Fresnillo PLC on Wednesday maintained annual output guidance, despite the precious metals miner saying third-quarter production was weaker and hurt by inflation and the revaluation of the Mexican peso will persist.
Attributable silver production, which includes silverstream, was 14.1 million ounces in the three months that ended September 30, down 5.1% from 14.9 million in the second quarter.
Fresnillo, which operates in Mexico, put this down to ‘lower ore grade and volume of ore processed’ at the San Julian and Saucito mines, and a lower volume of ore processed at Juanicipio.
Quarterly attributable gold production fell 13% to 132,627 ounces in the third quarter from 152,380 in the second. Fresnillo reported lower production at the Herradura and Noche Buena mines, as well as a lower ore grade and recovery rate at Saucito.
All of Fresnilllo’s mines are in Mexico.
Year-on-year, attributable silver output was 5.1% higher, though gold production was 17% lower.
Fresnillo backed its production outlook. It expects attributable silver production in the range of 57.0 million to 64.0 million ounces. Attributable gold production of between 590,000 and 640,000 ounces is expected.
It did warn on inflation and currency effects, however.
‘We continue to address the ongoing impact of inflation and the revaluation of the Mexican peso, which we expect to remain headwinds going into 2024, through measures including the greater use of technology, autonomous drilling and reducing haulage costs,’ Fresnillo said.
It also said that the lives of two contractors were lost in its projects recently.
‘It is with great sadness that I report two contractors’ workers recent fatalities, one in September, and one in October. The safety of our people remains key and we are thoroughly investigating the circumstances to ensure that we can learn and adapt our safety protocols to improve the safety culture across our sites,’ it added.
‘The incidents are being fully investigated by Fresnillo and the authorities.’
Fresnillo shares were 1.9% lower at 519.60 pence each in London on Wednesday morning.
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