFR)
1.26
1.37
0.99
1.25
1.20
Due to limitations of its use for comparability with other companies, the Lost Time Injury Severity Rate (LTISR) is no longer considered a part of the ESG KPIs but continues to be
monitored as part of our Occupational Health and Safety (OHS) Management System.
This investigation formed part of a report that was provided
to the Board, as well as an action plan comprising short and
medium-term actions to prevent a future recurrence.
Incidents that were minor in nature were also investigated
promptly and appropriate response measures were
implemented. We remain committed to health and safety
by continuing to promote the improvement of all activities
and assess the potential occurrence of HPEs. In the event
of an HPE occurring, our CEO leads a meeting to conduct a
thorough investigation and develop a corrective action plan.
Hochschild continues to work to reduce this number of HPEs
to zero through a range of initiatives.
– Health: In 2024 we did not record cases of work-related
diseases, demonstrating correct health policies and
procedures are in place.
– Cultural Transformation: Following the implementation of
the second iteration of our Safety Cultural Transformation
Plan in 2023, known as “Safety 2.0”, we commissioned a
safety culture assessment by an external consultant. Armed
with the results, members of senior management and key
leaders of the mining units held a workshop that outlined the
steps to follow. We have called this new phase “Safety 3.0”,
which will be officially launched later in 2025.
– We continue to promote leadership programs on safety
through professional supervisions in Peru and Argentina,
encouraging proactive involvement and the development
of safety initiatives at our mines. In Brazil, we developed a
binder of lessons learned from past fatal and HPE accidents
in Portuguese, along with leadership training on safety
management in line with DNV.
– In Peru, the Transportation Committee maintains close
oversight of personnel transport processes. Technological
enhancements in 2024, such as the installation of equipment
to improve cellular coverage, have improved the level of
monitoring on frequently used routes.
– Additionally, we continued with the “Siempre Sanos
Programme” (Always Healthy), which offers free medical
care, supports new parents with infant nutrition, and
educates community members on preventative care. In
2024, the programme saw a partnership with the Regional
Health Directorate (DIRESA) of Ayacucho, Peru (provinces of
Parinacocha and Paucar del Sara Sara).
Additional details and achievements will be presented in the
standalone 2024 Sustainability Report.
Material topics in ensuring health and safety
Occupational health and safety
Hochschild provides a safe, healthy, and secure workplace
for all of our colleagues. We implement effective practices to
prevent workplace fatalities, eliminate occupational health
risks, and support the well-being of our employees.
Hochschild implements a systematic risk management
approach to ensure a safe working environment, supported by
our OHS Management System. Additionally, in 2024, the Risk
Management System of San Jose and Inmaculada was certified
by DNV1, reaching a historic level 8, after 16 years of use of
the system. In Brazil, we began the process of implementing
the Risk Management System with the intention of achieving
similarly impressive results over the coming years.
1
At Hochschild, we use the International Sustainability Rating System (ISRS)
seventh edition to assess our occupational health and safety processes. Its
assessment covers 15 processes, compatible with ISO 45001, and has a rating
system that goes from level 1 to level 10. DNV certified the Company with level 8.
Fatal accidents1
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
Nil
Nil
Nil
2
1
Nil
3
4
Nil
Nil
LTIFR1
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
1.25
0.99
1.37
1.26
1.38
1.05
1.74
2.69
2.20
1.85
LTISR1
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
3652
37
93
6763
474
54
930
1,264
138
112
1
All health and safety indicators reported by Hochschild cover employees and contractors alike.
2
For further details on the year-on-year increase in the LTISR, please see earlier section entitled “Investigating and Learning from Safety Incidents”.
3
Taking into account the ICCM’s Health and Safety Guidance, the Sustainability Committee concluded that the Pallancata bus highway accident was not reportable by
Hochschild in its safety KPIs as it took place outside of Hochschild Mining’s operation and involved third-party transportation.
ANNUAL REPORT 2024
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GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Highlights
Alignment to UN SDGs
Our people are key to our business success and the positive impact
we make on the planet and society. By fostering a supportive and
empowering working environment, we can improve employee
satisfaction, offer better and more equal employee opportunities,
and improve retention rates. We identified the following additional
topics relating to this pillar: Labour relations; recruitment,
retention, and engagement; diversity, equity, and inclusion;
and innovation through technological solutions.
10%
WOMEN IN THE WORKFORCE
2023: 9.62%
3rd
2024 MERCO TALENTO RANKING
(OUT OF 18 MINING COMPANIES IN PERU)
2023: 4TH PLACE (OUT OF 16 COMPANIES)
Empowering
our people
Our approach to supporting our people
Our Corporate Diversity and Inclusion Policy formalises our
approach and our commitment to respecting human rights
and promoting diversity, equity, and inclusion. As part of our
corporate purpose, we aspire to provide a safe and healthy
workplace environment that, above all, promotes a healthy
work-life balance and demonstrates inclusion. As part of this
commitment, we invest in wellness initiatives and professional
development for our employees and offer competitive
compensation and benefits.
Key achievements 2024
– Meetings with women in mine sites: The ESG team
conducted on-site visits and meetings with female
employees at our three operating sites in Argentina, Brazil,
and Peru. These meetings focused on gathering their
insights and ideas, with the aim to better understand
the experiences of women in the mining sector and at
Hochschild. Based on these visits, an action plan will be
developed for gradual implementation until 2030, improving
diversity and inclusion, increasing women’s representation
in leadership roles, and aligning with Hochschild’s long-term
ESG ambitions related to women in the workforce.
– Increasing gender diversity at Hochschild: This year,
Hochschild has successfully increased the representation
of women at multiple levels of our business. We have
increased the percentage of women in our entire workforce
from 9.62% to 10.00%. As a result, we are proud that we
are moving closer to our 2030 gender diversity ambition
of 11%. As a mining company, we recognise the challenges
faced by our industry to build female representation. These
incremental improvements are reflective of the important
progress that is needed. We will continue, each year, to
promote the participation, education, training, development,
and leadership of women.
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HOCHSCHILD MINING PLC
Age structure (number of employees)
<30
30-50
>50
382
515
2,412
Progress against our 2030 ambitions
2021 Baseline
2022
2023
2024
2030 Ambition
Women in workforce (%)
8.65%
8.78%
9.62%
10.00%
11%
Women in leadership positions (%)1
15.19%
14.83%
17.98%
17.16%
20%
Voluntary turnover (%)
4.99%
3.92%
4.52%
4.96%
< 5%
1
Leadership roles include senior, middle and junior management.
– Training on the prevention of workplace violence and
harassment in partnership with ELSA: At Hochschild, we
firmly believe in creating safe and respectful workspaces
for everyone. Therefore, we partnered with ELSA, an
organisation specialised in preventing workplace sexual
harassment, to carry out the 4th comprehensive diagnosis
at our operations and administrative offices in Peru. This
diagnosis showed that while we are on the right path, there
is still room to strengthen understanding and action on this
issue among our employees. Aligned with this, we carried
out an innovative and transformative training programme
at the Inmaculada mine, focused on the prevention of
violence and workplace harassment. We will be looking
into replicating this effort in our other mine sites.
Additional details and achievements will be presented in the
standalone 2024 Sustainability Report.
Our focus areas relating to our people
Diversity, equity, and inclusion
Inclusivity and a safe work environment promote equal
opportunities for all, are fundamental to the sustainability
of our Company and our corporate purpose.
We are committed to respecting human rights and promoting
diversity, equity, and inclusion. As such, we reject any acts
of discrimination that are based on race, gender, religion,
ethnicity, age or any other distinguishing characteristic or trait.
Our Diversity and Inclusion Policy outlines our commitment
to promoting equal opportunities for all, including the
participation, education, and empowerment of women
in the workplace.
Gender diversity
2024
2023
2022
2021
2020
2019
2018
2017
2016
Number of employees
Men
2,978
2,921
3,282
3,347
3,155
3,024
3,894
3,849
3,859
Women
331
311
316
316
275
218
245
235
222
Number of senior managers
Men
35
38
44
43
41
37
37
36
35
Women
6
5
6
2
1
1
1
1
1
Number of Board members
Men
5
5
6
6
7
7
7
7
8
Women
3
3
3
3
2
1
1
1
1
ANNUAL REPORT 2024
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FINANCIAL STATEMENTS
FURTHER INFORMATION
Labour relations
We recognise and respect the right to freedom of association
and collective bargaining, in accordance with the laws and
regulations of the countries in which we operate. Our principles
and practices related to fair compensation, job security, and
professional development opportunities underpin our relations
with our workforce. In 2024, approximately 74% of our total
workforce was represented by a trade union or similar body.
We recorded no strikes or lockouts during 2024.
Well-being: “Conversemos en familia” (Conversations as a
family) is an annual event organised for the spouses of all
Hochschild employees in Peru. At our 2024 event, a series of
interactive talks and workshops were held. Some of the topics
discussed included:
– Relationships as a couple
– Safety at home
– How to take care of the environment from home
Additionally, a composting workshop was held to share
practical knowledge on the topic. We received 160 participants
at this event.
Recruitment, retention, and engagement
We are dedicated to attracting and retaining a talented
workforce by fostering a workplace that is engaging, innovative,
and guided by our corporate purpose and values. In 2024, nearly
97% of our employees were permanent full-time workers, with
a low voluntary turnover rate of 4.96%. Additionally, we saw a
material improvement in our Working Climate survey from 63%
in 2019 to 70% in 2024, reflecting our commitment to creating
a supportive work environment. This year, we will work to
implement the actions that have been identified to build on this
strong foundation. In the 2024 Merco Talento ranking, Hochschild
was ranked 3rd among 18 mining sector companies in Peru and
placed 28th out of the top 100 companies in Peru based on our
talent retention and attraction efforts. The ranking demonstrates
and promotes the improvement of human capital management
within organisations, providing them with various metrics and
evaluation elements that contribute to a better understanding
of the aspirations of the individuals working within them.We were
also recognised as a Great Place to Work in Argentina.
Employee status in 2024
Permanent
contracts
Fixed-term
contracts
Men
2,892
81
Women
320
10
Innovation through technological solutions
We strive to promote innovation in all aspects of our business
to increase productivity, improve worker safety, and reduce our
impact on the environment. This can be seen in projects such as
the technological improvements in personnel transport safety,
the Innova platform (see below), and the “SWAT” Project at
Inmaculada. Together with the Boston Consulting Group (BCG),
the Company sought to maximise the plant’s unused capacity.
The goal was to reach full production capacity as quickly as
possible by improving mining cycle productivity and addressing
bottlenecks such as ventilation. As a result, the plant processed
4% more ore than planned (compared to budget).
Innova Campaign and Environmental Ambassadors:
Our Innova platform facilitates the submission of initiatives
from every level of the Company. Launched in 2022, the
objective of the tool is to harness the ideas of our colleagues,
which incorporate technology and innovation into our
processes. The use of the platform is encouraged to share
ideas of disruptive, applied, or incremental initiatives for
evaluation and implementation in a timely manner.
In 2024, our Environmental Ambassadors were challenged
to make environmental improvements across all of our
operating mine sites, organised through the Innova platform.
As part of this initiative, a total of 27 proposals were received,
covering areas such as waste management, energy efficiency,
emission reduction, and resource conservation. To date, eight
impactful projects have been selected, which will be evaluated
and supported for implementation in 2025. The programme
has ultimately strengthened our environmental culture and
employee environmental stewardship.
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FURTHER INFORMATION
FINANCIAL STATEMENTS
GOVERNANCE
STRATEGIC REPORT
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ANNUAL REPORT 2024
Highlights
Alignment to UN SDGs
Conducting business honestly and ethically is a core pillar of our
corporate identity. We are wholly committed to ethical business
operations and are dedicated to maintaining the highest standards
of responsibility in our activities, partnerships, and business
dealings. Within our governance pillar, we have recognised the
following additional topics for our business: Respecting human
rights, responsible business conduct and ethics, responsible
supply chain management, and public policy.
63%
DIRECTORS CONSIDERED
TO BE INDEPENDENT
2023: 63%
38%
WOMEN ON THE BOARD
2023: 38%
Ensuring we are a
responsible business
Our approach to responsible business
Our practice for acting responsibly is led by our rigorous
corporate governance framework of appropriate systems,
policies, and procedures. This framework drives business
accountability across positive economic, social, and
environmental outcomes. It involves advancing a corporate
culture that is aligned with our shared values: Innovation,
inspiring others, recognising talent, seeking efficiencies, and
demonstrating responsibility, beyond minimum compliance
with legal and regulatory requirements.
Key achievements 2024
– ESG KPI integration and LTIP Programme: The purpose of
the LTIP programme is to align employee performance with
organisational sustainability and operational goals through
measurable KPIs and a long-term incentive structure.
Performance against the approved ESG KPIs will be reflected
in the LTIP for senior employees.
– ESG ratings: We incorporated ESG-related rating agencies
into our corporate performance evaluations, strengthening
the importance of ESG as a strategic pillar of the Company.
– Launch of the Internal Legal and Compliance Portal: In 2024,
we launched a portal to provide employees a streamlined
and instant access to all business conduct and ethics-
related documents and initiatives. This reinforces the
availability of resources supporting compliance with all
Company rules, policies, and documents.
– Expansion of the Compliance HOC Podcast: We expanded
our Compliance HOC Podcast to Peru and Argentina
this year. Launched in Brazil in 2023, this initiative
provides employees with accessible and approachable
content related to themes related to compliance.
Complementary to the Code of Conduct, the podcast
supports employee awareness and adherence with all
Company compliance rules.
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Progress against our 2030 ambitions
2021 Baseline
2022
2023
2024
2030 Ambition
Director Independence (%)
44%
67%
63%
63%
> 50%
Average Tenure of Non-Executive Directors (years)
6.4
5.0
5.3
6.3
< 6 years
Women on the Board (%)
33%
33%
38%
38%
40%
– Policy updates: We updated our Prevention and Criminal
Compliance Manual and Interaction with Public Officials
Policy. Our operations in Peru and Argentina were evaluated
for corruption risks in accordance with the Compliance
Manual; zero corruption-related incidents were reported.
Additionally, our UK Tax Policy was updated during the year
to clarify the conservative approach that would be taken by
Hochschild where the tax treatment of a proposed course of
action is unclear.
Additional details and achievements will be presented in the
standalone 2024 Sustainability Report.
Our focus areas relating to responsible business
Respecting human rights
Hochschild is resolutely committed to protecting and valuing
human rights within the Company and across our value chain.
Our Human Rights Policy is aligned with the Universal
Declaration of Human Rights, the United Nations Guiding
Principles, the UN Global Compact, and the International
Labour Organisation’s (ILO) core conventions. The policy
outlines a framework of standards that detail how our suppliers
and contractors are required to carry out their activities. In
2024, the policy was updated to include an explicit mention
of human trafficking, freedom of association, and the right to
collective bargaining, in line with our existing Code of Conduct.
In January 2025, we began developing, on a voluntary basis,
our first Modern Slavery Statement. We will also undertake
a human rights process consisting of two main phases: a
gap assessment and leadership training in 2025 and the
development of a due diligence framework in 2026.
Responsible business conduct and ethics
Hochschild is dedicated to sustaining the highest standards
of business conduct and ethics in our operations and
supply chain. Our Board oversees that our Company values
are reflected in our business behaviour and activities. To
operationalise this, we have implemented a Code of Conduct
(inclusive of environmental management), alongside
supplementary policies, that are applicable to all those who act
for or on behalf of Hochschild.
Our Code of Conduct is made available to all Hochschild
employees and details the standards and values of ethics that
our employees are expected to uphold, ensuring responsible
behaviour, establishing accountability, and fostering a positive
corporate culture. In addition to the Code of Conduct, our
supplementary policies cover topics such as anti-corruption,
anti-bribery, and money laundering prevention, amongst other
topics. Any breaches or violations of the Code of Conduct are
viewed as serious misconduct and managed with utmost gravity.
In conjunction with Hochschild’s established Whistleblowing
Policy, the Company has an online portal, available 24/7, to
allow any individual (whether they are employed by Hochschild
or not) to escalate concerns, anonymously or otherwise.
Hochschild takes all legitimate reports raised through the
Whistleblowing portal seriously, as they underpin the high
ethical standards that are expected. To serve this purpose, we
have a zero-tolerance policy towards any form of retaliation,
maintaining strict confidentiality concerning legitimate
complaints received and the identity of those submitting
reports.
Responsible supply chain management
We place high importance on ensuring that we contribute
to a value chain that protects human rights, safeguards the
environment, and promotes sustainable outcomes in our
operations. For this reason, compliance with the specific
standards outlined in our updated Supplier Code of Conduct is
required by all suppliers.
In all countries where we operate, we have a centralised system
for the evaluation of all new suppliers on their reputation,
financial situation, and background checks, to mitigate the
risk of crimes such as corruption, bribery, collusion, money
laundering, and terrorism financing. In addition, suppliers are
required to update their financial and corporate information
every two years to be reviewed by the Procurement and Internal
Audit departments. Furthermore, we require all entities with
which Hochschild has a commercial relationship to align to
our internal ESG-related requirements. Key requirements
in supplier contracts include the following:
– Implementation of an OHS Management System and
an EMS, aligned with Hochschild’s internal policies and
national regulations.
– Prioritisation of the hiring of local personnel and suppliers
from direct influence areas. In each contract, we determine
the objectives that each supplier must achieve, detailing
the number of individuals or services to be hired from our
communities.
– Compliance with human rights and anti-corruption
regulations.
– High standards for operations, including conditions of
equipment, vehicles, and tools.
Public policy
We purposefully engage with policymakers, professionals,
and civil society to collectively discuss, review, and approve
new initiatives aimed at improving regulations in mining
and environmental sectors. In our commitment to promoting
ESG guidelines and practices within the mining industry,
we play a key role in various industry associations and
professional forums such as the Sociedad de Minería and
Petróleo y Energía (SNMPE) in Peru, Cámara Argentina
de Empresarios Mineros (CAEM) in Argentina, and the
Confederação Nacional da Indústria (CNI) in Brazil. We also
participate in the Instituto Brasileiro de Mineração (IBRAM), a
key institution within Brazil’s mining industry, which promotes
responsible mining practices, driving policy decisions,
enhancing innovation, and facilitating collaboration among
various stakeholders in Brazil’s mining industry.
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Climate-related
financial disclosures
Introduction to Hochschild’s approach to
climate change
Within the Intergovernmental Panel on Climate Change’s
(IPCC) latest Assessment Report it was concluded that human
activities, including the burning of fossil fuels and changes in
land use, have caused unprecedented changes in the Earth’s
climate. We recognise climate change as being one of the
most urgent issues people are facing globally and that it could
significantly influence the physical, regulatory, and economic
environment in which we operate.
Here at Hochschild, we understand the key role that we, and the
mining industry as a whole, must play in supporting the global
transition to a Net-Zero world. Therefore, we are dedicated to
responsibly managing our impact on the environment, our
carbon footprint, in addition to the potential effects climate
change could have on our business.
This is reflected in the actions that we have taken in recent
years, including:
– The undertaking of a series of updated climate-related risk
and opportunity assessments – to provide additional insights
into how climate change could potentially affect our assets,
operations, and business strategy in the short, medium, and
long-term future.
– Our ambition to reduce our Scope 1 and 2 Greenhouse Gas
(GHG) emissions by 30% by 2030, against our 2021 baseline,
as well as our commitment to achieve a Net-Zero emissions
profile by 2050.
We also will be undertaking a financial quantification
assessment in 2025 to ensure that we fully understand
the potential financial materiality of the most significant
climate-related risks that our business faces.
HOCHSCHILD MINING PLC
80
Task Force on Climate-Related Financial
Disclosures (TCFD) requirements
Hochschild is within the scope of the UK Financial
Conduct Authority’s (FCA) and the UK Companies
Act climate-related reporting requirements. This
requires us to disclose, on a comply or explain basis,
against the recommendations of the TCFD, as well as
against the UK Climate-related Financial Disclosure
(CFD) requirements. The CFD’s guidance states that
disclosures consistent with the FCA’s listing rule and
the TCFD’s recommendations are likely to meet CFD
disclosure requirements. Therefore, the following
report includes a summary of how we are managing
our carbon footprint and the effect of climate change
on our business in alignment with the FCA’s reporting
requirements and UK CFD. This includes the 11 TCFD key
disclosure recommendations, covering four disclosure
areas: Governance, Strategy, Risk Management and
Metrics & Targets. For further details, please refer
to the table on page 95.
Hochschild’s products are key in the global
transition to a low-carbon economy
The transition to a low-carbon economy will require significant
quantities and investment in precious metals such as gold and
silver. This places Hochschild in a unique position to support
the transition to a low-carbon economy and to assist in the
global adoption of low-carbon technologies. Silver will play an
important feature in the energy transition as it is a component
for solar photovoltaic (PV) panels where global demand is
continuing to grow. Additionally, gold will have multiple uses
such as being used in battery technology and continuing to
play a crucial role in investment portfolios by central banks
and investors.
A new opportunity identified within this year’s updated
scenario analysis was to maximise circular processes,
ultimately reducing the intensity of energy use, alongside
benefits of reducing waste. Over the long term, this will enable
Hochschild to lower the emissions profile of both gold and
silver, therefore supporting the downstream supply chain in
reducing their Scope 3 emissions.
1
Please note that the IEA (“Institute for Environmental Analytics”) data for total
mineral demand for electric vehicles (“ EV”) does not include silver (but instead it
includes other minerals such as copper, graphite, nickel, etc.). However, the data
point has been selected as an indicator to represent the likely demand for silver
in the future.
Mineral demand for Solar PV (kt) under the
Stated Policies, Announced Pledges and Net Zero
by 2050 scenario (IEA, 2024)
Capacity for solar PV (GW)
Net Zero Emissions by 2050 Scenario
Announced Pledges Scenario
Stated Policies Scenario
Net Zero Emissions by 2050 Scenario
Announced Pledges Scenario
Stated Policies Scenario
Mineral demand for EV (kt) under the Stated
Policies, Announced Pledges and Net Zero
by 2050 scenario (IEA, 2024)1
Mineral demand for EV (kt)
2023
2030
2035
2040
2045
2050
2023
2030
2035
2040
2045
2050
5,500
5,000
4,500
3,500
3,000
2,500
2,000
1,500
1,000
500
0
20,000
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
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Governance of climate-related issues
Board of Directors
Sustainability continues to be an increasingly important
topic to Hochschild’s stakeholders; therefore it is crucial that
Environmental, Social, and Governance (ESG) topics are
seamlessly integrated into our operations and governance
structures. This includes ensuring there are clear governance
structures that manage climate-related risks and
opportunities responsibly. This is overseen at the highest level
by our Board of Directors who have overall accountability
for the management of policies and initiatives related to
sustainability and climate change. This includes consideration
of climate-related risks and opportunities that can affect
several aspects of the Group’s financial statements, such as
production costs, capital expenditure, and closure costs, as
well as influence the Group’s approach to strategic planning
and risk management. To date, Hochschild has effectively
managed climate-related risks within its day-to-day budget
allocations approved by the Board.
Board members bring expertise from their respective careers,
including individuals experienced in managing sustainability,
climate change and water management within the mining
industry. The Sustainability Committee supports the Board
in its oversight of these matters. This is key to understanding
the resilience of business operations in a changing climate.
The Board’s involvement in sustainability issues is facilitated
through quarterly interactions with the Sustainability and
Audit Committees, both of which are responsible for reporting
climate-related issues to the Board. At these meetings, key
sustainability topics are presented, including risks associated
with climate, water management, and other environmental
risks, as well as quarterly progress against Hochschild’s ESG
ambitions. This year, we have developed our first annual GHG
emissions action plan – which outlines the specific measures
that we intend to take to meet the interim goal set for the
year, which is aligned with our 2030 GHG emissions reduction
ambition. This GHG emissions action plan will be reviewed each
year, and the Sustainability Committee will provide the Board
with regular updates on the implementation of the action plan.
Sustainability Committee
Hochschild’s Sustainability Committee (the Committee)
has directly overseen sustainability systems and policies
since 2006. The Committee comprises Hochschild’s CEO, an
independent Director, and is chaired by a second independent
Director. Hochschild’s COO, and the Vice Presidents of Legal
and Public Affairs, and People Management and Corporate
Affairs are also regular attendees. The Committee has a wide
scope of responsibilities, and the discussion and management
of climate-related issues are scheduled agenda items during
every quarterly meeting. During these meetings, the Committee
provides recommendations to the Board on climate change
and GHG emissions-related topics that are material to
Hochschild’s operations and business plans. The Committee
also manages the processes around ESG-related risks and
opportunities, oversees Hochschild’s compliance with relevant
national and international standards, and reviews the policies
and procedures in place for investigating relevant incidents.
The Committee also reviews yearly ECO Score targets and ESG
KPIs and presents these to the Board for approval. In addition
to the Committee, special working groups are established in
response to specific climate-related events. For example:
– The El Niño phenomenon triggered the formation of a
taskforce in August 2023, which was in effect until the first
quarter of 2024 and included the Peruvian General Manager,
Corporate Safety Manager, Logistics Manager, and the Head
of Internal Audit. This group was responsible for monitoring
and managing business risks that might emerge by
working to understand the situation alongside government
authorities, implementing weather monitoring systems and
providing support to the mines that could be impacted.
– In 2024, a working water management taskforce was
established in response to water shortages across Argentina.
This taskforce is comprised of a range of managers and
superintendents across Argentina and is responsible
for reviewing actions being taken to increase our water
efficiency and reduce our overall water usage in San
Jose. Our Sustainability Director meets with the water
management taskforce on a bi-weekly basis – to track
and monitor any progress being made by the taskforce.
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Managing climate-related risks
Our process for monitoring climate-related risks and
opportunities is led by the Risk Committee made up
of Hochschild’s CEO, Vice Presidents, Country General
Managers, and the Head of the Internal Audit function.
The Risk Committee is primarily responsible for executing the
risk management process at Hochschild, and monitoring the
impact and effectiveness of controls to support Hochschild’s
business objectives. The Risk Committee meets prior to
quarterly Board meetings and approves the latest version
of the risk register for consideration by (a) the Group’s Audit
Committee, which has oversight of risk management on behalf
of the Board, and (b) the Board, in its consideration of the
significant risks faced by the business. Sustainability risks
and plans to mitigate these are also monitored by the
Sustainability Committee.
In 2024 we conducted an updated climate-related scenario
analysis, identifying emerging physical and transition risks
(detailed in the “Climate-related risks, opportunities and
strategies” section on page 84). In addition, the carbon pricing
risk and opportunity to reduce land transport emissions were
selected for deeper analysis.
Climate change is considered a significant risk in Hochschild’s
risk management framework (as detailed in the Risk
Management section on page 107), and the key risks identified
in the updated climate-related scenario analysis will be
integrated into it, considering current and potential future
implications of climate on the business. By leveraging forward-
looking climate data and integrating climate-related risks
into Hochschild’s risk management framework, the Board
and Management levels can assess the potential impact and
implications on future budget allocations.
Our governance structure
Board
Sustainability Committee
Chair (Independent), CEO and
1 Independent Director
Exploration working group
Audit Committee
Chair (Independent) and
3 Independent Directors
Risk Committee
Chair (CEO) and Senior Management
Remuneration Committee
Chair (Independent) and
3 Independent Directors
2
Non-Independent Directors
5
Independent Directors
Chair
(Non-Independent)
Environmental management
The Sustainability Director has responsibility for the ESG team
and reports to the Vice President of People Management
and Corporate Affairs. The ESG department monitors
Hochschild’s ESG performance through data gathering on
ESG metrics, including GHG emissions, energy usage, water
consumption, and percentage of waste recycled. The reporting,
disclosure, and communication of Hochschild’s progress within
these ESG areas, to both internal and external stakeholders,
are also managed by the ESG department.
In each country where mining operations are present (Peru,
Brazil, and Argentina) there is a dedicated Environmental Lead.
It is the responsibility of each Environmental Lead to ensure
environmental goals are met at all sites, and to take corrective
actions when necessary.
At Hochschild we have a Remuneration Policy in place to
incentivise a reduction in our environmental impact, the details
of which are available in the “Our Climate-Related Metrics and
Targets” section on page 90.
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Climate-related risks,
opportunities, and strategies
Our approach to assessing our exposure to physical
and transition risks and opportunities
At Hochschild, we understand the importance of fully
considering how climate change could impact our business.
As a result, in recent years we have undertaken a number of
Climate-related Risk and Opportunity (CRO) assessments –
focusing on how climate change could impact our current
and future exposure to a full range of physical risks and
transition risks and opportunities.
Due to changes in our business and the availability of
updated climate data, this year we have undertaken an
updated CRO assessment. This included scenario analysis
across physical risks and transition risks and opportunities,
and a detailed transition assessment. These updated
assessments have helped to:
– Improve our visibility of the different climate-related physical
risks and transition risks and opportunities that may exist
across our organisation (including the drivers and timing of
these risks/opportunities); and
– Prioritise, support and inform our management – including
our internal risk management decision-making process
- of the different physical risks and transition risks and
opportunities that may be present across five mining
facilities (including Inmaculada, Selene, Pallancata, Mara
Rosa, and San Jose, located across Peru, Brazil, and
Argentina).
During the process of undertaking the updated scenario
analysis, and through Hochschild’s existing governance
structures, climate-related risks and opportunities have been
assessed in alignment with our business-wide Enterprise
Risk Management framework. As with other business risks,
each identified climate-related risk and/or opportunity was
assigned a consequence of impact rating, that represented
the potential damage and/or associated loss of service, and a
probability rating that represented the likelihood of a climate
hazard/event occurring. Based on these consequence and
probability ratings, a 3x5 risk matrix, shown in the table below,
used to map each risk under baseline and future projected
climatic conditions (2030 and 2050). This produces an overall
risk rating classified as a Low, Medium, or High risk. Once risk
ratings were assigned, the potential impact of each risk was
also qualitatively assessed, and next steps were recommended
to manage each risk.
To ensure that physical and transition risks are appropriately
considered, we have integrated and mapped the significant
and emerging climate-related risks identified within previous
years’ CRO assessments onto our mining units’ existing risk
matrices (which are updated quarterly). These matrices are
consistently reviewed during quarterly Risk Committee and
Board meetings in the process described above. This ensures
that we are consistently monitoring and managing climate-
related risks and incorporating them into our financial strategy
and budget allocations. We plan to follow this same process
and integrate any significant and emerging climate-related
risks identified within this year’s updated CRO assessment in
the coming months.
Following this we also undertook a more detailed assessment of
the most significant transition risks and opportunities identified
in the updated CRO assessment. The findings have provided
us with greater insight and understanding into the Group’s
potential exposure to the most significant transition risks and
opportunities identified for our business.
Risk evaluation
Risk classifications and recommended actions
Consequence of impact rating (S)
Very high
5
5
10
15
High
4
4
8
12
Moderate
3
3
6
9
Low
2
2
4
6
Insignificant
1
1
2
3
1
2
3
Low
Medium
High
Probability/likelihood rating (P)
Risk
category
Risk
score
Hochschild Mining PLC
recommended actions
High
9-15
Requires management/
top management attention
Moderate
5-8
Requires management to
assign responsibilities
Low
1-4
Routine procedures are
required to address risks
HOCHSCHILD MINING PLC
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Scenarios used
In order to assess how physical risks and transition risks
and opportunities could impact our business in the future,
our updated CRO assessments utilised the latest climate
scenario data.
For the physical aspect of our assessment we utilised the
IPCC’s Shared Socioeconomic Pathway (SSP) 1-2.6 (SSP1-2.6)
and SSP5-8.5. SSP1-2.6 represents a lower emissions scenario
– resulting in warming of ~1.8°C by 2100* whilst SSP5-8.5
represents a higher emissions scenario – resulting in a warming
of ~4.4°C by 2100*. These two scenarios were selected as they
represent a range of plausible future climatic conditions,
as per the TCFD’s recommendations, and allow us to consider
how the physical impacts of climate change could impact
our business (for SSP5-8.5 specifically).
For the transition aspect of our assessment, we primarily
utilised the Network for Greening the Financial System (NGFS)
Net Zero 2050 and Current Policies scenarios. The Net Zero
2050 scenario represents a lower emissions scenario – resulting
in warming of ~1.5°C by 2100*, whilst the Current Policies
scenarios represents a higher emissions scenario – resulting in
~3°C by 2100*. For transition risks and/or opportunities where
suitable NGFS climate indicator data was not available, the
IEA’s Stated Policies Scenario (STEPS) and Net Zero by 2050
(NZE) scenarios were used (STEPS: representing a ~2.5-3°C
temperature increase by 2100* and NZE: representing a
1.5°C temperature increase by 2100*).
*
This figure represents future projected warming above pre-industrial
temperatures.
Time horizons
Within our updated CRO assessment, physical risks and
transition risks and opportunities were assessed across a
range of time horizons. This provides insight into the potential
materiality of each risk/opportunity in the short, medium, and
long-term future.
When assessing physical risks, the CRO assessment utilised the
following time horizons:
– Baseline, representing the current climatic conditions and
associated materiality of each risk;
– 2030, representing the materiality of each risk in the short-
medium term future; and
– 2050, representing the materiality of each risk in the long-
term future.
Our assessment of transition risks and opportunities included
the following time horizons:
– 2030, representing the materiality of each risk in the short-
term future;
– 2040, representing the materiality of each risk in the
medium-term future; and
– 2050, representing the materiality of each risk in the long-
term future.
All of the above time horizons were selected for inclusion
within this CRO assessment based upon their relevance to
the operational lifetime of our assets, and our forward looking
business strategy.
Electro hydraulic drilling rig
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Risk rating
(by 2050 (SSP5-8.5))
Hazard
Argentina
Brazil
Peru
Extreme
heat
Wildfires
Extreme
rainfall/
flooding
Water stress
and drought
Extreme
winds and
storms
The physical risk profile of our operations
in Peru, Argentina, and Brazil
The physical CRO assessment evaluated the exposure of
Hochschild’s facilities and immediate value chain across
Peru (including the Inmaculada and Pallancata mining sites
and Selene processing plant), Argentina (San Jose mining
site) and Brazil (Mara Rosa mining site) to nine climate
hazards. The assessment concluded that five physical risks
were rated as “high” risks and 15 were rated as “medium”
risks (see our risk evaluation matrix on page 84 for the
definitions of each risk category).
The results of this assessment are summarised in the table
to the right. This includes a summary of each of the physical
risks that were assigned a “high” risk rating, any mitigation
measures that are in place to manage each risk, and the
identification of which sites each risk is relevant to.
It should be noted that our current operating assets
(Inmaculada, Mara Rosa and San Jose) have a relatively
short life of mine. However, Hochschild’s expectation is
to continue operating beyond 2050; therefore, the longer-
term physical risks associated with climate change
(e.g. those that may emerge by 2050) are still identified
as being relevant to our business.
Low risk
Moderate risk
High risk
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Description of risk
Risk response
Impact of extreme heat on production efficiency,
reducing revenue and increasing operating
expenditure: Site operations may be disrupted due
to increasing temperatures negatively affecting
heat-sensitive manufacturing equipment (e.g.
extraction machinery). This could lead to more
inefficient or delayed production, potentially
reducing revenue. Increased operating expenditure
may be required for repairs to damaged equipment.
Under present-day conditions, this risk is not identified as a material
issue for any of our sites. However, we will continue to closely monitor
the potential emergence of this risk in the future – and will prepare
appropriate responses and action plans as needed.
Impact of wildfires on infrastructure, increasing
capital expenditure: Direct heat and flames
associated with wildfires can cause direct physical
damage to the structural integrity of on-site
infrastructure (e.g. water storage facilities, mineral
processing facilities, smelters etc.). If flammable
chemicals are stored incorrectly, this could
exacerbate the impacts associated with wildfires.
Repair or replacement of key site infrastructure
can also lead to significant increases in capital
expenditure.
For Mara Rosa specifically:
– Firebreaks have been created around the perimeter of the Mara Rosa site.
– Periodic inspections of our firebreaks are undertaken.
– We continuously monitor for the presence of smoke during the dry season
– and take immediate action to prepare for wildfires (where necessary).
– We have an on-site fire brigade to help manage and counteract fire risks.
– Communicate with neighbouring properties to ensure an appropriate
collective response to wildfires is carried out.
– Under present-day conditions, this risk is not identified as a material
issue for San Jose. However, we will continue to closely monitor the
potential emergence of this risk in the future – and will prepare
appropriate responses and action plans as needed.
Impact of extreme rainfall flooding on mining
facilities, reducing revenue: Extreme rainfall
flooding could lead to increased water levels in
tailings facilities which could reduce operating
capacity. In a worst-case scenario, this could
lead to overtopping, due to insufficient capacity
or failure of the embankments. A reduction in
the tailings facilities’ operating capacity and/or
disruption to nearby site personnel camps could
reduce revenues. The Mara Rosa site has already
experienced impacts associated with extreme
rainfall flooding as confirmed by the Mara Rosa
site lead.
– Precipitation levels are monitored continuously by the freeboard in the
Group’s Tailings Storage Facilities (TSFs).
– Internal and external audits are conducted on a regular basis to
ensure the stability of our operational TSFs. For example, in 2024, an
external audit was conducted on the three TSFs in San Jose.
– Following audits and where required, our TSFs have been redesigned
and upgraded.
– Roads to and from our sites are monitored to identify areas of high
erosion/washouts and are continuously maintained to reduce the risk
of erosion associated with extreme rainfall.
– Additional stocking of critical materials at our sites when needed, such
as during El Niño events.
Impact of water stress and drought on mining
operations, reducing revenue: Reductions in water
availability could disrupt operations across each
of Hochschild’s mining facilities (including the
TSFs present at each site). If sufficient water is
not made available at each site, water-intensive
operations could be disrupted. For TSFs specifically,
a reduction in water supply could reduce the
quantity of water that can be stored and reused
for operations. This could subsequently disrupt
upstream operations within each mining site.
