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March 8 (Reuters) - Precious metals miner Hochschild Mining Plc swung to a pretax profit in 2016, helped by strong output at its Inmaculada mine in Peru and a more favourable pricing environment.
Silver prices recovered last year with an about 15 percent gain while gold rose nearly 9 percent. The metals are also forecast to post their strongest year since 2014, benefiting from stronger industrial demand and attraction as a safe-haven investment amid political and economic uncertainties.
Hochschild, which has mining operations in Peru, Chile and Argentina, said it expected to produce 37 million silver equivalent ounces in 2017 after exceeding its production estimates for 2016.
The company's production last year was 35.5 million silver equivalent ounces. It had expected to produce 35 million ounces.
"In 2017, a further increase in output is expected with the new Pablo vein starting production and continued investment in our brownfield exploration strategy," Chief Executive Ignacio Bustamante said in a statement on Wednesday.
Hochschild reported a pretax profit of $108.3 million, compared with a loss of $256.2 million a year ago. Revenue rose to $688.2 million from $469.1 million last year.
All-in sustaining costs (AISC), the total cost of sustaining production and capital expenditure, for the year was $11.20 per silver equivalent ounce, compared with its expected range of $11-$11.50.
For 2017, it expects AISC to be in the range of $12.20-$12.70 per silver equivalent ounce.
The company's net debt declined to $187.4 million as at Dec. 31, from $350.5 million a year earlier.
Hochschild said its 2016 performance reflected the first full-year of production from its flagship Inmaculada mine, improved contributions from its Arcata mine and the increase in silver and gold prices last year.
The Inmaculada mine output was about 17 million silver equivalent ounces, accounting for nearly half of the company's 2016 silver output.
A Reuters poll in July showed analysts expected silver to average $17.09 per ounce this year, compared with an average of $15.68 in 2015.
Hochschild Mining shares fell 3.1 percent to 224.1 pence by 0845 GMT. Spot gold prices fell to 1,213.3 per ounce, their lowest since Feb. 3. Silver fell 0.7 percent. (Reporting by Tenzin Pema and Sanjeeban Sarkar in Bengaluru; Editing by Sunil Nair and Gopakumar Warrier)