12th Nov 2024 09:41
(Alliance News) - Fresnillo PLC on Tuesday said a silver production partner and largest shareholder has reported operational difficulties at a mine in Mexico.
Fresnillo shares slumped 6.2% to 634.00 pence each in London on Tuesday morning.
Industrias Penoles SAB, also the owner of around a 75% stake in Fresnillo, said the troubles at Sabinas are "impacting silver production". Fresnillo entered into a silverstream agreement with Penoles over the Sabinas mine back in December 2007.
However, the gold Mexico-focused precious metals producer warned the pact may need "significant adjustments" as a result of the Sabinas woes.
"Fresnillo and Penoles have initiated discussions in order to assess the extent of these operational difficulties and any associated impact on the silverstream agreement. Although it is too early to reach any specific conclusions, at this time Fresnillo considers that there is a reasonable likelihood that the process may lead to significant adjustments to the silverstream agreement," Fresnillo added.
Fresnillo was formerly a wholly owned operating division of Penoles before a minority stake in the company was spun off on the London Stock Exchange in a May 2008 initial public offering.
By Eric Cunha, Alliance News news editor
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