Wednesday 17 July 2019 1:18 pm

Fresnillo shares fall as it slashes production guidance

Shares in miner Fresnillo fell today as the firm lowered production guidance for the year after hitting delays and poor-quality ore.

The company said that production of silver in the second quarter hit 14.4m ounces, down six per cent year-on-year.

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Meanwhile gold production fell 5.4 per cent and zinc by 6.2 per cent.

Chief executive Octavio Alvidrez said that a lower grade of ore at its eponymous Fresnillo mine had impacted production.

He also pointed to construction delays at its Herradura site.

“We expected 2019 to be challenging and we remain cautious,” Alvidrez said.

“However, we will continue to work hard to ensure the improvements we have seen this quarter are maintained in the second half of the year,” he added.

Shares fell around 2.5 per cent to 898.6 in the early afternoon.

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Alvidrez said: “Production has continued to recover towards target levels since the first quarter as we begin to see the positive impact of operational measures and investments we have made into infrastructure, equipment and infill drilling, in particular at our Fresnillo and Saucito mines.

“The improvement and growth initiatives at all our operations, combined with the impact of the change to the accounting treatment of stripping costs at Herradura, have resulted in higher costs for the period.”

Main image credit: Getty