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Hochschild Mining posts record-breaking interim results

Published: 17:31 23 Aug 2011 AEST

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Hochschild Mining (LON:HOC) posted record-breaking interim results today as it said it continued to reap the benefits of high prices for precious metals.

The gold and silver focused company said revenue was up 62 percent  to US$496.8 million in the six months to June 30 this year.

The attributable profit after tax stood at U$92 million - an increase of a whopping 137 percent compared to last year.

The company also revealed it proposes to pay an interim dividend of U$0.03 per share - a 50 percent increase on the first half of 2010 when it paid U$0.02 per share.

Executive chairman Eduardo Hochschild said he was pleased to report what he called a "strong" set of results for the first half with "large increases" in many of the firm's key performance indicators and a continuing robust financial position.

He added: We are on track to deliver on all our stated production and cost targets despite the prevailing challenging industry environment with continuing strong precious metal prices likely to continue in the second half.

"Key deliverables for the rest of the year include feasibility studies at our Inmaculada and Crespo projects, ongoing progress on maximising our resource life and further results from this year's exploration programme."

Hochschild said it ended the period in a strong position with a cash balance of US$691 mln.

The company said it remained on course to achieve its production target of 22.5 million attributable silver equivalent ounces.

"The robustness of our asset base is proving to be a key competitive advantage for us in an environment of increasing cost inflation and more challenging labour conditions," said chief executive Ignacio Bustamante in the statement.

Looking to the rest of the year, he said: Hochschild expects the current uncertainty to continue in the global financial markets and consequently the resulting volatility in precious metals markets is set to remain.

"The key operational aims for the second half will be meeting our production targets across all our mines and focusing on mitigating against the effects of considerable cost inflation in all our key countries and ongoing additional input cost pressures."

Hochschild also said today that non-executive directors Sir Malcolm Field and Dionisio Romero have given advance notice of their retirement at 2012's annual general meeting.

Rupert Pennant-Rea will join the board as a non-executive director on September 1 this year, the firm said.

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