Fresnillo first quarter gold production falls but silver increases

Fresnillo’s gold production fell in the first quarter although silver increased and the miner said it remained on track to meet its full 2017 production guidance.

For the quarter ended 31 March, silver production rose 10.7% to 13.5m ounces (oz), including silverstream, compared to last year mainly due to the contribution of the first phase of the San Julián mine in Mexico.

However, gold production declined 3.3% compared to last year and down 17.1% compared to the previous quarter, to 222.3 koz, due to a one-off reduction of inventory levels at the Herradura mine last year and expected lower ore grades at the mine.

The FTSE 100 company maintained that it is on track to achieve its production guidance for the year of 58-61m oz of silver, including 4m oz of silverstream, and 870-900 koz of gold.

It said that the turnaround at the Fresnillo mine continued to show positive signs with improvements in the maintenance process and enhanced operative supervision resulting in an increase in silver production.

The mine experienced two consecutive quarters of increased ore grades and silver ounces produced and three consecutive quarters of increased ore throughput.

Chief executive Octavio Alvídrez said: "I am pleased to report a solid performance in the first quarter of the year.

"We continue to make good progress with our development projects. Construction of San Julián (phase II) continued with the commencement of initial tests and the project is on track to be commissioned at the end of the second quarter. The pyrites plant and second line of the dynamic leaching plant are also progressing as expected.”