UPDATE 2-Silver miner Hochschild surpasses cost-savings target
(Adds details on Hochschild's Inmaculada project, Fresnillo Plc results, adds analyst comment)
By Karen Rebelo
July 16 (Reuters) - Hochschild Mining Plc said it has exceeded its target of saving $200 million and identified new ways to cut the cost of mining silver in Peru and Argentina, sending its shares up more than 5 percent.
The company, which operates three underground mines in southern Peru and one in Argentina, also reported a small rise in silver output for the first half of the year and said it was on track to meet its 2014 production target.
Many gold and silver miners were forced to slash costs last year after prices of the precious metals fell to their lowest in a decade. Gold fell 28 percent and silver plunged 36 percent in 2013.
Hochschild reduced the size of its board and slashed directors' salaries last year as part of its cost-cutting drive to assuage investors' concerns.
In March, the company suspended dividend payments pending an improvement in its cash position. Hochschild said it had total cash of about $225 million and minority investments worth about $40 million at the end of the quarter.
Hochschild said on Wednesday that it had identified further cost-saving initiatives "in administration, operations and exploration". It did not give further details about these plans.
"We expect earnings to more than double over the next three years (versus 2013) and unit costs to continue to fall," Barclays analysts wrote in a note. Continuación...