FRESNILLO, the Mexican precious metals miner, yesterday cut its silver production guidance for 2011, after the company was to forced to improve safety conditions at all of its projects following the death of two miners in July.
The FTSE 100 company said quarterly production decreased by 5.8 per cent compared to the third quarter of 2010, mainly due to the slowdown of production at its largest mine in Mexico, from which Fresnillo takes its name.
Fresnillo said both deaths were caused by falling rocks “which resulted from breaches of Fresnillo’s safety policies” and said it continued to reinforce safety conditions.
The group lowered its guidance for the full year from its earlier forecast of 44m to 41m ounces of silver.
However, the company revised its full year total production target for gold from 400,000 to 430,000 ounces because of an ongoing expansion at two mines in Mexico.
Headquartered in Mexico City, Fresnillo is the world’s largest producer of silver and Mexico’s second-largest gold miner. It floated on the London Stock Exchange in 2008.
Numis analyst Cailey Barker described the results as “a mixed bag but generally disappointing”, after forecasting 10.5m ounces of silver output for last quarter.
Shares fell two per cent, closing at 1,665p last night.