Hochschild Mining (LSE: HOC) has become the third major mining company to suspend its dividend due to the COVID-19 pandemic.
The Peru-focused gold mining company’s announcement follows Glencore’s (LSE: GLEN) decision on March 31 to defer its decision on whether to proceed with the proposed cash distribution of US20¢ per share (about US$2.6 billion) in 2020, and Freeport McMoRan’s (NYSE: FCX) announcement on March 23 to suspend its first-quarter cash dividend of US5¢ per share planned for May 1.
Hochschild is withdrawing its proposal to pay a final dividend for the 2019 financial year. The company’s Inmaculada and Pallancata underground mines in southern Peru are suspended until April 26, due to the government’s measures to contain the deadly coronavirus.
“The board believes this is a prudent course of action reflecting the company’s focus on the conservation of cash resources,” Hochschild said in a news release on April 14.
In a press release in February reporting preliminary results for 2019, the company outlined a proposed full-year dividend of US$22.2 million, up from 2018’s US$20 million total dividend.
At the end of 2019, the company had cash and equivalents of US$166 million and net debt of US$33 million.
The company’s operations in Peru are epithermal vein mines, and the mineralized material is processed into silver-gold concentrate or dore.
Hochschild also operates a third underground mine in Argentina – San Jose.
Last year, the company produced a total of 477,400 gold-equivalent oz. (38.7 million silver-equivalent oz.), exceeding its guidance of 457,000 gold-equivalent oz. (37 million silver-equivalent ounces).