(Alliance News) - Mexican precious metals miner Fresnillo PLC on Wednesday said second-quarter gold and silver production was resilient due to mine improvement initiatives.
However, the FTSE 100 company has decided to lower annual gold output estimate due to Covid-19 related working restrictions mainly at Herradura and Noche Buena mines.
Shares in Fresnillo were up 5.9% at 1,132.10 pence each in London on Wednesday morning - the second-best performing blue-chip stock - tracking spot gold prices high.
Gold was trading at USD1,860.19 an ounce Wednesday morning, up sharply from USD1,839.86 at the London equities close Tuesday. The precious metal hit a fresh nine-year high of USD1,866.28 overnight.
For the three months to June 30, Fresnillo recorded gold production of 184,400 ounces, down 6.4% from 196,963 ounces produced in the first quarter of 2020 and 17% lower than 221,307 ounces produced a year ago.
First-half gold production decreased 12% to 381,319 ounces from 432,417 ounces last year due to a lower volume of ore processed at Herradura and Noche Buena mines.
Fresnillo said silver production for the second quarter stood at 12,944 million ounces, down 3.2% from 13,228 million ounces in the previous quarter and 5.1% lower than the year-ago production of 14,418 million ounces.
First half silver production was 26.8 million ounces, down 2.7% from last year. The FTSE 100-listed company, however, retained its 2020 sliver production guidance.
Fresnillo expects 2020 gold production to be in a range of 785,000 ounces to 815,000 ounces, from a previously guided range of 815,000 to 900,000 ounces, as a result of Covid-19 related disruption. Silver production guidance remains in the range of 51 million ounces to 56 million ounces.
Chief Executive Officer Octavio AlvÃdrez said: "Despite these challenges, I am pleased to report resilient production performance with further progress made on our mine improvement initiatives. As a result, we are maintaining our silver guidance for the full year, though we have reduced our gold guidance due to Covid-19 related working restrictions mainly at our Herradura and Noche Buena mines which have impacted production volumes.
"Our development projects remain on track, with the Pyrites Plant and optimisation of the beneficiation plant, both at Fresnillo, due for completion in the second half of the year while Juanicipio also remains on schedule. In the face of an unprecedented health crisis, this has been a positive quarter for Fresnillo, a testament of the excellent commitment of our people and the strength of our operations."
By Tapan Panchal; tapanpanchal@alliancenews.com
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Fresnillo (FRES)