Good morning, everyone. Welcome to our Presentation of our H1 Results. Here with me is Eduardo Noriega, our CFO, and Charlie Gordon in London. Charlie, please, if we can go to page three. Well, first, let me say that we have on H1 the strongest ever half-year financials. We have produced 150,000 oz, a little bit more. Revenues went up 62%, up to $844 million. Our adjusted EBITDA went up 119% to $492 million. The EPS went up 208% to $0.37. Our attributable all-in sustaining cash cost was $2,448/oz gold equivalent. We end up with $309 million in cash, and our net cash position is of $51 million. The dividend that we have established following our policy is $0.04 , equivalent to $21 million. What do we have to do with the rest of the second half? Mara Rosa reorganization is on track.
We'll talk about during this presentation. Royropata, the environmental permit was submitted through the Peruvian government at the date that we plan to do so. We continue working on Monte do Carmo on engineering. The decision or the FID will be at the end of the year. We continue having strong ESG metrics. We have also reviewed our all-in sustaining cash costs for the end of the year. The new range is between $2,380 to $2,500/oz . Basically, the reasons for this review is FX in the different countries that we operate. Also, the gold and silver price that affect directly to workers' profit sharing and royalties, for example.
I mean, the guidance stay, in terms of production stay as it was defined at the beginning of the year. The all-in sustaining cash cost is the figures that I just gave it to you. I pass the presentation to Eduardo Noriega to go through the financial results. Charlie, if you can go to page five, please.
Go ahead, Eduardo.
Thank you very much, Eduardo, and good morning. These strong set of financial results as Eduardo described as record half-year results are mainly characterized by strong metal prices but also strong operations and the recovery of our operational capabilities in Brazil. Revenue was up 62%. That was mainly driven by higher prices, gold and silver prices. That was partially offset by scheduled lower ounces produced. Cost of sales went up 11%, mainly due to, as I said, schedule a higher tonnage including waste movement in Mara Rosa to recover our operational capabilities. We also had the impact of higher prices in royalties, workers' profit sharing, export tax in Argentina, and other items directly correlated to prices. Also, we saw stronger local currencies in Peru and Brazil and net inflation in Argentina. I would say both those effects are closely tied to the stronger gold and silver prices.
In terms of administrative expenses, the increases versus last year is mainly driven also by the performance of the company prices impacting LT, but also workers' profit sharing and bonus provisions. In others, we recorded a higher adjustment to our mine closure provisions of $6 million, and also the impact of higher prices on some items in our expenses like the social contribution that we have in Argentina. Finally, effective tax rate was 35%, mainly including special mining taxes and the FX appreciation in Brazil and Argentina, especially mining taxes and royalties are in Peru, sorry, and also the impact of FX movements in Brazil and Argentina. Excluding these effects, our effective tax rate would have been 32%. We didn't record any exceptional items in the first half of the year. If we can go to the next page, please, Charlie.
Here we have the cash evolution, and I would just like to start saying that the free cash flow was very strong in the year and accounted for around $156 million in total. You can see that the cash that we were able to generate in Inmaculada and San José, very strong, the first one at $288 million, the second at $149 million. In Mara Rosa, we used $80 million to fully recover our capabilities and build a thickener, install the thickener, and open the pit. We invested $16 million in brownfield exploration. Our corporate overhead was $30 million. In terms of tax paid, we paid $129 million, from which most of it went to Peru and Argentina. We reduced debt by $80 million.
We paid $84 million in dividends, $26 million to Hochschild shareholders, and the rest, $58 million , to our joint venture partner in San José, McEwen Mining. We had temporary movements in working capital negative of -$37 million. We executed our care and maintenance and mine closure budgets, and invested $17 million. And we paid net interest of $8 million. In addition to those elements, we invested in Monte do Carmo $9 million to advance in our permitting process in our engineering process. In Royropata, $6 million. In Aclara, we made a capital contribution of $9 million in Q1, and we had other investments in $3 million, mainly the expenses that the Tiernan company invested in the Volcan p roject. With that, our ending balance of cash and short-term investments was $309 million.
