Hochschild Mining's Silver Output Falls In 2Q

(REUTERS) -- Precious metals company Hochschild Mining Plc reported a drop in its attributable production of silver equivalent for the second quarter, and said there was an inventory pile-up at its San Jose mine in Argentina due to regulatory changes.

Hochschild also said exports have resumed there and the inventory would be sold in the second half.

Mining companies in Argentina have sharply reduced exports as they are unable to meet a new government rule forcing them to cash in the proceeds within 30 days.

President Cristina Fernandez imposed a series of rules on trade and foreign exchange over the last year to boost the supply of dollars.

Lima, Peru-based Hochschild gets the bulk of its production from its south Peruvian mines. But the San Jose mine accounts for almost a third of its revenue and an even bigger slice of profit.

The silver and gold miner said attributable production of silver equivalent fell to 5.2 million ounces for the second quarter from 5.6 million ounces a year earlier.

Attributable production fell to 10.2 million silver equivalent ounces for the six months ended June 30 from 11.1 million ounces.

The Latin America-based company also said it was on track to meet is full-year production target of 20 million silver equivalent ounces.

Hochschild shares, which have risen about 9 percent since the start of the year, were slightly up 444.4 pence on the London Stock Exchange at 0750 GMT on Tuesday. They fell to 437 pence in early trade.