As a result, both impacts could result in a delay in
production and cause a reduction in revenue.
– Reusing water within our processing plants.
– Assigning KPI’s associated with reducing our freshwater usage.
– Implementing water usage reduction measures. For example:
• in 2024 we implemented a lined water reservoir at our San Jose site
to reduce losses by infiltration and evaporation; and
• at our Mara Rosa site we prioritise the reuse of water in our day to
day operations.
– We encourage our sites to reduce their potable water usage –
which is also recommended through our ECO Score.
Impact of extreme winds and storms on
aboveground structures and electrical equipment,
increasing capital expenditure: Strong winds
associated with storms could result in direct
physical damage to mining infrastructure such
as TSFs, processing facilities and machinery
(e.g. drilling equipment, transformers, water
pumps). As key assets required for the operation of
Hochschild’s mines, if replacement is required, an
increase in capital expenditure can be anticipated.
– We continuously track the weather across our operating regions.
– Undertaking future CRO assessments using multiple scenarios to
further improve project design.
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Risk/opportunity rating by 2050
(under Net Zero 2050 scenario)
TCFD category
Policy
Policy
Resource
efficiency
Technology
Resource
efficiency
Our transition risk and opportunity risk profile
The summary of transition risks and opportunities builds
on previous assessments and actions that are being
considered to meet our Net Zero targets.
The results shown in the table on the right consider
transition risks and opportunities to be relevant to all
operations across Peru, Argentina, and Brazil. These
focus on a high and a medium risk, followed by three high
opportunities split across alignment to TCFD categories.
Notably, the opportunities focusing on reducing road
transport emissions and investing in low carbon
technologies will enable us to make good progress in
reducing our overall emissions profile.
High opportunity
Moderate risk
High risk
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Description of risk/opportunity
Risk/opportunity response
Risk – The impact of carbon pricing on operating & capital
expenditure was selected for deeper analysis: Development
of carbon pricing mechanisms are expected to have an
impact on our operational costs in the future. The Brazilian
emissions trading scheme is expected to closely resemble
that of the European Union. Peru is expected to be a fast
follower of Brazil so we will continue to monitor regulatory
developments. Argentina has a carbon tax scheme, however,
it should be noted that it currently does not have an impact
on Hochschild’s operating costs.
Carbon pricing can drive innovation in cleaner technologies
and more efficient processes within the mining sector. The
cost of investing in lower carbon technologies may be cheaper
in the long run if carbon prices increase over time. We will
continue to decarbonise the operation over future time periods
to reduce our emissions profile and save future operating
expenditure.
– Hochschild will continue to monitor regulatory developments
to assess the impact of potential future carbon pricing.
Risk – Investor concern regarding climate action: As well
as regulatory pressure, activist investors have started to put
pressure on mining companies to decarbonise their business,
which may cause Hochschild to bring capital expenditure
ahead of time.
– Hochschild has an ambition to reduce 30% of Scope 1
and 2 emissions from the 2021 baseline level by 2030 and
develops annual action plans.
Opportunity – Reduced land transport emissions was selected
for deeper analysis: To reach our 2030 ambition and 2050
target we are seeking opportunities to reduce emissions
from our portfolio of fleet at our mines. We are expecting to
transition towards more energy efficient vehicles with lower
greenhouse gas emissions when these are readily available
at competitive costs within the next four years.
– Hochschild has close relationships and is continuing to
work with suppliers who are working to provide vehicles with
lower greenhouse gas emissions.
Opportunity – Investment in low carbon technologies:
Investing in low carbon technologies will enable us to create
operational efficiencies within its mining processes resulting
in lower emissions. We will continue to deploy capital
expenditure to fund new technologies which will enable
lower energy usage and savings on other inputs that create
emissions in the mining process (i.e. extraction).
– We have an offtake agreement with Solatio Energia (a
photovoltaic sector specialist) to implement a solar energy
project that will supply renewable energy for the Mara Rosa
operations. With a capacity of 124.6 MW of energy, the solar
plant will guarantee that the amount of energy produced
will meet the energy demand throughout the mine’s useful
life. All production from the new solar plant will feed into the
National Interconnected System (SIN), offsetting the total
volume of energy consumed by the operations in Mara
Rosa.Production is scheduled to begin in H2 2025.
– Hochschild are assessing opportunities to continue
transition to other renewable energy contracts, replacing
current remaining conventional grid sourced energy.
Opportunity – Developing circular processes: Under a
Net Zero scenario, developing circular processes at mine
sites will reduce emissions.
Our ultimate goal is to minimise waste generation to the
greatest extent possible and only reuse/recycle what is left
after the mining process.
– Tailings and waste rock are reused as backfill for the
underground mines in Inmaculada and San Jose.
– Some waste rock from Mara Rosa is sold to a rail company.
– We encourage our sites to maximise recycling of all
waste– which is also recommended through an ESG KPI.
– We reuse 100% of treated domestic wastewater in the
Inmaculada and San Jose processing plants.
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The resilience of our strategy to climate change
Both the physical and transition aspects of the updated
CRO assessment have considered the resilience of our assets,
operations and business strategy under a range of climate
change scenarios, including a 2°C or lower scenario (for the
physical element this scenario is SSP1-2.6 and for the transition
element this is the Net Zero by 2050/NZE scenario).
Although the findings of the physical CRO assessment
identified a number of risks which could impact our assets
and operations, we consider our business to be fairly resilient
to those risks. Part of our resilience is associated with our
expected Life of Mine (LOM). For example, the majority of
the identified physical risks are anticipated to materialise
over the long-term time horizon (2050) and under a higher
emissions scenario, whilst the current expected LOM of our
assets is currently up to 13 years – although it should be noted
that we expect to continue operating up to, and beyond, 2050
and therefore in general risks emerging by 2050 could still be
relevant to our business. Our resilience is also improved by
a number of the risk management measures and responses
we have implemented across each of our sites to reduce the
potential impact of high-risk climate hazards on our assets
and operations. For example, relating to flooding risks, we have
implemented mitigation measures including our continuous
monitoring of the freeboard in the Group’s TSFs and installation
of dewatering plants in Pallancata and Inmaculada (in 2025) to
ensure the freeboard is at a safe level. We also track weather,
install dry stacks where possible, and give maintenance of
water-related infrastructure as outlined in the physical risks
table (see pages 86 and 87).
We also consider our business to be resilient to the upcoming
combination of future policy, market, and technology-based
trends that will support the mining sector to reach Net Zero.
To further our progress to meet our short-term objective
of reducing Scope 1 and 2 emissions by 30% from the 2021
baseline level by 2030, in the next four years we expect low
carbon mining vehicles to be readily available at competitive
cost to reduce our emissions from our onsite mining fleet. In
order to progress future resilience, we are assessing low carbon
vehicle technology trends and continue to work with our third
parties to purchase fleet that will support us in reducing our
emissions. Across all mining operations, we are increasing the
supply of renewable energy using power purchase agreements.
Our climate-related metrics and targets
At Hochschild, we are committed to being the leading global
mining company in environmental excellence and recognise
the importance of monitoring and measuring our progress
against key metrics and targets relating to GHG emissions,
water, and waste. We have continued to measure our progress
against key metrics in 2024 to enable improvement in our
environmental initiatives.
We have developed a process to internally quantify our
environmental performance and to help monitor and measure
progress against our targets. At the group level, starting in 2025,
ESG metrics and KPIs represent 25% of our overall performance
KPIs and metrics, with the following breakdown: Lost Time
Injury Frequency Rate (LTIFR) 10%, Lost time injury severity
rate (LTISR) 5%, ECO Score 5%, improvement in ESG indices
5% (which covers climate change, including CDP Climate).
Terra Ronca State Park
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CONTINUED
Performance against these and other metrics (relating to
profitable production and financial results) determines the
extent of the annual bonus payouts to eligible employees,
incentivising a reduction in our environmental footprint
(as shown in the figure to the right). Additionally, we have
a Long Term Incentive Program which includes monitoring
performance targets against 13 of our 16 ESG KPIs – including
our 2030 GHG reduction and freshwater reduction ambitions.
This section focuses primarily on the waste and water
components as relevant metrics and targets associated
with the climate-related risks and opportunities which were
identified in our recently undertaken scenario analysis
(e.g. water stress and drought for physical risk).
Based on other risks identified in our the scenario analysis,
we anticipate considering additional metrics associated with
identified risks as they materialise.
Our model for monitoring and measuring progress
against key metrics and targets
By levels:
– Vice Presidents
– General Managers
– Corporate Managers
– Superintendent Chiefs
– Employees
Corporate
and
individual
What
Results
Objectives
Annual Bonus
How
Attitudes
Competencies
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Domestic waste generation (kg/person/day)
Ambition 2030 (kg/person/day)
Waste generation and 2030 ambition
(kg per person per day)
2.500
2.000
1.500
1.000
0.500
0.0
Water
At Hochschild, we understand the importance of
managing our water resources in the regions where
we operate. This is due to the water-intensive nature of
our operations and the potential risk from drought our
sites face as identified in our physical risk assessment.
As a result, we use multiple metrics to monitor our
consumption of water resources and have set targets
to reduce our on-site potable water consumption and
freshwater consumption in operations.
Between 2015 and 2024, a reduction in potable water
consumption (litres per person per day) of 66% was
achieved*, with 2024 representing our lowest recorded
potable water consumption at 138 litres per person per
day and meeting our 2030 ambition.
In addition to monitoring our potable water
consumption, we are also working towards increasing
the recirculation of water in our processing plants to
reduce freshwater intake. We recognise the importance
of monitoring freshwater consumption as a significant
proportion of our water requirements for our operations
is met through recycled water, and if insufficient
recycled water is available, freshwater is utilised. In
2024, 0.31m3 of freshwater was used per tonne of ore
processed and it is our intention to reduce freshwater
consumption to 0.22m3/tonne by 2030, as defined in
our 2030 ambitions. To minimise the intake of
freshwater, we utilise recycled water in our processing
plants. In 2024, 72% of all water used in the Inmaculada
and San Jose processing plants was recycled.
Waste
We also understand the benefits of reducing our
waste generation, including conserving resources and
reducing GHG emissions, and therefore monitor our
waste generation and recycling rates. Between 2015
and 2024, we have reduced landfilled domestic waste
by 52%*, with a decrease in waste generated per person
per day from 1.942kg to 0.928kg. To further reduce our
waste generation, Hochschild has set a 2030 ambition
for waste generated to be 0.90kg per person per day.
Simultaneously we seek to increase the percentage of
total waste that is recycled to 80% by 2030, compared
to 57% in 2024.
Potable water consumption and 2030 ambition
(litres per person per day)
Potable waste consumption (l/person/day)
Ambition 2030 (l/person/day)
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
500
450
400
350
300
250
200
150
100
50
0
408
294
214
225
206
231
193
171
163
Ambition 2030:
<174 l/person/day
Ambition 2030:
<0.9 kg/person/day
1.942
1.327
1.131
1.133
1.041
1.182
1.001 1.052 0.931 0.928
138
*
Water and waste data excludes Brazil due to Mara Rosa construction and commissioning activities. Mara Rosa will be included from 2025 which will be the first full year of
mining operations.
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Introduction to GHG emissions and
Net Zero commitments
At Hochschild, we report our Scope 1, 2 (market-based), and
3 emissions on an annual basis. For a full breakdown of
our Scope 1, 2, and 3 emissions for 2024, please refer to the
Environmental section of the Annual Report on page 69.
Emissions are calculated on a yearly basis in alignment with
the ISO 14064-1 Standard and the GHG Protocol Corporate
Accounting and Reporting Standard. Our Scope 1, 2, and 3
GHG emissions are a key metric used to monitor our climate
impact over time.
Our Scope 1 and 2 (market-based) emissions have increased
in 2024, since we are including the Mara Rosa mine emissions.
This increase has been partially offset by a decrease in
emissions between 2023 and 2024 since two of our mines
(Pallancata and Selene) were under care and maintenance.
We therefore recognise that we may need to rebaseline our
emissions in 2025 to account for these changes.
Our 2024 Scope 3 emissions constitute 24% of our total emissions,
with the highest contribution coming from Category 4 (58%).
However, it should be noted that Hochschild has only calculated
the following Scope 3 categories:
– Category 4: Upstream transportation and distribution
– Category 5: Waste
– Category 6: Business travel
– Category 7: Employee commuting
– Category 9: Downstream transportation and distribution
The selected categories represent emissions over which
Hochschild has a reasonable degree of influence. Other
categories either lack sufficient data for accurate assessment
or fall outside of our direct or indirect sphere of control,
limiting the ability to effectively measure or mitigate them.
We are planning to undertake a relevance and screening
assessment for our Scope 3 GHG emissions and update
our calculations, as required.
We have committed to become Net Zero by 2050 across
both our operations (Scope 1 and 2) and value chain (Scope 3).
In 2023 we also set an ambition to reduce our Scope 1 and 2
(market-based) emissions by 30% by 2030, compared to
our 2021 baseline.
Future Mara Rosa green energy project
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30% reduction
by 2030
Scope 1
Scope 2
Net Zero
by 2050
Scope 1
Scope 2
Scope 3
Next steps
This year we have taken action to improve:
– Our management of climate-related issues;
– Our understanding of the different climate-related risks
and opportunities that our business could be exposed to;
and
– Our overall compliance with the UK CFD and TCFD’s
recommendations.
Over the course of 2025, we will continue to review and adapt
our management of climate-related issues in alignment with
the TCFD and UK CFD.
Within the table to the right, we have detailed the current
status of our consistency with each of the TCFD’s
recommendations and our planned next steps to increase
our consistency in the future. In 2025 we have commissioned
a third-party consultancy to support us in undertaking a
financial quantification assessment of climate-related risks
associated with our business, which will be incorporated
into our annual financial report. This will help Hochschild to
understand the potential financial materiality of the most
significant climate-related risks that our business faces.
We are also aware of emerging regulatory requirements
which we will need to monitor and consider when publishing
future disclosures associated with climate-related issues
(from 2025 onwards). For example:
– The International Sustainability Standards Board (ISSB)
(of the International Financial Reporting Standards
- IFRS) has released the new “IFRS S2 Sustainability
Disclosure Standard”. The IFRS S2 supersedes the TCFD’s
recommendations and requires a number of additional
climate-related disclosures (when compared with the
TCFD’s recommendations).
– As the UK government develops its Sustainability
Reporting Standards (UK SRS), it is also assessing the
suitability of the IFRS Sustainability Disclosure Standards
for endorsement and application across the UK. Subject
to positive endorsement (which is anticipated to be
confirmed in 2025), the UK SRS will likely be based upon
IFRS S1 and S2.
– Following this, the Financial Conduct Authority will be able
to use the UK SRS to introduce requirements for UK-listed
companies to report sustainability-related information to
their investors.
We will continue to monitor the UK’s regulatory landscape to
ensure that we are disclosing in alignment with all relevant
climate-related disclosure requirements.
To achieve our target of Net Zero by 2050 across the value chain,
we understand the need to improve our understanding of our
Scope 3 footprint, and work closely with our suppliers in order to
implement a Scope 3 emission reduction strategy thereafter.
For Scope 1 and 2 GHG emission reductions, we have developed
a Carbon Roadmap. This has allowed our business to
understand some of the activities/investments that may be
required to reach this target including, but not limited to:
– Utilising low-carbon grid-based electricity and
prioritising the use of renewable energy when available
(already ongoing).
– Implementing behaviour change programs across
the business.
– Using higher efficiency vehicles, with lower GHG emissions.
As we start to implement these measures, we recognise the
importance of monitoring and assessing progress against our
GHG emission reduction targets. This year, we have developed
our first annual GHG emissions action plan – which outlines
the specific measures that we intend to take to meet the
interim goal set for the year, which is aligned with our 2030
GHG emissions reduction ambition. This GHG emissions
action plan will be reviewed each year, and the Sustainability
Committee will provide the Board with regular updates on the
implementation of the action plan.
Our annual GHG footprint is also presented to the Sustainability
Committee so that they can oversee progress against these
ambitions and support continued progress towards our Scope 1
and 2 reduction ambition by 2030.
Next steps
This year we have taken action to improve:
• Our management of climate-related issues;
• Our understanding of the different climate-related risks
and opportunities that our business could be exposed to;
and
• Our overall compliance with the UK CFD and TCFD’s
recommendations.
Over the course of 2025, we will continue to review and adapt
our management of climate-related issues in alignment with
the TCFD and UK CFD.
Within the table to the right, we have detailed the current
status of our consistency with each of the TCFD’s
recommendations and our planned next steps to increase
our consistency in the future. In 2025 we have commissioned
a third-party consultancy to support us in undertaking a
financial quantification assessment of climate-related risks
associated with our business, which will be incorporated
into our annual financial report. This will help Hochschild to
understand the potential financial materiality of the most
significant climate-related risks that our business faces.
We are also aware of emerging regulatory requirements
which we will need to monitor and consider when publishing
future disclosures associated with climate-related issues
(from 2025 onwards). For example:
– The International Sustainability Standards Board (ISSB)
(of the International Financial Reporting Standards
- IFRS) has released the new “IFRS S2 Sustainability
Disclosure Standard”. The IFRS S2 supersedes the TCFD’s
recommendations and requires a number of additional
climate-related disclosures (when compared with the
TCFD’s recommendations).
– As the UK government develops its Sustainability
Reporting Standards (UK SRS), it is also assessing the
suitability of the IFRS Sustainability Disclosure Standards
for endorsement and application across the UK. Subject
to positive endorsement (which is anticipated to be
confirmed in 2025), the UK SRS will likely be based upon
IFRS S1 and S2.
– Following this, the Financial Conduct Authority will be able
to use the UK SRS to introduce requirements for UK-listed
companies to report sustainability-related information to
their investors.
We will continue to monitor the UK’s regulatory landscape to
ensure that we are disclosing in alignment with all relevant
climate-related disclosure requirements.
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TCFD Pillar/Recommendation
Status
Next steps
Governance
1. Describe the board’s oversight of
climate-related risks and opportunities
Consistent
–
2. Describe management’s role in
assessing and managing climate-
related risks and opportunities
Consistent
–
Risk
management
3. Describe the organisation’s processes
for identifying and assessing climate-
related risks.
Consistent
Key risks identified in the 2024 climate-related scenario analysis
will be integrated into Hochschild’s risk management framework,
considering current and potential future implications of climate
on the business.
4. Describe the organisation’s processes
for managing climate-related risks.
Consistent
5. Describe how processes for identifying,
assessing, and managing climate-
related risks are integrated into the
organisation’s overall risk management.
Partially
consistent
Strategy
6. Describe the climate-related risks and
opportunities the organisation has
identified over the short, medium, and
long term.
Consistent
–
7. Describe the impact of climate-
related risks and opportunities on the
organisation’s businesses, strategy, and
financial planning.
Consistent
Based upon the results of our previously completed physical and
transition CRO assessments, we aim to quantify the financial
impact of any potentially material climate-related risks in 2025.
8. Describe the resilience of the
organisation’s strategy, taking into
consideration different climate-related
scenarios, including a 2°C or lower
scenario.
Consistent
Following the completion of our 2024 climate-related
scenario analysis, we intend to review and update our current
management of each of the key climate-related risks that we
have identified to ensure we are appropriately and effectively
managing each identified risk.
Metrics &
targets
9. Disclose the metrics used by the
organisation to assess climate-related
risks and opportunities in line with its
strategy and risk management process.
Partially
consistent
We will continue to explore the use of additional metrics that
could be used to support our management of climate-related
risks and opportunities, including the consideration of metrics
related to any climate-related risks identified in the scenario
analysis undertaken this year.
10. Disclose Scope 1, Scope 2, and if
appropriate, Scope 3 greenhouse gas
(GHG) emissions, and the related risks.
Partially
consistent
In 2026, Hochschild will undertake a relevance/screening
assessment for our Scope 3 GHG emissions and review/update
our calculations, as required.
11. Describe the targets used by the
organisation to manage climate-
related risks and opportunities and
performance against targets.
Consistent
–
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FURTHER INFORMATION
A measured and informed
approach to risk
RISK MANAGEMENT
Our risk appetite approach is to
minimise our exposure to reputational,
compliance and excessive financial
risk, whilst accepting a certain level of
risk to achieve our strategic goals.
Management of the Group’s operations and execution of
its growth strategies are subject to a number of risks, the
occurrence of which could adversely affect the performance
of the Group. The Group’s risk management framework is
premised on the continued monitoring of the prevailing
environment, the risks posed by it, and the evaluation of
potential actions to mitigate those risks.
The Risk Committee is a management committee tasked
with implementing the Group’s policy on risk management
and monitoring the effectiveness of controls in support of the
Group’s business objectives. It meets four times a year and
more frequently if required. The Risk Committee comprises
the CEO, the Vice Presidents, Country General Managers and
the Head of the Internal Audit function. A “live” risk matrix
is reviewed which maps the significant risks faced by the
business as well as those considered to be emerging risks.
The matrix is updated at each Risk Committee meeting, and
the most significant current and emerging risks, as well as
actions to mitigate them, are reported to the Group’s Audit
Committee, and if considered appropriate, also to the Board.
In light of their strategic importance, sustainability risks,
if any, and their mitigation plans are monitored by the
Sustainability Committee.
Risk appetite
Defining risk appetite is crucial in ensuring that a risk
management system is embedded into Hochschild’s
organisational culture. Our risk appetite approach is to
minimise our exposure to reputational, compliance and
excessive financial risk, whilst accepting a certain level of risk
to achieve our strategic goals. As part of setting risk appetite,
the Board will consider and monitor the level of acceptable
risk it is willing to take in each of the principal risk areas.
Appetite for risk will vary according to the activity undertaken,
and is predicated on the fact that a risk will only be tolerated
after a full understanding of the potential benefits and its
implications before proceeding with a course of action,
and that sensible mitigation measures are identified and
implemented. This year, for the first time, we have indicated
by each specific risk, the Board’s tolerance for that risk
using a scale of Low/Medium/High.
2024 risks
Details of the principal and emerging risks affecting the Group
and the associated mitigating actions are provided on the
following pages. The risks presented differ from those reported
in the 2023 Annual Report in that the following risks are no
longer considered to be relevant as at the end of 2024:
• The potential impact of the periodic El Niño weather
phenomenon was downgraded by the Peruvian government
in early 2024, which was eventually borne out with minimal
impact on the coastal regions of Peru; and
• Project Development is no longer considered to be a
significant risk following the commencement of commercial
production at Mara Rosa in May 2024.
Reasons for the year-on-year change in the profile of
a specific risk can be found in the commentary section
of the relevant risk.
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96
1 Identify
Business processes are reviewed to identify risks
to Hochschild’s strategic objectives with a risk
matrix prepared for each process.
2 Measure
Each risk identified is analysed for probability of
occurrence and scale of impact to determine the
level of threat to strategic objectives.
3 Manage
Taking into consideration the relevant risk
appetite and the scale of risk, mitigating actions
and controls are designed and implemented.
4 Monitor
Mitigation and controls monitored to ensure
effectiveness and to take all actions necessary
to achieve a level of risk management within the
defined appetite for risk.
5 Report
Established reporting within the business on risk
management by Internal Audit function. Principal
and emerging risks reported on quarterly basis
to Audit Committee and the Board.
Risk management process
Risk management responsibilities
Board
Determines risk appetite
Reviews Register of
significant strategic risks
and mitigating actions
Monitors effectiveness of
risk management process
Audit
Committee
Responsible for risk
management and internal
control processes
Oversees internal audit
function, including annual
work plan
Management Risk
Committee
Quarterly review of risk
universe and significant
strategic risks
Cascades risk tolerance
and appropriate risk
management culture
Determines mitigating
actions and monitors
effectiveness of controls
Proactive risk
identification
and management
process
1
3
5
2
4
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Risk heat map
To assist the reader in
assessing the relative
significance of each risk
discussed in this section,
the heat map indicates
the Board’s assessment
of the likelihood of the
unmitigated risk occurring
as well as the extent of the
impact on the Group.
The key to the map
indicates how the profile
of a risk has changed
(whether in terms of impact
or probability) relative to the
prior year.
1
8
2
9
3
10
4
11
5
12
6
13
7
Commodity price
Personnel: labour relations
Commercial counterparty
Political, legal and regulatory
Operational performance
Health and safety
Business interruption/supply chain
Environmental
Information security and cybersecurity
Climate change
Exploration and reserve and resource replacement
Community relations
Personnel: recruitment and retention
Risk heat map key
Probability
Impact
High
Low
Low
High
8
11
3
2
7
5
1
9
13
10
12
6
4
9
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Risk management
CONTINUED
STRATEGIC PILLARS:
1 Brownfield
2 Operational efficiency
3 ESG
4 Disciplined capital allocation
Financial risks
Risk, change, tolerance and impact
Mitigation
Commentary
1. Commodity price
Strategic pillar impacted:
1 2 3 4
Risk profile change:
Risk tolerance:
Medium
Adverse movements in precious
metal prices could materially
impact the Group in various
ways beyond a reduction in the
financial results of operations.
These include impacts on
the feasibility of projects, the
economics of mineral resources,
heightened personnel retention
and sustainability-related risks.
See the Market Review on
pages 10 to 15 for further
details on how commodity prices
performed in 2024.
– Constant focus on
maintaining a low
all-in sustaining cost
of production and
an efficient level of
administrative expense.
– Policy to maintain
reasonable levels of
financial leverage to
ensure flexibility through
price cycles.
– Flexible hedging policy
that allows the Company
to contract hedges to
mitigate the effect of price
movements taking into
account the Group’s asset
mix, forecast production
and debt profile.
The Group’s principal strategy to mitigate against
commodity price volatility is focused on conserving capital
and optimising cash flow through:
• Controlling operating and administrative costs;
• Optimising sustaining capital expenditure; and
• Managing working capital.
As previously reported, the Company executed hedges
in 2023 and 2024 to ensure an ongoing level of cash flow
stability which includes a hedge taken in February 2024 in
respect of 60,000 ounces of gold produced at Inmaculada
in 2025 with an average floor of $2,000 per ounce and an
average ceiling of $2,485 per ounce.
During 2024, the following hedged production was sold:
• 100,000 ounces of gold from Inmaculada with an
average floor of $2,000 per ounce and an average
ceiling of
$2,252 per ounce; and
• 27,600 ounces of gold from Mara Rosa at a fixed
price of $2,100 per ounce
The remaining commitments from the 2023 hedges in
respect of production from Mara Rosa are as follows:
• 2025: 50,000 ounces of gold at a fixed price of
$2,117 per ounce
• 2026: 50,000 ounces of gold at a fixed price of
$2,167 per ounce
• 2027: 50,000 ounces of gold at a fixed price of
$2,206 per ounce
2. Commercial
counterparty
Strategic pillar impacted:
2
Risk profile change:
Risk tolerance:
Medium
Insolvency of a customer or other
business counterparty (bank,
insurance company, contractor, etc)
could result in the Group’s inability
to collect accounts receivable or to
access funds or to receive services
which could adversely impact the
Group’s profitability.
– Active assessment of
customers and business
counterparties.
– Risk mitigation practices
seeking to diversify the
Group’s customer base, to
limit the size of shipments
and to maximise upfront
payments.
– Ongoing assessment
of methods to mitigate
collection risk.
During the year, the Group undertook the following:
• Commercial counterparty monitoring: The Company
undertakes an annual review of existing customers
which encompasses analysis of corporate governance,
balance sheet strength and other aspects impacting
credit quality. Customers and financial counterparties,
including insurance underwriters, are also the subject
of ongoing monitoring. In addition, members of the
Company’s sales function attended commercial events
with current and potential customers with a view to
diversifying and mitigating counterparty risk.
• Review of financial counterparties: The Group
continued to implement policies to identify suitable
financial counterparties to support the Group’s
treasury and insurance needs. On an ongoing basis,
the Group has adopted a number of practices such as
the placing of limits on cash balances invested with
financial institutions and monitoring credit ratings.
ANNUAL REPORT 2024
99
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Operational risks
Risk, change, tolerance and impact
Mitigation
Commentary
3. Operational
performance
Strategic pillar impacted:
2
Risk profile change:
Risk tolerance:
Low
Failure to meet production targets
and manage the cost base could
adversely impact the Group’s
profitability.
– Close monitoring of
operational performance,
costs and capital
expenditure at all stages
of the mining value chain
and during the entire
mine life cycle.
– Monitoring the adequacy
of key mining components
such as tailings and
water storage facilities,
waste rock deposits
and pipelines in close
liaison with relevant
departments ensuring
that procurement,
construction and
permitting are undertaken
appropriately.
In 2024 the Group’s attributable production was 347,374
gold equivalent ounces.
In setting budgets for the year, the Group continued
to focus on maintaining controlled levels of costs and
capital expenditure.
As reported in the Financial Review from page 48,
the all-in sustaining cost from operations was slightly
ahead of guidance for the year, at $1,638 per gold
equivalent ounce.
A committee comprising members of the Operations
team continued to meet during the year to oversee the
adequacy of key components. Projects during the year
included the expansion of Inmaculada’s tailings storage
facility (TSF), the closure activities of Ares’s TSF, the
construction of the reverse osmosis plant at Inmaculada
and a water storage facility at San Jose.
During 2024, management initiated a review of the process
by which the Group’s mine closure liabilities are estimated
and thereby provided for in the Group’s financial
statements. This has involved the establishment of a new
multi-disciplinary team with a view to improving planning,
engineering designs and execution of closure activities.
In addition, a short-term and medium-term action plan
has been formulated with a view to (a) enhancing the
Group’s forecasting capabilities and (b) integrating HOC’s
ESG strategy within the execution of closure activities.
4. Business
interruption/
supply chain
Strategic pillar impacted:
2
Risk profile change:
Risk tolerance:
Low
Assets used in the Group’s
operations may cease to function
or the provision of supplies or
electricity may be disrupted (e.g.
as a result of technical malfunction
or earthquake damage) thereby
causing production stoppages
with material effects.
– Insurance coverage to
protect against major risks.
– Management reporting
systems to support
appropriate levels of
inventory.
– Inspections every
18 months by insurance
brokers and insurers
(to coincide with
policy renewals) assist
management’s efforts to
understand and mitigate
operational risks.
– Negotiation of long-term
power supply contracts
and the procurement of
contingent generators
and transformers.
– Use of high-quality
equipment from
recognised manufacturers.
– Implementation of
preventive and predictive
maintenance programs.
In addition to maintaining insurance policies covering
machinery breakdown, mitigating actions taken during the
year include the following:
• The use of a Maintenance Module of SAP HANA to
monitor critical supplies and inventory which was also
implemented in respect of Mara Rosa in mid-2024; and
• Maintaining back-up equipment to ensure sufficient
power supply for critical onsite activities in the event
of a power outage.
Specifically with regards to supply chain risks across the
Group, the Company:
• Has identified alternative suppliers for numerous
critical consumables;
• Has restored stocks of critical consumables and
strategic spare parts to pre-pandemic levels;
• Requires, of certain suppliers, the maintenance of
minimum stock levels; and
• Monitors the financial position of key suppliers.
The Company has a Crisis Response Plan setting out the
necessary workstreams for a co-ordinated response in the
event of unforeseen disruption. This will be updated in the
current financial year.
STRATEGIC PILLARS:
1 Brownfield
2 Operational efficiency
3 ESG
4 Disciplined capital allocation
HOCHSCHILD MINING PLC
100
Risk management
CONTINUED
Risk, change, tolerance and impact
Mitigation
Commentary
5. Information
security and
cybersecurity
Strategic pillar impacted:
2
Risk profile change:
Risk tolerance:
Medium
Failure of any of the Group’s
business critical information
systems as a result of unauthorised
access by third parties may affect
the Group’s ability to operate.
– Compliance with ISO
27001, an internationally
recognised certification
to evaluate information
security management
systems.
– Dedicated team within the
Technology department
focused on preventing
evolving threats.
– Audits performed by the
internal audit department
and third parties to
test systems and issue
recommendations.
– Primary information
processing supported
by RISE with SAP.
Security of the Group’s information and networks are
assured through the following means:
• We have world-class cybersecurity tools supported
by artificial intelligence that secure and protect our
network as well as our computer assets and the
information that resides in them. Additionally, we have
a centralised CyberSOC (Cyber Security Operation
Center) that works 24x7 to monitor the different events
and possible attacks that may arise;
• Every year we perform ethical hacking evaluations to
identify potential vulnerabilities in our technological
infrastructure as well as the different applications that
we use for operations;
• We conduct cybersecurity training and maintain an
active communication channel with all employees
to report suspicious activity, which enables the
cybsecurity team to take immediate action;
• We migrated from SAP S4 HANA to RISE with SAP with
improved security infrastructure; and
• We increased use of cloud back-ups for strategically
important data.
6. Exploration
and reserve
and resource
replacement
Strategic pillar impacted:
1 2 4
Risk profile change:
Risk tolerance:
Low
a) The Group’s future operating
margins and profitability depend
upon its ability to find mineral
resources and to replenish
reserves.
b) Reserves stated in this Annual
Report are estimates.
– Implementing and
maintaining an annual
exploration drilling plan.
– Ongoing evaluation of
acquisition and joint
venture opportunities to
acquire additional ounces.
– Implementation of a
comprehensive permitting
strategy led by a
Permitting Committee.
– Comprehensive
engagement activities
with communities and
governmental authorities
(see later sections on
Macro-economic and
Sustainability risks).
– Alternate use of
independent experts and
internal qualified persons
to undertake annual audit
of mineral reserve and
resource estimates.
– Adherence to the JORC
Code and guidelines
therein.
General
The Group has an internal Permitting Committee to co-
ordinate efforts with a view to streamlining the permitting
process for exploration and operational requirements.
Senior executives actively participate in industry initiatives
to simplify the permitting process.
Limited greenfield exploration is undertaken, with the
aim of providing the Group with a focused portfolio
of advanced and early-stage opportunities in stable
jurisdictions in the Americas.
Developments during the year
The Company had an extremely successful year in terms
of the Brownfield exploration programme with 2.8m gold
equivalent ounces of resource additions being reported.
The year-on-year changes in the Company’s attributable
Reserves and Resources are 37% and 18% respectively.
Further details on brownfield exploration are provided on
pages 46 and 47.
The results of the Group’s external audit of mineral reserve
and resource estimates as at 31 December 2024 can be
found from page 242 for further details.
ANNUAL REPORT 2024
101
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Risk, change, tolerance and impact
Mitigation
Commentary
7. Personnel:
recruitment and
retention
Strategic pillar impacted:
2
Risk profile change:
Risk tolerance:
Medium
Inability to attract or retain
sufficiently skilled personnel.
For further details see the Directors’
Remuneration Report on page 142.
– The Group’s approach
to recruitment and
retention provides for the
payment of competitive
compensation packages,
well-defined career plans,
training and development
opportunities and the
overall employee value
proposition.
The Group has undertaken a number of initiatives to
improve the retention of employees. These include the
use of financial benefits such as the LTIP and non-
financial benefits (e.g. flexible working arrangements for
office-based staff) and personal development through
tailored personal plans, training on leadership and
cultural transformation in the areas of social, safety and
environmental as well as diversity and sexual harassment
training. In addition, initiatives have been launched on
causes valued by employees; providing employees with the
opportunity to contribute to the relaunched purpose of the
Company which includes innovation, safety, community
relations and environmental performance.
8. Personnel:
labour relations
Strategic pillar impacted:
2
Risk profile change:
Risk tolerance:
Medium
Failure to maintain good labour
relations with workers and/or unions
may result in work slowdown,
stoppage or strike.
– Development of a
tailored labour relations
strategy focusing on
profit sharing, working
conditions, management
style, development
opportunities, motivation
and communication.
– Periodic meetings with
mineworkers and unions
to ensure a complete
understanding of
expectations and to
keep all parties updated
on the Group’s financial
performance.
Peru
The Group’s Peruvian operation generated sufficient
taxable income to give rise to an entitlement to statutory
profit sharing for Peruvian mineworkers.
The Boluarte government has not taken further steps
following the enactment of new laws by Pedro Castillo’s
Government to empower labour unions, and prompting
the risk of increased industrial unrest. We monitor,
on an ongoing basis, the social risk and work with all
stakeholders to prevent disruption arising from these risks.
Argentina
In Argentina the Company maintains constructive
relations with the labour unions through ongoing and
regular dialogue. In addition to AOMA (Mining National
Union for hourly workers), ASIJEMIN (National Union
for mining employees) has been confirmed by the
national authorities as a union with legitimate rights of
representation and with whom the Company maintains
open and regular dialogue.
Following his election, President Milei implemented
austerity measures and reforms which were contested
by the country’s labour unions who called for many
nationwide strikes: general strikes and activity related
strikes. However, this trended downwards throughout 2024
as President Milei’s public image improved.
Brazil
In Brazil, in advance of the start of operations at Mara
Rosa, Hochschild established a Union Negotiation
Committee, meetings of which are convened to discuss
relevant issues and update the annual labour agreement.
HOCHSCHILD MINING PLC
102
Risk management
CONTINUED
STRATEGIC PILLARS:
1 Brownfield
2 Operational efficiency
3 ESG
4 Disciplined capital allocation
Operational risks continued
ANNUAL REPORT 2024
103
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Risk, change, tolerance and impact
Mitigation
Commentary
9. Political, legal
and regulatory
Strategic pillar impacted:
1 2 3
Risk profile change:
Risk tolerance:
Legal/regulatory compliance:
Low
Operating in such jurisdictions:
Medium
Changes in the government,
political, legal, tax and regulatory
landscape could result in significant
additional expense, restrictions
on or suspensions of operations
and may lead to delays in the
development of current operations
and projects.
Delays in granting/securing the
necessary environmental and
operational permits for exploration
or operations, including specifically
the operational permit for the
new areas of Inmaculada and
Pallancata’s Third Modified
Environmental Impact Assessment
(MEIA) could affect future
production and financial
results of the Group.
