Hochschild Mining

Website: Hochschild Mining
Index: FTSE 250
EPIC: HOC
Supersector: Basic Resources
Sector: Mining
Subsector: Platinum and Precious Metals
Market Cap: £3.18B
Payout Frequency: Semi-Annual

Hochschild Mining Dividend Analysis and Summary

Key dividend details

Dividend: Final dividend of 5.00 US cents per share (FY25)
Ex-dividend date: 07/05/2026
Record date: 08/05/2026
Payment date: 16/06/2026
Currency: Default payment in GBP; option to receive in USD (currency election deadline: 26/05/2026)
Total FY25 shareholder distributions: $30.9m (Interim: $5.1m; Proposed final: $25.7m)
Policy reference: Target payout of 20–30% of attributable free cash flow (FCF) with a $10m minimum

Payout, coverage and balance sheet support

Attributable FCF (FY25): $139.0m; implied payout ratio: ~22% (within the 20–30% policy range)
Adjusted EBITDA (FY25): $583.7m; Net cash from operations: $423.9m
Net debt at year-end: $22.7m (from $215.6m); Net debt/EBITDA: 0.04x; Cash: $317.0m
Undrawn committed facility: $180m (ESG-linked $300m MT facility)

Dividend sustainability and growth trajectory

Supportive factors:
- Strong FY25 cash generation and materially de-levered balance sheet
- Policy-driven payout (20–30% FCF) provides flexibility through cycles
- Operations largely cash-generative at current precious metal prices; hedging smooths near-term cash flows
Constraining factors:
- 2026 guidance signals flat-to-slightly lower production (300–328 koz AuEq) and higher AISC ($2,157–$2,320/oz), limiting organic uplift in FCF
- Capex needs: sustaining capex $210–225m plus $45m brownfield exploration
- Potential development capex at Monte do Carmo (FID targeted mid-2026) could absorb incremental cash in the near/medium term
Growth outlook: Near-term dividend growth likely to remain policy-driven and sensitive to metals prices and project timing. Over time, successful ramp-up at Mara Rosa and delivery of Monte do Carmo could enhance capacity for higher payouts.

Financial performance and capital allocation alignment

FY25 saw record results (Revenue $1,182m, Adj. EBITDA $583.7m) and rapid de-leveraging, consistent with a balanced capital allocation (debt reduction, project advancement, and increased dividends).
Total FY25 dividends of $30.9m sit comfortably within policy and cash generation, indicating prudent distribution discipline.
Hedging: realized hedge losses in FY25 ($86.0m) and a roll-forward of 20,813 oz to 2028; 2026 forwards limit upside but stabilize cash flows—supportive for policy-consistent dividends.

Structural or strategic developments relevant to dividends

Project pipeline: Monte do Carmo approaching FID (mid-2026); Royropata permitting progressing. These support medium-term growth but will likely increase capital outlays before contributing cash.
Mara Rosa turnaround advanced with operational improvements; 2026 production expected to rise (67–80 koz) but costs remain elevated—execution remains a key swing factor for FCF.
Tiernan Gold Corp (TSXV) RTO and listing: Monetisation of non-core assets with HOC retaining ~70%—incremental financial flexibility without diluting parent shareholders.
Financing flexibility: New $300m ESG-linked facility (undrawn $180m) and low leverage provide headroom to fund projects while maintaining dividends.

Risks and flags to dividend stability

Cost and execution risk: Elevated AISC; successful, sustained improvement at Mara Rosa is critical.
Capex intensity: Sustaining capex and a potential Monte do Carmo build could compete with distributions if metals prices soften.
Commodity price sensitivity and hedging: Large derivative liability from hedges (non-cash mark-to-market) and 2026 forwards cap upside; a sharp price decline would pressure FCF.
Jurisdictional risk: Argentina (tax/export regime volatility), Peru and Brazil regulatory/tax changes; higher royalties/taxes can compress margins.
Operational/ESG: Weather events (noted in Brazil), tailings and filtration upgrades (Mara Rosa), and mine-closure provision increases highlight ongoing compliance and cost risks.

Dividends Used in Calculation:

Ex-Dividend Date	Payment Date	Type	Amount	Currency
08/05/2025	18/06/2025	Final	1.94¢	USX
04/09/2025	03/10/2025	Interim	1.00¢	USX

Total (Annual Dividends Per Share): 2.20p (Using exchange rate on 17/06/2026 $ = £0.74660)

Dividend Yield = Annual Dividends Per Share (2.20p) ÷ Share Price (572.5p) = 0.38%

Ex Dividend Date	Payment Date	Type	Amount	Currency
07/05/2026	16/06/2026	Final	5.00¢	USX
04/09/2025	03/10/2025	Interim	1.00¢	USX
08/05/2025	18/06/2025	Final	1.94¢	USX
01/09/2022	23/09/2022	Interim	1.95¢	USX
05/05/2022	07/06/2022	Final	2.30¢	USX
09/09/2021	28/09/2021	Interim	1.95¢	USX
06/05/2021	02/06/2021	Final	2.34¢	USX
03/12/2020	31/12/2020	Interim	4.00¢	USX
07/05/2020	02/06/2020	Final	2.34¢	USX
29/08/2019	19/09/2019	Interim	2.00¢	USX
16/05/2019	12/06/2019	Final	1.96¢	USX
30/08/2018	20/09/2018	Interim	1.97¢	USX
10/05/2018	01/06/2018	Final	1.97¢	USX
31/08/2017	21/09/2017	Interim	1.38¢	USX
20/04/2017	17/05/2017	Final	1.38¢	USX
01/09/2016	22/09/2016	Interim	1.38¢	USX

Year	Interim	Final	Currency	Total	Change
2022	1.950	2.300	USX	4.250	-0.930
2021	1.950	2.340	USX	4.290	-32.330
2020	4.000	2.340	USX	6.340	60.100
2019	2.000	1.960	USX	3.960	0.500
2018	1.970	1.970	USX	3.940	42.750
2017	1.380	1.380	USX	2.760	100.000
2016	1.380		USX	1.380

Number of Shares:

Payment	Paid	Amount
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