Again, a very strong free cash flow generation in the first half of the year, despite having temporary movements like the working capital and also I didn't mention but in the tax line around $80 million were taxes that belong to the previous year, 2025, that were paid in March and in May. That regularization of 2025 taxes. If we can go to the next page please on cost drivers. The all-in sustaining costs at the Hochschild operations was $2,448/oz . In Inmaculada, that cost was $1,953/oz , and that cost included the impact of the scheduled lower grades, but also the impact of higher prices in worker profit sharing and other items of that cost.
We also had a stronger sol, the local currency in Peru, which had an impact. We had scheduled sustained CapEx increases, being mainly to develop new areas and execute our infill drilling program. In San José, our all-in sustaining cost was $2,944. That cost includes the impact of lower grades from the border areas that we are mining, but also the impact of higher prices in royalties and export tax. We also observed a local net inflation in Argentina. We were expecting more devaluation, but we saw in this first half a net inflation of around 7%. In the case of Mara Rosa, the all-in sustaining cost of $3,551/oz includes all the efforts and investment that we have made to successfully recover operational capabilities in the country. In Mara Rosa, we also had the impact of the stronger real versus the U.S. dollar.
I would like to highlight that the company has made a strong effort implementing a cost reduction and efficiency program in feeding new projects that has helped us mitigate the impact of general inflation in the mining industry associated to higher metal prices. Again, a very good performance, and as Eduardo pointed out, just would like to reiterate that the adjustment that we have done to our all-in sustaining cost guidance is mainly associated to higher prices and its direct impact in our all-in sustaining cost, and also the impact of stronger FX rates locally and net inflation in Argentina. All the rest of the inflationary pressure have been offset by our efficiency projects. We can go please to the following page on capital expenditures.
We have maintained our guidance of between $210 million and $225 million for the year. In the first half, we invested $105 million in sustaining CapEx on a consolidated basis. In Inmaculada, we invested $69 million, and these numbers may include mine developments and projects like the expansion of the tailings dam where we invested $10 million. We also executed our infill drilling campaign and other support CapEx. In the case of San José, our CapEx was $15 million, mainly related to mine developments. In the case of Mara Rosa, the $21 million invested in the first half is mainly associated to all the programs that we explained before to recover the mine operational capability, mainly the thickener, but also the opening of the pit.
On the following page, please. On the balance sheet we have $309 million in cash and short-term investments as stated before, and the cash generation of $156 million free cash flow is reflected in transformation of our net debt position by the end of 2025 was $20 million to a net cash position of $51 million. The interim dividend went up 300% to $0.05, $0.04 per share. Our net cash to last 12 months EBITDA was minus-- The net cash was 0.1x , much below our target of between 0.5x and 1.5x net debt to EBITDA in preparation for the investments where we are scheduled to do in Monte do Carmo and Royropata.
Back to you, Eduardo.
Thank you very much. Charlie, we can go to page 11. Okay. Just to remember what we defined three years ago, it was a strategy that pursue the delivery and to reach the growth. Basically, we define four pillars. The first one was brownfield: to bring long-term value basically expanding our life of mines in each of the sites that we operate. Also to be focused on resources that would end up mineable. It is important to bring mineable resources. Also to continue expanding our land packages in all the countries that we operate to maximize the chances to bring new resources. On operational excellence, of course we have a lean philosophy across the company looking for cost efficiencies. Also, we like to go by the book on project development, that is why we are working on Monte do Carmo at the moment.
Of course, it is very important for us to be on the sites and to have leadership that is present with the people. On ESG, we need to continue focus on safety. Safety is the most important thing for us. Of course, as you know water is something that is very delicate today in the world, so we like to focus on water management. As you know three years ago we implement a new community approach especially in Peru, and I mean the result has been no blockages or whatsoever during the three years. Of course talent management. On the fourth pillar is disciplined capital allocation, where we are looking to produce capital returns to our shareholders. Of course through our balance sheet we need funding organic growth.