– Local specialist personnel
continually monitor and
react, as necessary,
to policy changes. In
addition, political, social
and communications
advisers have been
engaged to support the
Group in responding to
developments.
– Participation in local
industry organisations.
Peru
Political
President Boluarte’s government continued to suffer from
widespread unpopularity during 2024. Her administration
has been the subject of corruption allegations and
ongoing investigations, some of which also implicate the
governor of Ayacucho where the Company’s operations
are located. Prompted by frustration over economic
inequality, political polarisation, and the perceived
illegitimacy of her government, there have been calls
for President Boluarte’s resignation and early elections.
In addition, Congress has come under scrutiny, with
several media reports highlighting members’ alleged
connections with illegal economies in sectors such as
mining, fishing, and transportation. These ties have had
notable repercussions, including the censure of a Minister
of Energy and Mines and the approval of legislation
favouring these sectors.
Easement and other permits
In 2024, the Company successfully secured a 10-year
renewal of the state-granted easement for the land
housing the critical mining components of the Inmaculada
mine. Meanwhile, the operational permit for the new
areas of Inmaculada remains pending; however, the prior
consultation process is advancing positively, providing
an encouraging outlook for its resolution. The process of
obtaining exploration and operational permits continues
to pose significant challenges for the mining sector.
The Third MEIA process for Pallancata is ongoing, with
meaningful progress achieved in negotiations with local
communities – an essential step for securing this permit.
Outlook
2025 is a pre-electoral year with approximately 40
political parties currently registered to participate in the
general election to be held in April 2026. These elections
will include changes to the executive branch and the
legislature as well as the re-introduction of a bicameral
Parliament, with regional elections to follow in Q4 2026.
Polls reveal significant fragmentation, with none of the
presumptive candidates expected to receive significant
support. Experts anticipate that the 2026 campaign will
likely deepen polarisation among social sectors, further
accentuating divisions between Lima and regions in the
central and southern parts of the country.
HOCHSCHILD MINING PLC
104
Risk management
CONTINUED
Risk, change, tolerance and impact
Mitigation
Commentary
9. Political, legal
and regulatory
continued
Argentina
Elected in late 2023, President Milei quickly moved to
implement his economic policies of overhauling the state,
cutting public spending, combatting hyperinflation and
stabilising the Peso. He also sought to reduce bureaucratic
red tape to stimulate private investment in the country.
The reforms have led to reduced inflation (albeit to
moderate levels), a sustained budget surplus achieved
during the year and an improvement in investor sentiment.
As a result, Milei’s approval ratings have improved in the
latter part of the year. However, economic challenges
remain since even though inflation in 2024 was 117%, the
Peso only devalued by less than 30%, leaving it at one of
its strongest levels in decades.
Brazil
President Lula continued to focus on social policies and
economic reform to, among other things, manage inflation.
The tax reform was approved and will be gradually
implemented from 2026 to 2032. Lula prioritised reducing
poverty and inequality, advancing programs aimed at
expanding access to education, healthcare, and housing.
Regional government in the state of Goias continued
to implement key reforms focusing on infrastructure,
healthcare and agricultural growth.
STRATEGIC PILLARS:
1 Brownfield
2 Operational efficiency
3 ESG
4 Disciplined capital allocation
Operational risks continued
ANNUAL REPORT 2024
105
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Sustainability risks
Risk, change, tolerance and impact
Mitigation
Commentary
10. Health and safety
Strategic pillar impacted:
2 3
Risk profile change:
Risk tolerance:
Low
Group employees working in the
mines may be exposed to severe
health and safety risks.
Failure to manage these risks
may result in occupational illness,
accidents, a work slowdown,
stoppage or strike and/or may
damage the reputation of the
Group and hence its ability
to operate.
– Health and safety
operational policies and
procedures reflect the
Group’s zero tolerance
approach to accidents.
– Use of world-class DNV
(Det Norske Veritas) safety
management systems.
– Dedicated personnel
to ensure the safety
of employees at the
operations via stringent
controls, training and
prevention programmes.
– Systematic programme of
training, communication
campaigns and other
initiatives promoting safe
working practices.
– Use of reporting and
management information
systems to monitor the
incidence of accidents
and enable preventative
measures to be
implemented.
Hochschild performed strongly in terms of safety in
2024 with the accident frequency at 1.25 (2023: 0.99) and
accident severity at 365 (2023: 37) and the attainment
of our ongoing objective of Zero Fatalities (2023: Zero
Fatalities). For information on the year-on-year increases
in the accident frequency and severity rates, please refer
to pages 72 and 73.
Highlights of the Company’s progress on safety include:
• Inmaculada and San Jose obtained Level 8 of
DNV certification for their health and safety risk
management system, the first mining operations to
have done so. This was followed up by training sessions
for internal auditors and the onsite leadership team;
• The six-monthly evaluation of Hochschild’s safety
culture by dss+ (formerly Dupont) which, in 2024,
included our sites in Brazil for the first time;
• The continued roll-out of the “Safety 2.0 Programme”
which included:
• training programmes tailored at each level including
a Risk Perception Programme;
• cross-audits at Inmaculada and San Jose of the Risk
Management System resulting in action plans for
implementation prior to the DNV audit at the end of
the year;
• the engagement of DNV to carry out a baseline audit
of our safety risk management information system at
our Brazilian operation, resulting in an action plan for
implementation; and
• accident investigation training in Argentina and Peru.
The continued use of the Seguscore, which is a holistic
measure of the Group’s safety performance combining
traditional indicators (including those referred to above)
with leading indicators reflecting the outcome of internal
and external safety audits.
For further details on our safety initiatives, please see the
safety section of the Sustainability Report on pages 72
and 73.
STRATEGIC PILLARS:
1 Brownfield
2 Operational efficiency
3 ESG
4 Disciplined capital allocation
Sustainability risks continued
HOCHSCHILD MINING PLC
106
Risk management
CONTINUED
Risk, change, tolerance and impact
Mitigation
Commentary
11. Environmental
Strategic pillar impacted:
1 2 3 4
Risk profile change:
Risk tolerance:
Low
The Group may suffer from
reputational risk and may be
liable for losses arising from
environmental hazards associated
with the Group’s activities and
production methods, ageing
infrastructure, or may be required
to undertake corrective actions or
extensive remedial clean-up action
or pay for governmental remedial
clean-up actions or be subject
to fines and/or penalties.
– The Group has a
Dedicated team
responsible for
sustainability-
related matters and
for environmental
management.
– The Group has adopted
a number of policies and
procedures to manage
its footprint.
– The Group has developed
a tool which allows
it to measure and
manage environmental
performance.
– The Group continues
to adopt measures to
minimise natural resource
use, with particular
emphasis on water
consumption in
its operations.
– A specific tailings
management framework
in place for TSFs, including
independent third-party
review.
In 2024, the Group performed strongly in its ECO Score
(with a score of 5.58 out of 6 (2023: 5.76)), reflecting the
following notable achievements:
• Two sites achieving a perfect score of 6 out of 6
(Ares and Sipan);
• The lowest water consumption since 2015
(138l/person/day);
• Continued with the lowest domestic waste generated
since 2015 (0.93 kg/person/day); and
• The Group maintains a very high level of
environmental culture compliance (using an internal
scoring system).
• In addition, during the year:
• The multi-disciplinary Sustainability team established
interim ESG goals and action plans aligned with our
2030 ESG ambitions;
• We improved year-on-year or already meet nine out of
16 ESG KPI goals;
• HOC received the fourth international prize for its
internally-designed ECO Score;
• The Sustainability team continued with its efforts
on reporting widely on the Group’s sustainability
performance by participating in numerous reporting
initiatives resulting in improvements in the 2024
ratings from FTSE4Good, MSCI, and Sustainalytics; and
• We continued the implementation of the
Environmental Culture Transformation Plan including
a comprehensive education programmes with
our stakeholders, empowerment of our employees
through our Environmental Ambassador program,
and promoted innovation through our new ECO Score
cloud-
based platform.
Subsequent to the year-end, the Group updated the
information published on its website regarding its TSFs
following the information request from the Church of
England Pensions Board originally made in 2019.
For further details, please refer to the environmental
section of the Sustainability Report on pages 66 to 71.
Risk, change, tolerance and impact
Mitigation
Commentary
12. Climate change
Strategic pillar impacted:
2 3
Risk profile change:
Risk tolerance:
Medium
Changes in climate and weather
patterns, including the occurrence
of extreme weather events such
as extreme heat, extreme rainfall
flooding, water stress and drought,
and storm conditions, may cause
operational disruption and, at
worse, could result in a suspension
of operations.
Failure to comply with climate-
related laws and regulations could
result in reputational risks for the
Group, increased costs and longer
permitting delays.
Lack of climate change actions
could result in restricted access
to capital.
Read our 2024 CFD Report
from page 80.
– The Company’s 2030
ambition is to reduce its
GHG Scope 1+2 emissions
by 30% against a 2021
baseline, with an aim
to reach Net Zero GHG
emissions by 2050.
– Enhanced management
oversight and operating
protocols to:
• quantify and verify
carbon footprint,
including Scope 3;
• maximise the efficient
use of natural resources
and minimise energy
consumption;
• maximise the use of
renewable energy; and
• promoting
transparency with
regards to the Group’s
performance through
participation in
investor-led reporting
initiatives.
Actions taken in 2024 include:
• Completion of a climate scenario analysis and
commencement of a detailed transition risk
assessment and update of the physical climate risk
assessment of operations, including Mara Rosa. These
studies identify current and future climate-related
risks to the Group’s infrastructure; and
• Updating the Board and Sustainability Committee on
the status of climate change-related risks.
Reporting of the Group’s performance has been
enhanced through:
• Continued external assurance of the calculation of the
Group’s carbon footprint at operations;
• Reporting in line with the Climate-related Financial
Disclosures (CFD); and
• Participation in Carbon DIsclosure Project information
request (B rating maintained).
A contract for the use of hydroelectric energy in Brazil
from January 2025 was signed in November 2024 and
the Company is due to renegotiate energy contracts for
the Argentinian and Peruvian operations with a view to
transitioning away from fossil fuels to renewable energy.
ANNUAL REPORT 2024
107
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
STRATEGIC PILLARS:
1 Brownfield
2 Operational efficiency
3 ESG
4 Disciplined capital allocation
Sustainability risks continued
Risk, change, tolerance and impact
Mitigation
Commentary
13. Community
relations
Strategic pillar impacted:
1 2 3 4
Risk profile change:
Risk tolerance:
Low
Communities living in the areas
surrounding the Group’s operations
may oppose the activities carried
out at existing mines or, with
respect to development projects
and prospects, may invoke their
rights to be consulted under
new laws.
These actions may result in loss
of production, increased costs
and decreased revenues, longer
lead times, additional costs for
exploration and have an adverse
impact on the Group’s ability to
obtain the relevant permits.
– The Group has a
dedicated team
responsible for
Community Relations
to lead constructive
engagement.
– Community Relations
strategy:
• has a territorial
and water focus,
prioritising the areas
of education, health,
local infrastructure
(water, sanitation,
connectivity)
and sustainable
development;
• seeks to adopt a
multi-party approach
to projects involving
public and private
organisations and
local communities.
– Policy to actively recruit
workers from local
communities.
– Policy of hiring service
providers from local
communities.
– The Group engages with
local governments to
support public investment
initiatives through
technical assistance and
direct investment.
Overall
The polarised political climate, the increase in illegal mining
and campaigning in advance of elections in 2026 has led to
an increase in social conflicts by some local communities
in Peru, which are trying to take advantage of the situation
to increase their economic demands. As a result, social
conflicts (e.g. blockades of access roads to the mining units)
have become common as a mechanism to pressure mining
companies into giving in to their demands.
Despite the existence of pre-existing agreements,
many communities refuse to recognise their validity
and demand renegotiation of the agreements, which
has led to numerous rounds of discussions.
Governmental authorities remain very sensitive to
conflicts between communities and mining companies
and typically take a cautious approach by prioritising
dialogue between parties and supporting social demands
regardless of their merit.
Hochschild developments
The Group continue to implement its social engagement
strategy in recognition of its responsibilities to host
communities. The Group invested significant resources
to understand the needs and expectations of local
communities and governments and actively participates
in discussions with different stakeholders, some of which
include the participation of the Peruvian State and other
organisations such as international development agencies.
During the year:
• The Group’s active engagement resulted in zero days
of operational disruption due to community protest;
• The Group spent or donated $5.4 million (2023:
$4.8 million) to benefit local communities;
• The Group resolved over 70% of the issues raised in
discussions with local communities in Peru during
roundtable sessions;
• We continued to work with the communities with a
wide range of programmes covering our areas of
focus: water, sanitation, connectivity, education, health
and women empowerment; and
• The Community Relations team continued to support
the business, for example, in relation to permitting,
negotiating new land access for operations and
ensuring that all community commitments are met.
HOCHSCHILD MINING PLC
108
Risk management
CONTINUED
Risk, change, tolerance and impact
Mitigation
Commentary
13. Community
relations continued
Brazil
With the commencement of operations at Mara Rosa,
the Company has strengthened its relations with the local
community, public authorities and representatives from
different economic sectors. This has helped Hochschild
generate a direct positive impact on the development of
the municipalities where Hochschild is present.
Social engagement during 2024 included:
• The holding of quarterly meetings with the community
to understand their expectations and to present our
sustainability actions; and
• The Company sponsored the participation of over
2,000 students in three days of activities held during
the second Literature, Culture and Art Festival of
Mara Rosa and Amaralina.
At the end of 2024, 85% of Hochschild’s Brazilian workforce
was from Mara Rosa and the surrounding region.
Further details can be found in the Sustainability
Report from page 60.
ANNUAL REPORT 2024
109
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Period of Viability statement
The Directors have reviewed the length of time to be covered by
the Viability statement, particularly given its primary purpose
of providing investors with a view of financial viability that goes
beyond the period of the Going Concern statement.
It has been concluded that the period from the date of this
statement and ending at the end of the second calendar
year thereafter (the “Viability Period”) is the appropriate time
horizon in light of:
– The inherent uncertainty of longer-term forecasting in a
cyclical industry which, in the case of precious metals, is
largely driven by global macro-economic factors; and
– The large number of external variables that need to be taken
into account in establishing any meaningful forecast of the
Group’s business.
Approach to assessing viability
In assessing the Group’s viability, the Directors have considered
a number of scenarios affecting the Inmaculada and/or Mara
Rosa mines (as stated in the description for each scenario
below) which are within reasonable contemplation taking into
account the principal risks to which the Group is exposed. Read
more in our Risk Management Report from page 96.
Inmaculada and Mara Rosa are collectively expected
to generate c.83% of attributable Group revenue in the
Viability Period.
In their assessment of the financial impact of each of the
above scenarios, the Directors made the same assumptions as
those used for the Base Case Scenario in the Going Concern
analysis, namely:
– December 2024 consensus prices as detailed below
(the “Assumed Prices”):
$/oz
2025
2026
2027
Au
2,633
2,466
2,438
Ag
32.3
32.0
32.1
• Operational forecasts are in line with the approved budget
for 2025 and the latest LOM plans for 2026 onwards;
• Debt repayments of $280 million between 2025 and 2027
will proceed according to schedule;
• Withdrawal of $203 million of the Group’s new $300 million
medium-term committed facility during the Viability
Period with repayments commencing in 2028; and
• 2025 environmental impact study expenses for Pallancata
and its development capex to be paid in 2026 and 2027 will
be incurred as anticipated.
The financial impacts of the outstanding hedges as at the date
of this report (as detailed in the commentary accompanying
Commodity Price risk on page 99) and of the outstanding
payments to be made to acquire the Monte do Carmo project
have been reflected in the forecasts used to analyse the
selected scenarios.
Viability statement
In accordance with provision 31 of the
UK Corporate Governance Code, the
Directors have assessed the viability of
the Group taking into account the Group’s
current position and principal risks.
HOCHSCHILD MINING PLC
110
The following scenarios were analysed:
In their assessment of the financial impact of each of the
scenarios, the Directors concluded that upon the occurrence of
any one of the scenarios, the Company would be viable. Taking
into account the causes of operational stoppages in the past
and the extent of the disruption caused, the Directors are of
the opinion that combinations of weak precious metal prices
and the occurrence of more than one of the above referenced
scenarios taking place concurrently is remote.
Should prices fall further than in Scenario 6, or the scenarios in
reality are more severe than those modelled or a combination
of scenarios occurs, the Board would oversee the use of
additional liquidity sources and the implementation of
mitigating actions which may include:
• The drawdown of the remaining $68 million from the
$300 million medium-term committed facility, which is
expected to be undrawn and available for use until
October 2026;
• The use of lines of credit with relationship banks, noting that
over $260 million of pre-approved, but uncommitted, working
capital credit lines are available as at the date of this
statement (subject to compliance with covenant ratios under
the medium-term credit facilities);
• Delaying discretionary capital expenditure at the Monte Do
Carmo project;
• Suspending dividend payments; and/or
• Raising capital at either the corporate or asset level.
Other actions which would serve to mitigate such scenarios
include cash pay-outs against insured risks, working capital
management, asset sales and commodity price hedging.
For examples of the actions taken by the Board during the year
under review to mitigate the impact of the Group’s principal
risks, please refer to the commentary in the Risk Management
section of this report.
Scenario 1:
A community-led protest results in a blockade of a
principal road to/from the mine and damage to a critical
plant component
A protest by a local community obstructs the access
road to Inmaculada for two months. Furthermore, it is
assumed that a component of the plant is damaged and
repair works will take six months to complete. The impact
analysis takes into account the cost of negotiating a
settlement and other associated expenses.
Scenario 2:
A strike by mineworkers
A widespread mineworkers’ strike results in a suspension
of operations at Inmaculada and Mara Rosa for three
weeks in different months. The impact analysis takes into
account the cost of negotiating a settlement and other
associated expenses.
Scenario 3:
The occurrence of a material safety accident
A severe fatal accident occurs at Inmaculada and
Mara Rosa which results in a one-month stoppage of
operations. The impact analysis takes into account other
financial liabilities that may result including the cost of
remedial work and regulatory fines.
Scenario 4:
The occurrence of a material environmental incident
A key part of Inmaculada and Mara Rosa’s plant
infrastructure is compromised which results in a major
spillage of contaminants. The impact analysis assumes a
suspension of operations for one month in different months
and takes into account the cost of repairs, remediation and
regulatory fines and other associated expenses.
Scenario 5:
The failure of the mill or other critical plant component
A major failure of one of the mills at Inmaculada’s plant
followed by a major failure of one of the mills at Mara Rosa’s
plant causes a stoppage of six months at each mining unit
which requires civil works, repairs and the acquisition of
replacement equipment. The impact analysis takes into
account the cost of the works and replacement costs as well
as contributions from relevant insurance policies.
Scenario 6:
Precious metal prices fall to a level that is 10% below the
annual average consensus prices for gold and 15% for silver
Following such a fall in prices, the Company would seek to
reduce variable costs and capital expenditure by 5%.
Conclusion
While it is always possible that combinations of weak
precious metal prices and the occurrence of more than
one of the above referenced scenarios could threaten the
solvency and liquidity of the Company over the Viability
Period, such combinations are considered to be remote.
The Directors have therefore assessed the impact of each
scenario, using the Assumed Prices and other factors
considered to be reasonable, and, accordingly, can
confirm that they have a reasonable expectation that the
Company will be able to continue in operation and meet
obligations over the Viability Period.
ANNUAL REPORT 2024
111
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
The information below is produced to comply with sections 414CA and 414CB of the Companies Act 2006.
The information is incorporated by cross-reference.
Group non-financial and
sustainability information
statement
Reporting requirement
Relevant policies
Further information
KPIs
Business model
Business model (page 22)
Principal risks
–
Risk Management (page 96)
–
Audit Committee report
(page 130)
Environmental matters
(including climate-related
financial disclosures)
–
Code of Conduct*
–
Corporate Sustainability Policy*
–
Environmental Policy*
–
Tailings Storage Facilities Policy*
–
Climate-related Financial
Disclosures Report (page 80)
–
Protecting the Environment
section of the Sustainability
Report (page 66)
–
GHG emissions
–
GHG intensity
–
ECO Score
–
Electricity consumption
–
Water consumption
–
% of water recycled
–
Domestic waste generation
–
% Recycled waste
Employees
–
Code of Conduct*
–
Corporate Sustainability Policy*
–
Protocol for the Prevention of
Covid-19
–
Health & Safety Policy*
The following sections of the
Sustainability Report:
–
Empowering our People (page 74)
–
Ensuring Health & Safety (page 72)
–
% local workforce
–
% voluntary turnover
–
High Potential Events rate
–
Work-related fatalities
–
Injury Frequency rate
Social matters
–
Corporate Sustainability Policy*
–
Community Relations Policy*
Serving our Communities section of
the Sustainability Report (page 64)
–
% local workforce
–
Social investment
(as % of revenue)
–
% local procurement
Human rights
–
Corporate Sustainability Policy*
–
Human Rights Policy*
–
Diversity & Inclusion Policy*
–
Sexual Harassment
Prevention Policy
Empowering our People section of
the Sustainability Report (page 74)
–
% of women (a) in the workplace,
(b) in leadership roles and (c) on
the Board
Anti-corruption and
anti-bribery matters
–
Code of Conduct*
–
Anti-corruption and
Anti-bribery Policy*
–
Whistleblowing Policy*
Audit Committee report (page 130)
*
Copies available from http://www.hochschildmining.com/en/responsibility.
Eduardo Landin
Chief Executive Officer
11 March 2025
HOCHSCHILD MINING PLC
112
ANNUAL REPORT 2024
113
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
113
ANNUAL REPORT 2024
Eduardo Hochschild
Chair of the Board
Joined the Group in 1987
and appointed Board Chair
in 2006.
Committee membership
N
Eduardo Landin
Chief Executive Officer
Appointed to the Board
in August 2023.
Committee membership
S
Key skills and competencies
–
Over 35 years’ involvement with the Group
–
Extensive board experience of companies
in Latin America
–
Proven ability to implement long-term
strategies in both the non-profit
and corporate sectors
Current external appointments
Commercial: Cementos Pacasmayo S.A.A.
(Chair), Aclara Resources Inc. (Chair)
Non-profit: UTEC (Chair), TECSUP
Previous experience
Eduardo joined the Hochschild Group in 1987
as Safety Assistant at the Arcata unit, becoming
Head of the Hochschild Mining Group in 1998.
Eduardo is the Company’s largest shareholder
with a c.38% interest.
Key skills and competencies
–
Long-standing operational experience
–
Broad knowledge of strategic planning and
operational control
–
Qualified Mechanical Engineer
Current external appointments
Commercial: Non-Executive Director
of Aclara Resources Inc.
Non-profit: Patronato Universidad
del Pacifico
Previous experience
Prior to his appointment as CEO in
August 2023, Eduardo served as COO of
the Company since March 2013. He joined
the Company in January 2008 as General
Manager of Argentinian operations and, in
2011, became General Manager of Projects with
direct responsibility for the development
of the Inmaculada and Crespo Advanced
Projects. Eduardo previously worked at
Cementos Pacasmayo, in the Government of
Peru’s Ministry of Energy and Mines and at
Repsol S.A. in England, Spain and Peru.
Jorge Born Jr.
Non-Executive Director
Appointed to the Board
in 2006.
Committee membership
N
Key skills and competencies
–
Extensive experience of managing
international businesses
–
Deep understanding of socio-political issues
in Latin America
–
Corporate finance
Current external appointments
Commercial: President of Consult & Co.
and Non-Executive Director of Aclara
Resources Inc.
Non-profit: Bunge and Born Charitable
Foundation (President)
Previous experience
Jorge served as a Director and Deputy
Chairman of international agribusiness Bunge
between 2001 and 2010. He previously served
as Head of European operations and Head of
the UK operations. Jorge previously served
as a Non-Executive Director of Dufry AG
(now Avolta AG).
Jorge has been nominated to the Board by the
Company’s largest shareholder, controlled by
Eduardo Hochschild.
Jill Gardiner
Independent
Non-Executive Director
Appointed to the Board
in August 2020.
Committee membership
A N R
Tracey Kerr
Independent
Non-Executive Director
Appointed to the Board in
December 2021. Designated
Non-Executive Director for
workforce engagement
Committee membership
N R S
Key skills and competencies
–
Long-standing career in investment banking
in Canada focusing on strategy and M&A
–
Significant experience on listed
company boards
–
In-depth knowledge of corporate
governance/finance/exec compensation
Current external appointments
Commercial: Non-Executive Chair
of Capital Power Corporation
Previous experience
Jill spent over 20 years in the investment
banking industry having served in a number of
senior leadership roles at RBC Capital Markets.
She provided strategic advice to and helped
raise capital for companies with a focus on
the power, pipeline, infrastructure and certain
commodity related industries. Jill has previously
served on the boards of several TSX-listed
companies including Turquoise Hill Resources,
Capstone Copper and Trevali Mining
Corporation.
Key skills and competencies
–
Extensive experience of managing
sustainability in mining
–
Geology, having overseen global
exploration activities
–
UK listed company governance
Current external appointments
Commercial: Non-Executive Director of
Weir Group PLC, Jubilee Metals PLC and
Antofagasta plc
Previous experience
Tracey spent almost 10 years working for
Anglo American plc, most recently as the
Group Head of Sustainable Development having
previously also been accountable for safety,
operational risk management and sustainable
development. Prior to working in sustainability,
Tracey worked as a geologist where she oversaw
Vale’s exploration activities in the Americas and
subsequently joined Anglo American as Group
Head of Exploration. Tracey previously served
as a Non-Executive Director of Polymetal
International PLC.
HOCHSCHILD MINING PLC
114
A highly skilled
and experienced Board
BOARD OF DIRECTORS
Joanna Pearson
Independent
Non-Executive Director
Appointed to the Board
in October 2023.
Committee membership
A N R
Michael Rawlinson
Senior Independent
Director*
Appointed to the Board in 2016
and as Senior Independent
Director in January 2018.
Committee membership
A N R
Key skills and competencies
–
Extensive experience of public company
financial reporting and risk management
–
Mining sector experience
–
UK listed company governance
Current external appointments
Commercial: Non-Executive Director
of Goldshore Resources Inc.
Previous experience
Joanna was formerly Executive Vice President
and Chief Financial Officer of the FTSE 100
company, Endeavour Mining plc, and, prior
to that, was an audit partner at Deloitte LLP,
Vancouver for 12 years where she conducted
multinational audit engagements for US and
Canadian listed companies primarily in mining
and emerging markets.
Joanna is a Chartered Professional Accountant
of British Columbia and has a certification from
the Canadian Institute of Corporate Directors.
Key skills and competencies
–
Significant knowledge of the mining sector
–
Corporate finance, strategy and M&A
–
UK listed company governance
Current external appointments
Commercial: Adriatic Metals Plc (Chair)
and Non-Executive Director of Capital
Limited and Andrada Mining
Previous experience
Michael’s career of over 20 years culminated
in his role as Global Co-Head of Mining and
Metals at Barclays Investment Bank. Before
that, he was one of the co-founding directors
at boutique investment bank Liberum Capital,
having worked as a corporate financier and
equity research analyst covering the mining
sector at JP Morgan, Cazenove and Flemings.
Mike Sylvestre
Independent
Non-Executive Director
Appointed to the Board
in May 2022.
Committee membership
A N S
Key skills and competencies
–
Extensive experience of managing mining
operations
–
In-depth knowledge of the Canadian
market, a key mining hub
–
Mining Engineering (B.Sc and M.Sc. from
McGill University and Queen’s University
respectively)
Current external appointments
Commercial: Non-Executive Director of
TSX-listed Vista Gold Corp.
Previous experience
Mike spent eight years at Kinross Gold Corp,
most recently as Senior Vice President,
Operations until his retirement in December
2022. He previously served as a Non-Executive
Director of Nickel Creek Platinum Corp. and as
a Director and Interim CEO of TSX-listed Claude
Resources Inc. having spent a significant
portion of his career with Vale Canada (formerly
Inco Ltd). During his time there he held the
positions of CEO New Caledonia and President,
Manitoba Operations. Mike is a member of
the Professional Engineers of Ontario and a
graduate of the Institute of Corporate Directors
(ICD) in partnership with the Rotman School
of Management.
Raj Bhasin
Company Secretary
Joined the Group and
appointed Company
Secretary in 2007.
Key skills and competencies
Raj is a solicitor and Chartered Secretary
with over 25 years’ experience in FTSE-listed
companies. He has significant experience in
advising on corporate governance and
corporate and commercial law.
Previous experience
Raj previously served as Deputy Company
Secretary and Commercial Counsel at Burberry
Group plc.
*
Having completed nine years on the Board, Michael Rawlinson will retire from the Board at the conclusion of the 2025 Annual
General Meeting when Tracey Kerr will assume the role of Senior Independent Director and Jill Gardiner will become the Chair
of the Remuneration Committee.
COMMITTEES:
A Audit Committee
N Nomination Committee
R Remuneration Committee
S Sustainability Committee
Chair
Gender of Independent
Non-Executive Directors
on the Board
Male
2
Female
3
Tenure of Independent
Non-Executive Directors
0-3 years
40%
Over 3 years
60%
ANNUAL REPORT 2024
115
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
HOCHSCHILD MINING PLC
116
The Directors present their report for the year ended
31 December 2024.
Information in Directors’ Report
The Directors’ Report comprises the Corporate Governance
Report from pages 118 to 141, this Report on pages 116 and 117,
and the Supplementary Information on pages 154 to 156. Other
information that is relevant to the Directors’ Report, and which
is incorporated by reference, comprises:
• An indication of likely future developments included in
the Strategic Report;
• Greenhouse gas emissions data and the steps taken by
the Company to increase its energy efficiency, included in
the Sustainability Report from page 60;
• Policy on financial risk management in note 39 to the
consolidated financial statements; and
• Details of events occurring after the year-end in note 40
to the consolidated financial statements.
For the purposes of compliance with Disclosure Guidance and
Transparency Rules 4.1.5R(2) and 4.1.8R, the Strategic Report
and this Directors’ Report (including the other sections of
the Annual Report incorporated by reference) comprise the
Management Report.
Dividend
The Directors did not declare an interim dividend in respect of
the year ended 31 December 2024 and are recommending the
payment of a final dividend of 1.94 US cents per share.
Dividend waiver
The trustee of the Hochschild Mining Employee Share Trust
(“the Employee Trust”) has waived, on an ongoing basis, the
right to dividend payments on shares held by the Employee
Trust. As at the date of this report, the Employee Trust does not
hold any shares.
Directors
The names, functions and biographical details of the Directors
serving at the date of this report are given on pages 114 and
115. All of the Directors were in office for the duration of the year
under review.
With the exception of Michael Rawlinson, who will be retiring
at the conclusion of the 2025 Annual General Meeting
(AGM) following completion of nine years on the Board, all
other Directors will be retiring and seeking re-election by
shareholders at the 2025 AGM in line with the UK Corporate
Governance Code.
Directors’ and officers’ liability insurance
The Company’s Articles of Association (the “Articles”) contain
a provision whereby each of the Directors may be indemnified
by the Company in respect of liability in relation to: (i) any
negligence, default, breach of duty or breach of trust relating to
the Company or any associated company; (ii) execution of his/
her duties as Director of the Company; and (iii) the activities
of the Company or any associated company as trustee of an
occupational pension scheme. For these purposes, associated
company has the meaning given to it by section 256 of the
Companies Act 2006.
However, a Director will not be indemnified for any liability
incurred by him/her to the Company or Group companies;
any criminal or regulatory fines; the costs of defending any
criminal proceedings in which he/she is convicted; or the costs
of defending any civil proceedings brought by the Company in
which judgment is given against him/her.
The Company has purchased and maintains liability insurance
for its Directors and officers as permitted by law and Deeds
of Indemnity on terms consistent with the Articles have been
executed by the Company in favour of the Directors.
Political and charitable donations
The Company does not make political donations. During the
year, the Group spent or donated a total of $12.29 million to
benefit local communities (2023: $8.2 million).
Relationship Agreement
Pelham Investment Corporation (the “Significant Shareholder”),
Eduardo Hochschild (who together with the Significant
Shareholder are collectively referred to as the “Controlling
Shareholders”) and the Company entered into a relationship
agreement (the “Relationship Agreement”) in preparation
for the Company’s IPO in 2006 and which was amended and
restated during 2014.
The principal purpose of the Relationship Agreement is to
ensure that the Group is capable of carrying on its business
for the benefit of the shareholders of the Company as a whole,
and that transactions and relationships with the Controlling
Shareholders and any of their respective associates are at
arm’s length and on normal commercial terms.
Further details of the Relationship Agreement with regard to
the conduct of the Significant Shareholder are set out in the
Corporate Governance Report on page 126 and, with regard
to the right to appoint Directors to the Board, are set out on
page 127.
As required by the Listing Rules, the Directors confirm that
the Company continues to be able to carry on the business
it carries on as its main activity independently from the
Significant Shareholder at all times.
Conflicts of interest
The Companies Act 2006 allows directors of public companies
to authorise conflicts and potential conflicts of interest of
directors where the Company’s Articles of Association contain a
provision to that effect. Amendments to the Company’s Articles
of Association were approved by shareholders in 2008, which
included provisions giving the Directors authority to authorise
matters which may result in the Directors breaching their duty
to avoid a conflict of interest.
Directors’ report
ANNUAL REPORT 2024
117
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
The Board has established effective procedures to enable the
Directors to notify the Company of any actual or potential
conflict situations and for those situations to be reviewed and,
if appropriate, to be authorised by the Board, subject to any
conditions that may be considered necessary. In keeping with
the approach agreed by the Board, Directors’ conflicts were
reviewed during the year under review.
Directors of the Company who have an interest in matters
under discussion at Board meetings are required to declare this
interest and to abstain from voting on the relevant matters.
Any related party transactions are approved by a committee
of the Board consisting solely of Independent Directors. In
addition, the Directors will be able to impose limits or conditions
when giving any authorisation, if they think this is appropriate.
Going concern
After their thorough review of Group liquidity and covenant
forecasts the Directors have a reasonable expectation that the
Group and the Company have adequate resources to continue
in operational existence for the period to 31 March 2026 which is
at least 12 months from the date of approval of these financial
statements. Accordingly, they continue to adopt the going
concern basis of accounting in preparing the annual financial
statements. Please refer to note 2(d) to the consolidated
financial statements for full details of the Directors’ assessment
of going concern.
AGM
The 19th AGM of the Company will be held at 9.30am on
12 June 2025. The shareholder circular incorporating the Notice
of AGM will be sent separately to shareholders or, for those
who have elected to receive electronic communications, will be
available for viewing at www.hochschildmining.com
The shareholder circular contains details of the business to be
considered at the meeting.
Auditor
A resolution to reappoint Ernst & Young LLP as Auditor will be
put to shareholders at the forthcoming AGM.
Statement on disclosure of information to Auditor
Having made enquiries of fellow Directors and of the
Company’s Auditor, each Director confirms that, to the best
of his/her knowledge and belief, there is no relevant audit
information of which the Company’s Auditor is unaware.
Furthermore, each Director has taken all the steps that he/she
ought to have taken as a Director in order to make himself/
herself aware of any relevant audit information and to establish
that the Company’s Auditor is aware of that information.
This confirmation is given, and should be interpreted, in
accordance with the provisions of section 418(2) of the
Companies Act 2006.
Directors’ responsibilities
The Directors confirm that to the best of their knowledge:
– that the consolidated financial statements, prepared in
accordance with UK-adopted international accounting
standards give a true and fair view of the assets, liabilities,
financial position and profit of the parent company and
undertakings included in the consolidation taken as a
whole; the Annual Report, including the Strategic 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; and
– that they consider the Annual Report, taken as a whole,
is fair, balanced and understandable and provides
the information necessary for shareholders to assess
the Company’s position, performance, business model
and strategy.
See page 157 for a detailed description of the Directors’
responsibilities in the preparation of the Annual Report and
the Group and Parent Company financial statements.
Disclaimer
Neither the Company nor the Directors accept any liability
to any person in relation to this Annual Report except to
the extent that such liability could arise under English law.
Accordingly, any liability to a person who has demonstrated
reliance on any untrue or misleading statement or omission
shall be determined in accordance with section 90A of the
Financial Services and Markets Act 2000.
On behalf of the Board.
Raj Bhasin
Company Secretary
11 March 2025
Hochschild Mining PLC
Company Number: 05777693
HOCHSCHILD MINING PLC
118
Corporate governance report
Dear Shareholder
I am pleased to present the Corporate Governance Report
for 2024.
In this section of the Annual Report, we report on the
Company’s compliance with the provisions of the 2024 edition
of the UK Corporate Governance Code (“the Code”) and the
application of its principles.
2024 was a year of relative operational stability given the
challenges faced in 2023 from the delayed approval of the
Inmaculada Modified Environmental Impact Assessment (MEIA).
However, as you will see from this report, the Board has been
active in diligently discharging its governance responsibilities.
Engaging with our stakeholders
During the first quarter, the Board held its first meeting of
the year in Brazil which was then followed by a tour of the
Mara Rosa mine. This provided Board members with a view
of the impressive level of progress made in the construction
of Hochschild’s inaugural operation in the country and the
opportunity to meet with our Brazilian colleagues.
Through our calendar of regular events, the Board was
kept informed of the views of our investors and, in October
2024, this was supplemented by a site visit for analysts and
investors to Mara Rosa who were able to witness, first-hand,
the mine in operation.
As our most valuable asset, it is fundamental that the views
and feedback from our people are well understood. During the
year, the Board received updates on the result of the working
climate survey and Tracey Kerr reported directly to the Board
on the Online Employee Forum that she hosted with colleagues
participating from across our operations.
