Fresnillo PLC on Wednesday confirmed its annual outlook on ‘a solid first quarter’s production, in line with expectations,’ despite a sharp fall in gold output.

The Mexico City-based silver and gold miner said it produced 13.3 million ounces of silver in the three months that ended March 31, up 5.1% from 12.6 million ounces a year before. On a quarterly basis, silver output rose 2.4% from 12.9 million ounces in the final quarter of 2021.

Fresnillo attributed this to a higher contribution of ore from its Juanicipio project and a higher volume of ore processed and higher ore grade at the Fresnillo mine. It noted that this was still partially offset by the anticipated lower volume of ore processed at Saucito.

Gold production amounted to 149,792 ounces in the recent quarter, reflecting a 34% annual fall from 228,193 ounces a year ago.

On a quarterly basis, gold production fell 0.3% from 150,313 ounces in the fourth quarter of 2020.

Fresnillo said that the lower production was in line with expectation. It explained that this was due to a lower volume of ore processed at the Herradura mine, as a result of larger haulage cycles and a lower ore grade.

Fresnillo left its 2022 outlook unchanged. It continues to expect attributable silver production in the range of 50.5 million to 56.5 million ounces, while attributable gold production is expected to be in the range of 600,000 to 650,000 ounces.

The miner produced 53.1 million ounces of silver in 2021, so the guidance would represent anything from a 4.9% decline to a 6.4% rise. Gold output was 751,200 ounces last year, so guidance would represent a 13% to 20% decline.

‘We are reporting a solid first quarter’s production, in line with expectations,’ Chief Executive Octavio Alvidrez says.

‘We remain committed to delivering on our targets for the year, completing the labour reform process, ramping up new Juanicipio production rapidly once connection to the electricity grid is enabled by mid-2022, capitalising on the considerable opportunities presented by our highly prospective exploration programme, while never losing focus on our people, their well-being and their safety. Our full-year guidance is unchanged.’

Shares were up 0.3% at 774.80 pence each on Wednesday morning in London.

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