Fresnillo retains guidance despite drop in Q1 output

Shares in silver miner Fresnillo dipped on Wednesday after the company reported a drop in both gold and silver output over the first three months of the year.

Nevertheless, the company did hold on to its 2024 guidance for silver production to be in the range of 55-62m ounces (moz) and gold production to be 580-630 thousand ounces (koz).

For the first quarter, silver production totalled 13.5moz, up 2.7% on last year but 4.6% lower compared with the preceding three months due to lower ore grades and decreased volumes processed at San Julián, and lower ore grades at Saucito and Fresnillo.

Gold output was down 7.7% quarter-on-quarter and 18.6% year-on-year at 140.8koz, as a result of lower ore grades at Herradura in line with the mine plan, and the mine closure plan at Noche Buena.

In terms of by-products, lead production was down 6.1% over the three months, while zinc production fell 9.3%.

"We have started the year with our performance in line with our expectations," said chief executive Octavio Alvídrez.

"We continue to prioritise safety across all our operations in 2024, while also focusing on reducing costs, improving efficiencies at all mine sites, and with our newest Juanicipio mine now fully ramped up, on the advancement of our growth pipeline. Our guidance for the full year is unchanged."

The stock was down 1.7% at 568.5p by 0837 BST.