Also to be able to pay debt, and of course if we do any M&A this M&A has to be value accretive. If we can go to the next page, please. Two years ago also we classified the assets on core assets and non-core assets. Today we are focused on our three core assets which is Inmaculada, Mara Rosa, San José. We also focus on the projects that we have on the near term; Monte do Carmo and Royropata. Also we have been working very hard on getting value out of those non-core assets. The best samples you have is that Tiernan Gold today Aclara has a value of $300 million, and Crespo Azuca Arcata was sold. If we go to the next page, please. As Eduardo Noriega mentioned, we need to be very focused on cost, and looking for efficiencies.
Today we have more than 50 initiatives in place to be able to control or to offset the inflation that we are living in the mining industry. That inflation has been able to set off with these initiatives. The only reason why we have reviewed the new guidance, cost new guidance is because we had the effects and also the price related cost. In this page you can see different top initiatives they have been implementing in each site, and we believe that we will be able to achieve the guidance in terms of cost and also in terms of production applying these programs. Going to Inmaculada, on page 14 please Charlie. Well, Inmaculada as you know is our flagship operation. The guidance for 2026 is between 174,000 And 185,000 oz of gold. We are in that path to be able to achieve these results.
Sadly, I have to say that we had a contractor fatality in June, but we have done an extensive investigation into what happened and applied all the lessons learned from this situation. Also, I would like to mention that, as you can see, the production profile goes a bit down here. But I have to say that this is the result of having higher prices: it lets you pass through the plant at lower grades. If we go to page 15, Inmaculada has been a fantastic story. We started Inmaculada back in 2015, and if you remember, we used to have 1 million oz of gold equivalent. It was 80 million oz of silver equivalent. In the last 10 years, we have been able to discover 80 veins, bringing a total resource of 5.2 million oz of gold.
What is next in Inmaculada? Well, with Inmaculada we are trying to do exploration at the south of the deposit. That is something that we haven't tested yet. Also Minas Cucho, we just got the permit. We are waiting for social permitting. That's at the northwest of the deposit. We have found at Eduardo Bell some new veins that could be potential resources in the next few years. Also, we believe that we will be able to bring around 250,000 oz this year or infer resources. But as you can see, this year our focus is to try to bring potential resources - potentially near areas – to be able to expand again the resource at Inmaculada. Going to page 16, we have Royropata project. We have great news here, which is that we have been able to file the environmental permit with the new Peruvian government.
Also as you know, we have been able to build this document. We have worked with specialist consultants. We closed our agreements with the communities back in 2024, and today we believe that we have a year of revision, and we could be seeing the permit granted next year around August. That's the plan. The thing about Royropata is that we have 3.3 million oz of gold equivalent. As you can see, the grade is 412 g of silver and 1.5 g of gold, and the average width of the deposits is 30 m. Also, you know that we have a plan of 3,000 tons ready to receive this material at our Selene plant that is in care and maintenance since 2023. We believe that we have huge value to bring to the company developing this new project.
Also, if we can go to the next page, you can see that we brought a lot of resources from 2007 to 2025. But between 2027 and 2030, we believe that we can look for new resources to extend Marco vein. Good news for the company is that we just got the semi-detailed permit that let us drill from 40 platforms, and we are going to target the extension of Pallancata vein and also the new areas where we believe that we can bring new resources. I believe that in a couple of years, we can have a new fantastic asset that will complement the production in Peru with at least 100,000 oz per year. If we go to page 18, you can see our land package between Inmaculada, Pallancata and Selene. It's 152,000 hectares. It's a huge land package.
We have been able to add 6 million oz of gold equivalent to date. We are using the most advanced exploration tools that are available in the market. The latest thing that we are doing is microgravity survey. We are testing current veins with these models, and we believe that there is a very good correlation. So between this microgravity and also the long-hole drilling, we believe that we have the tools to explore all this area and continue bringing resources to our plants at Inmaculada and Selene. Going to page 19, we fly to Brazil, to Mara Rosa. Mara Rosa, as you know, it was an asset that we acquired in Brazil, our first asset. During 2025 and 2026, we have been working on a reorganization, and finally, we have finished that. We have solved all the filtering issues.
