(Alliance News) - Fresnillo PLC on Wednesday expressed confidence in achieving its annual guidance amid a bright performance so far in 2021, though this was somewhat dimmed by reduced output in the third quarter.
The Mexican gold and silver miner reported year-to-date attributable silver production of 40.2 million ounces, in line with the prior year, citing a higher ore grade at the San Julian disseminated ore body in Mexico and, to a lesser extent, the contribution of development ore from the Juanicipio mine, also in Mexico.
For the third quarter alone, Fresnillo reported attributable silver production of 12.7 million ounces, down 15% when compared to the second quarter of 2021. On a year-on-year basis, silver output was down 4.7%, due to a lower volume of ore processed and a lower ore grade at Saucito.
Year-to-date attributable gold production of 600,900 ounces was up 8.5% year-on-year, primarily due to the higher volume of ore processed at Herradura mine in Mexico following the lifting of Covid-19 restrictions, which had resulted in lower volumes of ore deposited last year.
Quarterly attributable gold production was 172,500 ounces, down 14% quarter-on-quarter. When compared to the third quarter of 2020, gold production was flat.
"We have seen some limited short-term disruption as a result of the new labour reforms in Mexico, which has impacted the performance of our Fresnillo and Saucito mines in particular, due to the higher proportion of contractors at those underground mines," warned Chief Executive Octavio Alvidrez.
"However, the combination of continued efficiency measures, the higher volume of ore processed at Herradura, the ongoing contribution of development ore from our Juanicipio project and an increase in silver ore grades at San Julian disseminated ore body, give us confidence in our full year guidance," added Alvidrez.
Fresnillo said it remains on track to meet its 2021 production guidance of 53.5 million to 59.5 million ounces of silver and 675,000 to 725,000 ounces of gold. Fresnillo produced 53.1 million ounces of silver in 2020, down from 54.6 million in 2019, and 769,618 ounces of gold, down from 875,913 ounces.
The FTSE 100 stock was trading 0.4% lower in London on Wednesday morning at 882.20 pence a share.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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Fresnillo (FRES)