29th May 2020 09:29
(Alliance News) - Fresnillo PLC on Friday said it was too soon to determine the full impact of the Covid-19 pandemic on the company's operations and finances.
Speaking at the gold miner's annual general meeting, Chair Alerto Bailleres said that given the unclear impact of the pandemic on the global economy, it is still too early to know what the impact will be for Fresnillo in particular. As such, the company will plan cautiously.
Nontheless, Fresnillo's chair said the company has not changed its dividend policy, having declared an interim dividend of 2.6 US cents per share and final dividend of 11.9 US cents per share and with the annual payout at 14.5 US cents per share. However, this was sharply lower than the 27.40 cents paid in 2018, which was itself 32% lower than the year prior.
After a more challenging 2019 than expected, with silver and gold production both down from 2018 levels, Fresnillo is taking corrective steps to take production back to an acceptable level in the short-term, it said.
Steps taken so far include investment in infrastructure, plant and machinery. Fresnillo also has started defining its new programme to control costs and increase productivity, though the chair warned these "will not result in an immediate turnaround".
"I am confident that we are making good progress, and we should really start to see these measures take effect in the second half of this year and beyond," said Bailleres.
Fresnillo is on course to complete its pyrites plant project in the Fresnillo district of Mexico in the second half of the year, along with the second phase of the benefication plant optimisation project also at Fresnillo.
No officially confirmed Covid-19 cases have been found to originate from within Fresnillo's operations, and any suspected cases have resulted in isolation and monitoring. Thus far, three workers have been diagnosed from exposure outside the company's premises, and all are recovering.
Senior management and the Fresnillo board have all taken voluntary and temporary pay cuts.
However, mining has been confirmed by the Mexican government to be an essential activity, meaning operations can continue during lockdown.
"I would like to re-emphasise the board's determination to oversee an improved operational performance after a challenging period for the company," said Bailleres.
"Despite these challenges, I have confidence in the group's underlying strengths, in our strategy and teams, in our culture and behaviour, and in our ability to make valuable contributions to the wellbeing of all our stakeholders," he added.
Shares in Fresnillo were down 1.8% at 774.20 pence in London on Friday morning.
By Anna Farley; [email protected]
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