Fresnillo produces record gold output in the first quarter

MEXICAN precious metals miner Fresnillo posted record first quarter gold output after the launch of its new Soledad-Dipolos mine, the first leg of an expansion that will also boost its silver production by up to 70 per cent by 2018.

London-listed Fresnillo, the world’s largest primary silver producer, is focusing on organic growth after finding it difficult to make quality acquisitions and plans to open a new mine or expansion project each year until 2014.

“Attributable gold production has exceeded our expectations,” chief executive Jaime Lomelin said yesterday.

The firm will also keep its focus on silver in the long-term, but the new mine is richer in gold and is due to boost the group’s production of gold this year by about a fifth.

“Fresnillo’s two major growth projects are now ramping up, providing strong growth into 2011, however... Fresnillo continues to look expensive relative to its nearest silver peer Hochshild,” said analyst Dominic O’Kane at Liberum Capital.