Fresnillo on Track to Meet 2012 Silver, Gold Targets

July 18, 2012 at 09:43


Mexican precious metals producer Fresnillo said silver and gold output was on track to meet its targets for 2012, helped by the ramping up of production at its new Saucito mine, and despite a drop in quarterly silver production.

The FTSE 100 miner, which is the world’s largest primary silver producer, said output of the metal fell 12.6 percent in the three months to June 30, compared to the same period last year, due to falling grades at its flagship Fresnillo mine.

Fresnillo said it was still confident, however, that it would meet an annual production target of 41 million ounces of silver.

Gold production jumped 15.4 percent to 127,003 ounces to reach a record level for the quarter, Fresnillo said, and it was on track to post annual output of 460,000 ounces of gold, in line with its target.

Plans to build a new plant and expand milling capacity for gold at the Fresnillo mine, situated in an area where silver has been mined for 500 years, are helping to cement the company’s position as a gold-producer in its own right, it said.

Silver production from Saucito, which started operating in 2011, and higher ore grades from another mine, Cinega, have helped compensate for lower ore grades being produced at the Fresnillo mine.

“We will continue focusing our efforts towards stabilising production at our Fresnillo mine, delivering growth through new operations and discovering new deposits of precious metals,” Chief Executive Jaime Lomelin said in a statement on Wednesday.

Shares in Fresnillo, which have fallen 9 percent in the last three months, closed at 1,408 pence on Tuesday, valuing the company at 10.2 billion pounds.