Shares in FTSE 250 gold and silver miner Hochschild Mining (HOC) gained 2.5% to 218p despite the South America-focused company having to close one of its mines due to a significant rise in Covid-19 infections in the area.

Hochschild said that a significant increase in Covid-19 infections in the Santa Cruz province in Argentina has resulted in a temporary lockdown of various mines.

Its San Jose operation has therefore been mandated to halt operations and is currently undertaking a deep-clean of the site’s facilities and equipment.

Subject to permission from the authorities, Hochschild is expecting to restart limited operations on 4 December.

PRODUCTION NOT AFFECTED

But in positive news for investors, it added that the stoppage is not expected to affect the company’s revised full year guidance of between 280,000-290,000 gold equivalent ounces or 24-25 million silver equivalent ounces.

It comes after Hochschild last week resumed its dividend payments with an interim dividend of four cents per share, with CEO Ignacio Bustamante saying, ‘Hochschild continues to recover well operationally from the Covid-19 related stoppages and with the situation steadily improving in the region, our Board considers the resumption of dividends as one of its priorities and confirms our confidence in the outlook for the business.’

The firm also disappointed the market with its production forecasts for 2021 it announced at the same time as the dividend payment, as it said it expects to produce 360,000-372,000 ounces of gold equivalent next year, about 10% below consensus estimates of 407,000 ounces.

PETROPAVLOVSK APPOINTS NEW CEO

Meanwhile shares in another FTSE 250 gold miner, Petropavlovsk (POG), fell 1.8% to 26.7p as it announced the appointment of Denis Alexandrov as its chief executive.

Alexandrov was previously CEO of rival Russian producer Highland Gold Mining and will take over the job from Maxim Meshcheryakov, a relative unknown to investors who was appointed interim chief exec in August, after an activist investor succeeded in blocking the reappointment of former CEO and cofounder Pavel Mavlovskiy.

Investors will hope the appointment puts an end to the turmoil at the top of the company, following a shareholder coup over the summer.

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Issue Date: 30 Nov 2020