29th Jan 2025 09:53
(Alliance News) - Fresnillo PLC on Wednesday said it benefited from higher gold and silver prices in 2024, but said it expects gold output to be lower in 2025 amid an adjustment to the mine at Herradura, one of Mexico's largest open-pit gold mines.
The Mexico-focused precious metals producer said attributable gold production was 631,573 ounces in 2024, up 3.4% from 610,646 in 2023 and 0.2% above the upper end of its guidance of 580,000 to 630,000 ounces. It was 0.7% lower than 635,926 ounces in 2022.
In the fourth quarter alone, gold output jumped 30% to 203,942 ounces from 156,759 in the third quarter. It was up 34% on a year before.
Attributable silver production including silverstream was 56.3 million ounces in 2024, flat from 2023. This was at the lower end of Fresnillo's guidance range for 2024 of 55.0 million to 62.0 million ounces.
In the fourth quarter, silver production was down 5.1% to 13.7 million ounces from 14.4 million in the third. On a year before, production was down 3.3%.
Looking ahead, Fresnillo expects attributable gold output to decline by 8.2% to 17% to between 525,000 and 580,000 ounces in 2025 from 631,573 in 2024. This reflects an adjustment to the mine at Herradura, where Fresnillo in 2024 produced 57% of its total gold. Further out, Fresnillo expects to produce 515,000 to 565,000 ounces of gold in 2026 and 535,000 to 595,000 in 2027.
Attributable silver output including silverstream is expected to be 49 million to 56 million ounces in 2025, so flat to down from 2024. In both 2026 and 2027, Fresnillo expects to produce 47 million to 53 million ounce of silver.
Notably for 2024, the company said average realised gold and silver prices were up 25% and 22%, respectively, compared to 2023, with the zinc price up 8.7%, while the lead fell by 2.7%.
Amid these movements, Fresnillo expects to report revenue growth of 25% to 35% for 2024 compared to 2023, when it had reported total revenue of USD2.71 billion.
Further, it expects to report gross profit between USD1.2 billion and USD1.3 billion for 2024, up sharply from USD503.2 million in 2023.
Profit for 2024 is set to benefit from lower administrative, corporate and exploration costs, the company highlighted.
Fresnillo will release 2024 results on March 4.
"In parallel, metallurgical and underground mining optimisation projects continue, together with the ongoing analysis of brownfield projects, to further enhance the production platform and cost base for the 2026-2030 period, while we continue advancing our greenfield projects, Rodeo, Tajitos, Orisyvo and Guanajuato," the company said.
Fresnillo shares rose 2.3% to 672.00 pence each on Wednesday morning in London, giving it a market capitalisation of GBP4.95 billion.
By Tom Budszus, Alliance News slot editor
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