Ensuring High-Level of Governance
The Board oversaw two discrete activities which demonstrate
the commitment with which we undertake our role.
Firstly, the Board received and approved the recommendation
from the Audit Committee on the appointment of Deloitte
LLP as the Company’s external auditor from 2026. This was
the culmination of a thorough process which commenced
in 2023 and which is described in more detail in the Audit
Committee report.
Secondly, the Board engaged Lintstock to undertake the
Board Effectiveness review. This was conducted in the second
half of the year through a combined approach of online
questionnaires and face-to-face discussions.
A year of robust performance
and active governance
Eduardo Hochschild
Company Chair
While 2024 was a year of
relative operational stability,
the Board was active in
diligently discharging its
governance responsibilities.
Introduction
This report, together with the Directors’ Remuneration Report,
describes how the Company has applied the Principles of the
UK Corporate Governance Code (“the Code”) (2024 edition)
in respect of the year ended 31 December 2024. A copy of the
Code is available on the website of the Financial Reporting
Council (FRC) at www.frc.org.uk.
Disclosures to be included in the Corporate Governance
Report in relation to share structure, shareholder agreements
and the Company’s constitutional provisions pursuant to the
Disclosure Guidance and Transparency Rules are provided in
the Supplementary Information section on pages 154 to 156.
Statement of Compliance
The Board confirms that, in respect of the year under review,
the Group has complied with the provisions contained in the
Code with the exceptions noted below:
Provision
The Chairman has been in post beyond nine years from the date of
his first appointment to the Board
Explanation
As a major shareholder of the Company and given his significant
experience of mining in Peru, the Directors consider Mr Hochschild’s
continued role as Board Chair to be in the best interests of the
Company. As described later in this report, the Company’s
governance structure incorporates a number of checks and
balances to ensure ongoing objectivity and that undue influence
is not exercised.
Provision
Directors’ contracts and/or other agreements
or documents which cover director remuneration should include
malus and clawback provisions that would enable the Company to
recover and/or withhold sums or share awards.
Explanation
In order to overcome the legal difficulties in enforcing clawback in
Peru, the Group’s malus policy describes the events which may lead
to its implementation including misconduct, reputational damage,
error in calculation and any material breach of an individual’s
employment contract.
ANNUAL REPORT 2024
119
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
While the Directors are pleased to note that the review
concluded that the Board benefited from quality and diversity
of expertise and a constructive dynamic at meetings, a
number of valuable recommendations were made that we are
committed to implementing over the course of the year. Further
details can be found on page 128.
I hope you will find this report to be informative reading. Please
do not hesitate to contact me at Chairman@hocplc.com if you
should have any comments or observations you wish to share.
Eduardo Hochschild
Company Chair
Our governance structure
Board
Audit Committee1
Nomination Committee1
Remuneration Committee1
Exploration Working Group
Sustainability Committee1
Joanna Pearson
Independent
Non-Executive Director
Eduardo Hochschild
Chair of the Board
Eduardo Hochschild
Chair of the Board
Tracey Kerr
Independent
Non-Executive Director
Michael Rawlinson
Senior Independent
Director
READ MORE
page 130
READ MORE
page 142
READ MORE
page 138
READ MORE
page 60
A working group consisting of management and Non-Executive Directors
which reviews detailed reports on, and progress against, brownfield and
greenfield exploration programmes.
2
NON-INDEPENDENT
DIRECTORS
5
INDEPENDENT
DIRECTORS
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The Board
The Board is responsible for approving the Company’s
strategy and monitoring its implementation, for overseeing
the management of operations and for providing leadership
and support to the senior management team in achieving
sustainable added value for shareholders. It is also responsible
for enabling the efficient operation of the Group by providing
adequate financial and human resources and an appropriate
system of financial control to ensure these resources are fully
monitored and utilised.
There is an agreed schedule of matters reserved for the Board
which includes the approval of annual and half-yearly results,
the Group’s strategy, the annual budget and major items of
capital expenditure.
2024 Board meetings
Business
10 Board meetings were held during the year, of which
four were scheduled meetings. The ad-hoc meetings were
convened to consider:
• Operational updates;
• The option to acquire the Monte do Carmo project in Brazil;
• A presentation from the management of Aclara in
connection with a proposed equity financing;
• The recommendation from the Audit Committee arising
from the tender of the external audit engagement
(see page 134 for further details);
• The approval of the renewed $300m medium-term credit
facility; and
• Administrative matters, such as the adoption of revised
banking and delegated signing authorities.
Board leadership and Company purpose
Attendance
All directors attended each of the scheduled Board meetings
held during the year.
In addition to the regular updates from across the business,
the principal matters considered by the Board during 2024
are detailed on the opposite page. In keeping with Board
practice, meetings incorporate reports from each of the
Committee Chairs on the business considered at their
respective meetings. Any significant matters arising from
those meetings are discussed by the full Board and feature
among the matters described.
Senior executives of the organisation are invited to attend
Board meetings and to make presentations on their areas
of responsibility. In the event a Director is unable to attend a
Board or Committee meeting, comments are encouraged to be
fed back to the Chairman of the relevant meeting who ensures
that the absent Director’s views are conveyed.
In between Board meetings, Directors are kept informed
of latest developments through monthly management
reports on the Company’s operations, safety performance,
exploration activity and financial position. In addition,
monthly update calls are diarised which provide an opportunity
for the Chief Executive Officer (CEO) to brief the Board on
recent developments.
The Directors receive briefings from the Company Secretary
and legal advisers on their duties under English law to promote
the success of the Company. As in other large companies,
these duties are, in part, discharged through a framework of
delegated authorities.
1
see www.hochschildmining.com/about-us/governance/ for copies of the committees’ terms of reference
*
See page 125 on how wider stakeholders’ interests were considered in relation to these key Board decisions.
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FURTHER INFORMATION
Health
and safety
• Updates on the ongoing implementation of the Company’s framework of safety programmes and
initiatives, Safety 2.0 (see page 73 for further details);
• Quarterly reviews of the Company’s Health Dashboard detailing a number of health-related indicators for
each of the Company’s sites; and
• Updates on the findings of the Company’s investigations into health and safety matters including a bus
accident suffered by a construction contractor transporting its personnel working at Inmaculada and an
accident suffered by an electrical contractor at Mara Rosa.
Financial
• The stress-tested scenarios and the underlying assumptions used in (a) the going concern statements
in support of the 2023 annual financial statements and 2024 half-yearly financial statements and (b) the
viability statement included in the 2023 Annual Report and Accounts;
• Approval of the 2023 Annual Report and Accounts and the 2024 Half-Yearly Report;
• The Group’s ongoing financial position and projected cash flows. This included consideration of securing
future cash flow certainty by hedging a limited amount of 2025 production from Inmaculada through the
purchase of a Zero Cost Collar;
• Consideration of matters related to capital return, including the adoption of a policy and the decision
to seek shareholder approval of a Rule 9 waiver enabling the Company to undertake share repurchases
without the participation of the Company’s Significant Shareholder;
• Updates on unbudgeted expenditure; and
• The review and approval of the 2025 budget.
Strategy
and Growth
• The review and approval of the Group’s annual strategic plan*;
• The decision to proceed with expedited due diligence of the Monte Do Carmo project and the subsequent
decision to exercise the option to acquire the asset from Cerrado Gold*; and
• The combined sale of non-core assets Arcata and Azuca which is due to complete in Q1 2025.
Business
performance
• Detailed updates on operational performance including progress on permitting in relation to Pallancata’s
Third MEIA (Royropata); and
• Presentations on progress against the project plans for the construction of the Mara Rosa mine and
updates on its operation following the start of commercial production in mid-May.
Risk
• Political developments in the Company’s countries of operation; and
• The Group’s Risk Register detailing the significant and emerging risks faced by the Group and their
corresponding mitigation plans. As reported in the Risk Management report, over the course of the
year, the risks associated with Project Development and the anticipated El Niño were removed from the
Risk Register.
Governance
• Updates and presentations from the Company Secretary on relevant legal and governance-related
developments including the status of governance reform, the implications for the Group of the revised
Listing Rules and lessons drawn from decisions of the Financial Conduct Authority for Listing Rules/
regulatory breaches committed by London-listed companies;
• An update on the implementation of the 2023 Board evaluation recommendations;
• The process for the externally-led Board effectiveness review; and
• The annual reviews of the Directors’ conflicts of interest and the independence of Non-Executive Directors.
Sustainability
• Reviews of the social climate in Peru, Argentina and Brazil and their potential impact on the Group;
• Performance of the Group against the internally-designed environmental corporate scorecard (the ECO
Score) and updates on the Company’s implementation of the Environmental Cultural Transformation Plan;
• Review of the 2023 Sustainability and CFD Reports; and
• Feedback on employees’ views expressed during the Online Employee Forum hosted by Tracey Kerr.
Investors’
views
• Regular reports from the Head of Investor Relations on investor sentiment as part of the Group’s
comprehensive investor engagement schedule (see later section headed Shareholder engagement
activities in 2024 on page 124);
• Feedback from investors and proxy voting agencies on 2024 AGM business; and
• Views of investors and analysts from the site visit to Mara Rosa.
Matters Considered by the Board in 2024
Our corporate values
The Company frequently implements programmes to
reinforce the Company’s purpose and culture involving
colleagues across all three operations. During 2024 these
included an event held at Mara Rosa, our first Brazilian
operation (see opposite lower corner) and at Inmaculada
which was designed around the themes of team cohesion
and recognition (see opposite upper corner).
These values not only represent key input in our business
model in the performance of our core activities but they
also inform our approach to our growth strategy (see the
Strategy section on page 24).
Setting the tone
The Board sets the tone from the top, reflecting HOC’s values
in its deliberations and decision-making. The CEO and the
executive management team is the crucial conduit through
which the tone is cascaded throughout the organisation.
Examples of the communications and initiatives led by the
CEO and the executive management team related to:
– The achievement of key strategic events including
the commencement of operations at Mara Rosa, the
sale of non-core assets and the acquisition of the
Monte Do Carmo project;
– The 2023 annual financial results and strategic
future priorities;
– Organisational changes; and
– Support for the International Day for the Elimination of
Violence against Women.
In addition, as part of his frequent trips to the operations, the
CEO held an interactive session at Inmaculada promoting
the values of Responsibility, with a focus on the importance
of safety in the workplace and of Inspiring Others, by
valuing colleagues’ own contributions as well as of their peers.
Year-end events were also held at all mining units and in Lima
to recognise the achievements during the year. The event
in Lima was led by the CEO and recognised individual and
collective achievements across all levels of the organisation.
Innovation
Inspiring
others
Recognising
talent
Demonstrating
responsibility
Seeking
efficiencies
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Purpose and culture
The Group was established over a hundred years ago and
over time it has characterised itself not only through sound
operations but also in striving to achieve the highest standards
of safety and with regards to its social impact. This approach
is reflected and described in further detail in the Code of
Conduct, which was originally adopted in 2010 and last
updated in 2023, and sets out the standards and behaviours
expected from all levels within the Company as well as our
partners, namely: professionalism, honesty, integrity, respect for
our stakeholders and a commitment to safety, our communities
and the environment. These are further reiterated in the
Group’s anti-bribery and corruption policies.
The Company’s purpose is “Responsible and Innovative Mining
Committed to a Better World” – and has adopted the following
values which create a culture that is aligned with the purpose:
Mara Rosa
The commencement of operations at
Mara Rosa provided a key opportunity to integrate
Hochschild’s organisational culture and foster a cohesive
work environment that celebrates diversity and cultural
integration.
This special event, which was attended by members
of the executive management team, was designed to
introduce our colleagues to the essence of the HOC
culture and how it contributes to the achievement of
our corporate purpose. During the event, each member
of the executive team shared key messages from their
respective functional perspective including the promotion
of behaviours expected by our Code of Conduct. The
event not only served as a welcome to our new operation
but also represented a mutual commitment between
cultures to work together toward a shared purpose.
Inmaculada event: inspiring
others and recognising talent
This event was held for colleagues at our Inmaculada
mine with the aim of strengthening organisational
culture and highlighting the importance of recognition
in the workplace.
The day consisted of interactive activities, theatrical
performances, and artistic activities encouraging
reflection on the value of recognition. Participants
also shared messages of gratitude and took part in a
symbolic chain of recognition. Additionally, unit leaders
took the opportunity to emphasise key messages about
HOC’s cultural attributes and the positive impact of a
motivating environment.
Assessing and monitoring culture
The Board assesses and monitors the Company’s culture using
a dashboard of measures, some of which are reported on
a monthly basis.
Surveys
The Board also receives updates from management on specific
engagement initiatives which provide valuable insight into
culture at an operational level, including:
– The findings of the 2024 working climate survey (see page 76
for further details); and
– A Survey on Organisational Culture and Effectiveness
which was carried out in conjunction with Spencer
Stuart and identified opportunities to further strengthen
workplace culture which were agreed at an event held in
Lima with the participation of senior management and
Country General Managers.
Responsibility
Safety
Accident Frequency Index (LTIFR), Accident Severity Index,
High Potential Event rate, Leading indicators, Seguscore
(see page 72 for further details)
Environmental
ECO Score
Community Relations
Production stoppages due to social issues
ESG
Scores given by specialist ratings organisations
Ethical practices/Integrity
Whistleblowing reports, compliance training roll-out,
internal audit reports
Monitoring Culture: Whistleblowing Reports
– Hochschild has a well-established process for
colleagues to submit their concerns, including on
an anonymous basis, with regards to acts which are
inconsistent with our corporate values. See page 132
for more details.
Innovation
Updates on operational efficiency projects
Inspiring others and promoting talent
Team and individual development plans, staff turnover/
retention rates, results of diversity and inclusion
programmes, results of working climate survey
Efficiency
Operational KPIs including AISC, Production and
Brownfield Exploration results, Financial KPIs including
Adjusted EBITDA, Working Capital, Cash Balance, Debt
Covenant ratios
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FINANCIAL STATEMENTS
FURTHER INFORMATION
Engagement
The Board ensures there is regular and sustained engagement
with its shareholders and other stakeholders which is fed
back to the Board and taken into consideration in discussions
and decision-making. This section of the report includes the
s172(1) statement and, by cross-referencing other parts of this
report, summarises how engagement was undertaken and
how stakeholders were considered in the key decisions taken
during the year.
Engagement with Shareholders
Our approach
The Board Chair, with the support of the Senior Independent
Director and the Company Secretary, is available to engage
with major shareholders on matters of governance and
performance against strategy.
The Chief Executive Officer is responsible for discussing
strategy and business performance with the Company’s
shareholders and conveying their views to the other members
of the Board. He is supported in this regard by the Chief
Financial Officer and the Head of Investor Relations who is
based in the London corporate office.
In addition to the direct means of contact as detailed
in the table below, Directors are kept informed of major
shareholders’ views through copies of (i) relevant analysts’
and brokers’ briefings, (ii) voting recommendation reports
issued by institutional investor agencies, and (iii) significant
correspondence from shareholders with respect to the
business to be put to shareholder vote at General Meetings.
Shareholder engagement activities in 2024
Month
Event
January
(and May, July, October)
Conference calls following each
Quarterly Production Report
February
BMO Global Metals & Mining Conference
March
2023 annual results presentation and
UK roadshow
May
BoA Merrill Lynch Global Metals,
Mining and Steel Conference
June
AGM
August
H1 2024 results presentation
September
H1 2024 results UK roadshow, including
presentation to retail investors via
the Investor Meet Company platform
Denver Gold Forum
October
Site visit to Mara Rosa mine for analysts
and investors (see box top right)
An extensive investor relations schedule resulted in
management holding approximately 100 investor meetings
during the year. The Company continued its use of the
Investor Meet Company platform whereby approximately
100 individual investors were able to attend virtually a live
presentation from the CEO on the full-year and half-year
financial results and submit questions. This enabled the
Company to facilitate engagement with retail investors
on occasions which would previously have been attended
exclusively by institutional investors.
In addition to the above, the Non-Executive Directors are
available to meet shareholders on request. During the year,
Mike Sylvestre participated in a call at the request of a
significant shareholder to discuss matters related to the
workings of the Board.
2024 AGM
The resolutions put to the 2024 AGM were passed with the
support of an average of over 93% of the votes cast, with
the exception of the re-elections of Eduardo Hochschild and
Michael Rawlinson, and the approval of the Rule 9 Waiver. The
reasons for the voting outcomes and the actions taken by the
Company were addressed in announcements made in June
and December 2024 respectively.
Eduardo Hochschild’s re-election
With regards to the voting outcome on Eduardo Hochschild’s
re-election, this reflected concerns with respect to his tenure as
Chair and the lack of a defined succession plan and a publicly
disclosed definitive timeline for retirement.
As stated in last year’s Annual Report, the Board believes
that, taking into account Eduardo Hochschild’s long-standing
involvement with the Company, his significant shareholding,
and the governance structure and practices that have been
adopted as described later in this report, his continued role as
Board Chair remains in the best interests of the Company.
As is the case for all senior positions, the Company has a
succession plan in place in relation to the Chair. Whilst there
are no short or medium-term plans for Eduardo Hochschild to
retire, he has informed the Board that, absent any change in
circumstances, his intention is to retire by the age of 70 (being
within the next nine years).
Michael Rawlinson’s re-election
The Directors are aware that the voting result on Michael
Rawlinson’s re-election reflected shareholder concerns with
the lack of gender diversity at management level and concerns
with his time commitment in light of his other board positions.
The Directors are acutely aware of the gender imbalance within
the mining industry and oversee various initiatives to promote
diversity, both generally in the workforce and within the pipeline
of executive talent development.
READ MORE
Please refer to pages 74 and 75 for further details on
these initiatives.
As for time commitment, the Nomination Committee is satisfied
that Michael has demonstrated a consistently high level of
participation and rigour during his tenure as a Hochschild
Board member.
Rule 9 Waiver
The Directors note the concerns of certain shareholders
with what has been described as the “creeping control” that
Eduardo Hochschild would indirectly benefit from as a result
of any share buyback undertaken by the Company in which
Pelham Investment Corporation (the entity controlled by
Investor Engagement: Mara Rosa Site
Visit for Analysts and Investors
In October 2024, the Group organised a visit to the Mara
Rosa mine for 10 participants, comprising primarily equity
research analysts and investors.
The visit, which was conducted over three days, involved
presentations from the COO and CFO and provided
an opportunity to showcase Hochschild’s first operation in
Brazil. Participants also met with the General Manager for
Brazil and other members of the senior operations team.
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Eduardo Hochschild which holds c.38% of Hochschild shares)
(“Pelham”) does not also tender its shares pro-rata. These
views notwithstanding, the Independent Non-Executive
Directors (INEDs) feel that, in the right circumstances,
maintaining flexibility to return value to shareholders through
such a share buyback would be in the best interests of all
shareholders. As a result, it is the INEDs’ collective intention to
propose the re-approval of shareholders to the Rule 9 waiver
at the forthcoming AGM, subject to the consent of the UK
Takeover Panel.
Engagement with other Stakeholders
On pages 56 to 59 of the Strategic Report, we have identified
our key stakeholder groups, described how the Company
engages with them and indicated the issues raised by them
during the year.
The Directors are aware of their duty under English company
law (the “section 172 duties”) to act in the way that is considered,
in good faith, as most likely to promote the success of the
Company for the benefit of its shareholders and other factors.
These include the likely consequences of any decisions in
the long term, the interests of the Company’s employees, the
need to foster the Company’s business relationships with all
stakeholders, the impact of the Company’s operations on the
community and environment, and the desire to maintain a
reputation for high standards of business conduct.
By understanding stakeholders’ views and expectations, the
Board is able to successfully steer the Company towards
achieving its strategic goals in a sustainable manner and which
acknowledges its licence to operate.
Below, we have summarised how the Board receives feedback
from its key stakeholder groups:
Employees
Tracey Kerr, as Chair of the Sustainability
Committee, is our designated Director to
oversee workforce engagement who, in addition
to receiving quarterly updates from the Vice
President of Human Resources on discussions
with trade unions and other employee group
meetings, also chaired an online employee forum
during the year. See box opposite for further
information. Tracey also met with colleagues at
Mara Rosa during the March 2024 Board site visit,
and at the Lima office in August 2024.
Social
Reported to the Sustainability Committee, which
feeds back to the Board.
Government/
Regulators
Reported to the Board (a) on a routine basis in
relation to significant matters and (b) as part of its
consideration of the quarterly Risk Management
updates on the political/regulatory climate.
Suppliers/Lenders
Reported to the Board as part of its consideration
of the quarterly Risk Management updates
in relation to Counterparty and Business
Interruption & Supply Chain risks.
Customers
Significant matters are reported to the
Board by the Chief Financial Officer who is
responsible for managing the sales and logistics
department. There were no material matters
raised during the year.
Impact on wider stakeholder group of key decisions in 2024
In discharging their section 172 duties the Directors have
regard to the factors set out above as well as other factors
which are considered relevant to the decision being made.
It is acknowledged that every decision we make will not
necessarily result in a positive outcome for all our stakeholders.
By considering the Company’s purpose together with its
strategic priorities, and having a process in place for decision-
making, the aim is to make sure that decisions reflect the
Group’s corporate values.
For details on how our Board operates and the matters we
discussed and debated during the year, please see pages
120 and 121. We set out below examples of how the Directors
had regard to the matters set out in section 172(1)(a)-(f) when
discharging their section 172 duties on certain decisions
taken during the year.
(a) Annual Strategic Review
As it does each year, the Board carried out a review of the
Group’s strategy. The discussion in 2024 identified ten strategic
objectives as key drivers for growth, with a five-year target set
for each one. Each objective reflects the pillars of Hochschild’s
corporate purpose and incorporates taking a leading role in
promoting good ESG practices to ensure the achievements
of the Group’s 2030 ambitions as well as seeking to become
an employer of choice by providing a positive working
environment. By taking this approach, the Board has mandated
that every strategic business decision should promote
sustainability for a wide range of stakeholders.
(b) Exercise of the option to acquire the Monte do Carmo
gold project
In its decision to acquire the Monte do Carmo project, the
Board considered:
– The views of shareholders on (a) geographic diversification
of the Company’s portfolio of operating assets and (b) the
need for a pipeline of advanced projects to support future
profitable production;
– The interests of employees who would benefit from the
addition of a high-quality asset into the Company’s portfolio;
– The interests of local stakeholders (including communities,
suppliers and government) who would benefit from the
generation of sustainable value at Monte do Carmo; and
– The neutral impact on existing customers.
Online Employee Forum
During the year, Tracey Kerr chaired an Online
Employee Forum with employees from across the
Group’s mining units.
The forum, which was launched in 2022, has proven to be
valuable for Directors who learn, first-hand, the views of
colleagues across the business on a variety of subjects.
During this session, colleagues talked of the appeal of
Hochschild as an employer, as well as the development
opportunities within their respective roles. The opportunity
was also taken to seek colleagues’ views on Hochschild’s
corporate and safety culture as well as holding a general
Q&A session. Colleagues expressed their satisfaction with
the support they receive from across the organisation as
well as acknowledging the continued focus on safety by
senior management. Feedback was also received on the
potential for sharing best practices across departments
as well as expanding the scope of the Company’s existing
platforms, to encourage the submission of initiatives
related to safety and environmental matters and not solely
to achieve further operational efficiencies.
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FINANCIAL STATEMENTS
FURTHER INFORMATION
Division of responsibilities
Board composition
The Board comprised, at all times, a majority of Non-Executive
Directors considered to be of independent judgement and
character. In addition to Eduardo Hochschild, the other non-
independent Non-Executive Directors are Eduardo Landin
(CEO), and Jorge Born who has been nominated to the Board
by Pelham under its rights pursuant to the Relationship
Agreement (further details of which can be found on page 116 of
the Directors’ Report).
Chair and Chief Executive
The Board is led by the Chair, Eduardo Hochschild, who controls
Pelham which has a c.38% shareholding in the Company.
The Board has approved a document which sets out the division
of responsibilities between the Chair and Chief Executive Officer.
As Chair of the Board, Eduardo Hochschild is responsible for
leading the Board of Directors and ensuring that the Board is
enabled to play a full and constructive part in the development
and determination of the Group’s strategy and overall
commercial objectives.
Eduardo Landin, as Chief Executive Officer, is responsible for the
formulation of the vision and long-term corporate strategy of the
Group, the approval of which is a matter for the full Board.
The Chief Executive Officer is responsible for leading the
executive team in the day-to-day management of the
Group’s business.
Status of the Chair
In light of his significant shareholding, Eduardo Hochschild is
not considered to be independent. However, the other Directors
of the Board continue to assert that he chairs the Board in an
objective manner and encourages open and full debate. The
Directors are satisfied that the composition of the Board and
the implementation of certain contractual arrangements act
as additional measures which prevent the exercise of undue
influence by Eduardo Hochschild.
Firstly, the significant presence of Independent Directors and the
active role of the Senior Independent Director ensure that the
views of minority shareholders are well represented.
Secondly, the undertakings provided in the Relationship
Agreement (as described below) ensure that the Company
and its subsidiaries are capable of carrying on their business
independently of Eduardo Hochschild and his associates.
The Relationship Agreement, which was revised in 2014 following
the implementation of new rules governing such agreements
(the “2014 Listing Rules”), contains undertakings from each of
Eduardo Hochschild and Pelham that:
– All transactions with the Company (and its subsidiaries) will be
conducted at arm’s length and on normal commercial terms;
– Neither of them (nor their associates) (the “Relevant Parties”)
will take any action that would have the effect of preventing
the Company from complying with its obligations under the
UK Listing Rules;
– The Relevant Parties will not propose, and neither will they
procure the proposal of, a shareholder resolution intended
or which appears to be intended to circumvent the proper
application of the UK Listing Rules; and
– The Relevant Parties will not take any action that would
preclude or inhibit any member of the Group from carrying
on its business independently of any of them.
Senior Independent Director
Michael Rawlinson is the Senior Independent Director.
His role is not only to act as a central point of contact for
the Non-Executive Directors as a group but to also act as a
conduit between the Non-Executive Directors and the executive
management team. To facilitate this, Michael Rawlinson chairs
meetings of the Non-Executive Directors and of the Independent
Non-Executive Directors after each Board meeting. This provides
the opportunity to gather feedback and thoughts on Board
discussions which are subsequently relayed to the Board Chair
and/or the executive team as appropriate. A crucial part of the
role of the Senior Independent Director is to meet with major
shareholders if concerns have not been addressed by the
executive team. No such meetings were requested during
the year.
In light of his tenure of over nine years, Michael Rawlinson will
be retiring from the Board at the forthcoming AGM and will be
succeeded, as Senior Independent Director, by Tracey Kerr.
Non-Executive Directors
The Company’s Non-Executive Directors have held senior
positions in the corporate sector. Each such Director brings
their experience and independent perspective to enhance
the Board’s capacity to help develop proposals on strategy
and to oversee and grow the operations within a sound
framework of corporate governance.
Details of the tenure of appointment of Non-Executive
Directors are provided in the Directors’ Remuneration Report.
Independence of Non-Executive Directors
In keeping with its usual practice, the Board considered, during
the year, the independence of Non-Executive Directors taking
into account the circumstances set out in Provision 10 of the
Code. The Board has concluded that, with the exception of
Eduardo Hochschild in light of his significant shareholding,
and Jorge Born, who is a nominee director of Pelham, all other
Non-Executive Directors are considered to be independent.
Company Secretary
The Company Secretary is appointed and removed by
the Board and is responsible for advising the Board on
governance matters and the provision of administrative and
other services to the Board. All the Directors have access to
the Company Secretary.
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Composition, succession
and evaluation
Appointments and re-election of Directors
The Board has established a Nomination Committee which
recommends nominations to the Board. The report of the
Nomination Committee appears on pages 138 to 141.
The Company has adopted the practice of requiring Directors
to seek annual re-election by shareholders in keeping with
the UK Corporate Governance Code. The biographies of
the Directors can be found on pages 114 and 115 which,
in addition to specifying other positions, also highlight the
key skills and experience of each Board member.
Under the terms of the Relationship Agreement, Pelham has (i) the
right to appoint up to two Non-Executive Directors to the Board
for so long as it holds an interest of 30% or more in the Company
and (ii) the right to appoint one Non-Executive Director for so long
as it has an interest of 15% or more in the Company, and in each
case to remove any such Director(s) previously appointed.
The Relationship Agreement continues for so long as the
Company’s shares are traded on the London Stock Exchange
or until such time as the Controlling Shareholders (including
Eduardo Hochschild) cease to own or control in aggregate a
minimum of 15% of the issued share capital or voting rights of
the Company.
In the exercise of its nominating rights, Pelham has currently
only appointed Jorge Born.
Board development
It is the responsibility of the Board Chair to ensure that the
Directors update their knowledge and their skills and are
provided with the necessary resources to continue to do
so. This is achieved through the various means described
as follows.
Briefings
The Directors receive regular briefings from the Company
Secretary on developments in the areas of corporate law and
corporate governance that affect their roles as Directors of
a UK listed company. By way of example, during the year, the
Company Secretary gave presentations on, among other
things, the progress of governance reform in the UK and the
new Listing Rules that came into force in July. In addition, the
Directors have ongoing access to the Company’s officers and
advisers with presentations arranged periodically on topics
such as Directors’ duties and disclosure obligations.
Advice
The Company has procedures by which members of the Board
may take independent professional advice at the Company’s
expense in the furtherance of their duties.
Board effectiveness
The Board is committed to the process of continuous
improvement and so, during the year (a) took a number of
actions to implement the findings of the internal evaluation in
2023, and (b) undertook an externally-facilitated evaluation.
Implementation of 2023 Board Effectiveness Review
The table below sets out the key actions taken in 2024 in respect of the principal recommendations arising from the prior year’s review.
Area of Focus
Action
Update
Workings & Composition
of the Board
–
The resumption of Board meetings in Lima and
mine sites would provide further opportunities for
Directors to meet with colleagues across the business
–
Matters identified as key priority areas/concerns by
the Directors to be reflected in Board material
–
Specific skillsets considered desirable around the
Board table to be incorporated into the Nomination
Committee’s brief when recruiting additional
Non-Executive Directors
–
March 2024 Board meeting was combined with
a site visit to Mara Rosa. Directors were given
the opportunity to interact with operations
management and on-site colleagues
–
Incorporated in the production of Board papers
–
This has been actioned subsequent to the year-end
with the announced appointment of Andrew Wray
as an Independent Non-Executive Director with
effect from the conclusion of the 2025 AGM
Retrospective Review
Review papers with regards to specific matters to be
produced for Board discussion
Lessons learnt papers on matters of strategic
importance produced by management and discussed
in detail at the November 2023 Board meeting
Workings of the Committees
Specific practical suggestions to support the work of
the Committees including:
–
Increasing the visibility of workplace diversity below
Board level
–
Training and development of the Directors to
be facilitated by the participation of expert
speakers at meetings of the Directors
–
Increased oversight of relevant matters of strategic
importance by the Sustainability Committee
Practices adopted by management through:
–
more detailed reporting on wider diversity
initiatives;
–
arrangements to be made as appropriate and
incorporated into the Board calendar;
–
management’s consideration in the preparation
of papers on strategic matters with ESG
implications
ANNUAL REPORT 2024
127
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
2024 Board Effectiveness Review
Process
In line with the recommendation of the UK Corporate Governance Code, the Board commissioned an externally-facilitated Board
Effectiveness review which was carried out by Lintstock Limited. The appointment of Lintstock was the result of a selection process
which was overseen by a Sub-Committee of the Board with support from the Company Secretary. Lintstock does not have any
connection with the Company or any individual director.
The online questionnaires covered the following areas:
The Board
Composition and Dynamics,
Stakeholder Oversight,
Board Support, Focus of
Meetings, Oversight of
Specific Key Areas.
The Committees
Review of structure,
reporting and
future priorities.
Peer Reviews
In relation to the Chair
–
Effectiveness of relationships, management of board meetings
In relation to the Directors
–
Self-review of effectiveness of relationships, performance and development
areas
–
360 Review of other Board members’ strengths and development areas
August 2024
Form of review discussed
by Board. Sub-
Committee established
with authority to select
an external reviewer and
to oversee review
September 2024
Proposals from short-
listed firms reviewed
October 2024
Lintstock Limited selected as Board
Effectiveness Reviewer and meetings
held with Company Secretary and Sub-
Committee members to finalise scope of
online questionnaires for (a) Board and
Committee Reviews, (b) Individual Director
Review and (c) Chair Review
November/December
2024
Online questionnaires
completed and one-to-one
interviews conducted with
each Board member
December 2024
Recommendations
issued
The discussions conducted by Merlin Underwood of Lintstock with each of the Directors delved into the responses of the online
questionnaire in more depth.
Findings
The areas of strength and development areas identified in the 2024 Board and Committee Review are summarised in the table below:
Areas of Strength
Performance of the
Chair in the conduct
of Board Meetings
Quality and diversity
of expertise of Board
Members
Open and constructive
dynamic at Board
Meetings
Board materials and
support provided by the
Company Secretary
The use of monthly
Board update calls
Area of Focus
Action
Enhancing
Director
insight
Site visits
Consideration to be given to “virtual visits” during Board meetings if physical visits are not feasible
(due to remoteness, adverse weather, safety etc)
External environment
Opportunities to be taken to enhance the Directors’ knowledge of the Company’s peers and their relative
performance, technological advances in the industry and community-related considerations
Management succession
Successor development below executive management level
Strategy
Board involvement in
strategic planning
Enhance preparation for, and conduct of, the Annual Strategic Review and consideration of
longer-term priorities
Governance
& risk
Transition to new Senior
Independent Director (SID)
Supporting Tracey Kerr through the incorporation of suggested practices to ensure smooth flow of
information between Chair and the Non-Executive Directors
Risk management
Targeted areas of development to enhance the Board’s understanding of the Company’s risk environment
Internal Board
effectiveness reviews
Introducing a more robust individual director performance review
HOCHSCHILD MINING PLC
128
Corporate governance report
CONTINUED
Audit, risk and internal control
Risk management
Throughout the year, the Board considered its risk appetite
which was considered to be appropriate. The Board confirms
that its assessment of the emerging and principal risks facing
the Company, including those that would threaten its business
model, future performance, solvency or liquidity, and which
are set out in the Risk Management and Viability sections on
pages 96 to 111, was robust.
Internal control
As detailed in the Audit Committee report that follows, the
Board, through the delegated authority granted to the Audit
Committee, monitors the ongoing process by which critical
risks to the business are identified, evaluated and managed.
This process is consistent with the FRC’s “Guidance on Risk
Management, Internal Control and Related Financial and
Business Reporting” published in 2014.
The Directors confirm that, with the support of the Audit
Committee, the effectiveness of the Company’s system of
risk management and internal controls has been reviewed
with respect to the year under review. These covered material
controls, which included controls covering operational, financial
and compliance matters. The controls operated effectively
during the financial year although, as is the case for many large
companies, additional controls were implemented or further
strengthened during the year. The Audit Committee was made
aware of the control changes and there was no significant
impact on the financial results. The Directors confirm that no
significant failings or weaknesses were identified as a result
of the review of the effectiveness of the Group’s system of
internal control.
ANNUAL REPORT 2024
129
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Dear Shareholder
On behalf of the Board, I am pleased to present the Audit
Committee Report for the year ended 31 December 2024.
Firstly, I would like to thank my predecessor Jill Gardiner
for having diligently chaired the Committee prior to my
appointment as Chair of the Audit Committee in June 2024.
As part of its audit oversight responsibilities, the Audit
Committee focuses on ensuring the integrity of the published
financial information, as well as monitoring the effectiveness
of internal controls and the Company’s risk management
processes, oversight of the key areas of judgements and
estimates, such as potential impairments and reversal of
impairments in the year, and oversight of the external audit. In
2024, the Audit Committee considered the financial reporting
implications of the commencement of commercial production
at Mara Rosa in May 2024, as well as receiving updates from
management and Internal Audit on the implementation of the
Company’s policies and procedures at Mara Rosa, including
those related to risk management and internal controls and our
whistleblowing portal. Further details of this work can be found
from page 132.
With EY having acted as Hochschild’s external auditors since
the Group’s listing in 2006 and, having been re-appointed
following a tender in 2016, the Audit Committee carried out
a tender for the external audit engagement in advance of
the mandatory deadline in 2026. This comprised a review of
the market of appropriately-qualified firms which was then
followed by a comprehensive schedule of meetings and
presentations with short-listed firms. I am pleased to report
that, as announced by the Company in November 2024, Deloitte
were successful in securing the appointment. Further details of
the process can be found on page 134.
With respect to the 2024 financial statements, the Committee has
reviewed management’s material accounting judgements and
disclosures where the issues of impairments, the commencement
of commercial production at Mara Rosa and mine rehabilitation
provision were considered in detail. Further details on these key
accounting matters are provided on page 135.
As Chair of the Audit Committee, I meet regularly with the
Chief Executive, the Chief Financial Officer, the head of Internal
Audit, and the external lead audit partner. During this coming
year, the Audit Committee will be focussing on the requisite
workstreams to ensure that the Board will be in a position,
in a year’s time, to make the necessary confirmations with
respect to the Group’s framework of internal controls and
risk management, as required by the latest edition of the UK
Corporate Governance Code. I look forward to reporting on this,
and other matters of relevance in next year’s report.