We have a new contractor in place, and we keep our guidance for 2026 between 67,000 and 80,000 oz. If we go to the next page, I believe that the most interesting thing is the graph down at the bottom of the page, the run rate performance. As you can see in August, we have the crushing mill and filtering plants nearly to our nameplate capacity. Good news is that we were able to implement the thickener that now is fully commissioned and working in record time, in three months. The most important thing is that today we come with a very competent mining constructor, and we are doing many improvements at the mine. I believe that the second half for Mara Rosa is going to be very good for the company. We have finished all this work. If you can go to page 21, Charlie, please.
You can see the open pit there. You can see the filters. You can see the dry stack on the right upper corner of the page. That is state-of-the-art in terms of stability and everything. The thickener in place. You see the ore stockpile full of ore, and also the filtering plant with their ceilings ready for with the roofs ready for the rainy season. If we go to page 22, we can see the Mara Rosa near mine program to add new resources. As you know, the place where Posse, which is Mara Rosa, is placed is an orogenic trend that extends for 20 km, and we have many mining concessions along this trend. Currently, we are evaluating a structural corridor with three structures: Posse, Araras, and Espete. We believe that we have promising results from drilling at the north of Posse.
The idea is to continue bringing, as we established in our strategy, is continue bringing new resources to current assets. If we can go to page 23, we can see Monte do Carmo. Monte do Carmo is our new project in Brazil that we acquired in 2024 for $60 million. It's 1 million oz of gold. It's located in a very mining-friendly Tocantins State, which is north of Goiás. This project is fully permitted, and I have to say that has an excellent infrastructure in terms of paved highways, hydropower plants, airports, big cities, that I'm sure will attract very good talent once we start the operation. Today, we are working on waste rock facilities and restrip engineering, going to detail engineering. The plan engineering done by Ausenco is nearly finished.
Of course, we continue doing some pile drilling. Of course, w e have been able to talk to suppliers talking about the orders for milling, crushing, power lines, and filtration, to make sure that the lead times of those equipment are ready for us. We expect to present to the market an updated economic and go to our board of directors for FID at the end of the year. At that point, we will have finished 100% of our basic engineering, and through H1 2027, we will perform the detailed engineering of all the components. Basically, once you have basic engineering, you can apply a fast-track construction strategy developing detailed engineering during construction. That is the idea.
I believe that the first thing is to make sure that based on basic engineering, we have a very strong project even at very conservative prices. That also is established on our strategy to make sure that any M&A has to be value accretive. Going to San José, San José is doing very well in terms of production. Inflation has went down in Argentina. Today we have up to 16%, but unfortunately, we did not have any evaluation. Cost is increasing and it is incredible how many efficiency project we have done in order to control those costs. But 16% of cost increase is a lot. We believe that we will be able to finish the year inside the new ranges that we have presented to the market and, of course, be able to accomplish with our guidance.
In terms of exploration, if we can go to page 25. We believe that San José still has a lot of potential in terms of new resources. In 2026, we have been drilling on Huevos Verdes West, in Ayelén and Maura. We are also using microgravity survey that has been complete 70% in areas that we believe that it could have new resources. Of course, also we are working at the San José province where we have some mining properties, and we believe that we can bring more value to the company.
Okay, changing the subject, if we go to page 26. I believe that we need to talk the new Peruvian government. As you know, we had elections on July 28th, and Keiko Fujimori was appointed as a new president in Peru. I have to say that a new cabinet has been appoint, and I would say that is technical and investment friendly. At the inaugural address it was centered basically on restoring stability, confidence, and growth. We believe that these early moves give us signals of continuity and pragmatic market-orientated tone. On the economic team, we are very happy because Julio Velarde has been reappointed to the Central Bank. You know that the Peruvian sol has been the most established FX in Latin America.
Julio Velarde, which he will continue as a governor of the Central Bank, has decided to extend his leadership until 2031. Also, as a Ministry of Economy, Elmer Cuba has been appointed and he is a macroeconomist, very well reputed respected macroeconomic and also former Central Bank Director. We expect to have a growth of 3.5% GDP in 2026. The Mining and Energy Minister Guillermo Shinno has been appointed as a minister. He used to be Vice Minister of Mines, and he's a person that has a lot of experience on the private sector also.
