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(Alliance News) - Mexican miner Fresnillo PLC on Wednesday reported a rise in quarterly gold output but the annual figure has fallen short of revised guidance.
Fresnillo, which was a member of the FTSE 100 index until dropping out in December, produced 233,744 ounces of gold in the fourth quarter of 2019, 11% higher on the previous quarter and 0.7% higher year-on-year.
For 2019 as a whole, Fresnillo gold production fell 5.1% to 875,913 ounces. In December, it had set guidance at 885,000 ounces, from previous guidance of 880,000 ounces to 910,000 ounces.
The company's fourth-quarter production increase on the prior was driven by an improvement at the Herradura mine, offsetting lower throughput and grades at Noche Buena. Annual production declined due to the lower production at Noche Buena and lower grades at San Julian.
For 2020, Fresnillo sees gold production between 815,000 ounces and 900,000 ounces.
Fresnillo's fourth-quarter silver production was 13.8 million ounces, 3.7% higher quarterly but down 11% on the prior year. The 2019 figure was 54.6 million ounces, 12% lower year-on-year.
Fourth-quarter production improved on the third quarter due to higher quarterly grades at San Julian and Saucito, but fell on the prior year due to a year-on-year fall in grades at Saucito and lower volumes at San Julian.
Annual silver production declined due to the lower grades at Saucito, and lower-than-expected grades at the Fresnillo and San Julian mines.
Silver production has been guided between 51 million to 56 million ounces.
Chief Executive Octavio Alvidrez said: "Silver and gold production is up on the previous quarter as we begin to see the impact of our performance improvement plan, which includes intensive infill drilling to improve the certainty of the geological model, dilution control and raising development rates, together with actions to address contractor productivity and equipment availability. Full year silver and gold production is in line with our updated guidance."
"As we set out at our capital markets day in December, we are determined to drive better performance from our core assets and we will continue to implement our mine improvement plan throughout the year. Though grades remain variable as we update and refine our geological models, we continue to process higher volumes of ore on a consistent basis, and as a result, our 2020 forecasts are unchanged," he added.
Shares were 0.3% lower on Wednesday morning in London at a price of 611.40 pence each.
By George Collard; georgecollard@alliancenews.com
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