Joanna Pearson
Committee Chair
2024 Meeting attendance
Members
Independent
Maximum
possible
attendance
Actual
attendance
Joanna Pearson,
Non-Executive Director (Chair)1
Yes
4
4
Jill Gardiner,
Non-Executive Director
Yes
4
4
Michael Rawlinson,
Non-Executive Director
Yes
4
4
Mike Sylvestre,
Non-Executive Director
Yes
4
4
1
Joanna Pearson succeeded Jill Gardiner as Chair of the Committee on
13 June 2024.
Joanna Pearson
Committee Chair
Audit Committee
Report
HOCHSCHILD MINING PLC
130
Audit committee report
Key roles and responsibilities
• To monitor the integrity and material accuracy of the
Company’s financial statements and related disclosures;
• To monitor the effectiveness of the Company’s internal
controls and risk management systems and review the
preparation of the going concern and viability statements;
• To review, on behalf of the Board, the Company’s procedures
for detecting fraud, the Company’s systems and controls
for the prevention of bribery and to review and conclude on
non-compliance;
• Oversight of the Internal Audit function, review of its annual
work plan and its findings;
• To oversee the relationship with the Company’s external
Auditor and to review the effectiveness of the external audit
process; and
• To report to shareholders annually on the Committee’s
activities including details of the significant audit issues
encountered during the year and how they have been
addressed.
Membership
As previously reported, Jill Gardiner acted as Audit Committee
Chair until the conclusion of the 2024 AGM when Joanna
Pearson was appointed to succeed in that role.
Jill Gardiner was formerly an investment banker at
RBC Capital Markets with a focus on certain commodity
and energy-related industries and has built up extensive
experience of public company corporate governance and
financial reporting through numerous Board and Committee
positions. Jill currently serves as Chair of TSX-listed Capital
Power Corporation and as an ex-officio member of its
Audit Committee.
– Joanna Pearson was formerly Executive Vice President and
Chief Financial Officer of the FTSE 100 company, Endeavour
Mining plc, and, prior to that, was an audit partner at
Deloitte LLP, in Vancouver, Canada where she conducted
multinational audit engagements for US and Canadian
listed companies primarily in mining and emerging markets.
Joanna is also a Non-Executive director of the TSX-Venture
exchange listed Goldshore Resources Inc. and chairs the
Audit Committee. Joanna is a Chartered Professional
Accountant of British Columbia and is a graduate of the
Institute of Corporate Directors (ICD), Rotman Directors
Education Program.
Michael Rawlinson’s career in banking specialised in the mining
sector, having initially worked as an analyst and corporate
financier, serving most recently as Global Co-Head of Mining
and Metals at Barclays Investment Bank from 2013 until his
retirement from that role in June 2017. Michael currently
serves as Chair of Adriatic Metals Plc and sits on its Audit
and Risk Committee. He also serves on the Boards and Audit
Committees of London-listed Capital Limited and AIM-listed
Andrada Mining Limited.
Mike Sylvestre spent a significant portion of his career with
Vale Canada (formerly Inco Ltd), a world leading producer
of nickel where he held key senior management positions
domestically and internationally. Most notably, he held the
position of CEO New Caledonia and President, Manitoba
Operations. He previously served as Vice President of
Operations for PT Vale Indonesia. He serves on the Board
of NYSE and TSX-listed Vista Gold Corp. Mike is a member of
the Professional Engineers of Ontario and a graduate of the
ICD, Rotman Directors Education Program.
The Audit Committee members are considered to be
Independent Directors and the Board is satisfied that at least
one member has recent and relevant financial experience and
that the Audit Committee, as a whole, has competence relevant
to the sector in which the Company operates.
For further details on the skills and experience of the Audit
Committee members, please refer to the biographical details
on pages 114 and 115. The performance of the Audit Committee
was considered as part of the annual Board evaluation process
which was considered by the whole Board.
Attendees
The lead partner of the external Auditor, EY, the Chair of the
Company, the Chief Executive Officer, the Chief Financial
Officer, the Vice President of Legal & Public Affairs and the
Head of Internal Audit attend each Audit Committee meeting
by invitation. The Company Secretary acts as Secretary to
the Committee.
During 2024, in addition to its oversight responsibilities,
the Audit Committee spent significant time on reviewing
matters related to the new Mara Rosa operation and the
tender for the Group’s external audit engagement.
ANNUAL REPORT 2024
131
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Activity during the year
The Committee considered the following principal matters
during the year:
Financial reporting
The 2023 Annual Report and Accounts and the 2024 Half-
Yearly Report were reviewed by the Audit Committee before
recommending their approval by the Board. In its review of
these financial reports, the Audit Committee considered that
appropriate accounting policies, estimates and judgements
were applied in preparing the relevant statements and the
transparency and clarity of disclosures contained within them.
This included a review of the assumptions made with respect
to the use of the going concern basis in preparation of the
accounts, and the longer-term viability statement.
Review of 2023 Annual
Report & Accounts
In October 2024, the Corporate Reporting Review team
(CRR) of the Financial Reporting Council (FRC), informed
the Company that it had conducted a review of the
2023 Annual Report and accounts as part of its ongoing
monitoring responsibilities to promote improvements in
the quality of corporate reporting. While there were no
questions or queries that the FRC wished to raise with
the Company, three suggestions were made as reporting
improvements (to the extent they are considered to
be material and of relevance). The Audit Committee
considered the recommendations as part of its review of
this year’s Annual Report and, in respect of those areas
considered to be of relevance, are satisfied that they have
been addressed.
Note:. The letter received from the CRR provides no assurance that the Annual
Report and accounts are correct in all material respects; the FRC’s role is
not to verify the information provided to it but to consider compliance with
reporting requirements. The FRC (which includes its officers, employees and
agents) accepts no liability for reliance on its communication by the Company
or any third party, including but not limited to investors and shareholders.
Review of audit plans
In line with its usual practice, the Committee considered
reports from the external Auditor on the scope and structure
of the review of the half-yearly results and audit of the annual
results and any recommendations on the Company’s processes
and controls.
During the year, the Committee members held meetings
with the external Auditor without executive management to
discuss matters relating to the 2023 annual audit and the
2024 interim review.
Risk management
Consideration and challenge of risk management
assessments which incorporate a risk matrix detailing (i) the
most significant and emerging risks facing the Group, (ii)
an evaluation reflecting the likelihood of the occurrence of
the risk and the extent of the potential impact on the Group,
and (iii) commentary on the steps taken to manage each
specific risk. See page 96 for a description of the process
by which the Group’s principal and emerging risks are
identified and monitored, and the actions taken during the
year to mitigate them.
Internal audit
The Audit Committee continued to oversee and challenge the
Group’s adoption of a risk-based approach to internal audit.
The Audit Committee receives a quarterly report from the
Head of Internal Audit which sets out specific areas covered,
improvements being recommended and introduced, and
proposals for the programme over the following three months.
The CEO and Chief Financial Officer also receive copies of
these reports who ensure that adequate support is provided for
the activities of the Internal Audit function. During the year, the
Audit Committee met with the Head of Internal of Audit without
the presence of executive management to discuss, among
other things, the results of the internal audit during the year
and the scheduled work plan.
Internal control
Through the processes described on page 136, the Audit
Committee reviewed the adequacy of the Group’s internal
control environment and risk management systems.
Whistleblowing
In line with the Corporate Governance Code, the Audit
Committee reviewed, on behalf of the Board, the adequacy
of the Group’s whistleblowing arrangements. Whistleblowing
reports are circulated to a group comprising the Audit
Committee Chair (“AC Chair”), the Head of Internal Audit,
the Vice-President of Human Resources and the Company
Secretary (“the Reporting Group”); the AC Chair has a
preliminary discussion with the Head of Internal Audit on
the approach to the investigation; and the findings of the
investigation are then reported, in the first instance, to the
Reporting Group, and to the Audit Committee at its next
scheduled meeting. The Head of Internal Audit also circulates to
the Reporting Group, on a periodic basis, summaries of ongoing
investigations into matters raised through the Company’s
whistleblowing channels, and their relevant status.
In October 2024, training sessions for over 130 colleagues
were delivered jointly by our Group Head of Internal Audit
and the Head Auditor for Brazil on the use of Hochschild’s
whistleblowing portal. In addition, an online training platform
(HOC Classroom) was launched in Brazil offering colleagues
a wide range of courses on workplace conduct including
preventing workplace harassment and avoiding conflicts
of interest.
Categories of 2024 Whistleblowing Reports
Breaches
of Code of
Conduct/Other
policies
54%
Health & Safety
15%
Workplace
conduct
31%
Categories above relate to the nature of the allegation made whether or not
they were established by the subsequent investigation.
HOCHSCHILD MINING PLC
132
Audit committee report
CONTINUED
Fraud and bribery
The Audit Committee continued to review and challenge
the actions taken by management to promote ethical and
transparent working practices.
The Group’s Code of Conduct describes the values and
standards of behaviour expected of our employees and our
business partners. In addition, the Group has adopted a
specific anti-bribery and anti-corruption policy to reflect the
Board’s zero tolerance to these types of acts. The Code of
Conduct was reviewed and circulated in 2023 with all recipients
required to confirm receipt online and confirming their
agreement to its terms.
External audit
Ongoing Relationship Management
The Audit Committee oversees the relationship with the
external Auditor. The Audit Committee evaluated the
performance of EY in 2024 and concluded that it was
appropriate to recommend the reappointment of EY as
external Auditor at the 2024 Annual General Meeting. The
Audit Committee reviewed the findings of the external Auditor,
reviewed management letters, and reviewed and approved the
audit fees.
In line with its usual practice, the Audit Committee evaluated
the effectiveness of EY and the external audit process taking
into account the results of Hochschild management’s internal
survey relating to EY’s performance as well as views and
recommendations from management and its own experiences
with the external Auditor. Key criteria of the evaluation included
resources and expertise, quality and timeliness of the audit
process, quality of communication and reporting to the
Audit Committee. The current audit partner is Jessy Maguhn
who has held the role since 1 May 2024.
AQR Inspection Report
In December 2024, the Audit Committee was notified by
the Audit Quality Review team of the Financial Reporting
Council (“FRC”) of the findings of its inspection of Ernst
& Young LLP’s audit of the Company’s 2023 financial
statements.
The inspection, which covered risk assessment and
planning, execution of the audit plan; and completion
and reporting, covered specific audit areas including
impairment and climate change reporting.
The Audit Committee considered the inspection of EY’s
audit of the financial statements for the year ended
31 December 2023 and it was noted the inspection did not
raise any key findings.
Mandatory audit tender
In line with relevant legal and regulatory requirements, EY is
subject to mandatory rotation on completion of 20 years and,
therefore, must be replaced as the Company’s external Auditor
by 16 October 2026 (the “Statutory Deadline”). Accordingly,
the Company undertook a tender of the external audit
engagement in 2024 – see overleaf for further details.
Auditor objectivity
The Audit Committee has adopted a policy on the use of
the external Auditor for the provision of non-audit services
(see later section on Auditor independence for more details).
In addition, objectivity is also ensured by the regular rotation
of the lead audit partner which, in the case of Hochschild, took
place following the approval of the 2023 financial statements.
Governance
The Audit Committee received updates from the Auditor and
the Company Secretary on regulatory and other developments
impacting the Committee’s role such as the status of reforms of
UK audit governance.
ANNUAL REPORT 2024
133
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Audit tender
As anticipated in last year’s annual report, the Committee
conducted a rigorous external audit tender process in
accordance with statutory requirements and the minimum
standard for audit committees, with the selected firm to take
on the role from the review of the 2026 half-yearly financial
statements. The process was overseen and co-ordinated
by the following:
– The Audit Committee which led the audit tender process,
agreed the scope and considered the tender proposals.
The Audit Committee ensured that the tender process
was run in an efficient, transparent, fair and effective
manner, before submitting a recommendation to the
Board on the appointment of external auditor.
– The Audit Tender Working Group (ATWG) comprising the
Audit Committee members and members of the Audit
Tender Management Team (ATMT) which comprised the
Chief Financial Officer, Group Financial Controller and
Company Secretary. Collectively, the ATWG separately
met with each firm and collectively attended the audit
tender presentations.
– The ATMT was tasked with coordinating and managing
the audit tender process including the drafting of the
request for proposal, collating tender information packs
and arranging supplementary meetings as required.
Clear criteria
The criteria used to make the selection included: audit quality
(including approach and methodology), alignment with
Hochschild’s corporate values and geographies, experience,
transition process and fee. There was a particular focus given
to firm independence, technical competence and presence
of skilled support in each of the countries in which the
Company operates. As recommended by the FRC, the Audit
Committee took into consideration other indicators of audit
quality such as the findings of the FRC Audit Quality Reviews.
The Committee deliberately started the planning process
for the tender in 2023 to maximise the potential number of
participating firms.
Maximising participation
In light of the Company’s premium listing in London and
mining operations in Peru, Argentina and Brazil, the number
of firms with sufficient technical and geographic reach were
inherently limited. Management engaged with each of the
three “Big-4” firms prior to inviting them to participate in
the tender. Background information detailing Board and
group structure, principal activities and policies, were shared
together with key milestones as part of the tender invitation.
The initial group reduced to two firms after one firm withdrew
from the tender process by reason of lack of capacity
to undertake the audit. Management followed this up to
see if any further action could be taken to facilitate their
participation. The Committee was satisfied that the audit
tender exercise had been undertaken on a fair basis with
adequate consideration given to the possible participation of
challenger firms.
An informed approach
A data room was set up for the participating firms to access
relevant information to assist in the preparation of their
proposals. The Audit Committee members and the CFO had
an opportunity to meet with the lead audit partners of each of
the firms. The audit firm teams also met with business leaders
including the Head of IT and the Director of Sustainability
in September 2024 to discuss expectations and capabilities
in these key areas. The Audit Committee received regular
updates throughout the process. The CFO spoke with an
existing client of each firm’s lead partner and provided
feedback to the Committee. The Audit Tender Working Group
evaluated the audit tender presentations and provided
objective feedback to the Committee. The evaluation was
conducted using standardised scorecards and considered
the request for proposals, presentations and the interactions
with management. Scores against each selection criteria
were weighted.
The Committee considered the results of the tender in
October and agreed to recommend to the Board that
Deloitte be appointed as the Group’s external auditors.
For good practice, the Chair of the Audit Committee,
as a former Vancouver-based partner of Deloitte, also
sought confirmation of the recommendation without her
participation which remained unanimous. Accordingly, the
recommended appointment with effect from the review of
the H1 2026 financial statements, was put to the Board which
was accepted and approved. Deloitte’s appointment will
be put to shareholders for approval at the 2026 Annual
General Meeting.
H2 2023
Audit Committee
considered
tender timeline
and long-list of
participating
firms
April 2024
Investor input
invited on
tender process
June 2024
RFP Issued to
short-listed firms
July 2024
Corporate
presentation
and Q&A session
hosted by CFO to
Participating Firms
September 2024
Firms submitted
proposal documents.
Presentations given
to Audit Tender
Working Group
October/
November 2024
Board approved
Audit Committee’s
recommendation
and Deloitte’s
appointment as
external auditor
announced
HOCHSCHILD MINING PLC
134
Audit committee report
CONTINUED
Evaluation
The Committee’s performance was evaluated as part of the
annual Board effectiveness review which, as reported earlier in
this Corporate Governance Report, was facilitated by Lintstock,
an independent consultancy specialising in Board Effectiveness
reviews. Aspects of the Committee’s role were considered in
the online questionnaire and were discussed in the one-to-
one interviews held by Lintstock with each Board member. The
process confirmed that the Audit Committee continued to fulfil
its responsibilities effectively.
Tax compliance strategy
The Audit Committee approved on behalf of the Board a
document on the Group’s approach to UK tax matters. The
document can be found at: https://www.hochschildmining.com/
sustainability/sustainability-reports-and-policies/
Significant issues relating to the 2024 financial statements
As recommended by the Code, the following is a summary
of the significant issues considered by the Committee in relation
to the 2024 financial statements and how these issues have
been addressed.
(a) Impairments
The Audit Committee considered management’s analysis of
potential indicators of impairment and impairment reversals
across the Group’s operating and development stage assets.
In addition, the Committee considered the analysis undertaken
with respect to (a) the Group’s exploration assets, namely Arcata,
Azuca, and Volcan; and (b) the Group’s investment in Aclara.
Having concluded on the presence, or not, of triggering factors,
the Audit Committee reviewed and challenged:
– The commodity prices, inflation, foreign exchange and
discount rates used for the reversal of impairment analysis
with respect to San Jose;
– The basis of the calculation of the impairment charges in
relation to Arcata and Azuca;
– The basis of the calculation for the possible impairment
analysis with respect to Volcan, using an in-situ basis, and
reflecting the appropriate risk adjustment related to the
water rights; and
– The basis of the calculation of the impairment charges
related to the investment in Aclara, reflecting the recent
price of the Aclara shares issued by Aclara to the Company
and third parties.
In conclusion, the Audit Committee concurred with management
that there was no impairment or reversal of impairments for
San Jose and Volcan in the year ended 31 December 2024. In
addition, the Audit Committee concurred with management
that, in addition to the impairments recognised and previously
reported in the half-yearly financial statements with respect
to Azuca and Arcata of $13.7 million, an additional impairment
of $5.1 million be recognised with respect to the Company’s
investment in Aclara, such that the impairment charge for the
full year is $18.8 million.
(b) Commencement of Commercial Production at Mara Rosa
The Audit Committee considered the judgements and estimates
in determining the commencement of commercial production at
Mara Rosa in May 2024.
In its assessment of the analysis undertaken by management,
the Audit Committee reviewed and challenged:
– The date at which commercial production was determined
to have commenced, at which point the Company no longer
capitalised borrowing costs;
– That sales and costs prior to commercial production are
recognised in profit or loss appropriately;
– The change in functional currency for the Mara Rosa entity
at the date of commercial production, which is accounted for
on a prospective basis; and
– The capitalisation of deferred stripping costs from the date
of commercial production using the life of mine stripping
ratio to be applied over the life of the mine.
In conclusion, the Audit Committee concurred with
management’s accounting for and the judgements and
estimates used for the commencement of commercial
production at Mara Rosa.
(c) Mine rehabilitation provision
The Audit Committee considered the judgement exercised by
management in assessing the amounts required to be paid by
the Company to rehabilitate the Group’s assets.
In its assessment of the analysis undertaken by management,
the Audit Committee took into account:
– The basis of the estimation of future rehabilitation costs;
– The discount rates applied;
– The significant changes in estimates and the basis for
increased costs; and
– The accounting for the changes in the provisions.
The Audit Committee concluded the provision and related
disclosures related to the Group’s mine rehabilitation to be
appropriate.
Auditor independence
The Audit Committee continues to oversee the implementation
of specific policies designed to safeguard the independence and
objectivity of the Auditor, which includes the Group’s policy on
the provision of non-audit services.
Policy on the use of Auditor for non-audit services
The Audit Committee has adopted a policy on the use of the
Auditor for non-audit services (the “NAS Policy”).
The NAS Policy reflects the Revised Ethical Standard in
permitting the engagement of the Auditor only for additional
services that are directly linked to the audit or are required
by law and/or regulation. The NAS Policy requires (i) the Audit
Committee and Chief Financial Officer to approve all non-audit
services undertaken by the external Auditor and (ii) that the cost
of non-audit services rendered by the external Auditor, in any
financial year, cannot exceed 70% of the average of the audit
fees paid to the external Auditor in the last three consecutive
financial years.
The Audit Committee continuously monitors the level of fees
for non-audit services compared to the audit fees paid to the
Auditor in the last three consecutive financial years.
ANNUAL REPORT 2024
135
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Process through which controls are assured
2024 Audit and non-audit fees
Please refer to note 34 to the consolidated financial statements
for details of the fees paid to the external Auditor.
Safeguards
Additional safeguards to ensure Auditor objectivity and
independence include:
– Six-monthly reports to the Audit Committee from the Auditor
analysing the fees for non-audit services rendered;
– An annual assessment, by the Audit Committee, of the
Auditor’s objectivity and independence in light of all
relationships between the Company and the audit firm; and
– The pre-approval of any non-audit services by the CFO and
the Audit Committee.
Compliance Statement required under Article 7.1 of the
Statutory Audit Services for Large Companies Market
Investigation (Mandatory Use of Competitive Tender
Processes and Audit Committee Responsibilities)
Order 2014 (the “Order”)
The Company confirms that it has complied with the Order
during the year under review.
Internal control and risk management
The Committee acknowledges its responsibility to assist
the Board in its oversight of the Group’s risk management
and internal control systems, including the adequacy and
effectiveness of the control environment and internal control
over financial reporting. The system of internal control is
designed to manage rather than eliminate the risk of failure
to achieve business objectives and it must be recognised that
such a system can only provide reasonable and not absolute
assurance against material misstatement or loss.
Audit Committee’s assessment
At its March 2025 meeting, the Audit Committee reviewed the
process described on the right-hand side and is satisfied that,
for the year under review and the period from 1 January 2024 to
the date of approval of the Annual Report and Accounts, internal
controls are in place at the operational level within the Group.
Reviews of accounting and financial reporting
processes together with the internal control
environment at Group level. This involves the
monitoring of performance and the taking of
relevant action through the monthly review of Key
Performance Indicators and, where required, the
production of revised forecasts. The Group has
adopted a standard accounting manual to be
followed by all finance teams, which is continually
updated to ensure the consistent recognition and
treatment of transactions and production of the
consolidated financial statements.
Reports from the Head of the Internal Audit
function (see earlier for more information).
Consideration of progress against
strategic objectives.
Review of budgets and reporting
against budgets.
The external Auditor’s observations of the
Company’s internal control environment.
The monitoring of cash balances by the
Treasury function.
The adoption of delegated authorities with respect
to capital expenditure and investments.
HOCHSCHILD MINING PLC
136
Audit committee report
CONTINUED
ANNUAL REPORT 2024
137
137
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Eduardo Hochschild
Committee Chair
Nomination
Committee Report
2024 Meeting attendance
Members
Independent
Maximum
possible
attendance
Actual
attendance
Eduardo Hochschild,
Committee Chair
No
3
3
Jorge Born,
Non-Executive Director
No1
3
3
Jill Gardiner,
Non-Executive Director
Yes
3
3
Tracey Kerr,
Non-Executive Director
Yes
3
3
Joanna Pearson,
Non-Executive Director
Yes
3
3
Michael Rawlinson,
Non-Executive Director
Yes
3
3
Mike Sylvestre,
Non-Executive Director
Yes
3
3
1
As a Non-Executive Director nominated by Pelham, the Company’s largest
shareholder, Jorge Born is not considered to be independent.
Dear Shareholder
I am pleased to present the Nomination Committee’s
2024 report.
The issue of succession planning continued to dominate the
work of the Nomination Committee in 2024. At the Board level,
I am pleased to report that Joanna Pearson assumed the
role of chair of the Audit Committee at the conclusion of the
2024 Annual General Meeting (AGM) and that, in planning
ahead for Michael Rawlinson’s retirement from the Board at
the forthcoming AGM, Tracey Kerr was nominated as Senior
Independent Director-designate.
Discussions by the Nomination Committee on the implications
of Michael’s retirement identified a need to appoint a UK-based
Independent Non-Executive Director to ensure that the
Board maintains a balance of skills that also acknowledges
Hochschild’s London-listing. The Committee therefore pro-
actively undertook a search for a candidate which resulted
in the announcement, in January 2025, of the appointment of
Andrew Wray to take effect from the 2025 AGM.
The Committee also devoted a significant amount of time on
discussing the management succession plan and ensuring,
in particular, the development needs of existing members of
senior management and the adequate investment in a pipeline
of talent to succeed to senior management positions.
Eduardo Hochschild
Committee Chair
HOCHSCHILD MINING PLC
138
Nomination committee report
Planning is key to ensuring
effective oversight by the Board and
at Senior Management level.
ANNUAL REPORT 2024
139
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Key roles and responsibilities
– Identify and nominate candidates for Board approval;
– Make recommendations to the Board on composition
and balance;
– Oversee the succession planning of Board and senior
management positions; and
– Review the Directors’ external interests with regards to
actual, perceived or potential conflicts of interest.
Membership and meetings
The members of the Committee are listed in the table
opposite. At all times, a majority of the members of the
Committee were independent.
The Company Secretary acts as Secretary to the Committee.
Activity during the year
The Committee met three times during the year and
a summary of the matters considered is provided below.
In addition, the Committee passed a number of written
resolutions in relation to the consideration of conflicts of
interest arising from proposed external directorships to
be taken by Board members.
Reporting and monitoring
– The approval of the report of the Committee’s activities
for inclusion in the 2023 Annual Report
Board/Committee roles
– The recommended appointment of Joanna Pearson as
Chair of the Audit Committee and Tracey Kerr as Senior
Independent Director-designate; and
– Discussions on potential UK-based candidates for the
role of Independent Non-Executive Director to succeed
Michael Rawlinson following his scheduled retirement from
the Board following the 2025 AGM. This led to discussions
being held with two candidates at the end of 2024 and
resulted in the announcement of the appointment of
Andrew Wray in January 2025.
Succession planning
Board succession plan
In recruiting for Board positions, the Committee refers to the
Board skills matrix which maps the presence of key strategic
skills and other desirable attributes around the Board table,
thereby identifying any current gaps and those that could arise
following anticipated changes in the composition of the Board
(see Board skills matrix (to the right). For further details on the
succession of the Chair, please refer to page 124.
Executive succession and development plan
(the HOC Talent Review Plan)
Considered the HOC Talent Review Plan (TRP) which, in
addition to setting out the developmental needs for senior
executives, also identifies successors to “Critical Positions”
and their personal development strategies. In reviewing this
Plan during the year, the Committee also sought, in line with its
commitment, to improve the diversity of the pipeline of talent
coming through to executive management level.
Conflicts of interest
Considered the presence of any actual or potential conflicts of
interest arising from the following proposed directorships prior
to their acceptance by the relevant Board member:
– Tracey Kerr’s appointment to the Board of Antofagasta plc
– Mike Sylvestre’s appointment to the Board of Vista Gold Corp.
– Jorge Born’s appointment to the Board of Aclara
Resources Inc.
Evaluation
As reported on page 128, an externally-facilitated board
performance review was commissioned during 2024 by
Lintstock Limited. The performance of the Committee was
evaluated as part of this process which, among other things,
(i) commended the composition of the Board in terms of its
skills and experience and (ii) highlighted further consideration
of (a) instituting formal feedback by the Chair to individual
Non-Executive Directors, (b) enhancing the Board’s views of
the external environment and (c) further oversight of successor
development in the layer below the senior management team.
Board skills matrix
1
2
3
4
5
6
7
8
9
10
11
Eduardo Hochschild
x
x
x
x
x
x
Jorge Born
x
x
x
x
x
Jill Gardiner
x
x
x
Tracey Kerr
x
x
x
x
x
Eduardo Landin
x
x
x
Joanna Pearson
x
x
x
Michael Rawlinson
x
x
x
x
x
x
Mike Sylvestre
x
x
x
x
1 Operational Mining Experience, 2 Geology, 3 Experience of operating/overseeing
Latam business, 4 Peruvian Government relations, 5 Recent and relevant audit/
financial experience, 6 Corporate Finance, 7 M&A Experience, 8 UK corporate
governance, 9 Relations with UK institutional investors, 10 New Technologies/
Innovation, 11 Experience of ESG/regional socio-political issues.
HOCHSCHILD MINING PLC
140
Nomination committee report
CONTINUED
Appointments to the Board
The Company’s approach
In seeking candidates for appointment to the Board, regard is
given to relevant experience and the skills required to complete
the composition of a balanced Board (with reference to the
Board skills matrix) and taking into account the challenges
and opportunities facing the Company. Other factors are also
considered such as the opportunity to increase diversity and
the time commitment for the role. With respect to the latter, the
Company does not take a prescribed approach with reference
to the number of other Board positions that may be held by an
existing or potential Board member but rather an assessment
on a case-by-case basis of the capacity to assume the
responsibilities required of the role in question.
Diversity
Policy on Board appointments
The Board is committed to the overriding principle that every
member and potential appointee must be able to demonstrate
the skills and knowledge to be able to make a valued
contribution to the Board. It is also acknowledged that diversity
brings new perspectives which can drive superior business
performance and promote innovation.
The Directors have therefore adopted a multifaceted approach
to Board (and, by extension, Committee) recruitment which:
– Primarily considers a candidate’s merits; and
– Seeks opportunities to ensure the ongoing diversity of
the Board whether of gender, culture, race, professional
background, nationality or otherwise and which reflects
the Company’s specific circumstances, primarily that it is
headquartered in Peru with operating assets located solely
in South America.
Compliance with UKLR 6.6.6R(9) (Diversity Disclosures)
The following tables are included in compliance with
the FCA Listing Rules requirements on Board/Senior
management diversity.
The information used to complete the tables below was
requested of each Director by the Company Secretary who
provided the categories and sub-categories of ethnicity
referred to in the FCA Listing Rules which are based on
those used by the UK Office for National Statistics.
Each Director was provided the opportunity to appear in the
following tables as “not specified/preferred not to say”.
ANNUAL REPORT 2024
141
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Statement of Compliance
Target
Compliance
Explanation (where non-compliant)
At least 40% of the
board are women
No
While the proportion of women on the Board overall as at 31 December 2024 is just short of the
target, at 38%, it should be noted that this percentage (a) rises to 43% if Jorge Born is excluded
from the calculation given that his is nominated to the Board by Pelham, the Company’s largest
shareholder, pursuant to its contractual right under the Relationship Agreement, and furthermore
(b) rises to 50% if you also exclude Eduardo Landin, who has been appointed to the Board by virtue
of his position as Chief Executive Officer.
At least one of the senior
board positions (Chair, CEO,
Senior Independent Director
or CFO) is held by a woman
No
While the Company is not currently compliant with this target, the Board succession plan envisages
the appointment of Tracey Kerr as Senior Independent Director to succeed Michael Rawlinson at the
conclusion of the forthcoming AGM.
It is noted that two of the Board Committees are chaired by women as at 31 December 2024
which will rise to three in June 2025 when Jill Gardiner succeeds Michael Rawlinson as Chair of the
Remuneration Committee.
At least one member of
the board is from a minority
ethnic background
No
The composition of the Board reflects the Company’s geography of operations which are located
solely in South America where, it is noted, definitions of ethnicity differ from those used in the UK.
There have been no changes to the above information since 31 December 2024 up until the date of approval of this report.
Gender diversity
Members
Number of
Board members
Percentage
of the Board1
Number of senior
positions on the Board
(CEO, CFO, SID and Chair)2
Number in executive
management
Percentage of executive
management
Men
5
63%
4
6
100%
Women
3
38%
–
–
–
Not specified/prefer not to say
–
–
–
–
–
1
Subject to rounding.
2
The CFO is included in the table above but is not a Board member.
Ethnic background
Members
Number of
Board members
Percentage
of the Board
Number of senior
positions on the Board
(CEO, CFO, SID and Chair)2
Number in executive
management
Percentage of executive
management1
White British or other
White (including minority-
white groups)
8
100%
3
–
–
Mixed/Multiple Ethnic Groups
–
–
–
–
–
Asian/Asian British
–
–
–
1
17%
Black/African/Caribbean/
Black British
–
–
–
–
–
Other ethnic group,
including Arab
–
–
1
5
83%
Not specified/prefer not to say
–
–
–
–
–
1
Subject to rounding.
2
The CFO is included in the table above but is not a Board member.
Increasing workforce diversity
The Company is committed to redressing the diversity imbalance in its workforce which is reflective of the mining industry in
general. Please refer to pages 74 to 76 for further details of the diversity and inclusion initiatives and the progress made by the
Company over the course of 2024.
Michael Rawlinson
Committee Chair
Directors’
remuneration report
Dear Shareholder
On behalf of the Board, I am pleased to present the Directors’
Remuneration Report for the year ending 31 December 2024
which is split into two sections: this Annual Statement and the
Annual Report on Remuneration.
Pay and performance in 2024
2024 PERFORMANCE
General
As has been described earlier in the Annual Report, the
Company had a good year operationally which, combined
with favourable precious metal prices, has resulted in a level
of Net Profit that has not been seen for over a decade. This
performance also reflects the successful construction and
subsequent commencement of production at Mara Rosa –
Hochschild’s first mine in Brazil.
The above notwithstanding, the Company was not able to
achieve its most stretching production objective set at the
beginning of the year due, in the main, to the longer-than-
expected ramp up process of the plant at Mara Rosa. In terms
of costs, there was an adverse impact from the aforementioned
delay and, among other things, inflation in Argentina which was
not mitigated by the expected devaluation of the Peso.
Strategic growth
The Company made excellent progress during the year in
achieving our medium to long-term growth objectives.
Following the negotiation of an option over the Monte Do
Carmo gold project in Tocantins, Brazil, the performance of
confirmatory due diligence resulted in an expedited timeline to
acquire this exciting project which was completed in November.
In terms of organic growth, management also achieved
notable milestones associated with the permitting of the
Royropata deposit as well as adding over 2.8 million gold
equivalent ounces of inferred resources through our Brownfield
exploration programme at our operating sites and Pallancata.
Both of these activities will see production secured from 2028.
93%
OF VOTES AT THE 2024 AGM SUPPORTED
OUR REVISED THREE-YEAR DIRECTORS’
REMUNERATION POLICY
2024 Meeting attendance
Members
Independent
Maximum
possible
attendance
Actual
attendance
Michael Rawlinson,
Non-Executive Director (Chair)
Yes
3
3
Jill Gardiner,
Non-Executive Director
Yes
3
3
Tracey Kerr,
Non-Executive Director
Yes
3
3
Joanna Pearson,
Non-Executive Director
Yes
3
3
HOCHSCHILD MINING PLC
142
Directors’ Remuneration Report
Responsibility
The Group continues to maintain its focus on safety in respect of
which the Group has performed well, with our year-end LTIFR at
1.25 which, although higher than 2023, is a very creditable level for
the industry. The Group also had a strong year of environmental
performance as highlighted by our full-year ECO Score which
reflects, among other things, an all-time low in potable water
consumption which has reduced by c.15% compared to 2023.
We continued to look at wider employee pay matters by
reviewing the alignment of elements of pay across the
organisation with our strategic objectives. Our community
relations initiatives continued to focus on supporting
education, connectivity, health and nutrition, and promoting
socio-economic development. In terms of the latter, we are
delighted that the Company has successfully seen through its
commitments to increasing, year-on-year, the levels of local
employment and procurement.
You can read further about these initiatives in our Sustainability
Report from page 60.
Assessing performance
As stated in detail later in this report, the Remuneration
Committee assessed performance reflecting on the above
aspects. It was concluded that as the operational objectives set
at the beginning of the year in relation to production, Adjusted
EBITDA and costs were only partially met, the overall bonus
outcome for 2024 was just under 70% of maximum. Further
details of the performance outcomes are set out in the
Annual Report on Remuneration.
LTIP vesting
The 2022 LTIP awards have reached the end of their
performance period (being the 2022, 2023 and 2024 financial
years) and vested on 23 February 2025. The 2022 awards
were subject to three performance measures based on the
Company’s relative TSR performance against a tailored
peer group (50%), the additions of measured and indicated
resources (25%), and a consistency metric measured against
average bonus scorecard outcomes (25%). The 2022 LTIP
awards vested as to 66.6% of maximum and further details of
the performance outcomes are also set out
in the Annual Report on Remuneration.
Pay in 2025
As confirmed later in this report, there are no material changes
in how the bonus and LTIP will operate in 2025. With regards to
the CEO’s salary it has been increased by 10% with effect from
1 March 2025.
2025 AGM
At the forthcoming AGM, shareholders will be asked to approve
the Directors’ Remuneration Report, being the usual annual
advisory vote.
I would like to thank our shareholders for their continuing
support on remuneration matters, which saw our new three-
year Directors’ Remuneration Policy approved at last year’s
AGM with over 93% of shareholders voting casting their vote in
favour, and with the resolution to approve our 2023 Directors’
Remuneration Report also receiving a similar level of support.
As in past years, I would like to assure all our shareholders that
the Committee welcomes all input on remuneration matters,
and if you have any comments or questions on any element of
the Directors’ Remuneration Report, please do not hesitate to
contact me at info@hocplc.com.
It has been a pleasure to have chaired Hochschild’s
Remuneration Committee for over seven years and I am
delighted that Jill Gardiner, who has served on the Committee
so diligently since her appointment in August 2020, will be
succeeding me as Committee Chair when I retire from the
Board at the AGM.
Michael Rawlinson
Chair of the Remuneration Committee
Underpinned by strong financial performance
and exceptional brownfield exploration success,
our remuneration decisions also seek to reflect the
experience of Hochschild’s stakeholders.
ANNUAL REPORT 2024
143
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
This report has been prepared according to the requirements of the Companies Act 2006 (“the Act”), Regulation 11 and Schedule 8
of the Large and Medium-Sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013, the Companies
(Miscellaneous Reporting) Regulations 2018, the Companies (Directors’ Remuneration Policy and Directors’ Remuneration Report)
Regulations 2019 and other relevant requirements of the FCA Listing Rules. In addition, the Board has applied the principles of
good corporate governance set out in the UK Corporate Governance Code, and has considered the guidelines issued by its leading
shareholders and bodies such as ISS (Institutional Shareholder Services), the Investment Association, and Glass Lewis.
Directors’ Remuneration Policy (unaudited)
The Directors’ Remuneration Policy for executive and non-executive directors for the three-year period expiring at the Company’s
2027 AGM, and which was approved by shareholders at the AGM held on 13 June 2024, can be found within the Company’s Annual
Report and Accounts for 2023 (on pages 125 to 133) which is available on the Company’s website at www.hochschildmining.com/
investors/results-reports-presentations.
Annual Report on Remuneration
The following section provides details of how Hochschild’s approved 2024 Directors’ Remuneration Policy was implemented during the
financial year ending 31 December 2024, and how the Remuneration Committee intends to implement the Directors’ Remuneration
Policy in 2025. Any information contained in this section of the report that is subject to audit has been marked as such.
Remuneration Committee membership
The Remuneration Committee was chaired during the year under review by Michael Rawlinson, and its other members were Jill
Gardiner, Tracey Kerr and Joanna Pearson. The Remuneration Committee has comprised, at all times, only Independent Non-
Executive Directors. The composition of the Remuneration Committee and its terms of reference comply with the provisions of
the UK Corporate Governance Code and the terms of reference are available for inspection on the Company’s website at www.
hochschildmining.com.
