Fresnillo silver production stable in fourth quarter

Mining firm Fresnillo reported a 0.9% increase in fourth quarter silver production on Wednesday, to 13,548 kiloounces (koz).

The FTSE 100 company said Silverstream production, however, decreased 8.6% to 612 koz, resulting in total silver production of 14,161 koz, reflecting a modest 0.4% increase.

Gold production in the same quarter jumped 15.1% to 152,605 ounces, while lead production increased 9.1% to 15,895 tonnes.

Conversely, zinc production experienced a slight dip of 0.8%, totalling 28,844 tonnes during the period.

For the full year of 2023, silver production, including Silverstream, amounted to 56,282 koz, reflecting a 4.7% increase compared to the prior year.

In contrast, gold production for the year decreased 4%, reaching 610,646 oz.

Lead production saw a substantial 9.2% increase, totalling 57,833 tonnes, while zinc production rose by 8.6%, reaching 107,705 tonnes.

The board put the increased silver production for the full year down to the ramp-up at Juanicipio and higher ore grades at San Julián Veins.

However, that was partially offset by lower ore grades at San Julián (DOB) and Fresnillo.

It said the relatively stable quarterly silver production was due to the increase in production at Saucito and San Julián Veins being counterbalanced by decreased volume and lower ore grades at Fresnillo and San Julián (DOB).

Gold production in the fourth quarter benefited from higher ore grades at Herradura and increased volumes of ore processed.

The decline in gold production was due to reduced ore processing at Herradura and the closure of Noche Buena.

By-product production of lead and zinc exhibited positive trends throughout the year, driven by contributions from Juanicipio and higher volumes of ore processing at Saucito.

“We achieved our full year guidance of 105.1 million silver equivalent ounces,” said chief executive officer Octavio Alvídrez.

“Notably gold, lead and zinc production were within our guided ranges.

“Silver production was up 4.7% year on year driven by the ramp up at Juanicipio and higher ore grade at San Julián Veins, albeit it was slightly below expectations.”

Alvídrez said the company overcame a number of operational challenges, as it successfully ramped up production at its new Juanicipio mine, reaching full nameplate capacity.

“We continued to see the impact of inflation and the revaluation of the Mexican peso affecting costs across the business.

“Our priorities for 2024 are clear - safety is key and we will continue working hard to instil a true culture of safety across our operations.

“We will continue to identify cost reduction initiatives to address inflation, while we will also focus on efficiencies across all our mines.”

At 0835 GMT, shares in Fresnillo were up 4.64% at 503.2p.

Reporting by Josh White for Sharecast.com.