Fresnillo: ‘steady’ performance allows miner to maintain guidance

Bumper lead and zinc output and improved access to higher grade areas has helped Mexican miner Fresnillo to maintain its full year guidance despite poor weather being a drag on the much of the area’s mining sector.

Production of lead and zinc at the FTSE 100 constituent increased by 13.3 per cent and 11.8 per cent respectively, in the three months to June 30, securing double-digit rises in production of both metals for the year to date.

Silver production also rose 8.4 per cent on the previous three months, due largely to improved ore grade at the firm’s Saucito mine and the firm’s ability to process a higher volume of ore.

But even though the firm reported a “strong rise” in gold output at another of its mines, the miner’s production of the yellow metal dropped 7.7 per cent over the quarter.

A lower recovery rate and decreased ore grade were held up as the main reasons for the drop.

Octavio Alvidrez, Fresnillo’s CEO, said: “The group has maintained the steady operating performance demonstrated in the first quarter and we remain on track to meet full year guidance.

“I am particularly pleased with the strong output from Saucito which has offset a slightly weaker performance at the Fresnillo mine. I would also like to highlight the excellent work done by the team at Juanicipio where we have gained access to higher grade areas, and Ciénega where we have reported a strong rise in gold output.”

The latest production figures were released during what is a challenging period for the London-listed firm, whose share price has collapsed by over 50 per cent since its all time high in late 2020.

Its falling share price was compounded by a duo of bad news unveiled in its most recent full year results issued in May. A weakening peso added £79m to its costs for the year in 2023. And, even more wretchedly, the firm lost 20,000 ounces of gold from a mine to thieves in an unfortunate episode that cost the company $22m (£17.50m).