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(Alliance News) - Fresnillo PLC on Wednesday reported a rise in quarterly gold output but a fall in silver production, but warned that costs are expected to have risen.
The Mexico City-based gold and silver miner said total silver production fell 3.0% year-on-year in the fourth quarter to 12.5 million ounces from 12.9 million ounces. Across the whole of 2022, however, it rose 1.2% annually to 53.7 million ounces from 53.1 million ounces in 2021.
It said the quarterly fall was due to a "decrease in ore throughput and lower ore grade at San Julian and Cienega, mitigated by increased volumes of ore processed and higher ore grades at Fresnillo".
Gold production was up 12% in the fourth quarter to 167,969 ounces from 159,205 a year earlier.
However, it fell 15% in 2022 to 635,926 ounces from 751,203 ounces in 2021, primarily due to a "lower recovery rate as higher volumes of sulphide ore are processed and lower ore grade at Herradura," the miner explained.
"Fresnillo reports a solid operating result in the fourth quarter, with full year production in line with our guidance. In particular, silver output was driven by a strong performance from our Fresnillo mine which is showing consistent improvement and the continued contribution of our new Juanicipio project offsetting the expected lower grades at San Julian," said Chief Executive Officer Octavio Alvidrez.
Fresnillo said commissioning of the Juanicipio plant is ongoing. It continues to expect a gradual ramp up with the objective of reaching full nameplate capacity in the third quarter this year.
Additionally, the miner said adjusted production costs for the second half of 2022 are expected to have increased by about 20% compared to the same period a year ago. This is mainly due to an increase in volumes of ore, accelerating cost inflation and an increase of 49% in waste material hauled charged to costs, as well as increased maintenance.
Looking ahead, Fresnillo said it expects "increased production of gold due to an updated mine plan at Herradura and a slight increase in volumes at Noche Buena following condemnation drilling."
Attributable silver production in 2023 is expected to be in the range of 57.0 to 64.0 million ounces, and attributable gold output is expected to be in the range of 590,000 to 640,000 ounces.
Fresnillo will announce its 2022 results on March 7.
Shares were down 1.7% at 863.50 pence each on Wednesday morning in London.
By Xindi Wei, Alliance News reporter
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