16th May 2014 08:58
LONDON (Alliance News) - Fresnillo PLC on Friday promised to return to full capacity at its Herradura Mine in the second half of the year.
Chairman Alberto Baillères will tell shareholders at the companies annual general meeting Friday that, despite struggling financial results in 2013 due to falling metal prices, rising operating costs, lower ore grades, and increased governmental and community actions, it remains in a good position to deal with these kind of challenges.
In March, the company announced a 65% fall in pretax profit to USD418.7 million in 2013 as revenues fell 25% to USD1.62 million. Results were hurt primarily by a combination of lower precious metals prices, lower gold production - which arose from a dispute with the local community about explosives permits at its Minera Penmont operations - and a non-cash loss generated by its Silverstream asset revaluation.
On Friday, Baillères will add that the firm's portfolio of mines and development projects is expected to yield profitable returns even in a low-metal price environment moving forward and that the company continues to drive forward efficiency measures.
Baillères will say that due to the suspension of its explosives permit at the Herradura mine it had focused on selling leached metals during the interim period but had exhausted its gold inventories at the end of February.
After getting back the permit in earlier this year, the mine became fully operational during March, but because the inventories were run down, the company doesn't expect to return to full capacity at Herradura until the second half of 2014.
"As we set our sights beyond the current horizon, I am confident in the capacity of the whole team and our group to create continued value for all stakeholders," Baillères will say.
Fresnillo shares were down 1.8% to 845.00 pence on Friday.
By Tom McIvor; [email protected]; @TomMcIvor1
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