LONDON (Reuters) - Latin American precious metals miner Hochschild (HOCM.L) has cut the size of its board and reduced directors’ salaries by as much as 30 percent after a sharp drop in both gold and silver prices this year prompted a push to slash costs.
Hochschild announced the measures alongside a dip in quarterly production, though it said output was in line with expectations and it remained on track to hit its 2013 target.
Hochschild, which produces silver and gold from mines in Peru and Argentina, posted output of just under 5 million silver equivalent ounces in the quarter, compared to 5.16 million ounces in the same quarter a year ago.
The company, which in the first half produced 9.7 million silver equivalent ounces, had in January set a production target of 20 million silver equivalent ounces for 2013.
Hochschild, like other precious metals miners, has sought to cut costs amid plunging prices and the group said on Wednesday that two non-executive directors, Fred Vinton and Rupert Pennant-Rea - out of a 10-strong board - would be standing down at the end of the month.
It also said the salary of its executive chairman, Eduardo Hochschild, and non-executive directors would be cut by 30 percent, while Chief Executive Ignacio Bustamante would take a 10 percent pay cut.
Hochschild, which plans to update the market next month on its cost plans, said it had also further reduced capital expenditure and its exploration budget.
“We are confident that the (cost-cutting) programme will deliver material savings in the second half of 2013 and more fully in 2014,” Bustamante said in a statement.
Gold and silver prices have plunged this year - gold was down 23 percent in the April-June period while silver posted an even steeper drop.
Shares in Hochschild, which have fallen nearly 70 percent in the last six months, closed at 136.1 pence on Tuesday, valuing the group at 490.9 million pounds.
Reporting by Clara Ferreira-Marques; Editing by Sarah Young