I believe that the Fujimori platform for our sector is try to formalize mining, tackle illegal mining, and also simplify permitting. I believe that why it's important this news for investors is because we have an improvement sentiment with renewed expectations to have faster permitting. I am sure that the country is going to be attracting new investments. I know that permitting remains challenging overall because we need to implement a lot of changes on regulations that the Fujimori's government has presented. Of course, we have the Royropata permit now with this government, and I believe that that's pretty good news for the company.
I insist that Royropata could be the new flagship of Hochschild Mining, and we need to continue developing this project. If we go to page 27 again, this slide is always on our presentation: it's that we believe that we have a valuation opportunity. Now we have Mara Rosa that I believe that on H2 is going to perform. Inmaculada continues having a very strong performance. Today Royropata, we have already presented the permit. Monte do Carmo, we believe that at the end of the year, we are going to be able to present the FID. With all these news, if we compare ourselves with our peers, we have still a very low value. That's an opportunity to buy our share, and the expectation is that the value is going to grow in the future.
As a conclusion, 2026 H1 has been, as we said, a record performance in terms of financial. I am extremely happy with the execution that we have been able to implement at Mara Rosa in its turnaround. We have very strong Peruvian and Argentinian cash flows. The dividend is going to be $21 million. Also, as we established in our strategy, Tiernan and Inmaculada investments now are valued at more than $300 million. What is coming is Monte do Carmo project advancing with FID, as I explained. We believe that our brownfield program will deliver new additional ounces.
Royropata project to deliver more than 100,000 oz gold equivalent starting production in 2028. Of course, we will be keeping our disciplined capital allocation strategy to make sure that we pay debt, that we have the cash to continue investment, and for sure to give returns to our shareholders.
With this, I have finished the presentation. Of course, please, I would like to open the Q&A session. Thank you so much for being here today.
Thank you for the presentation. We have had a number of questions pre-submitted and submitted live. Just as a reminder, if you would like to ask a question, please type them into the Q&A box situated on the right-hand side of your screen. I will now hand over to Charlie Gordon who will be asking the questions for today.
Thank you very much. The first question is on long-term value. What do you believe is currently the biggest gap between Hochschild's underlying asset value and its market valuation? What specific actions will management take to close that gap?
Eduardo, you may.
Thank you, Eduardo. I think the most important value catalyst that the company has at this time is one, to prove our execution capacity in Mara Rosa. We have recovered operational capacity in our new asset in Brazil, Mara Rosa, and I think that is coming soon. Then, of course, we have our two new advanced projects, Monte do Carmo in Brazil, very close to Mara Rosa, and with also great exploration upside. Finally, a very large silver deposit in Peru, our Royropata Project. Once we are able to advance on those projects and improve our operational capacity in Mara Rosa, I think the perception of the value of the company will recover fast.
Thank you very much. This next question is on costs and margins. Given the current gold and silver price environment, how confident are you that Hochschild can maintain or improve its AISC performance whilst simultaneously investing heavily in its growth projects?
Thank you, Charlie. Higher price environment is certainly a positive environment for the company given the stronger margins that we are able to achieve. However, higher prices also bring higher cost not only because of general inflation in the industry but also because of the direct correlation of prices with royalties, export taxes, workers' profit sharing in Peru. I think our strong focus on cost efficiencies and cost reductions that we have proven to mitigate the general inflation together with the new production coming from two excellent assets like Royropata and Monte do Carmo are the catalysts that will help us mitigate inflation even further and reduce our all-in sustaining costs in the future.
Thank you. The next question is: could you provide an update on the fatal contractor accident at Inmaculada in June? What corrective actions have been implemented?
Of course. Well, let me say that safety is our first priority. We want to make sure that every single worker that goes to our operations go back to their home safely. That was a very unfortunate situation. Rodney, our contractor, he was involved in a fatal accident basically because they have to develop a front with a raise climber. The explosion didn't go out, and they tried to go up and fix the front. Suddenly the raise climber cage stopped. Unfortunately, he decided to self-rescue himself using a cable. It was 100 m raise, so he died in that attempt.