Members of senior management attend meetings at the invitation of the Committee. During the year, such members included the
Chair, the CEO and the Vice President of People and Corporate Affairs. No Director or senior executive is present when his or her
own remuneration arrangements are considered by the Committee. The Company Secretary acts as Secretary to the Committee.
The Committee’s terms of reference
The duties of the Remuneration Committee are to determine and agree with the Board the broad policy for the remuneration
of the Executive Directors, the other members of senior management and the Company Secretary, as well as their specific
remuneration packages including pension rights and, where applicable, any compensation payments. In determining such
policy, the Remuneration Committee shall take into account all factors which it deems necessary to ensure that members of the
senior executive management of the Group are provided with appropriate incentives to encourage strong performance, and are
rewarded in a fair and responsible manner for their individual contributions to the success of the Group.
The Committee undertook the following items of business:
2023 Remuneration and reporting
– Reviewed and approved incentive outcomes for 2023 (2023 annual bonus and vesting of 2021 LTIP awards); and
– Considered and approved the 2023 Directors’ Remuneration Report.
2024 Remuneration
– Considered and approved the adjustment to the CEO’s base salary from 1 March 2024 to reflect performance in role from
appointment;
– Approved the opportunity/award level and performance targets for 2024 annual bonus and LTIP awards including the
replacement of the Consistency Performance Condition for LTIP with an ESG-related performance condition; and
– Considered a provisional assessment of the CEO’s performance against his annual bonus objectives.
Future Remuneration
– Considered, in principle, the nature of the objectives and related weightings of the 2025 annual bonus objectives;
– Approved the updated Directors’ Remuneration Policy which was approved by our shareholders at the 2024 AGM; and
– Approved the form of the renewed version of the Deferred Bonus Plan which was approved at the 2024 AGM.
Keeping informed
– Considered feedback from shareholders regarding the 2023 Directors’ Remuneration Report and the renewal of the Directors’
Remuneration Policy at our 2024 AGM;
– Regularly considered market trends in executive remuneration and key themes for 2024 and 2025; and
– Received updates on workforce remuneration across the Group.
HOCHSCHILD MINING PLC
144
Directors’ Remuneration Report
CONTINUED
The Committee is satisfied the principles of provision 40 of the UK Corporate Governance Code relating to the design of
remuneration policies and practices have been applied in 2024:
Clarity: We ensure pay for performance and our policy is designed to be logical and transparent.
Simplicity: Executive Director remuneration comprises a minimum of components, based on a regular package including fixed pay,
and short- and long-term variable pay.
Risk: A significant proportion of the Executive Director remuneration package is delivered in long-term or deferred pay which
ensures the longer-term impact of decisions is reflected in pay. Furthermore, the combination of in-post and post-employment
shareholding requirements, as well as capturing several categories of performance in the variable pay elements, helps to ensure
appropriate risk management by senior executives.
Predictability: Variable pay is subject to the achievement of specific and transparent performance targets, and the Committee has
the ability to apply its discretion to ensure variable pay outcomes reflect underlying corporate health.
Proportionality: The Executive Director pay mix is similar to that at comparable international mining peers, and the Committee
has the ability to apply its discretion to ensure overall pay outcomes are proportionate to the Company’s long-term
performance.
Alignment to culture: Variable pay captures several categories of performance, including non-financial objectives such as those
relating to safety and environmental performance, helping to ensure pay reflects multiple perspectives on performance, and not
just financial outcomes.
Advisers
During the year, in order to enable the Committee to reach informed decisions on executive remuneration, advice on market data
and trends was obtained from independent consultants FIT Remuneration Consultants LLP (FIT).
FIT reported directly to the Committee Chair in 2024 and are signatories to and abide by the Code of Conduct for Remuneration
Consultants (which can be found at www.remunerationconsultantsgroup.com). Other than advice on remuneration, no other
services were provided by FIT to the Company. The Committee is satisfied that the advice provided by FIT in 2024 was independent
and objective.
FIT was appointed as the independent adviser to the Remuneration Committee following a competitive tender process in 2021. The
fees paid to FIT in respect of work carried out in 2024 were £50,914, excluding expenses and VAT, and were charged on the basis of
FIT’s standard terms of business for advice provided.
Summary of shareholder voting
The table below shows the results of the binding vote on the 2024 Remuneration Policy at the 2024 AGM and of the advisory vote on
the 2023 Annual Report on Remuneration at our 2024 AGM:
2024 Remuneration Policy
2023 Annual Report on Remuneration
Total number
of votes
% of
votes cast
Total number
of votes
% of
votes cast
For (including discretionary)
358,843,749
93.28%
360,197,871
93.63%
Against
25,844,735
6.72%
24,492,686
6.37%
Total votes cast (excluding withheld votes)
384,688,484
–
384,690,557
–
Votes withheld
61,032
–
58,959
–
Note: Votes withheld are not included in the final proxy figures as they are not recognised as votes in law.
The Committee is committed to listening to and engaging with the views of our shareholders and takes an interest in voting
outcomes. The Committee will continue to be transparent in our remuneration decision-making and to engage with our
shareholders on remuneration matters.
During the year, the Committee received and considered a report summarising the base salaries, benefits and incentives received
by each category of Group staff and summarising the bonus potential and performance metrics used in each of the annual bonus
schemes in operation across the Group. In addition, the Committee ensures that it remains informed regarding mandatory profit
sharing for Peru-based employees.
The Company undertakes varied forms of engagement with employees. In 2024, this included workshops on corporate and safety
cultures led by senior management. The year also saw the continuation of the virtual roundtable sessions hosted by Tracey Kerr as
the Non-Executive Director designated for workforce engagement (and a member of the Remuneration Committee). In addition,
there are frequent and periodic meetings held by mine management with mine-site employees as well as regular engagement with
workers’ appointed representatives regarding many aspects of the business. These processes provide an opportunity for feedback
on Executive Directors’ pay to be given and explanations to be shared, although most of the engagement process is focused on
wider employee welfare; a report on any material feedback regarding remuneration is received by the Remuneration Committee.
ANNUAL REPORT 2024
145
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Single total figure of remuneration for Executive Directors (audited)
The table below sets out a single figure for the total remuneration received by the Chief Executive Officer, being the only Executive
Director, for the year ended 31 December 2024 and the prior year:
2024
(US$000)
20231
(US$000)
Eduardo Landin
Eduardo Landin
Ignacio Bustamante
Base salary
588
190
409
Taxable benefits2
8
2
29
Total fixed
596
192
438
Single-year variable3
754
253
–
Multi-year variable4
396
240
–
Profit share5
94
8
43
Total variable
1,244
501
43
Compensation for Time Service (CTS)6
97
36
34
Tax refunds7
6
2
4
Total remuneration
1,943
731
519
All figures are rounded to the nearest $000
1
2023 figures reflect Ignacio Bustamante’s resignation as CEO (and Executive Director) on 26 August 2023 and the appointment of Eduardo Landin to that position. 2023
figures in relation to Eduardo Landin’s Taxable Benefits and Profit share (and consequently Total variable and Total remuneration) restate those disclosed in the 2023
Annual Report to accurately reflect pro-rating for time.
2 Taxable benefits comprises medical insurance and, in addition, for Ignacio Bustamante only, a company car ($22k).
3
Outcomes for performance during the year under the Annual Bonus Plan. See following sections for further details.
4 2024 Multi-year variable value relates to the partial vesting of the 2022 LTIP awards based on performance to 31 December 2024. See following sections for further details.
5
All-employee profit share mandated by Peruvian law.
6
CTS is a legal entitlement for employees in Peru which provides for a fund in the event of termination of employment. CTS in respect of base salary is calculated as
one month’s wages and is deposited biannually in an employee’s interest-accruing bank account and prior to the end of employment. Employees can gain access to
the deposited amount to the extent it exceeds four months’ wages. CTS in respect of other forms of remuneration such as incentive payouts, that are considered to
be “non-extraordinary”, is currently calculated at a rate of 1/24th. For 2024, CTS comprises: CTS on base salary of $49k (2023(pro-rated) Eduardo Landin:$16k, Ignacio
Bustamante:$34k), CTS on LTIP of $17k (2023(pro-rated) Eduardo Landin:$10k, Ignacio Bustamante:$NIL) and CTS on bonus of $31k (2023(pro-rated): Eduardo Landin:
$11k, Ignacio Bustamante:$NIL).
7
Refunds payable in relation to social security.
Single total figure of remuneration for Non-Executive Directors (audited)
The table below sets out a single figure for the total remuneration for the year ended 31 December 2024 and the prior year received by
Non-Executive Directors serving during those periods:
Base fee
(US$000)
Additional fees
(US$000)
Taxable benefits
(US$000)
Total
(US$000)
2024
2023
2024
2023
2024
2023
2024
2023
Eduardo Hochschild1
417
400
0
0
688
665
1,105
1,0652
Jorge Born Jr
93
87
0
0
0
0
93
87
Jill Gardiner
93
87
21
22
0
0
115
109
Tracey Kerr
93
87
32
30
0
0
125
117
Michael Rawlinson
93
87
51
47
0
0
144
134
Mike Sylvestre
93
87
13
10
0
0
107
97
Joanna Pearson
93
153
24
33
0
03
117
183
Former Directors
Ignacio Bustamante
n/a
304
n/a
04
n/a
04
n/a
304
Nicolas Hochschild
n/a
385
n/a
05
n/a
05
n/a
385
Eileen Kamerick
n/a
395
n/a
135
n/a
05
n/a
525
All figures are rounded to the nearest $000. Non-Executive Directors’ fees are denominated in GBP and accordingly differences in USD:GBP exchange rates impact the
comparisons between Non-Executive Directors’ fees for the year being reported and the comparative prior year.
Notes:
1
Eduardo Hochschild was an Executive Director until 31 December 2014 and, as reported in the 2015 Annual Report, Eduardo Hochschild retained eligibility to receive benefits
following his transition to the Non-Executive Chairman role comprising personal security, medical insurance and use of a company car and driver.
2
Restated to show the correct total amount intended to have been paid to Eduardo Hochschild in 2023 notwithstanding adjustments that were made during the year as a
result of overpayments during 2022.
3
Joanna Pearson was appointed to the Board on 1 October 2023.
4 Ignacio Bustamante served as a Non-Executive Director between 26 August 2023 and 31 December 2023.
5
Corresponds to the period until Nicolas Hochschild and Eileen Kamerick stepped down from the Board on 9 June 2023.
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Salary and fees for the year ended 31 December 2024
Executive Director
Executive Director
Base salary from
1 March 2024
(US$000)
Base salary from
date of appointment
(US$000)
% change
Eduardo Landin
600
550
9%
Base salary above excludes CTS. All salaries are denominated in US dollars.
Non-Executive Directors
The Non-Executive Directors’ fees have been set at a level to reflect the amount of time and level of involvement required in order
to carry out their duties as members of the Board and its Committees. The annual rates of fees payable to the Non-Executive
Directors of the Company in 2024 and 2023 are set out in the table below. All Non-Executive Directors receive a base fee, and
additional fees are paid for acting as Chair or member of one of the Board Committees (excluding the Nomination Committee)
and as Senior Independent Director. As reported in last year’s report, with effect from 1 March 2024, a 5% increase was made to
the levels of the Board Chair’s fee, the Non-Executive Directors’ base fees and the additional fees paid for acting as a Committee
Chair, Committee member and Senior Independent Director.
Executive Director
Fee level from
1 March 2024
(Stated currency p.a.)
Previous fee level
(Stated currency p.a.)
% change
Non-Executive Board Chair’s fee
US$420,000
US$400,000
5%
Non-Executive Directors’ base fee
£73,500
£70,000
5%
Additional fees
Senior Independent Director
£14,700
£14,000
5%
Chair of the Audit, Remuneration and Sustainability Committees
£14,700
£14,000
5%
Committee membership fee (Audit; Remuneration; Sustainability)
£5,250
£5,000
5%
Incentive outcomes for the year ended 31 December 2024 (audited)
Annual bonus in respect of 2024 performance
Objectives for the 2024 bonus were set by the Committee at the beginning of the year and assessment of performance during the
year was undertaken at the March 2025 Committee meeting.
Details of the bonus paid to the CEO (Eduardo Landin) for 2024, including the specific performance metrics, weightings and
performance against each of the metrics, are provided in the table below:
2024 Targets
2024 Assessment
Objective
KPI
Target
weighting
Threshold
Target
Maximum
2024 result
Final bonus
score/
(Maximum)
Profitable
production and
financial results
Attributable Production
(Koz Au Eq)
15%
343
354
360
347k Oz Au Eq
5.74% (15%)
Adjusted EBITDA1
15%
US$252m
US$274m
US$287m
US$262m
5.8% (15%)
Adjusted AISC from operations
with growth (/oz Au Eq)2
15%
US$1,550/oz
US$1,536/oz
US$1,510/oz
US$1,533/oz
8.3% (15%)
Strategy
Strategic advancement
10%
Remco Assessment
Satisfied
10% (10%)
Brownfield
exploration
Inferred resources added during the
year (subject to permits available)
(Moz Au Eq)
15%
0.7
0.9
1.2
2.8M Oz Au Eq
15% (15%)
Responsibility
Accident frequency rate (LTIFR)
10%
2.25
–
1.45
1.25
10% (10%)
Accident Severity Index
5%
300
–
150
365
NIL (5%)
Social key milestones
5%
Remco Assessment
Satisfied
5% (5%)
ECO Score3
10%
5.00
–
5.50
5.58
10% (10%)
Bonus payable (as a percentage of maximum opportunity)
69.84
Notes:
1
Adjusted EBITDA is used for the annual bonus and is determined based on EBITDA which is adjusted primarily to neutralise price effects, unbudgeted expenditure or
external factors. Such adjustments in 2024 included primarily (a) the impact of higher-than-budgeted commodity prices net of the adverse impact of hedges and higher
selling expenses (c.US$197 million) and (b) the net impact of unbudgeted effects of foreign exchange and inflation in the countries of operation (c.US$26m).
2
All-in sustaining cost (AISC) is adjusted to ensure comparability with the assumptions used to set the objective at the beginning of the year and therefore primarily
disregards (a) the impact of the unbudgeted effects of foreign exchange and inflation in the countries of operation (c.US$64/oz), (b) the additional costs arising from
higher-than-forecast commodity prices (c.US$40/oz) and (c) the positive impact of deferred capital expenditure projects (c.US$19/oz).
3
Refer to www.hochschildmining.com for further details on the methodology of calculating the Group’s ECO Score (the internally designed measurement of the Company’s
environmental performance).
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GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
General approach
The determination of the bonus payout is at the discretion of the Committee, taking into account performance during the year
against the above scorecard. Each objective in the scorecard has a “threshold”, “target” and “maximum” performance target,
achievement of which translates into a score for each objective. The bonus scores for each objective are summed which translates
into a percentage which is applied to the maximum bonus opportunity. The maximum annual bonus opportunity is 180% of salary.
For “threshold” and “target” levels of performance, the bonus earned is up to 30% and 50% of maximum, respectively.
Adjustments were made in line with the Company’s usual practice to maintain the quality of earnings by primarily disregarding the
impact of factors outside of management’s control such as the price of silver and gold (as compared to budgeted prices).
Assessing performance against 2024 bonus objectives
In arriving at the above bonus scorecard, the Committee paid particular attention to the following aspects of
the Company’s performance:
Operational and financial performance
As mentioned in the Annual Statement, operational performance in 2024 was good, with Mara Rosa contributing to the
achievement of Hochschild’s production range for the year. However, delays in the ramp-up at Mara Rosa and other factors
including, primarily, the absence of the anticipated devaluation of the Argentinian Peso to mitigate the impact of inflation, had
negative repercussions with regards to production, Adjusted EBITDA and Adjusted AISC.
Overall, the full year operational and financial performance was judged against the objectives set at the beginning of the year
(adjusted, where appropriate, for external factors as described in the footnotes to the table above) which were only partially satisfied.
Safety
The Company’s strong safety performance in 2024 which, in addition to seeing the Company achieve its long-term objective of
Zero Fatalities, saw an industry-leading level of lost time accident frequency rate. However, the occurrence of a serious accident
at Mara Rosa meant that the objective on accident severity was not achieved. For further details on the accident, please refer to
page 72 of the Sustainability Report.
ECO Score
The overall ECO Score for the year is 5.58 against a stretch target of 5.50. This internally designed award-winning measure of
environmental management reflects the following:
– The lowest level of water consumption (138l/person/day) since such records have been maintained (for at least 10 years)
– Domestic waste generation of 0.93 kg/person/day
Further details on the ECO Score can be found on the Company’s website at www.hochschildmining.com
Strategic advancement
In evaluating performance against this objective, the Committee considered a range of actions taken to position the Company for
long-term and sustainable growth to benefit our shareholders, including:
Mara Rosa (Brazil)
– the commencement of commercial production in mid-May 2024
Royropata MEIA (Peru)
– the completion of the requisite baseline and project description in connection with the permitting of Royropata with its exciting
potential of seeing further operational activity at Pallancata
Accretive M&A
– the decision to exercise the option to acquire the Monte Do Carmo gold project following the expedited confirmatory due
diligence on the asset. For further details, see pages 40 and 41.
Brownfield exploration
In light of the significant amount of inferred resources added over the course of the year, which provides assurance of the Group’s
future production, this objective was fully satisfied in line with the performance scale shown in the table above. Please see pages 46
and 47 (Brownfield Exploration) for further details.
Social key milestones
The Remuneration Committee’s consideration of performance against this objective took into account the actions taken by
management to implement the Board-approved social strategy and culture transformation. In addition, the Committee took into
consideration the absence of operational disruption prompted by social issues and, accordingly, concluded this objective to be
fully satisfied.
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Experience of key stakeholders
The Committee also took into account the experience of the Group’s key stakeholders during the year, noting:
• The share price performance during the year which had more than doubled by the year-end;
• The Company’s ongoing programme of initiatives to assist local communities and other local stakeholders; and
• The continued reporting initiatives undertaken in 2024 reinforcing the Group’s commitment to transparency.
For further details, see the Sustainability Report from page 60.
In conclusion, the Committee agreed that Eduardo Landin be awarded a bonus of 69.84% of the maximum opportunity.
2022 LTIP vesting
On 23 February 2022, Eduardo Landin was granted an LTIP award with a face value of US$595,000 in his then non-Board role as
Chief Operating Officer.
Vesting of the 2022 LTIP was dependent on (i) three-year relative TSR performance against a tailored peer group (50% of the total
award) and (ii) internal KPIs as summarised in the table below (50% of the total award). There was no retesting of performance.
Further details of the performance conditions are shown in the table below:
Performance measure
Weighting
Performance targets
TSR
Relative TSR1 performance
vs. tailored peer group2
50%
Upper quintile (80th percentile): full vesting
Upper tercile (67th percentile): 75% vesting
Median (50th percentile): 25% vesting
Below median: nil vesting
Straight-line vesting between (a) Median and Upper tercile, and (b) Upper tercile and Upper quintile
Internal KPIs
Measured & Indicated
Resources (M&IR) per share3 –
absolute growth over three-year
performance period 2022-2024
25%
180 Ag Eq Moz growth in M&IR – full vesting
160 Ag Eq Moz growth in M&IR – 75% vesting
120 Ag Eq Moz growth in M&IR – 25% vesting
Straight-line vesting between these points
MI&R growth measured as Total M&I Resource Additions over three years
Consistency
Performance Condition
25%
Average bonus scorecard outcome 2022-2024 with threshold vesting of 25% requiring an average
achievement of 60% scorecard attainment with straight-line vesting up to full vesting requiring
an average of 100% scorecard attainment. There is an overriding underpin whereby if the annual
scorecard achievement is less than 60% in any one year, then the vesting of this LTIP component will
be nil.
Notes:
1
TSR is calculated in common currency.
2
The 2022 LTIP peer group, at the time of measurement of the award, comprised: Agnico-Eagle Mines, Alamos Gold, AngloGold Ashanti, Barrick Gold, Cia des Minas
Buenaventura, Centamin, Coeur Mining, Eldorado Gold, Endeavour Silver, First Majestic Silver, Fortuna Silver Mines, Fresnillo, Gold Fields, Hecla Mining, IAMGOLD, Kinross
Gold, Newmont Mining, OceanaGold Corp, Pan American Silver, Petropavlovsk, Polymetal and SSR Mining.
3 M&IR additions only in the three-year period.
The Remuneration Committee considered the following outcome of the performance conditions between 1 January 2022 and
31 December 2024:
– the Company’s TSR over the performance period ranked between median and upper tercile relative to that of the tailored peer
group, thereby resulting in vesting as to 55.32% of the award;
– the Company’s M&IR additions totalled 297 Ag Eq Moz, resulting in 100% vesting as to 25% of the award; and
– the average bonus scorecard was 76.41% of maximum resulting in 55.77% vesting as to 25% of the award.
Accordingly, the 2022 LTIP awards will vest as to 66.6%.
Scheme interests awarded in 2024 (audited)
On 13 March 2024, Eduardo Landin was granted a cash-settled award under the LTIP with a maximum face value of $1,100,000.
Vesting is dependent on performance conditions measured from 1 January 2024 to 31 December 2026, with 50% of the award based
on TSR performance against a tailored peer group and 50% based on internal KPIs as summarised in the table below.
Awards normally vest on the third anniversary of the date of grant, subject to continued employment, and are subject to potential
malus in line with the Company’s Malus policy (see page 119 for further details). Due to legal difficulties arising from its enforcement
in Peru, the Remuneration Committee is unable to operate clawback.
ANNUAL REPORT 2024
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FINANCIAL STATEMENTS
FURTHER INFORMATION
After payment of tax, all of the vested cash award will be required to be invested in Hochschild shares which will be held for a
further period of two years. Dividends, if any, will accrue to shares during the holding period. Further details, including vesting
schedules, are provided in the table below:
Executive Director
Grant date
Performance period
Face value of
award at grant
Award value
for threshold
performance
Eduardo Landin
13.03.24
1 January 2024 to 31 December 2026
$1,100,000
$275,000
Performance measure
Weighting
Performance targets
TSR
Relative TSR1 performance
vs. tailored peer group2
50%
Upper quintile (80th percentile): full vesting
Upper tercile (67th percentile): 75% vesting
Median (50th percentile): 25% vesting
Below median: nil vesting
Straight-line vesting between (a) Median and Upper tercile, and (b) Upper tercile and Upper quintile
Internal KPIs
Measured & Indicated
Resources (M&IR) per share3 –
absolute growth over
three-year performance
period 2024-2026
25%
180 Ag Eq Moz growth in M&IR – full vesting
160 Ag Eq Moz growth in M&IR – 75% vesting
120 Ag Eq Moz growth in M&IR – 25% vesting
Straight-line vesting between these points
MI&R growth measured as Total M&I Resource Additions over three years
ESG Performance Condition
25%
Requires year-on-year consistency or improvements in the three-year performance period in at
least 35% of 14 selected ESG key performance indicators covering communities (including local
workforce, local procurement and social investment), environmental management (including GHG
and water consumption), people (including gender) and health & safety
Notes:
1
TSR is calculated on the basis of common currency.
2
The 2024 LTIP peer group, at the date of grant, comprised: Agnico-Eagle Mines, Alamos Gold, AngloGold Ashanti, Barrick Gold Corp, Centamin, Cia des Minas
Buenaventura, Coeur Mining, Eldorado Gold Corp, Endeavour Silver Corp, Equinox Gold, First Majestic Silver Corp, Fortuna Silver Mines, Fresnillo, Gold Fields, Hecla Mining,
IAMGOLD, Kinross Gold, Newmont Mining, OceanaGold Corp, Pan American Silver, Petropavlovsk, Polymetal and SSR Mining.
3
M&IR additions only in the three-year period.
Exit payments made in the year (audited)
There were no exit payments made in the year.
Payments to past Directors (audited)
No payments were made to past Directors in the year.
Implementation of Remuneration Policy for 2025
A summary of how the Remuneration Policy will be applied for the year ending 31 December 2025 is provided below.
Salary
The Committee reviewed the CEO’s salary and, in light of his performance, a 10% increase was agreed (to $660,000 from $600,000)
with effect from 1 March 2025. It was noted that the new salary level remained lower than that paid to the former CEO.
Annual bonus
The maximum annual bonus opportunity for the CEO for the 2025 financial year will be 180% of salary. The bonus payment will be
subject to performance against broadly the same measures as those used in 2024 except that the social milestone objective has been
replaced with an objective relating to the Company’s ESG ratings as assessed by external ratings organisations and the weighting of the
ECO Score objective has been reduced from 10% to 5%. Further disclosure of measures and targets, where not commercially sensitive,
will be provided in next year’s Annual Report on Remuneration.
As in previous years, the Committee will assess performance against the objectives set and calculate an overall bonus score which
will be applied to the maximum bonus opportunity. The bonus will be subject to malus provisions in line with the Remuneration
Policy and, a discretionary override will be applied such that the occurrence of any fatality during the year at the Group’s
operations will result in the reduction, to nil, of the safety-related objectives.
Any bonus earned above 150% of salary will be paid in shares and deferred for two years.
LTIP
The Committee will make awards in 2025 at levels up to 200% of base salary. The awards will be made on the same terms as those
applying to the 2024 awards.
Vested LTIP awards will be invested (on a post-tax basis) in the Company’s shares which are required to be held for a further two years.
The performance conditions are:
• Relative TSR performance vs tailored peer group (50% weighting: same median to upper quintile range as for 2024 awards);
• Measured & Indicated Resources (M&IR) per share (25% weighting: growth over three-year performance period 2025-2027,
reflecting the same absolute growth targets as for 2024 awards); and
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• ESG Performance Condition (25% weighting: subject to year-on-year maintenance of or improvements in at least 35% of the
14 selected ESG key performance indicators covering communities, environmental management, people and health & safety
over the three-year performance period).
Malus provisions will apply to LTIP awards granted in 2025 in line with the Remuneration Policy.
Non-Executive fees
Fees for the Chair and Non-Executive Directors (i.e. base, additional and Committee membership fees) will be the subject of a 3.5%
increase with effect from 1 March 2025.
Annual percentage change in Directors’ remuneration
The tables below show, in respect of those Board Directors serving during 2024 and for comparative purposes, Ignacio Bustamante,
the former CEO, the percentage change in their remuneration between 2020 and 2024 compared with the percentage change in
remuneration for all other employees.
% change
2024
Base salary/
Non-Executive fees1
Taxable
benefits2
Single-year
variable3
Executive Directors
Eduardo Landin4
209.5%
14.3%
198%
Non-Executive Directors
Eduardo Hochschild
4.3%
3.5%
n/a
Jorge Born Jr
6.9%
n/a
n/a
Jill Gardiner
5.5%
n/a
n/a
Tracey Kerr
6.8%
n/a
n/a
Michael Rawlinson
7.5%
n/a
n/a
Mike Sylvestre
10.3%
n/a
n/a
Joanna Pearson5
550%
n/a
n/a
Average all employees6
5.2%
n/a
-10.3%
% change
2023
Base salary/
Non-Executive fees1
Taxable
benefits2
Single-year
variable3
Executive Directors
Eduardo Landin
n/a
n/a
n/a
Non-Executive Directors
Eduardo Hochschild
-1.8%
10.6%
n/a
Jorge Born Jr
0%
n/a
n/a
Ignacio Bustamante4
n/a
n/a
n/a
Jill Gardiner
12.4%
n/a
n/a
Tracey Kerr
9.3%
n/a
n/a
Michael Rawlinson
1.5%
n/a
n/a
Mike Sylvestre
90.2%
n/a
n/a
Joanna Pearson
n/a
n/a
n/a
Average all employees6
6%
n/a
-16%
% change
2022
Base salary/
Non-Executive fees1
Taxable
benefits2
Single-year
variable3
Executive Directors
Ignacio Bustamante4
0%
7.4%
-1.5%
Non-Executive Directors
Eduardo Hochschild
0%
-9.6%
n/a
Jorge Born Jr
-9.3%
n/a
n/a
Jill Gardiner
1%
n/a
n/a
Tracey Kerr7
1,867%
n/a
n/a
Michael Rawlinson
-2.2%
n/a
n/a
Mike Sylvestre
n/a
n/a
n/a
Average all employees6
7.0%
n/a
14%
% change
2021
Base salary/
Non-Executive fees1
Taxable
benefits2
Single-year
variable3
Executive Directors
Ignacio Bustamante4
0%
-10%
5.7%
Non-Executive Directors
Eduardo Hochschild
0%
17%
n/a
Jorge Born Jr
0%
n/a
n/a
Jill Gardiner
0%
n/a
n/a
Tracey Kerr
0%
n/a
n/a
Michael Rawlinson
0%
n/a
n/a
Average all employees6
6.2%
n/a
0.8%
ANNUAL REPORT 2024
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FINANCIAL STATEMENTS
FURTHER INFORMATION
% change
2020
Base salary/
Non-Executive fees1
Taxable
benefits2
Single-year
variable3
Executive Directors
Ignacio Bustamante4
0%
4.5%
–5.3%
Non-Executive Directors
Eduardo Hochschild
0%
2%
n/a
Jorge Born Jr
0%
n/a
n/a
Tracey Kerr
n/a
n/a
n/a
Michael Rawlinson
0%
n/a
n/a
Average all employees6
5.8%
n/a
3.8%
Notes:
1
Note that Non-Executive Director fees other than those paid to Eduardo Hochschild are denominated in British Pounds but are reported in US Dollars at the relevant
rate for reporting purposes. % changes are therefore the result of a combination of (i) differences in exchange rates used for reporting purposes, (ii) the introduction
of Committee membership fees from 1 March 2022, and (iii) the 5% increases in the fees of the Board Chair and Non-Executive Directors (see table in “Non-Executive
Directors” section of this report). Where “0%” is stated, this means that there was no change in the relevant fee as denominated.
2
Taxable benefits comprise (a) for Eduardo Landin, medical insurance and (b) for Eduardo Hochschild, the use of a car and driver, personal security and medical insurance.
3
Single-year variable comprises (a) bonus (calculated with reference to base salary only, i.e. before CTS and tax rebates) and (b) statutory profit-share.
4 Ignacio Bustamante resigned as CEO (and Executive Director) on 26 August 2023 and served as a Non-Executive Director until 31 December 2023. Eduardo Landin was
appointed as CEO (and Executive Director) on 26 August 2023
5
Year-on-year % increase reflects the fact that Joanna Pearson was appointed to the Board on 1 October 2023.
6
“All employees” comprises full-time salaried employees in Peru. 2024 percentage change is an approximation only, as final data is not available as at the date of the report.
7
Year-on-year % increase reflects the fact that Tracey Kerr was appointed to the Board on 10 December 2021.
Relative importance of spend on pay
The table below shows the percentage change in total employee pay expenditure and shareholder distributions (i.e. dividends)
from the financial year ended 31 December 2023 to the financial year ended 31 December 2024.
2024
2023
% change
2024
2023
% change
Distribution to shareholders (US$000)1
10
NIL
n/a
Employee remuneration (US$000)
181,231
174,208
4.03%
Notes:
1
Comprises all cash dividends paid in respect of each year.
The Directors are recommending the payment of a final dividend of US$10m for the year ended 31 December 2024.
Pay for performance
The following graph shows the TSR for the Company compared to the FTSE 350 Precious Metals and Mining Index and FTSE 250
Index, assuming £100 was invested on 31 December 2014. The Board considers that the FTSE 350 Precious Metals and Mining Index
is an appropriate published index as it reflects the sector that Hochschild operates in, and the FTSE 250 Index provides a view of
performance against a broad equity market index of which Hochschild has been a constituent for the majority of the past 10 years.
The table below details the CEO’s single figure remuneration and actual variable pay outcomes over the same period.
400
350
300
250
200
150
100
50
0
Historical TSR Performance
Growth in the value of a hypothetical £100 holding over the 10 years to 31 December 2024
Hochschild Mining
FTSE 250
FTSE 350 Precious Metals and
Mining Index
Source: Datastream (a LSEG product)
Ignacio Bustamante
Ignacio
Bustamante
and Eduardo
Landin1
Eduardo
Landin
CEO
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
CEO single figure of
remuneration ($000)
1,328
3,474
4,519
4,174
3,665
1,933
1,996
1,986
IB 519
EL 731
1,943
Annual bonus outcome
(% of maximum)
67%
83%
83%
90%
95%
90%
78.5%
85.35%
74.05%
69.84%
LTI vesting outcome
(% of maximum)
0%
0% (ELTIP)
90% (LTIP)
86% (ELTIP)
100% (LTIP)
43% (ELTIP)
100% (LTIP)
34% (ELTIP)
0% (LTIP)
0% (LTIP)
0% (LTIP)
0% (LTIP)
40.3% (LTIP)
66.6%
(LTIP)
Notes:
1
The 2023 figures represent the single figure of total remuneration for Ignacio Bustamante in respect of the period 1 January 2023 to 26 August 2023 and for Eduardo Landin
from 26 August 2023 to 31 December 2023. The latter has been restated to accurately reflect pro-rating for time with regards to taxable benefits and profit share.
HOCHSCHILD MINING PLC
152
Directors’ Remuneration Report
CONTINUED
Directors’ interests (audited)
The interests of the Directors and their families in the ordinary shares of the Company as at 31 December 2024 are detailed in the
table below.
The Company has adopted shareholding guidelines whereby all Executive Directors (currently only the CEO) are required to
acquire and retain a beneficial shareholding in the Company equal to at least 250% of base salary. The CEO is required to invest
the entire amount of a vested LTIP for two years (on a net basis) regardless of his achievement of the shareholding guideline.
Shares held
Owned outright
or vested at
31 Dec 2023
Owned
outright or
vested at
31 Dec 2024
Vested but
subject to
holding
period
Unvested
and
subject to
performance
conditions
Unvested
and subject
to deferral
only
Shareholding
requirement
(% of salary)
Current
shareholding
(% of salary
Requirement
met?
Eduardo Landin
282,700
430,700
72,500
0
0
250%
225%1
No
Eduardo Hochschild
196,900,306
196,900,306
Jorge Born Jr
0
0
Jill Gardiner
0
0
Tracey Kerr
0
0
Michael Rawlinson
0
0
Mike Sylvestre
0
0
Joanna Pearson
0
0
Notes:
1
Using the Company’s closing share price and GBP/USD exchange rate as at 31 December 2024 (being the last trading day of the year) of £2.14 and £1:$1.251 respectively.
There have been no changes to Directors’ shareholdings since 31 December 2024.
Directors’ interests in share options, shares and cash awards in Hochschild Long-Term Incentive Plans
Details of Directors’ interests in shares and cash awards under Hochschild’s Long-Term Incentive Plans are set out in the table below.
Eduardo Landin
Date
of grant
Share price
at grant
Exercise price
at grant
Number of shares
awarded
Max
value
Performance
period
Vesting
date
2023 LTIP
20.04.23
n/a
n/a
n/a
$595,000
01.01.23 – 31.12.25
20.04.26
2024 LTIP
13.03.24
n/a
n/a
n/a
$1,100,000
01.01.24 – 31.12.26
13.03.27
None of the Directors had an interest in the shares of any subsidiary undertaking of the Company or in any significant contracts of
the Group.
Signed on behalf of the Board
Michael Rawlinson
Chair of the Remuneration Committee
11 March 2025
ANNUAL REPORT 2024
153
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Introduction
References in this section to “the Articles” are to the Company’s
Articles of Association as at the date of this report, copies of
which are available from the Registrar of Companies or on
request from the Company Secretary.
References in this section to “the Companies Act” are to the
Companies Act 2006.
Share capital
Issued share capital
The Company’s issued share capital comprises 514,458,432
ordinary shares of 1 pence each (“shares”). No shares were
issued during the year.
The Hochschild Mining Employee Share Trust (“the Trust”) is an
employee share trust established to hold shares on trust for the
benefit of employees within the Group. The Trust did not, at any
time during the year, and does not, at the date of this report,
hold any such shares.
The Trustee of the Trust has absolute discretion to vote or
abstain from voting in relation to the shares held by it from time
to time and in doing so may take into account the interests of
current and future beneficiaries and other considerations.
Current share repurchase authority
The Company obtained shareholder approval at the AGM held
in June 2024 for the repurchase of up to 51,445,843 shares
which represents 10% of the Company’s issued share capital
(“the 2024 Authority”). Whilst no purchases have been made
by the Company pursuant to the 2024 Authority, it is intended
that shareholder consent will be sought on similar terms at this
year’s AGM when the 2024 Authority expires.
Additional share capital information
This section provides additional information as at
31 December 2024.
(a) Structure of share capital
The Company has a single class of share capital which is
divided into ordinary shares of 1 pence each, which are in
registered form.
Further information on the Company’s share capital is provided
in note 30 to the consolidated financial statements.
(b) Rights and obligations attaching to shares
The rights attaching to the ordinary shares are described in full
in the Articles. In summary, on a show of hands and on a poll at
a general meeting or class meeting, every member present in
person or, subject to the below, by proxy has one vote for every
ordinary share held. 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.
Members are entitled to appoint a proxy to exercise all or any
of their rights to attend and to speak and vote on their behalf
at a general meeting or class meeting. A member that is a
corporation is entitled to appoint more than one individual to
act on its behalf at a general meeting or class meetings as a
corporate representative.
(c) Transfer of shares
The relevant provisions of the Articles state that:
– registration of a transfer of an uncertificated share may
be refused in the circumstances set out in the CREST
Regulations and where, in the case of a transfer to
joint holders, the number of joint holders to whom the
uncertificated share is to be transferred exceeds four;
– the Directors may, in their absolute discretion, decline to
register any transfer of any share which is not a fully paid
share. The Directors may also decline to recognise any
instrument of transfer relating to a certificated share unless
the instrument of transfer:
• is duly stamped (if required) and is accompanied by the
relevant share certificate(s) and such other evidence
of the right to transfer as the Directors may reasonably
require; and
• is in respect of only one class of share.
