Moody’s ups Hochschild Mining, notes

Moody's Investors Service said it upgraded Hochschild Mining plc’s corporate family rating and its senior unsecured notes due 2021 and issued by Compania Minera Ares SAC to B1 from B2.

The notes are fully and unconditionally guaranteed by Hochschild plc and its main subsidiaries.

The outlook is positive.

Moody’s said the upgrade to B1 reflects the improvement in Hochschild's credit metrics observed in the first half of 2016, as a result of both higher metals prices, as well as the company's efforts to enhance the production profile (higher volumes at lower costs), reduce leverage with payment of debt ($175 million in the past 12 months), and maintain an adequate liquidity profile.

Accordingly, part of the recovery in EBITDA can be explained by market conditions – in the first half of 2016, average realized gold and silver prices were $1,236/oz and $17.10/oz, respectively, which compares to $1,159/oz and $16/oz in 2015, respectively, but also from an enhanced production and cost profile with Inmaculada, which started up in mid-2015, the agency added.

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