Fresnillo production falls as firm prepares for mine closure
Full year gold and silver production at FTSE 250 miner Fresnillo fell in 2019 as the firm prepared for the closure of its Noche Buena mine in Mexico.
Total silver production fell 11 per cent, from 61.8 million ounces in 2018 to 54.6 million ounces last year. However, the final quarter showed a 3.7 per cent increase in output.
The same pattern was in evidence for gold production, with totals for the whole year slipping 5.1 per cent to 875.9 kilo ounces, but the final quarter seeing an 11.4 per cent increase to 233.7 kilo ounces.
The fall was expected, as Noche Buena, which produced almost 18 per cent of the group’s total gold output and over nine per cent of total adjusted revenue in 2018, will close next year.
In line with planning gold output at the mine fell 23.9 per cent last year because lower volumes of ore were processed.
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Last year Fresnillo had to cut production forecasts four times as a result of construction delays and low quality ore, which knocked 25 per cent off the firm’s share value.
For 2020 the firm said that silver production would be between 51 and 56 million ounces, with gold output estimated at 81 to 90 kilo ounce.
Fresnillo’s chief executive Octavio Alvídrez said: “Silver and gold production is up on the previous quarter as we begin to see the impact of our performance improvement plan. Full year silver and gold production is in line with our updated guidance.
“Though grades remain variable as we update and refine our geological models, we continue to process higher volumes of ore on a consistent basis, and as a result, our 2020 forecasts are unchanged.”
Shares in the miner slipped 0.3 per cent in the morning’s trading.