(Adds details on mine from statement, share move)
Feb 24 (Reuters) - Fresnillo said on Monday it
expects to start production at its Mexican joint venture with
Canada's MAG Silver earlier than expected this year,
raising its expectations for initial output while wearing $45
million in additional costs.
Fresnillo, which cut its full-year production forecasts four
times last year, has been striving to cut capital investment and
costs after core profits almost halved in the first six months
of 2019.
But it said it would now see Juanicipio reach 85% of planned
capacity in the fourth quarter of 2021, compared to previous
guidance of 65%.
Its stock, which has recovered steadily from a three-year
low in recent months, jumped 6% in response to hit a seven-month
high, also helped by a more than 2% jump in gold prices globally
due to coronavirus concerns.
By 0806 GMT, the stock, which fell out of the UK bluechip
index in December, was among the top gainers on the mid-cap FTSE
250.
Fresnillo said a pre-operative capital cost of $395 million,
estimated in early 2018, had been revised to $440 million.
Fresnillo is constructing, developing and operating the
Juanicipio mine and holds a 56% stake in the venture, with MAG
Silver owning the rest.
The standalone project, which is located in the Fresnillo
District, is expected to produce 11.7 million ounces of silver
and 43,500 ounces of gold annually once operational.
To compare, Fresnillo reported silver production of 51.8
million and gold output of 875,913 for 2019.
(Reporting by Muvija M in Bengaluru; Editing by Bernard Orr and
Patrick Graham)
Fresnillo (FRES)
