(Alliance News) - Fresnillo PLC on Wednesday said its gold and silver production declined in 2020, with silver production suffering at its Saucito mine and gold production down at Herradura and Noche Buena.
Shares in Fesnillo were down 4.0% at 1,020.00 pence in London, making it the worst performer in the FTSE 100 index in morning trading.
The Mexican miner reported attributable 2020 total silver production of 53.1 million ounces, down 2.7% from 54.6 million ounces in 2019. This includes a 3.6% drop in silverstream production to 2.8 million ounces from 2.9 million and a 2.9% drop in silver to 50.3 million ounces from 51.8 million.
Fresnillo said this reduction was: "Due to the expected lower ore grade at Saucito, mitigated by a higher ore grade at San Julian DOB and development ore from Juanicipio being processed for the first time."
Silver production in the fourth quarter alone, including silverstream, fell 5.8% to 13.0 million ounces from 13.8 million.
Attributable gold production in 2020 as a whole dropped 12% to 769,618 ounces from 875,913 ounces the year before. This was attributed to "a lower volume of ore processed at Herradura as a result of Covid-19 related working restrictions and the aforementioned issues at Noche Buena."
In the fourth quarter alone, gold production fell 7.8% to 215,581 ounces from 233,744 ounces in the same quarter of 2019. However, production did improve 25% versus the third quarter of 2020 where gold production was only 172,718 ounces.
In terms of by-products, annual lead production rose 14% year-on-year to 63,242 tonnes from 55,722 tonnes and zinc production rose 15% to 106,793 tonnes from 92,578 tonnes.
For 2021, Fresnillo is guiding for attributable silver production in the 53.5 million to 59.5 million ounce range including silverstream. The lowest end of the forecast would be only a 0.8% improvement from 2020.
This forecast is the result of Covid-19-related impact on timing for Fresnillo's Juanicipio development as well as a delay to start of operations for the Pyrites Plant, combined with a 20 day partial shut down at the San Julian lead circuit following minor structural damage suffered in late December.
For gold, Fresnillo is forecasting 2021 attributable production of between 675,000 and 725,000 ounces, below 2020 production by as much as 12%. This is predominantly due to a minor land slip at Noche Buena, limiting access to deeper pit areas and altering mining sequencing. Also hurting gold production forecasts is the lower ore grade at Cienega.
Chief Executive Octavio Alvidrez said: "The optimisation plant, which will improve our ability to process the higher lead and zinc content at the Fresnillo mine, is expected to start operations in February, while electrical permitting delays will push back start of the Pyrites plant into the third quarter. Nevertheless, our high-quality team and resource base continue to give us grounds for confidence as we enter 2021."
By Anna Farley; annafarley@alliancenews.com
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Fresnillo (FRES)