23rd Jan 2019 08:33
LONDON (Alliance News) - Fresnillo PLC on Wednesday said it achieved record production in 2018 amid a "challenging" year for the Mexican gold miner, though it expects a decline in silver output in 2019.
Shares in Fresnillo were down 1.8% at 895.40 pence each early Wednesday.
The FTSE 100-listed precious metals miner said silver production remained flat in the three months to the end of December 2018, at 15.5 million ounces, compared to the third quarter of 2018. On a year-on-year basis, fourth quarter silver production fell by 3.2% due to lower throughput and lower ore grade.
Annual silver production increased by 5.3% to 61.8 million ounces.
"Despite the year-on-year increase in silver production resulting from a full year of operations at San Julian, we are reporting lower silver production than anticipated," said Chief Executive Octavio Alvidrez.
"This was mainly explained by the lower than expected ore grades at the Fresnillo and Saucito mines which have persisted into the final quarter, together with operational issues," explained Alvidrez.
Gold output in the fourth quarter of 2018 was 232,000 ounces, unchanged year-on-year, but up 3.0% on the third quarter. Annual gold production, meanwhile, improved by 1.3% to 923,000 ounces due to higher ore grades and recovery rates at the Saucito mine in Mexico.
Looking ahead, Fresnillo said it expects silver production in 2019 to be between 58 million and 61 million ounces, which would represent a slight fall on that achieved in 2018. Gold production is anticipated to be flat year-on-year, in the range of 910,000 to 930,00 ounces.
The company said that for 2019 it will have an exploration budget of USD140 million, including capitalised exploration expenses.
"While 2018 was a challenging year at Fresnillo, we remain both confident and determined we will return the mine to the positive trend seen in previous years," said Alvidrez.
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