Fresnillo posts decent first-quarter production figures

Fresnillo reported a 5.1% increase in quarterly attributable silver production for the first quarter of 2023, totaling 13.1 million ounces, including Silverstream.

The FTSE 100 miner said the increase was driven by higher ore grade at San Julián (DOB) and the increased contribution of ore from Juanicipio, partly offset by the lower volume of ore processed at Saucito.

However, the quarterly attributable silver production was down 0.9% compared to the same period in 2022.

Fresnillo's quarterly attributable gold production for the first quarter totalled 173,000 ounces, up 3% from the prior quarter.

The board said the increase was mainly due to the higher ore grade at Saucitom and higher ore grade and recovery rate at Herradura, offset by the lower recovery rate and decreased ore grade at Noche Buena.

Quarterly attributable gold production also increased, by 15.5% compared to the same period last year, driven by the higher volume of ore processed and ore grade at Herradura and the higher ore grade at Saucito, partly offset by the decrease in gold production at Noche Buena.

Quarterly attributable by-product lead production increased 4.8% compared to the previous quarter, due to a higher ore grade at Saucito and San Julián (DOB) and the increased contribution from Juanicipio, offset by the lower ore grade and volume of ore processed at Ciénega.

The quarterly attributable by-product zinc production increased 4.6% compared to the prior quarter, due to the higher volume of ore processed at Fresnillo, increased contribution from Juanicipio, and the higher ore grade at San Julián (DOB) and Saucito, partly offset by the lower ore grade, volume of ore processed, and recovery rate at Ciénega.

Fresnillo said the commissioning of Juanicipio was completed as planned during the first quarter, adding that it was now in the ramp-up phase, with full nameplate capacity expected by the third quarter.

The company said it remained focussed on complying with the requirements from the state-owned electricity company and the energy regulator to complete the tie-in of the Pyrites Plant to the national power grid, with the commissioning and start-up of operations expected in the second quarter.

Fresnillo's 2023 outlook remained unchanged, with attributable silver production expected to be in the range of 57 million to 64 million ounces, including Silverstream, and attributable gold production expected to be in the range of 590,000 to 640,000 ounces.

Expressed in silver equivalent ounces, production was expected to be 104 million to 115 million ounces.

“I am pleased to report a solid start to the year - silver and gold production are both up on the previous quarter driven by the increasing contribution from our new Juanicipio mine and the strong performance at our Herradura gold mine in particular,” said chief executive officer Octavio Alvídrez.

“We have a very clear set of priorities that we are focused on in the second quarter.

“This includes the continued safe ramp up of the Juanicipio plant now that we have successfully completed the commissioning phase, while also progressing the tie-in to the national power grid of our new Pyrites Plant.”

Alvídrez said both of those projects would support Fresnillo’s production objectives into the future.

“We have successfully managed through considerable recent challenges, reaching a sound level of operational consistency, putting us well on track to meet our full year production guidance.”

At 0812 BST, shares in Fresnillo were up 0.63% at 737.6p.

Reporting by Josh White for Sharecast.com.