– the Directors may:
• in their absolute discretion, refuse to register a transfer if it
is in favour of more than four persons jointly; and
• decline to register a transfer of any of the Company’s
shares by a person with a 0.25% interest, if such a person
has been served with a notice under the Companies Act
after failure to provide the Company with information
concerning interests in those shares required to be
provided under the Companies Act.
(d) Restrictions on voting
No member shall be entitled to vote at any general meeting or
class meeting in respect of any shares held by him or her, if any
call or other sum then payable by him or her in respect of that
share remains unpaid. Currently, all issued shares are fully paid.
In addition, no member shall be entitled to vote if he or she
failed to provide the Company with information concerning
interests in those shares required to be provided under the
Companies Act.
(e) Deadlines for voting rights
Votes are exercisable at the general meeting of the Company in
respect of which the business being voted upon is being heard.
Votes may be exercised in person, by proxy or, in relation to
corporate members, by a corporate representative. Under the
Articles, the deadline for delivering proxy forms cannot be
earlier than 48 hours (excluding non-working days) before the
meeting for which the proxy is being appointed.
Supplementary information
HOCHSCHILD MINING PLC
154
Substantial shareholdings
The Company has been notified of the interests detailed in the table below in the Company’s shares in accordance with Chapter 5
of the Financial Conduct Authority’s Disclosure Guidance and Transparency Rules (DTRs).
As at 31 December 2024
Number of ordinary
shares/voting
rights
Percentage of
issued share
capital
Nature of holding
Eduardo Hochschild1
196,900,306
38.27%
Indirect
BlackRock
Below 5%
Below 5%
–
Van Eck Associates Corporation
15,465,722
3.01%
Direct
1
The shareholding of Eduardo Hochschild is held through Pelham Investment Corporation.
Subsequent to 31 December 2024, the Company has been
notified of the following additional changes:
Shareholder agreements
The Relationship Agreement entered into prior to the IPO
between, amongst others, the Major Shareholder (as defined
in the Relationship Agreement) and Eduardo Hochschild
(collectively “the Controlling Shareholders”) and the
Company contains provisions restricting the Controlling
Shareholders’ rights to exercise their voting rights to procure an
amendment to the Articles that would be inconsistent with the
Relationship Agreement.
Significant agreements
A change of control of the Company following a takeover
bid may cause a number of agreements to which the
Company, or any of its trading subsidiaries, is party to
take effect, alter or terminate. Such agreements include
commercial trading contracts, joint venture agreements and
financing arrangements.
Further details are given below of those arrangements where
the impact may be considered to be significant in the context
of the Group.
(a) $300 million Credit Agreement and $200 million
Credit Agreement (the “Credit Agreements”)
Under the terms and conditions of the Credit Agreements
which are between, amongst others, the Group and BBVA
Securities Inc, and The Bank of Nova Scotia, a Change of
Control obliges the Group to prepay all Advances (as defined
in the agreement) unless any Lender notifies the Group that it
is declining any such prepayment in which case the Advances
owing to such declining Lender shall not be prepaid.
In summary, a Change of Control means an event or series
of events by which: (a) the Permitted Holders (being Eduardo
Hochschild, his spouse, either of their descendants or estate or
guardian of any of the aforementioned, a trust for the benefit
of one or more of the aforementioned or any entity controlled
by any one or more of the aforementioned) shall for any reason
cease, individually or in the aggregate, to be the beneficial
owners (as so defined) of at least 30% of the Company’s
shares; or (b) the Permitted Holders shall for any reason cease,
individually or in the aggregate, to have the power to appoint
at least the number of the members of the Board of Directors
or other equivalent governing body of the Company that the
Permitted Holders are permitted to elect as at the date of the
relevant agreement; or (c) the Company shall for any reason
cease, directly or through one or more of its Subsidiaries, to
be the “beneficial owner” (as so defined) of more than 50% of
the Equity Interests in either Compañia Minera Ares S.A.C. or
Amarillo Mineraçao do Brasil Ltda.
(b) Long-Term Incentive Plans
Awards made under the Group’s Long-Term Incentive Plan
shall, upon a change of control of the Company, vest early
unless a replacement award is made. Vesting will be pro-rated
to take account of the proportion of the period from the award
date to the normal vesting date falling prior to the change of
control and the extent to which performance conditions (and
any other conditions) applying to the award have been met.
Summary of constitutional and other provisions
Appointment of Directors
Under the terms of the Articles Directors may be appointed by
the Company by ordinary resolution or by the Board. A Director
appointed by the Board holds office only until the next following
AGM and is then eligible for election by shareholders but is not
taken into account in determining the Directors or the number
of Directors who are to retire by rotation at that meeting.
The Directors may from time to time appoint one or more of their
body to be the holder of any executive office for such period
(subject to the Companies Act) and on such terms as they may
determine and may revoke or terminate any such appointment.
Each Director is subject to periodic re-election by shareholders
at intervals of no more than every three years. Each Director
(other than the Chairman and any Director holding executive
office) shall retire at each AGM following the ninth anniversary
of the date on which he or she was elected by the Company.
Approach to appointments adopted by the Board
Under law, the Company is entitled to adopt such practices
which are no less stringent than those set out in the
Articles. Accordingly, notwithstanding the above, the Board
has adopted the recommendation of the UK Corporate
Governance Code that all Directors should seek annual
re-election by shareholders.
Listing Rules
In line with the UK Listing Rules which apply to Hochschild
given the presence of a controlling shareholder, the election or
re-election of any Independent Director must be approved by:
(i) all shareholders of the Company; and (ii) the independent
shareholders of the Company (i.e. any person entitled to vote
on the election of Directors of the Company who is not a
controlling shareholder).
If either shareholder resolution to elect or re-elect the
Independent Director is defeated, the Company may propose a
further resolution to elect or re-elect the proposed Independent
Director provided that the further resolution must not be voted
on within 90 days from the date of the original vote but it must
then be voted on within a period of 30 days from the end of the
90-day period. It may then be passed by a simple majority of
the shareholders of the Company voting as a single class.
ANNUAL REPORT 2024
155
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Removal of Directors
The Company may, in accordance with and subject to the
provisions of the Companies Act by ordinary resolution of which
special notice has been given, remove any Director before
the expiration of his/her term of office. The office of Director
shall be vacated if: (i) s/he is prohibited by law from acting as
a Director; (ii) s/he resigns or offers to resign and the Directors
resolve to accept such offer; (iii) s/he becomes bankrupt or
compounds with his/her creditors generally; (iv) a relevant
order has been made by any court on the grounds of mental
disorder; (v) s/he is absent without permission of the Directors
from meetings of the Board for six months and the Directors
resolve that his/her office be vacated; (vi) his/her resignation
is requested in writing by not less than three quarters of the
Directors for the time being; or (vii) in the case of a Director
other than the Chairman and any Director holding an executive
office, if the Directors shall resolve to require him/her to resign
and within 30 days of being given notice of such notice s/he so
fails to do.
Relationship Agreement
In addition, under the terms of the Relationship Agreement:
– For as long as the Major Shareholder has an interest of 30%
or more in the Company, it is entitled to appoint up to two
Non-Executive Directors and to remove such Directors so
appointed; and
– For as long as the Major Shareholder has an interest of
15% or more of the Company, it is entitled to appoint up to
one Non-Executive Director and to remove such Director
so appointed.
Amendment of Articles of Association
Any amendments to the Articles may be made in
accordance with the provisions of the Companies Act by way
of special resolution.
Powers of the Directors
Subject to the Articles, the Companies Act and any directions
given by special resolution, the business and affairs of the
Company shall be managed by the Directors who may exercise
all such powers of the Company.
Subject to applicable statutes and other shareholders’ rights,
shares may be issued with such rights or restrictions as
the Company may by ordinary resolution decide or, in the
absence of any such resolution, as the Directors may decide.
Subject to applicable statutes and any ordinary resolution of
the Company, all unissued shares of the Company are at the
disposal of the Directors. At each AGM, the Company puts in
place an annual shareholder authority seeking shareholder
consent to allot unissued shares, in certain circumstances for
cash, in accordance with the guidelines of certain Investor
Protection Committees.
Repurchase of shares
Subject to authorisation by shareholder resolution, the
Company may purchase its own shares in accordance with
the Companies Act. Any shares which have been bought
back may be held as Treasury shares or, if not so held, must
be cancelled immediately upon completion of the purchase,
thereby reducing the amount of the Company’s issued share
capital. The minimum price which must be paid for such shares
is specified in the relevant shareholder resolution.
Dividends and distributions
Subject to the provisions of the Companies Act, the Company
may by ordinary resolution from time to time declare dividends
not exceeding the amount recommended by the Directors.
The Directors may pay interim dividends whenever the financial
position of the Company, in the opinion of the Directors, justifies
their payment. If the Directors act in good faith, they are not liable
to holders of shares with preferred or pari passu rights for losses
arising from the payment of interim dividends on other shares.
Additional disclosures
Disclosure table pursuant to Listing Rule 6.6.4R
For the purposes of UKLR 6.6.4R, the information required to be disclosed by UKLR 6.6.1R can be found in the following parts of this
Annual Report:
Section
Matter
Location
(1)
Interest capitalised
Note 28 to the consolidated financial statements
(2)
Publication of unaudited financial information
Not applicable
(3)
Details of specified long-term incentive scheme
None
(4)
Waiver of emoluments by a Director
None
(5)
Waiver of future emoluments by a Director
None
(6)
Non pre-emptive issues of equity for cash
None
(7)
Item (6) in relation to major subsidiary undertakings
None
(8)
Parent participation in a placing by a listed subsidiary
None
(9)(a)
Contract of significance in which a Director is interested
None
(9)(b)
Contract of significance with controlling shareholder
None
(10)
Provision of services by a controlling shareholder
None
(11)
Shareholder waivers of dividends
Directors’ Report
(12)
Shareholder waivers of future dividends
Directors’ Report
(13)
Statement of compliance to conduct business independently of controlling shareholder
Directors’ Report
HOCHSCHILD MINING PLC
156
Supplementary information
CONTINUED
The Directors are responsible for preparing the Annual
Report and the Group and Parent Company financial
statements in accordance with applicable United Kingdom
law and regulations.
Company law requires the Directors to prepare Group and
Parent Company financial statements for each financial year.
Under that law the Directors have elected to prepare the Group
and Parent Company financial statements in accordance with
UK-adopted international accounting standards (IFRS). Under
company law the Directors must not approve the financial
statements unless they are satisfied that they give a true and
fair view of the state of affairs of the Group and the Parent
Company and of their profit or loss for that period.
Under the Financial Conduct Authority’s Disclosure Guidance
and Transparency Rules, Group financial statements are
required to be prepared in accordance with UK-adopted
international accounting standards.
In preparing those financial statements, the Directors are
required to:
– Select suitable accounting policies in accordance with IAS 8
Accounting Policies, Changes in Accounting Estimates and
Errors and then apply them consistently;
– Make judgements and accounting estimates that are
reasonable and prudent;
– Present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
– Provide additional disclosures when compliance with the
specific requirements in IFRS is insufficient to enable users
to understand the impact of particular transactions, other
events and conditions on the Group and Parent Company
financial position and financial performance;
– In respect of the Group financial statements, state whether
UK-adopted international accounting standards have been
followed, subject to any material departures disclosed and
explained in the financial statements;
– In respect of the Parent Company financial statements, state
whether UK-adopted international accounting standards
have been followed, subject to any material departures
disclosed and explained in the financial statements; and
– Prepare the financial statements on the going concern basis
unless it is appropriate to presume that the Parent Company
and/or the Group will not continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Parent
Company’s and Group’s transactions and disclose with
reasonable accuracy at any time the financial position of the
Parent Company and the Group and enable them to ensure
that the Parent Company and the Group financial statements
comply with the Companies Act 2006. They are also responsible
for safeguarding the assets of the Parent Company and the
Group and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
Under applicable law and regulations, the Directors are also
responsible for preparing a Strategic Report, Directors’ Report,
Directors’ Remuneration Report and Corporate Governance
Statement that comply with that law and those regulations.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the Company’s website. Legislation in the UK governing the
preparation and dissemination of financial statements may
differ from legislation in other jurisdictions.
Statement of Directors’
responsibilities
ANNUAL REPORT 2024
157
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Independent auditor’s
report to the members of
Hochschild Mining PLC
Opinion
In our opinion:
– Hochschild Mining PLC’s Group financial statements and
Parent Company financial statements (the “financial
statements”) give a true and fair view of the state of
the Group’s and of the Parent Company’s affairs as at
31 December 2024 and of the Group’s profit for the year
then ended;
– The Group financial statements have been properly
prepared in accordance with UK adopted international
accounting standards;
– The Parent Company financial statements have been properly
prepared in accordance with UK adopted international
accounting standards as applied in accordance with section
408 of the Companies Act 2006; and
– The financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
We have audited the financial statements of Hochschild Mining
PLC (the ‘Parent Company’) and its subsidiaries (the ‘Group’)
for the year ended 31 December 2024 which comprise:
Group
Parent company
Consolidated statement
of financial position as at
31 December 2024
Statement of financial position
as at 31 December 2024
Consolidated income statement
for the year then ended
Statement of changes in equity
for the year then ended
Consolidated statement of
comprehensive income for the
year then ended
Statement of cash flows for the
year then ended
Consolidated statement of
changes in equity for the year
then ended
Related notes 1 to 14 to the financial
statements, including material
accounting policies
Consolidated statement of cash
flows for the year then ended
Related notes 1 to 40 to
the consolidated financial
statements, including material
accounting policies
The financial reporting framework that has been applied
in their preparation is applicable law and UK adopted
international accounting standards and as regards to
the Parent company financial statements, as applied in
accordance with section 408 of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further
described in the Auditor’s responsibilities for the audit of
the financial statements section of our report. We believe
that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Independence
We are independent of the Group and Parent Company in
accordance with the ethical requirements that are relevant
to our audit of the financial statements in the UK, including
the FRC’s Ethical Standard as applied to listed public interest
entities, and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
The non-audit services prohibited by the FRC’s Ethical
Standard were not provided to the Group or the Parent
Company and we remain independent of the Group and the
Parent Company in conducting the audit.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that
the Directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.
Our evaluation of the Directors’ assessment of the Group
and Parent Company’s ability to continue to adopt the going
concern basis of accounting included:
– Confirming our understanding of the Directors’ going
concern assessment process and the key factors and
assumptions that are considered in their assessment;
– Auditing the key factors and assumptions adopted in the
assessment of going concern and the cash flow model,
including considering whether management has exercised
any bias in selecting their assumptions, by comparing
against past performance and available market data;
– Checking the reasonableness of all key assumptions in
management’s forecasts, including the forecast gold and
silver price used; the production profiles which form the basis
of the cash flow forecast; and the mitigating factors that
exist and that can be utilised to ensure the liquidity of
the Group;
HOCHSCHILD MINING PLC
158
– Obtaining the Directors’ going concern assessment,
including cash flow forecast and covenant calculations
for the going concern period which covers 12 months
from the audit report date to 31 March 2026. The Directors
have modelled a severe scenario in order to incorporate
unexpected changes to the forecast liquidity of the Group.
This severe scenario modelled a reduction in precious metal
prices, stoppages of all operations and unforeseen social
related costs. We evaluated the sufficiency of the sensitivities
performed, by assessing whether the severe scenario was
appropriately severe based on historical track record;
– Obtaining an understanding of the operation of
management’s model, checking the clerical accuracy of
management’s modelling, and recalculating management’s
forecasts of their compliance with borrowing covenants
throughout the assessment period under management’s
scenarios;
– Verifying the terms, maturity, interest rates, and any
restrictions or covenants of the borrowings held by the
Group at the date of approving the financial statements
against the original contracts;
– Obtaining the contract with Cerrado Gold in relation
to Monte do Carmo acquisition and verified the terms
and timing of the deferred payments, to ensure they
are consistent with the cash flows recognised in
management’s model;
– Checking the consistency of the factors and assumptions
adopted in the going concern assessment with other areas
of our audit, including the Group’s asset impairment tests;
– Challenging the adequacy of the going concern assessment
period until 31 March 2026, considering whether any events
or conditions foreseeable after the period indicated a longer
review period would be appropriate;
– Considering the results of management’s reverse stress
tests in order to identify what factors would lead the Group
reaching the minimum liquidity levels required to maintain
the business or would result in the Group breaching any of its
debt covenants during the going concern period. Assessed
the likelihood of these factors in the context of the outlook
for commodity prices and against historic market lows as
well as our own industry experience;
– Obtaining bank confirmations covering over 99% of the
Group’s cash and cash equivalents as at 31 December 2024.
We also compared the cash balance as per the accounting
records to those in the going concern model for January
and February 2025 and assessed the Group’s post year
end trading performance by comparison to budget;
– With regards to the Parent Company financial statements,
reviewing the letter of support received from Compañía
Minera Ares (‘CMA’) and assessed the ability of CMA to
provide financial support to the Parent Company during
the going concern period, through our test of CMA’s future
cashflows included within the Group’s going concern model;
– Considering whether management’s disclosures in the
Annual Report and Accounts are appropriate, through
consideration of the relevant disclosure standards; and
– Reviewing the support prepared by management and
the disclosures relating to the viability assessment and
considered whether they accurately represented the
process followed by management and whether the Group
complied with the UK Corporate Governance Code
disclosures requirements.
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
Group and Parent Company’s ability to continue as a going
concern for a period to 31 March 2026.
In relation to the Group and Parent Company’s reporting on
how they have applied the UK Corporate Governance Code,
we have nothing material to add or draw attention to in relation
to the Directors’ statement in the financial statements about
whether the Directors considered it appropriate to adopt the
going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors
with respect to going concern are described in the relevant
sections of this report. However, because not all future events or
conditions can be predicted, this statement is not a guarantee
as to the Group’s ability to continue as a going concern.
Overview of our audit approach
Audit scope
–
We performed an audit of the complete
financial information of three components,
and audit procedures on specific balances
for a further four components and for the
remaining twenty components we performed
other audit procedures.
–
The components where we performed full or
specific audit procedures accounted for 100%
of Adjusted EBITDA, 100% of Revenue and
98% of Total Assets.
Key audit matters
–
We identified the ‘Recoverability of the carrying
value of the Group’s mining assets and
investment in associate’ as a key audit matter
that, in our professional judgement, had the
greatest effect on our overall audit strategy,
the allocation of resources in the audit and
in directing the audit team’s efforts.
Materiality
–
We tested to an overall Group materiality of
US$8.1m. Final materiality was calculated as
US$8.4m based on 2% of the Group’s Adjusted
EBITDA. Given our planning materiality was
lower than the final materiality we continued
to use US$8.1m as our materiality.
An overview of the scope of the
Parent Company and Group audits
Tailoring the scope
In the current year our audit scoping has been updated to
reflect the new requirements of ISA (UK) 600 (Revised). We have
followed a risk-based approach when developing our audit
approach to obtain sufficient appropriate audit evidence on
which to base our audit opinion. We performed risk assessment
procedures, with input from our component auditors, to
identify and assess risks of material misstatement of the Group
financial statements and identified significant accounts and
disclosures. When identifying components at which audit work
needed to be performed to respond to the identified risks of
material misstatement of the Group financial statements, we
considered our understanding of the Group and its business
environment, the applicable financial framework, the Group’s
system of internal control at the entity level, the existence
of centralised processes, applications and any relevant
internal audit results.
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FURTHER INFORMATION
We determined that centralised audit procedures would be
performed on the following key audit areas: recoverability of
mining assets and investment in associate; mine rehabilitation
provision; accounting impact of reserves and resources;
accounting for hedges; and the acquisition of Monte do Carmo.
We then identified three components as individually relevant
to the Group due significant risk or an area of higher assessed
risk of material misstatement of the Group financial statements
being associated with the components. These three components
of the Group are also individually relevant due to materiality or
financial size of the component relative to the Group.
For those individually relevant components, we identified the
significant accounts where audit work needed to be performed
at these components by applying professional judgement,
having considered the Group significant accounts on which
centralised procedures will be performed, the reasons for
identifying the financial reporting component as an individually
relevant component and the size of the component’s account
balance relative to the Group significant financial statement
account balance.
We then considered whether the remaining Group significant
account balances not yet subject to audit procedures, in
aggregate, could give rise to a risk of material misstatement
of the Group financial statements. We selected four
components of the Group to include in our audit scope
to address these risks.
Having identified the components for which work will be
performed, we determined the scope to assign to each
component.
Of the seven components selected, we designed and performed
audit procedures on the entire financial information of three
components (“full scope components”). For four components,
we designed and performed audit procedures on specific
significant financial statement account balances (“specific
scope components”).
Our scoping to address the risk of material misstatement for
the key audit matter is set out in the Key audit matters section
of our report.
Involvement with component teams
In establishing our overall approach to the Group audit,
we determined the type of work that needed to be undertaken
at each of the components by us, as the Group audit
engagement team, or by component auditors operating
under our instruction.
The Group audit team continued to follow a programme of
planned visits that has been designed to ensure that the Senior
Statutory Auditor, or another senior member of the Group audit
team, visits each of the primary operating locations where
the Group audit scope is focused. During the current year’s
audit cycle, visits were undertaken by the primary audit team
to the component teams in Peru, Argentina and Brazil, with
the Senior Statutory Auditor attending the visits to Peru and
Brazil. These visits involved discussing the audit approach with
the component team and any issues arising from their work,
meeting with local management and reviewing relevant audit
working papers on risk areas. The Group audit team interacted
regularly with the component teams where appropriate
during various stages of the audit, reviewed relevant working
papers and were responsible for the scope and direction of
the audit process. Where relevant, the section on key audit
matters details the level of involvement we had with component
auditors to enable us to determine that sufficient audit
evidence had been obtained as a basis for our opinion
on the Group as a whole.
This, together with the additional procedures performed at
Group level, gave us appropriate evidence for our opinion on
the Group financial statements.
Climate change
Stakeholders are increasingly interested in how climate change
will impact Hochschild Mining PLC. The Group has determined
that the most significant future impacts from climate change
on its operations will be from potential governmental and
societal responses to climate change risks, changes in weather
patterns and consequential restricted access to capital as a
result of failing to respond to these risks. These are explained
on pages 80 to 95 in the Task Force On Climate Related
Financial Disclosures (TCFD) report and on page 107 in the
principal risks and uncertainties. All of these disclosures
form part of the “Other information”, rather than the audited
financial statements. Our procedures on these unaudited
disclosures therefore consisted solely of considering whether
they are materially inconsistent with the financial statements or
our knowledge obtained in the course of the audit or otherwise
appear to be materially misstated, in line with
our responsibilities on “Other information”.
In planning and performing our audit we assessed the potential
impacts of climate change on the Group’s business and any
consequential material impact on its financial statements.
As explained in Note 2(b) to the Consolidated Financial
Statements and the TCFD report on pages 80 to 95 the
governmental and societal responses to climate change risks
are still developing, and are interdependent upon each other,
and consequently the financial statements cannot capture
all possible future outcomes as these are not yet known.
The degree of certainty of these changes may also mean
that they cannot be taken into account when determining
asset and liability valuations and the timing of future cash
flows under the requirements of UK adopted International
Accounting Standards.
Hochschild recently introduced a 2030 interim ambition as
a part of their overarching ambition to be Net Zero by 2050.
Specifically, the 2030 interim ambition relates to reducing
greenhouse gas emissions (GHG) scope 1 and 2 emissions
by 30%, against the 2021 baseline emissions level, by 2030.
We note that the Group are conducting a financial impact
assessment in 2025 to determine the financial statement
impact of these measures and are undertaking a detailed
low-carbon transition assessment to refine their climate-
related strategy. Therefore, until this assessment has been
completed, we are unable to determine the full future economic
impact on its business model and operational plans and
therefore the potential impacts are not fully incorporated
in these financial statements.
Our audit effort in considering the impact of climate change
on the financial statements was focused on evaluating
management’s assessment of the impact of climate risk,
physical and transition and whether these have been
appropriately reflected in the disclosures in Note 2(b) to
the Consolidated Financial Statements. We also challenged
the Directors’ considerations of climate change risks in
their assessment of going concern and viability and
associated disclosures.
Based on our work we have not identified the impact of
climate change on the financial statements to be a key audit
matter or to impact a key audit matter.
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Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the
financial statements of the current period and include the
most significant assessed risks of material misstatement
(whether or not due to fraud) that we identified. These matters
included those which had the greatest effect on: the overall
audit strategy, the allocation of resources in the audit; and
directing the efforts of the engagement team. These matters
were addressed in the context of our audit of the financial
statements as a whole, and in our opinion thereon, and we
do not provide a separate opinion on these matters.
Risk
Our response to the risk
Recoverability of the carrying value of the Group’s mining
assets and investment in associate
Refer to the Audit Committee Report; Accounting policies (page 173);
and Notes 16 to 19 to the Consolidated Financial Statements
(pages 199 to 205)
At 31 December 2024 the carrying values of the Group’s mining
assets were:
–
Property, plant and equipment: US$1,070.8m (2023: US$1,018.9m);
–
Evaluation and exploration assets: US$132.3m (2023: US$67.3m);
–
Intangible assets: US$49.6m (2023: US$30.0m); and
–
Investment in associate: US$15.8m (2023: US$22.9m).
IFRS requires companies to test cash generating units (CGUs) for
impairment whenever an indicator exists. An intangible asset with
an indefinite useful life is tested for impairment at least annually and
whenever there is an indication that the asset might be impaired.
For the Group, CGUs represent individual mines and advanced
exploration projects.
Additionally, IFRS requires testing of CGUs for impairment reversal at
the end of each reporting period where there is any indicator that an
impairment loss recognised in prior periods (for an asset other than
goodwill) may no longer exist, or may have decreased.
For the Group, the relevant CGUs are:
–
Operating mines: Inmaculada, San Jose and Mara Rosa;
–
Development projects: Volcan, Azuca, Arcata, Pallancata, and
Monte do Carmo; and
–
Investment in associate: Aclara.
The Volcan CGU includes an intangible asset with an indefinite useful
life and therefore is tested for impairment at least annually.
A number of impairment or impairment reversal indicators were
identified across the Group’s CGUs, including but not limited to:
–
The increase in gold and silver prices, impacting San Jose
and Volcan;
–
The share purchase agreement signed for the sale of Arcata
and Azuca; and
–
The announcement of Aclara’s private placement of common
shares at $0.50 per share.
As disclosed in Notes 16 to 19 to the consolidated financial statements,
total impairment charges of $18.8m were recognised in the year. These
charges related to Azuca and Arcata ($13.7m) and Aclara ($5.1m).
The risk relating to recoverability of the carrying value of mining
assets and investment in associate has remained stable in comparison
to the prior year.
Our approach focused on the following procedures:
–
We obtained an understanding of management’s key controls over
impairment of mining assets in supporting the prevention, detection
and correction of material errors in the financial statements.
–
We also obtained an understanding of management’s process to
obtain and extend the mining operating permits, assessing the
respective life of mines of the Group’s assets.
–
We obtained management’s assessment of whether any indicators
of impairment or reversal of impairment were present at
31 December 2024.
–
We challenged the validity of the indicators identified by management,
with a focus on the following key assumptions:
• Comparing and assessing management’s prices to analysts’
consensus forecasts for gold and silver as at 31 December 2024.
• Obtaining relevant support of management’s position on market
interest rates and other macro-economic factors.
• Challenging the economic performance of the CGUs during the
year, discussed with management and reviewed the approved mine
plans and/or budgets.
• For exploration projects, obtaining an understanding of
management’s plans to recover the carrying value in full from
successful development or by sale. We also obtained technical
reports from third-parties for development projects.
• Obtaining relevant support about expected renewal/extension
of mining permits.
–
We obtained the recoverable value model from management for
the Group’s CGUs and Investment in associate. We performed the
following procedures:
• Assessed the appropriateness of the methodology applied in
preparing each model by reference to industry and valuation
practices.
• Undertook an assessment of management’s track record of
accuracy in forecasting to determine the reliability of current
forecasts. We further agreed the main inputs to the approved mine
plans, budgets, technical reports and historic figures.
• Involved our valuation specialists to assist us in challenging
and assessing the appropriateness of the discount rate used in
the calculation.
• With respect to San Jose, we challenged management on the
updates made to the life of mine and production assumptions,
driven by changes in reserves and resources estimates.
• With respect to the recoverable value model for the Volcan CGU,
we assessed management’s FVLCD, determined using an
Enterprise Valuation (EV). This included agreeing the main inputs
to information from appropriate independent sources and
involving EY valuation specialists to assist us in assessing the
appropriateness of the methodology applied, the EV of comparable
entities, as well as the reasonableness of the risk premium
used therein.
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FURTHER INFORMATION
Risk
Our response to the risk
• With respect to Azuca and Arcata CGUs, we verified the sale
consideration, including contingent consideration for Net Smelter
Return royalties over the projects. We additionally engaged EY
valuations specialists to assist us in assessing management’s
contingent consideration calculations and methodology. Finally,
we assessed managements held for sale disclosures to ensure
these were in line with IFRS 5 Non- current Assets Held for Sale
and Discontinued Operations.
• With respect to Aclara, we challenged the appropriateness of the
impairment recognised by reference to the private placement
valuation, including engaging our EY valuations specialists to assist
us in determining the appropriateness of the valuation approach
and to benchmark the private placement price.
–
We reviewed, by reference to the FRC’s guidance, the appropriateness,
sufficiency, and clarity of the impairment-related disclosures, including
around reasonably possible changes in estimates.
Key observations communicated to the Audit Committee
As a result of the audit procedures performed, we have concluded that management’s impairment indicator analysis and impairment assessment
for the Group’s CGUs has been carried out appropriately and in accordance with the requirements of IFRS.
We further concluded that the significant assumptions used in the recoverable value models prepared by management were appropriate, and
where applicable, fell within the range of acceptable outcomes that we had calculated.
Based on the procedures performed, we consider the impairment charges recorded by management at 31 December 2024 totalling $18.8m to be
appropriate. We are satisfied that the carrying values of the Inmaculada, San Jose, Mara Rosa and Volcan do not require impairment nor reversal
of impairment as at 31 December 2024.
We concluded that the related disclosures in the Group financial statements are appropriate.
How we scoped our audit to respond to the risk and involvement with component teams
All audit work performed to address this risk was undertaken by the Group audit team.
Revenue recognition is a significant risk presumed by ISAs
(UK). It is not included above, as Hochschild’s revenue streams
are largely routine in nature and do not involve significant
judgement or use of significant estimates. Consequently, the
auditing of revenue recognition did not have the greatest effect
on our overall audit strategy, the allocation of resources in the
audit or in directing the efforts of the engagement team.
As part of our audit, we also address the risk of management
override of internal controls, including evaluating whether there
is evidence of bias by the Directors that may represent a risk
of material misstatement due to fraud. We determined that the
risk of management override does not represent a separate
key audit matter, on the basis that it is our assessment that this
risk principally manifests itself through recoverability of the
carrying value of the Group’s mining assets, where there are a
number of significant judgements and estimates involved that
are susceptible to management bias.
In the prior year, our auditor’s report included a key audit
matter in relation to the ‘Recoverability of the carrying value
of the Group’s mining assets’. This is consistent with the key
audit matter included in our auditor’s report for the current
year. The name of the key audit matter has been expanded to
specifically make reference to the investment in associate.
Our application of materiality
We apply the concept of materiality in planning and performing
the audit, in evaluating the effect of identified misstatements
on the audit and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that,
individually or in the aggregate, could reasonably be expected
to influence the economic decisions of the users of the financial
statements. Materiality provides a basis for determining the
nature and extent of our audit procedures.
We determined planning materiality for the Group to be
US$8.1m (2023: US$4.8m), the level on which we based our
testing. Final materiality was calculated as US$8.4m (2023:
US$5.5m) based on 2% (2023: 2%) of the Group’s Adjusted
EBITDA. Given our planning materiality was lower than the
final materiality we continued to use US$8.1m as our materiality
for our testing. We believe that Adjusted EBITDA provides us
with a suitable basis for calculating materiality, as it is an
earnings-based measure that is considered to be a critical
measure for users of the financial statements, given the focus
on this metric by the Group’s shareholders, investors and
external lenders. In addition, the Adjusted EBITDA measure
is used to assess the Group’s compliance with key restrictive
covenants on the Group’s borrowings.
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We determined materiality for the Parent Company to be
US$17.2m (2023: US$8.8m), which is 1% (2023: 1%) of Equity.
The Parent Company materiality is higher than the Group
materiality as it is based on Equity, which we consider to be
an appropriate basis for materiality for a holding company,
as the users of the financial statements focus on a capital-
based measure.
Adjustments
– Add: Depreciation and amortisation in cost of sales and
in administrative expenses (US$159.8m)
– Add: Exploration expenses other than personnel and
other exploration related fixed expenses (US$59.3m)
– Deduct: Other non-cash expenses (US$5.6m)
Materiality
– US$421.4m Adjusted EBITDA
– Materiality of US$8.1m (2% of materiality basis)
– During the course of our audit, we reassessed
initial materiality and we maintained our planning
materiality level for the purpose of completing our audit
procedures as the same was below our final materiality.
Starting basis
•
Profit from operations before net finance income/(cost),
foreign exchange loss and income tax (US$207.9m)
Performance materiality
The application of materiality at the individual account
or balance level. It is set at an amount to reduce to
an appropriately low level the probability that the
aggregate of uncorrected and undetected misstatements
exceeds materiality.
On the basis of our risk assessments, together with our
assessment of the Group’s overall control environment,
our judgement was that performance materiality was 75%
(2023: 75%) of our planning materiality, namely US$6.1m
(2023: US$3.6m). We have set performance materiality at this
percentage due to our understanding of the Group’s control
environment, and that there have been no significant events
that would alter our expectation that there is a low likelihood
of misstatements that would be material individually or in
aggregate to the financial statements.
Audit work was undertaken at component locations for the
purpose of responding to the assessed risks of material
misstatement of the Group financial statements. The
performance materiality set for each component is based on
the relative scale and risk of the component to the Group as
a whole and our assessment of the risk of misstatement at
that component. In the current year, the range of performance
materiality allocated to components was US$1.8m to US$4.2m
(2023: US$2.0m to US$3.9m).
Reporting threshold
An amount below which identified misstatements are
considered as being clearly trivial.
We agreed with the Audit Committee that we would report to
them all uncorrected audit differences in excess of US$405k
(2023: US$240k), which is set at 5% of planning materiality,
as well as differences below that threshold that, in our view,
warranted reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both
the quantitative measures of materiality discussed above and
in light of other relevant qualitative considerations in forming
our opinion.
Other information
The other information comprises the information included in
the Annual Report set out on pages 1 to 157, including Strategic
Report and Governance sections (including the Directors’
Report, Corporate Governance Report, Directors’ Remuneration
Report, Supplementary Information and Statement of Directors’
Responsibilities), other than the financial statements and our
auditor’s report thereon. The Directors are responsible for the
other information contained within the Annual Report.
Our opinion on the financial statements does not cover the
other information and, except to the extent otherwise explicitly
stated in this report, we do not express any form of assurance
conclusion thereon.
Our responsibility is to read the other information and, in
doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge
obtained in the course of the audit, or otherwise appears
to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are
required to determine whether this gives rise to a material
misstatement in the financial statements themselves. If, based
on the work we have performed, we conclude that there is a
material misstatement of the other information, we are required
to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed
by the Companies Act 2006
In our opinion, the part of the Directors’ Remuneration Report
to be audited has been properly prepared in accordance
with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of
the audit:
– The information given in the Strategic Report and the
Directors’ Report for the financial year for which the financial
statements are prepared is consistent with the financial
statements; and
– The Strategic Report and the Directors’ Report have been
prepared in accordance with applicable legal requirements.
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FURTHER INFORMATION
Matters on which we are required
to report by exception
In the light of the knowledge and understanding of the
Group and the Parent company and its environment obtained
in the course of the audit, we have not identified material
misstatements in the Strategic Report or the Directors’ Report.
We have nothing to report in respect of the following matters
in relation to which the Companies Act 2006 requires us to
report to you if, in our opinion:
– Adequate accounting records have not been kept by the
Parent company, or returns adequate for our audit have not
been received from branches not visited by us; or
– The Parent company financial statements and the part of
the Directors’ Remuneration Report to be audited are not in
agreement with the accounting records and returns; or
– Certain disclosures of Directors’ remuneration specified by
law are not made; or
– We have not received all the information and explanations
we require for our audit
Corporate Governance Statement
We have reviewed the Directors’ statement in relation to going
concern, longer-term viability and that part of the Corporate
Governance Statement relating to the Group and Company’s
compliance with the provisions of the UK Corporate Governance
Code specified for our review by the UK Listing Rules.
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial
statements or our knowledge obtained during the audit:
– Directors’ statement with regards to the appropriateness of
adopting the going concern basis of accounting and any
material uncertainties identified set out on page 117 and Note
2(d) of the Consolidated Financial Statements;
– Directors’ explanation as to its assessment of the Company’s
prospects, the period this assessment covers and why the
period is appropriate set out on page 111;
– Directors’ statement on whether it has a reasonable
expectation that the Group will be able to continue in
operation and meets its liabilities set out on page 117 and
Note 2(d) of the Consolidated Financial Statements;
– Directors’ statement on fair, balanced and understandable
set out on page 117;
– Board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks set out
on page 129;
– The section of the Annual Report that describes the review
of effectiveness of risk management and internal control
systems set out on page 129; and
– The section describing the work of the Audit Committee set
out from page 130.
