The company also saw a 12.5 per cent decline in revenue for 2014, from $1.6bn in 2013 to $1.4bn.
The group said that its “low cost operations, strong balance sheet, high quality assets and a solid pipeline of organic growth projects provided some defence” against a challenging year for precious metal producers, but acknowledged it was not enough to prevent a 10.2 per cent decline in the average realised gold price. The average realised silver price fell by 18.4 per cent.
Fresnillo chairman Alberto Bailleres said that while geopolitics, global security issues, economic uncertainties and volatility “may have driven investors to precious metals as a safe haven in the past”, those factors had “no direct correlation to prices this year”.
He added: “I am hard pressed to recall a time in this industry with such marked uncertainty regarding precious metal prices. There is little consensus today on where we are in the current cycle and which catalysts might bear most impact on pricing. In the face of such uncertainties, we choose to be conservative in our projections.”
Despite the uncertainty in the market, the company has raised capex for 2015 to around $700m, compared to $425.6m in 2014, due to on-going construction at its San Julian operation, and development of several other sites.