LONDON, March 20 (Reuters) - Latin American precious metals group Hochschild Mining posted a jump in 2011 profit and lifted its dividend, as higher prices helped offset rising costs and a dip in attributable gold and silver production.
Full-year earnings before interest, tax, depreciation and amortisation (EBITDA) at the miner climbed 42 percent to $563.4 million, while attributable profit after tax jumped 75 percent to $166 million. The average silver price for the year was up 53 percent, while the average gold price climbed 25 percent.
Hochschild said in January it had set a production target of 20 million silver equivalent ounces for 2012, lower than last year’s 22.6 million, due to declining output from its Ares mine in Peru.
The miner had also warned of rising costs in Peru and inflation in Argentina, forecasting unit cost inflation of around 25-30 percent in Argentina and 15 percent in Peru, excluding royalties.
“The one wrinkle on an otherwise impressive set of numbers is cost inflation... with total per ounce cash costs increasing 51 percent year-on-year to $12.8/oz silver,” Liberum analysts said in a note.
Shares in Hochschild were up 0.4 percent at 488.8 pence at 0822, outperforming a 1.7 percent drop in the sector.
The company raised its total 2011 dividend on Tuesday by 20 percent to $0.06 per share.
Its cash balance stood $627.5 million at the end of the year.