Fresnillo silver production up 14% in first quarter

Silver production at Fresnillo rose 14% on the year in the first quarter, but fell compared to the previous quarter, the company said on Wednesday, as it reaffirmed its full-year guidance.

Silver production in the three months to the end of March rose to 15.4m ounces from 13.5m ounces in the same quarter a year ago, driven by a positive contribution from the new San Julian JM phase II mine. However, it was down 3.7% from the fourth quarter of last year, mainly due to the lower volume of ore processed and ore grade at the Saucito mine.

Meanwhile, quarterly gold output was up 4.1% versus the first quarter of last year to 231,458 ounces, mainly thanks to the higher contribution from the Herradura mine.

Chief executive officer Octavio Alvidrez said: "Fresnillo has started the year well and delivered a solid operating performance during the period.

"We continue to make good progress with our key development projects. Both the Pyrites plant and the second Dynamic Leaching Plant projects have advanced on time and on budget. We expect to commission both projects during the second quarter and for them to make a positive contribution to full year production in 2018.

"Overall, we remain confident in the outlook and today reiterate our full year production guidance."

RBC Capital Markets said silver production was slightly weaker than the 16.2m ounces it had expected, although this was partly offset by stronger gold production, which it had pencilled in at 222,500 ounces.

At 1040 BST, the shares were down 0.5% to 1,271.50p.