Fresnillo’s gold loses its lustre as silver shines

 
Suzie Neuwirth
FTSE 100-listed miner Fresnillo yesterday reported a 6.3 per cent increase in quarterly silver production but lowered its full-year guidance for gold output.

The year-on-year increase in silver output was a result of increased volumes at two of the firm’s mines and silver will meet guidance this year, the company said.

However, gold output fell 6.8 per cent year-on-year and production guidance was lowered from 465,000 ounces from 490,000 ounces, due to the halt in mining the Dipolos open pit after a district court ruled in favour of a community group claiming rights to the mining area.

“Fresnillo bounced back from a weak start to 2013, delivering improved silver grades, and continuing to ramp-up [its silver mine] Saucito,” said broker Deutsche Bank in a note. “The shine was taken off the results, in our view, by the seemingly permanent closure of the Dipolos open pit gold mine.”

“Our growth pipeline remains robust and on track with development projects and encouraging exploration results,” said chief executive Octavio Alvidrez.