We have done a full investigation. Clearly we can improve certain procedures like lock out of these raise climbers, but also it is clear that we need to continue working on behaviors. At the end of the day based on the engineering of the process, it was a safe process. The other guy that was with Rodney was rescued. Nothing really happened, but Rodney decided to take this action. We believe that we need to continue working on things related to behaviors, mental health, working with psychologists at the site, and make sure that people make the best possible decisions once they are alone. I believe that is the trend that the industry in general has to follow.
Thank you. The next question is: Are you seeing any operational issues at Inmaculada or San José that investors should be aware of?
Not for the moment. Inmaculada is running really well. We are producing 4,100 tons per day from the underground mine. We have the flexibility. We have been doing the developments to have different fronts with different grades. I believe that from now on, the second semester is going to be very positive. That is Inmaculada, I do not see any issues. At San José, the same. San José, the only thing is that we are in the borders of the mineralization as you know and there is some variability on the grades. But San José has been working also on making their developments, make sure that they have the flexibility to reach the annual production goals.
Thank you. The next question is: Congratulations on a very strong first half. What are your priorities for the second half? What actions remain outstanding at Mara Rosa?
Well, basically the priority for this year is to complete the turnaround at Mara Rosa and make sure that we have a second semester demonstrating to the market that Mara Rosa is working correctly. I would say that we need to continue working with Fagundes, our new contractor, to make sure that they do the pushback at the mine to give us the flexibility to have the different fronts with high grades that we can process at the plant. I have to say that the plant is working smoothly, crushing area, milling, leaching. The thickener is in place today. Filtering is also working really well.
And we have been able to control the dry stack procedure. So today I believe that the operation is totally stable. We need to continue work at the mine giving us some flexibility to have different fronts with grades to reach the annual guidance that we believe we can do it.
Thank you very much. Next question is: With the share price having risen strongly, what do you think the market is still underestimating about Hochschild?
Well, I can pass that question to Eduardo Noriega.
Thank you, Eduardo. Really, the two projects that we have in front of us, Royropata and Monte do Carmo, are the ones that the assets that will actually transform the company and increase production materially to above 500,000 gold equivalent ounces per year. Those are the two catalysts as I said before for the value of that company. Those two assets will also prove Hochschild's capacity to build projects on budget, on time, which is something we have done in the past within Inmaculada and that we are prepared to do going forward. And also we'll demonstrate our capacity to add further value through exploration. We should recall that the Royropata asset is an asset that was discovered through our brownfield exploration plan, and that adds a lot of value to our shareholders.
In the case of Royropata, it was a strategic acquisition that took advantage of a specific situation of the target company right before the cycle of high prices. I think in general terms, we are very happy with those two assets, and we are fully confident that we will add a lot of value to our shareholders.
Thank you. Next question is on growth and production. With production expected to increase significantly from 2028, what are the key milestones management must achieve over the next 12- 24 months to deliver that growth on schedule and within budget?
Well, basically, I believe that we need to get to the FID of Monte do Carmo by making sure that we present to the market a strong project, a profitable project at consensus prices. Then once we got the FID, we should start constructing using our know-how to make sure that that project is built on time and on budget. That will give us production in 2028 from Brazil, additional production. On the other hand, we have Royropata Project. As I said, Royropata is a very big silver project. It is a project that could give us like 13.5 million oz of silver per year. As you know, we have presented already the permit to the Peruvian government, and the thing we need to do now is to pursue this approval working together with the authorities and, of course, responding any question that they might have.
With these two projects in place, we can add 200,000 oz to the current level of production, and that could be fantastic results for Hochschild Mining.
Thank you. This is a further question on Monte do Carmo. As construction of Monte do Carmo is expected to begin in 2026, what are the biggest remaining execution risks particularly around capital costs, permitting, and construction timelines? How are you managing the likely costs and margins of the project?
The first step is to finish the basic engineering and make sure that based on basic engineering that has an error margin of ±10%. We need to present a robust project that with a level of CapEx and certain sensitivities it still has to be profitable. Then, we need to define the construction strategy. I believe that once you have basic engineering, the level of definition of the engineering is quite advanced. We could use a fast-track strategy developing detail engineering on certain parts through the construction. With the right supervision and the right contracts and contractors, that's something that we need to choose in the next few months. I believe that we can be successful on this project.