Responsibilities of Directors
As explained more fully in the Directors’ responsibilities
statement set out on page 157, the Directors are responsible
for the preparation of the financial statements and for being
satisfied that they give a true and fair view, and for such
internal control as the Directors determine is necessary to
enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are
responsible for assessing the Group and Parent company’s
ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern
basis of accounting unless the Directors either intend to
liquidate the Group or the Parent company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit
of the financial statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with ISAs (UK)
will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions
of users taken on the basis of these financial statements.
Explanation as to what extent the audit was considered
capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-
compliance with laws and regulations. We design procedures
in line with our responsibilities, outlined above, to detect
irregularities, including fraud. The risk of not detecting a
material misstatement due to fraud is higher than the risk of
not detecting one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion. The extent to
which our procedures are capable of detecting irregularities,
including fraud is detailed below.
However, the primary responsibility for the prevention
and detection of fraud rests with both those charged with
governance of the Company and management.
– We obtained an understanding of the legal and regulatory
frameworks that are applicable to the Group and determined
that the most significant and directly relevant to specific
assertions in the financial statements are those related
to the reporting frameworks (UK adopted international
accounting standards), the Companies Act 2006, the UK
Corporate Governance Code, the Listing Rules of the UK
Listing Authority and the relevant tax compliance regulations
in the jurisdictions in which the Group operates (principally
UK, Peru, Argentina and Brazil). In addition, we concluded
that there are certain significant laws and regulations that
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CONTINUED
may have an effect on the determination of the amounts and
disclosures in the financial statements, mainly relating to
health and safety, employee matters, bribery and corruption
practices, environmental and certain aspects of company
legislation recognising the regulated nature of the Group’s
mining activities and its legal form.
– We understood how Hochschild Mining PLC is complying
with those frameworks by making enquiries of management,
internal audit, those responsible for legal and compliance
procedures and the Company Secretary. We corroborated
our enquiries through our review of Board minutes, papers
provided to the Audit Committee and correspondence
received from regulatory bodies, and noted there was no
contradictory evidence.
– We assessed the susceptibility of the Group’s financial
statements to material misstatement, including how fraud
might occur by meeting with management from various
parts of the business, including outside the finance function,
to understand what areas were susceptible to fraud. We also
considered performance targets and their propensity to
influence management to manage the Group’s earnings.
– We considered the programmes and controls that the
Group has established to address risks identified, or that
otherwise prevent, deter and detect fraud; and how senior
management monitors those programmes and controls.
Where risk was considered as higher, we performed audit
procedures to address each identified fraud risk.
– Based on this understanding we designed our audit
procedures to identify non-compliance with such laws
and regulations that could have a material impact on the
financial statements. Our procedures involve: incorporated
data analytics across our audit approach, journal entry
testing with a focus on manual consolidation journals and
journals meeting our defined risk criteria based on our
understanding of the business; enquiries of the legal counsel,
Group management, internal audit and all full and specific
scope management; review of Board and Audit Committee
reporting; evaluating any investigations into matters of
non-compliance with support from our IT, forensics and legal
specialists as necessary; and focused testing as referred to
in the key audit matters section above.
– We ensured our global team has appropriate industry
experience through working for many years on relevant
audits, including experience of mining. Our audit planning
included considering external market factors, for example
geopolitical risk, the potential impact of climate change,
commodity price risk and major trends in the industry.
A further description of our responsibilities for the audit
of the financial statements is located on the Financial
Reporting Council’s website at https://www.frc.org.uk/
auditorsresponsibilities. This description forms part of
our auditor’s report.
Other matters we are required to address
– Following the recommendation from the Audit Committee,
we were appointed by the Company on 16 October 2006
to audit the financial statements for the year ending
31 December 2006 and subsequent financial periods.
Following a competitive tender process, we were reappointed
as auditor of the Company for the period ending
31 December 2016 and subsequent financial periods.
The period of total uninterrupted engagement including
previous renewals and reappointments is 19 years, covering
the years ending 31 December 2006 to 31 December 2024.
– The audit opinion is consistent with the additional report
to the Audit Committee.
Use of our report
This report is made solely to the company’s members, as a
body, in accordance with Chapter 3 of Part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we might
state to the company’s members those matters we are required
to state to them in an auditor’s report and for no other purpose.
To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company
and the company’s members as a body, for our audit work,
for this report, or for the opinions we have formed.
Jessy Maguhn (Senior statutory auditor)
for and on behalf of Ernst & Young LLP, Statutory Auditor
London
12 March 2025
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FURTHER INFORMATION
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)
HOCHSCHILD MINING PLC
166
Consolidated Financial Statements
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.
ANNUAL REPORT 2024
167
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
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
HOCHSCHILD MINING PLC
168
Consolidated Financial Statements
CONTINUED
Consolidated statement of cash flows
For the year ended 31 December 2024
Year ended 31 December
Notes
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
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).
ANNUAL REPORT 2024
169
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Consolidated statement of changes in equity
For the year ended 31 December 2024
Other reserves
Notes
Equity
share
capital
US$000
Fair value
reserve of
financial
assets at
fair value
through OCI
US$000
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
HOCHSCHILD MINING PLC
170
Consolidated Financial Statements
CONTINUED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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:
ANNUAL REPORT 2024
171
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
1
Corporate information continued
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:
HOCHSCHILD MINING PLC
172
Notes to the consolidated financial statements
CONTINUED
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.
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Material accounting policies continued
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).
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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 the 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 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
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Material accounting policies continued
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
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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.
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Material accounting policies continued
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,
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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.
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Material accounting policies continued
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 costumers 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.
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Notes to the consolidated financial statements
CONTINUED
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
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FURTHER INFORMATION
2
Material accounting policies continued
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, and
‒ 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.
HOCHSCHILD MINING PLC
182
Notes to the consolidated financial statements
CONTINUED
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; or statement of financial position) when:
‒ The rights to receive cash flows from the asset have expired; or
‒ 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.
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FURTHER INFORMATION
2
Material accounting policies continued
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.
HOCHSCHILD MINING PLC
184
Notes to the consolidated financial statements
CONTINUED
(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)
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FURTHER INFORMATION
3
Segment reporting continued
‒ 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.
HOCHSCHILD MINING PLC
186
Notes to the consolidated financial statements
CONTINUED
Inmaculada
US$000
San Jose
US$000
Mara Rosa
US$000
Pallancata
US$000
Exploration
US$000
Other
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.
ANNUAL REPORT 2024
187
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
3
Segment reporting continued
(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
HOCHSCHILD MINING PLC
188
Notes to the consolidated financial statements
CONTINUED
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
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
exploration 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.
ANNUAL REPORT 2024
189
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
4
Acquisition of Monte do Carmo continued
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.
HOCHSCHILD MINING PLC
190
Notes to the consolidated financial statements
CONTINUED
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 costumers
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).
ANNUAL REPORT 2024
191
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
6
Cost of sales continued
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 (2023: 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).
HOCHSCHILD MINING PLC
192
Notes to the consolidated financial statements
CONTINUED
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)
Canada3
–
2,176
Brazil
1,581
–
1,814
2,320
Generative4
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 Corresponds to the SNIP project which was managed by Hochschild Mining Canada Corp.
4 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.
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).
ANNUAL REPORT 2024
193
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
10 Personnel expenses continued
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).
HOCHSCHILD MINING PLC
194
Notes to the consolidated financial statements
CONTINUED
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).
ANNUAL REPORT 2024
195
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
13
Finance income, finance costs and foreign exchange loss
Year ended
31 December
2024
US$000
Year ended
31 December
2023
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%.
HOCHSCHILD MINING PLC
196
Notes to the consolidated financial statements
CONTINUED
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 effect3
(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 royalty4
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 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).
4 Corresponds to the mining royalty and special mining tax in Peru (note 38).
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$2,479,000).
15
Basic and diluted earnings per share
Earnings per share (EPS) is calculated by dividing profit for the year attributable to equity shareholders of the Parent by the
weighted average number of ordinary shares issued during the year.
The Company does not have dilutive potential ordinary shares as at 31 December 2024. The Company had antidilutive potential
ordinary shares as at 31 December 2023.
ANNUAL REPORT 2024
197
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
15
Basic and diluted earnings per share continued
As at 31 December 2024 and 2023, EPS has been calculated as follows:
Year ended 31 December
2024
2023
BASIC EARNINGS PER SHARE
Before exceptional items (US$)
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
HOCHSCHILD MINING PLC
198
Notes to the consolidated financial statements
CONTINUED
16 Property, plant and equipment
Mining
properties
and
development
costs1
US$000
Land and
buildings
US$000
Plant and
equipment2, 3
US$000
Vehicles4
US$000
Mine
closure
asset
US$000
Construction
in progress
and capital
advances1, 5
US$000
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 movements7
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 movements7
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 There were borrowing costs capitalised in property, plant and equipment amounting to US$6,678,000 (2023: US$18,790,000).
2 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.
3 Plant and equipment include US$1,564,000 of right-of-use assets (note 27).
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 note 16 and 25).
7 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.
General
Additions of right-of-use assets amounting to US$7,092,000 (2023: US$3,493,000 (note 27).
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 pledge were acquired following the Group’s acquisition of Amarillo in April 2022.
ANNUAL REPORT 2024
199
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
16 Property, plant and equipment continued
Mining
properties
and
development
costs
US$0003
Land and
buildings
US$000
Plant and
equipment
US$000 1, 7
Vehicles4
US$000
Mine
closure
asset
US$000
Construction
in progress
and capital
advances
US$000 3, 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.
HOCHSCHILD MINING PLC
200
Notes to the consolidated financial statements
CONTINUED
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.
ANNUAL REPORT 2024
201
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
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).
HOCHSCHILD MINING PLC
202
Notes to the consolidated financial statements
CONTINUED
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
–
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
–
(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
3,967
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
ANNUAL REPORT 2024
203
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
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 profit/(loss) for the period
(2,492)
(855)
Equity gain in Aclara from CAP strategic financing
1,865
–
Ending balance
15,811
22,927
HOCHSCHILD MINING PLC
204
Notes to the consolidated financial statements
CONTINUED
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.
ANNUAL REPORT 2024
205
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
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$000
Trade receivables1
–
37,238
–
28,051
Advances to suppliers
–
13,324
–
2,577
Funds in escrow2
–
14,278
–
–
Duties recoverable from exports of Minera Santa Cruz3
272
–
234
–
Receivables from related parties (note 33(a))
–
121
–
127
Loans to employees
333
220
358
194
Interest receivable
–
89
–
93
Tax claims
8,060
7,826
1
10,399
Other4
2,674
11,310
452
12,791
Total assets classified as receivables
11,339
84,406
1,045
54,232
Prepaid expenses
2,764
11,083
1,210
6,569
Value Added Tax (VAT)5
4,213
40,325
10,183
19,655
Total
18,316
135,814
12,438
80,456
The fair values of trade and other receivables approximate their book value.
1 Net of a provision for impairment of trade receivables from customers in Peru of US$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.
HOCHSCHILD MINING PLC
206
Notes to the consolidated financial statements
CONTINUED
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.
ANNUAL REPORT 2024
207
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
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
HOCHSCHILD MINING PLC
208
Notes to the consolidated financial statements
CONTINUED
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.
ANNUAL REPORT 2024
209
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
26 Trade and other payables continued
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).
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:
Year ended 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.
HOCHSCHILD MINING PLC
210
Notes to the consolidated financial statements
CONTINUED
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.
ANNUAL REPORT 2024
211
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
28 Borrowings continued
‒ 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.
HOCHSCHILD MINING PLC
212
Notes to the consolidated financial statements
CONTINUED
28 Borrowings continued
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
US$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:
ANNUAL REPORT 2024
213
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
29 Provisions continued
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.
HOCHSCHILD MINING PLC
214
Notes to the consolidated financial statements
CONTINUED
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.
ANNUAL REPORT 2024
215
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
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).
HOCHSCHILD MINING PLC
216
Notes to the consolidated financial statements
CONTINUED
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).
ANNUAL REPORT 2024
217
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
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.
–
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.
3 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).
HOCHSCHILD MINING PLC
218
Notes to the consolidated financial statements
CONTINUED
34 Auditor’s remuneration
The auditor’s remuneration for services provided to the Group during the years ended 31 December 2024 and 2023 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
ANNUAL REPORT 2024
219
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
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).
HOCHSCHILD MINING PLC
220
Notes to the consolidated financial statements
CONTINUED
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 US$000
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)
ANNUAL REPORT 2024
221
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
39 Financial risk management continued
The effect recorded is as follows:
Year ended
31 December 2024
US$000
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
–
HOCHSCHILD MINING PLC
222
Notes to the consolidated financial statements
CONTINUED
(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.
ANNUAL REPORT 2024
223
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
39 Financial risk management continued
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$000
Balance at 1 January 2023
42,364
Net change in trade receivables from goods sold
(8,644)
Changes in fair value of price adjustments (note 5)
1,174
Realised price adjustments during the year
(5,473)
Balance at 31 December 2023
29,421
Net change in trade receivables from goods sold
11,892
Changes in fair value of price adjustments (note 5)
8,209
Realised price adjustments during the year
(12,284)
Balance at 31 December 2024
37,238
The impact of the hedging instrument and hedge item on the statement of financial position is as follows:
ounces
Average price
US$/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.
HOCHSCHILD MINING PLC
224
Notes to the consolidated financial statements
CONTINUED
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.
ANNUAL REPORT 2024
225
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
39 Financial risk management continued
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).
HOCHSCHILD MINING PLC
226
Notes to the consolidated financial statements
CONTINUED
PARENT COMPANY FINANCIAL STATEMENTS
Parent company statement of financial position
As at 31 December 2024
As at 31 December
Notes
2024
US$000
2023
US$000
ASSETS
Non-current assets
Investments in subsidiaries
5
1,786,774
927,196
Other receivables
6
573
1,878
1,787,347
929,074
Current assets
Other receivables
6
333
5,546
Cash and cash equivalents
7
465
278
798
5,824
Total assets
1,788,145
934,898
EQUITY AND LIABILITIES
Equity share capital
8
9,068
9,068
Other reserves
–
6,643
Retained earnings
1,711,763
858,989
Total equity
1,720,831
874,700
Non-current liabilities
Other payables
9
648
1,816
Provisions
10
414
–
1,062
1,816
Current liabilities
Trade and other payables
9
66,252
58,382
66,252
58,382
Total liabilities
67,314
60,198
Total equity and liabilities
1,788,145
934,898
As permitted by section 408 of the Companies Act 2006, the Company has not presented its own profit and loss account. The
profit of the Company after tax amounted to US$852,774,000 (2023: US$328,819,000).
The financial statements were approved by the Board of Directors on 11 March 2025 and signed on behalf of the Company
(registered number 05777693) by:
Eduardo Landin
Chief Executive Officer
11 March 2025
ANNUAL REPORT 2024
227
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
Parent company statement of cash flows
For the year ended 31 December 2024
Year ended 31 December
Notes
2024
US$000
2023
US$000
Reconciliation of loss for the year to net cash used in operating activities
Profit for the year
852,774
328,819
Adjustments to reconcile Company profit/(loss) to net cash outflows from operating activities
(Reversal)/impairment on investment in subsidiary
5
(858,796)
(339,763)
Write-off of prepayments
–
3,766
Share-based payments
454
395
Finance income
13
(1,519)
(532)
Finance costs
14
12
Others
14
(15)
Decrease of cash flows from operations due to changes in assets and liabilities
Other receivables
586
7
Trade and other payables
93
1,156
Provision for Long-Term Incentive Plan
10
414
–
Cash used in operating activities
(5,966)
(6,155)
Interest received
8
6
Net cash used in operating activities
(5,958)
(6,149)
Cash flows from financing activities
Loans from subsidiaries
11(a)
6,150
5,750
Cash flows generated from financing activities
6,150
5,750
Net increase/(decrease) in cash and cash equivalents during the year
192
(399)
Foreign exchange difference
(5)
15
Cash and cash equivalents at beginning of year
278
662
Cash and cash equivalents at end of year
7
465
278
HOCHSCHILD MINING PLC
228
Parent company financial statements
CONTINUED
Parent company statement of changes in equity
For the year ended 31 December 2024
Other reserves
Notes
Equity share
capital
US$000
Share-based
payment reserve
US$000
Total other
reserves
US$000
Retained
earnings
US$000
Total equity
US$000
Balance at 1 January 2023
9,061
6,312
6,312
529,486
544,859
Profit for the year
–
–
–
328,819
328,819
Total comprehensive income for the year
–
–
–
328,819
328,819
Forfeiture of share-based payments
–
(1,528)
(1,528)
107
(1,421)
Exercise of share-based payments
7
(584)
(584)
577
–
Accrual of share-based payments
–
2,443
2,443
–
2,443
Balance at 31 December 2023
9,068
6,643
6,643
858,989
874,700
Profit for the year
–
–
–
852,774
852,774
Total comprehensive income for the year
–
–
–
852,774
852,774
Modification of share-based payment awards
–
(7,954)
(7,954)
–
(7,954)
Accrual of share-based payments
–
1,311
1,311
–
1,311
Balance at 31 December 2024
9,068
–
–
1,711,763
1,720,831
During the current and prior years there were no other comprehensive income.
ANNUAL REPORT 2024
229
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
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 Company was
incorporated to serve as a holding company to be listed on the London Stock Exchange. The Company acquired its interest in a
group of companies to constitute the Hochschild Mining Group (“the Group”) pursuant to a share exchange agreement (“Share
Exchange Agreement”) dated 2 November 2006.
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, 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.
2
Significant accounting policies
(a) Basis of preparation
The Company’s financial statements have been prepared in accordance with UK adopted International Accounting Standards. The
Company applies the same Group policies, unless there is an exception in its financial statements.
The financial statements of the Company have been prepared on a historical cost basis. The financial statements are presented in
US dollars (US$) and all monetary amounts are rounded to the nearest thousand ($000) except when otherwise indicated.
(b) Going concern
The financial position of the Company is set out in the Statement of Financial Position. The Company has received a support letter
from its wholly owned subsidiary, Hochschild Mining Holdings Ltd (“HM Holdings”), indicating that it will not request a repayment of
the interest free loan of US$56,900,000 for the period to 31 March 2026.
The ability for the Company to continue as a going concern is dependent on Compañía Minera Ares S.A.C. (“Minera Ares”), another
wholly owned subsidiary of the Company, providing additional funding to the extent that the operating inflows of the Company are
insufficient to meet future cash requirements. The Company has obtained a letter of support from Minera Ares indicating that the
financial support will continue until 31 March 2026.
Considering the support available from the subsidiaries described above, the Directors have a reasonable expectation that the
Company has adequate resources to meet continue in operation until 31 March 2026, being a period of at least 12 months from the
approval date of these financial statements. Accordingly, the financial statements have been prepared on the going concern basis.
(c) Exemptions
The Company’s financial statements are included in the Hochschild Mining Group consolidated financial statements for the years
ended 31 December 2024 and 31 December 2023. As permitted by section 408 of the Companies Act 2006, the Company has not
presented its own profit and loss account.
(d) Changes in accounting policy and disclosures
The accounting policies adopted in the preparation of the financial statements are consistent with those applied in the
preparation of the Company financial statement for the year ended 31 December 2023. Amendments to standards and
interpretations which came into force during the year did not have a significant impact on the financial statements. The Company
has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.
(e) Significant areas of estimation uncertainty and critical judgements
Certain 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
estimation 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:
‒
Impairment in subsidiaries – notes 2(f) and 5
Estimates are required to be made by management in determining the recoverable value of the investments in subsidiaries. The
Company tested its investment in subsidiary determining the recoverable value using a fair value less cost of disposal (‘FVLCD’),
that was determined with reference to the market capitalisation of the Company, to which a control premium is applied.
Judgement is involved in determining the control premium rate to be paid by market participants in an arm’s length transaction.
HOCHSCHILD MINING PLC
230
Notes to the Parent company financial statements
Critical judgements:
‒
Income tax – note 2(n)
The Company analyses the possibility of generation of profit and determined the recognition of deferred tax. No deferred tax
asset is being recognised by the Company as it does not expect to generate any profit to settle the temporary difference.
‒
Financial guarantee – note 2(p)
The Company estimates the fair value of the financial guarantee contract as the difference between the net present value of the
contractual cash flows required under a debt instrument, and the net present value of the net contractual cash flows that would
have been required without the guarantee. The present value is calculated using a risk-free interest rate.
(f) Investments in subsidiaries
Subsidiaries are entities over which the Company controls operating and financial policies, generally by owning more than 50% of
voting rights. Investments in subsidiaries are recognised at acquisition cost less any provision for impairment. The Company
assesses investments for impairment whenever events or changes in circumstances indicate that the carrying value of an
investment may not be recoverable. If any such indication of impairment exists, the Company makes an estimate of its recoverable
amount. Where the carrying amount of an investment exceeds its recoverable amount, the investment is considered impaired and
is written down to its recoverable amount. If, in subsequent periods, the amount of the impairment loss decreases and the decrease
can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is
reversed. Any subsequent reversal of an impairment loss is recognised in the profit and loss account, to the extent that the carrying
value of the asset does not exceed its cost at the reversal date.
(g) Dividends receivable
Dividends are recognised when the Company’s right to receive payments is established. Dividends received are recorded in the
income statement.
Dividends distributions of non-cash assets are recognised at fair value.
(h) Other receivables
Other receivables are initially recognised at fair value 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.
(i)
Currency translation
The functional currency of the Company is the US dollar and is determined by the currency of the primary economic environment
in which its subsidiaries operates and therefore drives their ability to pay dividends.
Transactions denominated in currencies other than the functional currency of the Company are initially recorded in the functional
currency using the exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign
currencies are remeasured at the rate of exchange ruling 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. Nonmonetary 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.
(j)
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 in hand and deposits held with banks that are readily convertible into known
amounts of cash within three months or less 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.
(k) 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.
(l)
Share-based payments
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 Company’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.
ANNUAL REPORT 2024
231
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
2
Significant accounting policies continued
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 Company’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.
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.
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.
(m) Finance income and costs
Finance income and costs mainly comprise interest income on funds invested, and interest expense on borrowings. Interest income
and costs are recognised as they accrue, taking into account the effective yield on the asset.
(n) 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
exemptions:
-
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, associates and joint ventures,
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.
(o) 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 Company’s business model for managing them.
The Company’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.
HOCHSCHILD MINING PLC
232
Notes to the Parent company financial statements
CONTINUED
Subsequent measurement
The Company measures financial assets at amortised cost (debt instruments) 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, and
-
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 rate (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 Company’s financial assets at amortised cost includes other receivables.
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 Company’s consolidated statement of financial position) when:
-
The rights to receive cash flows from the asset have expired, or
-
The Company 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
Company has transferred substantially all the risks and rewards of the asset, or (b) the Company 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 Company 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 Company expects to receive, discounted at an approximation of the original effective interest rate.
For other receivables, the Company applies a simplified approach in calculating ECLs. Therefore, the Company 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, loans and
borrowings, payables, 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 Company’s financial liabilities include trade and other payables, loans including bank overdrafts, and financial guarantee
liabilities.
Subsequent measurement
After initial recognition, interest-bearing loans 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 as finance costs in the statement of profit or loss.
This category generally applies to interest-bearing loans.
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.
(p) Financial guarantees
Financial guarantees are initially recognised in the financial statements at fair value at the time the guarantee is issued. The
Company estimates the fair value of the financial guarantee contract as the difference between the net present value of the
contractual cash flows required under a debt instrument, and the net present value of the net contractual cash flows that would
have been required without the guarantee. The present value is calculated using a risk-free interest rate.
Subsequent to initial recognition, the Company’s liability under each guarantee is measured at the higher of the amount initially
recognised less cumulative amortisation recognised in profit and loss, and the amount of ECL. Financial guarantee ECL reflect the
cash shortfalls adjusted by the risks that are specific to the cash flows. If the ECL exceeds the initially recognised guarantee
amount less cumulative amortisation the difference is taken to profit and loss.
A financial guarantee liability is derecognised when the liability underlying the guarantee is discharged or cancelled or expires, or
if the guarantee is withdrawn or cancelled. The carrying amount of the financial guarantee is taken to the statement of profit or
loss.
(q) Dividend distribution
Dividend distribution to the Company’s shareholders is recognised as a liability in the Company’s financial statements in the
period in which the dividends are approved by the Company’s shareholders.
The Company measures a liability to distribute non-cash assets as a dividend to its owners at the fair value of the assets to be
distributed.
ANNUAL REPORT 2024
233
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
3
Profit and loss account
The Company made a profit attributable to equity shareholders of US$852,774,000 (2023: US$328,819,000).
4
Property, plant and equipment
At 31 December 2024 and 2023 the Company has property, plant and equipment with cost of equipment of US$265,000 which is
fully depreciated.
There were no additions during 2023 and 2024.
5
Investments in subsidiaries
Total
US$000
Cost
At 1 January 2023
2,338,958
Additions
350
At 31 December 2023
2,339,308
Accumulated impairment
At 1 January 2023
1,751,875
Reversal of impairment
(339,763)
At 31 December 2023
1,412,112
Net book value at 31 December 2023
927,196
Cost
At 1 January 2024
2,339,308
Additions
782
At 31 December 2024
2,340,090
Accumulated impairment
At 1 January 2024
1,412,112
Reversal of impairment
(858,796)
At 31 December 2024
553,316
Net book value at 31 December 2024
1,786,774
In December 2024, management determined that there was an impairment reversal trigger in Company's investment in its HM
Holdings Limited ('HMH') subsidiary due primarily to the increase in gold and silver prices along with the improved performance
and prospects of the Group’s operations. These factors have contributed to an increase in the Company’s publicly listed share
price. As a result of this impairment test, the Company recognised an impairment reversal in the HMH investment of
US$858,796,000 (2023: US$339,763,000).
The recoverable value of the investment in HM Holdings was determined using a fair value less costs of disposal. The fair value less
costs of disposal was determined with reference to the market capitalisation of the Company at 31 December 2024 translated from
pounds sterling into US dollars using the year-end exchange rate (both Level 1 inputs), to which a control premium of 25% was
added based on recent market transactions (a Level 2 input), and subsequently adjusted for the assets and liabilities held directly
by the Company, which result in fair value measurements categorised in its entirety as Level 3 in the fair value hierarchy. A Level 1
input refers to quoted prices in active markets, while a Level 2 input corresponds to other information that can be observed directly
or indirectly.
A positive/adverse change of 10% of the market capitalisation would result in an additional increase/decrease to the reversal of the
impairment recognised by US$172,421,000 (2023: US$87,793,000). A change in the control premium would have the following impact
over the reversal of impairment recognised in 2024 and 2023 as follows:
As at 31 December
2024
US$000
2023
US$000
Control premium (increase by 5%)
68,968
35,117
Control premium (decrease by 5%)
(68,968)
(35,117)
HOCHSCHILD MINING PLC
234
Notes to the Parent company financial statements
CONTINUED
The breakdown of the investments in subsidiaries is as follows:
As at 31 December 2024
As at 31 December 2023
Country of
incorporation
Equity interest %
Carrying value
US$000
Country of
incorporation
Equity interest %
Carrying value
US$000
Hochschild Mining
Holdings Ltd
England and Wales
100%
1,786,774 England and Wales
100%
927,196
Total
1,786,774
927,196
The list of indirectly held subsidiaries of the Company is presented in note 1 (Corporate information) of the notes to the
consolidated financial statements.
During 2024 the Company recorded a capital contribution of US$782,000 (2023: US$350,000) related to the financial guarantee
granted over some borrowings entered into by Amarillo Mineração do Brasil Ltd. (“Amarillo”) and Minera Ares., both of its indirectly
held subsidiaries (note 9).
6
Other receivables
As at 31 December
2024
US$000
2023
US$000
Current
Amounts receivable from subsidiaries (note 11)
211
5,339
Prepayments
122
205
Receivable from Kaupthing, Singer and Friedlander1
–
–
Other receivable
–
2
Total
333
5,546
Non-current
Amounts receivable from subsidiaries (note 11)
573
1,878
Total
573
1,878
1 Net of the impairment of receivable of US$183,000 (2023: US$186,000).
The fair values of other receivables approximate their book values.
Movements in the provision for impairment of receivables:
Total
US$000
At 1 January 2023
176
Provided during the year
10
At 31 December 2023
186
Release during the year
(3)
At 31 December 2024
183
As at 31 December 2024 and 2023, none of the financial assets classified as receivables (net of impairment) were past due.
ANNUAL REPORT 2024
235
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
7
Cash and cash equivalents
As at 31 December
2024
US$000
2023
US$000
Bank current account1
130
167
Deposits2
335
111
Cash and cash equivalents considered for the cash flow statement
465
278
1 Relates to bank accounts which are freely available and bear interest.
2 These deposits have an average maturity of Nil days (2023: Nil days).
8
Equity
(a) Share capital and share premium
Issued share capital
The issued share capital of the Company as at 31 December 2024 and 31 December 2023 is as follows:
Issued
Class of shares
Number
Amount
Ordinary shares (1 pence per share)
514,458,432
£5,144,584
At 31 December 2024 and 2023, all issued shares with a par value of 1 pence each were fully paid (2024: weighted average of
US$0.018 per share, 2023: weighted average of US$0.018 per share).
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
Share-based payment reserve
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 (note 10).
HOCHSCHILD MINING PLC
236
Notes to the Parent company financial statements
CONTINUED
9
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 payables
–
1,123
–
1,331
Payables to subsidiaries (note 11(a))
–
63,813
731
56,215
Remuneration payable1
–
759
–
56
Taxes and contributions
–
264
–
201
Financial guarantees2
648
293
1,085
576
Others
–
–
–
3
Total
648
66,252
1,816
58,382
1 In 2024, mainly related to LTIP payable.
2 The Company provided financial guarantee to the banks loan entered into by its subsidiary Minera Ares and Amarillo. The financial guarantee was recognised at its fair
value at initial recognition of US$4,080,000 (US$1,472,000 recognised in 2019, additional US$1,476,000 recognised in 2021, US$350,000 recognised in 2023 and US$782,000
recognised in 2024). This fair value was determined through the use of certain level 3 estimates, the most significant of which being the estimated rate of interest Minera Ares
and Amarillo would have been charged were it not for the guarantee provided by the Company.
Trade payables mainly relate to the purchase of third party services. These payables do not accrue interest and no guarantees
have been granted in relation to these payables. The fair value of trade and other payables approximate their book values.
10 Provisions
As at 31 December
2024
US$000
2023
US$000
Beginning balance
–
–
Increase in provision, net
414
–
At 31 December
414
–
Less: current portion
–
–
Non-current portion
414
–
Corresponds to the provision related to awards granted under the Long-Term Incentive Plan (LTIP) to designated personnel of the
Company. 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 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:
As at 31 December 2024
LTIP 2023
LTIP 2024
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.
ANNUAL REPORT 2024
237
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
11
Related-party balances and transactions
(a) Related-party accounts receivable and payable
The Company had the following related-party balances and transactions during the years ended 31 December 2024 and 31
December 2023.
As at 31 December 2024
As at 31 December 2023
Accounts
receivable
US$000
Accounts
payable
US$000
Accounts
receivable
US$000
Accounts
payable
US$000
Subsidiaries
Compañía Minera Ares S.A.C.1
–
6,890
6,025
6,173
Hochschild Mining Holdings Ltd2
–
56,900
–
50,750
Minera Santa Cruz S.A.3
662
20
1,040
20
Other subsidiaries
122
3
152
3
Total
784
63,813
7,217
56,946
1 The account receivable mainly related to the share-base payment awards that were modified in 2024, so no receivable was considered in 2024. The account payable mainly
relates to the services performed by Minera Ares to the Company, which during 2024 amounts to US$717,000 (2023: US$887,000). The Company provided certain financial
guarantees on behalf of Minera Ares and Amarillo (note 9).
2 Relates to loans payable to HM Holdings. The loan payable is repayable on demand and is free of interest. During the year the Company received cash proceeds from loans
of US$6,150,000 (2023: US$5,750,000).
In February 2025, the Company received a support letter from HM Holdings indicating that it will not request a repayment of the interest free loan of US$56,900,000 for the
period to 31 March 2026.
3 The account receivable mainly relates to the LTIP 2020. The account payable mainly relates to the services performed by Minera Santa Cruz to the Company, which during
2024 and 2023 amounts to US$Nil-
The fair values of the receivables and payables approximate their book values. Transactions between the Company and these
companies are on an arm’s length basis.
(b) Compensation of key management personnel of the Company
Key management personnel include the Directors who receive remuneration. The amount of this remuneration totals US$1,117,000
(2023: US$1,071,000).
12
Dividends paid and proposed
Year ended 31 December
2024
US$000
2023
US$000
Dividends paid and proposed during the year
Proposed dividends on ordinary shares:
10,000
–
Final dividend for 2024: 1.94 US$ cents per share (2023: Nil US$ cents per share)
10,000
–
Dividends per share
There was no interim dividend paid during 2024 (2023: US$Nil). The proposed final dividend in respect of the year ending 31
December 2024 is 1.94 US$ cents per share (2023: US$Nil).
13
Finance income
Year ended 31 December
2024
US$000
2023
US$000
Interests on deposits
8
6
Income from guarantee
1,502
526
Others
9
–
Total
1,519
532
HOCHSCHILD MINING PLC
238
Notes to the Parent company financial statements
CONTINUED
14 Financial risk management
The Company is exposed to a variety of risks and uncertainties which may have an impact on the achievement of financial and
economic objectives. These risks include strategic, operational and financial risk and are further categorised into risk areas to
facilitate risk assessment. The Company is not exposed to significant sources of commodity price, equity or interest rate risk.
(a) Foreign currency risk
Due to the operations of the Company, it has cash and cash equivalents and trade payables denominated in pounds sterling.
Accordingly, the financial results of the Company may be affected by exchange rate fluctuations. The Company does not use
derivative instruments to manage its foreign currency risks. The following table demonstrates the sensitivity of financial assets and
liabilities, at the reporting date denominated in their respective currencies, to a reasonably possible change in the US dollar
exchange rate, with all other variables held constant, of the Company’s profit before tax and the Company’s equity.
Increase/
decrease in
US$/other
currencies rate
Effect
on profit
before tax
US$000
Effect
on equity
US$000
As at 31 December 2024
Pound sterling
+/-10%
-/+92
–
As at 31 December 2023
Pound sterling
+/-10%
-/+94
–
(b) Credit risk
The Company is primarily exposed to credit risk in transactions in cash which are primarily limited to cash balances deposited in
banks and accounts receivable at the statement of financial position date. The Company has evaluated and introduced efforts to
try to mitigate credit risk exposure.
To manage credit risk associated with cash balances deposited in banks, the Company is:
-
increasing banking relationships with large, established and well-capitalised institutions in order to secure access to
credit and to diversify credit risk;
-
investing cash in short-term, highly liquid and low risk instruments (term deposits);
-
maintaining excess cash abroad in hard currency.
Credit risk concentrations exist when changes in economic, industrial or geographic factors take place, affecting in the same
manner the Company’s counterparties whose added risk exposure is significant to the Company’s total credit exposure.
Receivable balances are monitored on an ongoing basis with the result that the Company’s exposure to bad debts is not
significant. The maximum exposure is the carrying amount as disclosed in notes 6 and 7.
(c) Liquidity risk
Liquidity risk arises from the Company’s inability to obtain the funds it requires to comply with its commitments. Management
constantly monitors the Company’s level of short- and medium-term liquidity in order to ensure appropriate financing is available
for its operations.
The Company is funded by HM Holdings through loans in order to meet its obligations. Liquidity is supported by the balance of
cash and cash equivalent held by the Company of US$465,000 (2023: US$278,000) and the financial support provided by Minera
Ares (see note 2(b)). The Company also serves as principal funding conduit for the Group’s capital raising activities such as equity
issuances.
The table below analyses the Company’s financial liabilities into relevant maturity groupings based on the remaining period to the
contractual maturity date:
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
65,695
–
–
–
65,695
At 31 December 2023
Trade and other payables
57,605
731
–
–
58,336
ANNUAL REPORT 2024
239
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
The table below analyses the maximum amounts payable under financial guarantees provided to Minera Ares (note 9), considering
that if the guarantees were to be called, the guaranteed amounts would be due immediately:
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
Financial guarantees1
230,000,000
–
–
–
230,000,000
At 31 December 2023
Financial guarantees1
335,000,000
–
–
–
335,000,000
1 Not including any accumulated interest that may be payable at the call date.
(d) Capital risk management
The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order
to provide returns for shareholders and 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 other parties
(notes 8 and 9). In order to ensure an appropriate return for shareholders’ capital invested in the Company, management monitors
capital thoroughly and evaluates all material projects and potential acquisitions before submission to the Board for ultimate
approval, where applicable.
HOCHSCHILD MINING PLC
240
Notes to the Parent company financial statements
CONTINUED
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.
ANNUAL REPORT 2024
241
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
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 pages 242 to 244 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
an Ag/Au ratio of 75x.
Reserves and resources
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.
HOCHSCHILD MINING PLC
242
Further information
CONTINUED
Attributable metal resources as at 31 December 20241
Reserve 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
Table represents 100% of the Mineral Resource. Resources are inclusive of Reserves.
2
Operations only were audited by P&E Consulting.
ANNUAL REPORT 2024
243
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
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.
HOCHSCHILD MINING PLC
244
Further information
CONTINUED
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.)
Shareholder information
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.
Financial calendar
Ex-dividend date
8 May
Record date
9 May
Deadline for return of currency election forms
23 May
Payment date
18 June
21 Gloucester Place
London
W1U 8HR
United Kingdom
ANNUAL REPORT 2024
245
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
FURTHER INFORMATION
This 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.
Forward looking
statements
HOCHSCHILD MINING PLC
246
Further information
CONTINUED
Hochschild Mining PLC
21 Gloucester Place
London W1U 8HR
United Kingdom
+44 (0) 203 709 3260
info@hocplc.com
www.hochschildmining.com