MEXICAN precious metals miner Fresnillo beat its annual output target and said it expected stable silver production in 2012, as a boost from new mines offsets lower ore grades at its flagship operation.
Fresnillo, along with other miners of silver and gold, has benefited from prices that touched records last year, and said it would post a “strong financial performance” for 2011.
The firm said its 2011 silver production, including output from the Silverstream agreement, came in at 41.9m ounces, just above its revised 41m guidance.
Meanwhile African Barrick Gold said the higher prices would help it keep unit costs in line with guidance, despite a drop in production after power outages hit its newest Tanzanian mine.
Latin American rival Hochschild warned of the flip side of higher prices – double-digit cost increases.
Silver prices climbed to a record high of $49.51 per ounce in April 2011 and then fell back later in the year.
But the average price for the year nearly doubled by comparison with 2010.
The miner also warned of rising cost inflation, a problem across the sector as boom years lift input costs and wages, with unit costs in 2012 expected to rise as much as 15 per cent in Peru and between 25 and 30 per cent in Argentina
The metal was trading around $30.20 an ounce yesterday.