Thank you very much. This question is on capital allocation. How are you balancing investment in exploration and new projects with dividends and other shareholder returns? What conditions would allow you to increase the dividend materially in the coming years?
Thank you, Charlie. Our capital allocation priorities has in the first position the execution of our brownfield exploration plans and programs as well as the development of our advanced projects, Monte do Carmo and Royropata. That is the main priority for use of funds of the company. In addition, we announced a couple of years ago a new division policy that would allow the company to distribute between 20% and 30% of the attributable free cash flow generated by the company. I think with that policy, we will serve our shareholders with a return for its capital and at the same time will allow us to keep strengthening our balance sheet for future growth opportunities. The policy was recently approved. I think it's valid. It's working well. At this point, we have no plans to change that policy.
Okay. Next question is: Brownfield exploration seems to be a big focus. Is this something you will continue to prioritize as you develop your projects? And how much value does the brownfield work generate?
I would say that brownfield is probably the most important source of value for the company because at the end, it's a cheap operation. To drill in your own property and to bring new ounces is probably the most profitable thing that you can do. The idea is to extend life of mining in our sites. Of course, it's the same strategy at our projects. And we have demonstrated that through brownfield exploration we can bring projects like Royropata, which today counts 3 million oz of gold.
Thank you very much. Next one is, does the submission of the Royropata EIA give you confidence that the timetable to production is on track?
I believe so. I believe that with the current government we can go ahead and get this permit. And as we announce also we are planning to start, a soft start of Royropata probably next year, with the remainder of some tonnage. We low grade that we have at the old Pallancata mine. We can start working with the communities and do a very soft starting staffing the mine and everything. I believe that yeah, we can accomplish with the current schedule.
Thank you. Next question. In this metal pricing environment, is it a good time to buy or sell precious metal projects? Are you looking at any opportunities at the moment?
I think that at any part of a cycle, we should be disciplined on identifying the right opportunities for that company. The right opportunities for us means ensuring that we have the high-quality assets that we want to have in our portfolio. Specifically in this part of the cycle when prices look to be high, but who knows, there are also projections that gold and silver prices could go even higher. It's a good time, I would say, probably it's more a sellers market. However, there are several options and alternatives to also secure the new assets, new projects through buying mechanisms or optional mechanisms, that would allow the mining companies to keep growing. We're permanently looking for opportunities in our portfolio and also looking for other alternative outside.
Okay. Thank you. The final question is: Once Mara Rosa reaches full production and is fully ramped up, do you expect AISC to sustainably fall back below $1,500/oz ?
Well, I would say that with today's prices, it will be very difficult to go back to $1,500. What we are doing at the moment with different consultant is to analyze what it would be the optimal cost for an open pit like the one we have in Mara Rosa. We are going to work with these consultants for the next two, three months, realize what it would be the gaps between the current situation and the ideal one, and try to implement all the corrections for budget 2027.
Thank you very much. That's all the questions we have at the moment. I'm just going to hand it back to Eduardo Landin for any final remarks.
Well, basically, as I said at the end of the presentation, I believe that we had a very strong H1, with best results, historical results, at Hochschild Mining. We expect to have a second half that could be better because Mara Rosa will continue improving. San José and Inmaculada are doing extremely well this year. I believe that also, this year, we will put the first steps for the new two projects that could nearly double our production from 2028 onwards. I believe that Royropata discovery has been a fantastic asset that we brought through our brownfield exploration and could bring many years of very profitable production.
Also Monte do Carmo could be our second operation based on the lesson learned that we have got from Mara Rosa. I'm sure that it will be a fantastic operation and very profitable too. Our idea as management is to increase, continuing increasing production, and of course once we reach that level of production to have the life of mind to continue producing for many years. Thank you very much.
Thank you to the management team for joining us today. That concludes the Hochschild Mining Retail Investor Presentation. Please take a moment to complete a short survey following this event. The recording of this presentation will be made available on Engage Investor. I hope you enjoyed today's webinar.