HCHDF - Hochschild Mining: No Longer A Value Play

Yesterday, Hochschild Mining (OTCPK:HCHDF) released its preliminary annual report for 2019. The market reaction has been very enthusiastic so far – at the time of writing this piece, the stock is up around 17%. However, although I used to be a long-term investor in Hochschild, perceiving this stock as a value play, I do not share Mr. Market’s sudden burst of enthusiasm. Let me explain.

Introduction

Hochschild is a mid-cap gold/silver producer operating two mines in Peru (Inmaculada and Pallancata) and one mine in Argentina (San Jose – this mine is shared with