Fresnillo share price rises as gold output sparkles

Jessica Morris
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Fresnillo is Mexico's second-largest gold producer (Source: Getty)

Fresnillo shares ticked up today, after the precious metals miner said it's on course to meet production targets this year.

The London-listed company's shares rose as much as two per cent to 1,012p this morning, before settling back down to 1,008p later in the day.

Fresnillo reported gold production shot up 26 per cent to 230,0000 ounces in the first quarter of 2016, on higher speed recovery at its Herradura and Noche Buena sites.

Read more: Gold prices are heading upwards - and here's three reasons why experts suggest they're going to keep rising

But silver output inched down 1.7 per cent to 12.2m ounces, due to lower ore grade at its Saucito mine near the city of Zacatecas in Mexico following unusually high ore grade there a year earlier.

But Fresnillo assured it's still course to meet full-year production guidance of 775,000 to 790,000 ounces of gold, alongside 49m to 51m ounces of silver.

The firm reported a third consecutive quarter of improvements in grade and production at its flagship Fresnillo mine, as the turnaround plan gets underway.

Read more: Why the gold rally will last this time

The development projects will play an important role in Fresnillo hitting its production growth targets this year.

The company added that the construction of its important San Julián project also remains on track. It's expected to deliver an extra 10.3m ounces of silver and 44,000 ounces of gold per year once it hits full capacity.

Octavio Alvídrez, chief executive, said: "I am pleased to report a solid quarter of production, with 230 thousand ounces of gold and 12.2m ounces of silver produced across our mines and from the Silverstream contract."

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