Fresnillo PLC on Wednesday posted solid quarterly production figures and backed annual its annual guidance.
The Mexico City-based silver and gold miner said volumes at Fresnillo and Saucito continued to improve, but this was partially offset by lower ore throughput and grade variability at San Julian.
Shares in Fresnillo were 2.4% higher at 731.20 pence each in London on Wednesday morning.
In the third quarter, total silver production, including silverstream, rose 7.4% year-on-year to 13.6 million ounces, compared to 12.7 million ounces. This was ‘due to the higher contribution from Juanicipio, higher ore processed and ore grade at Fresnillo and higher ore grade at Saucito’, the miner said.
From the second quarter of 2022, it fell 5.4%, mostly due to the expected lower ore grade and lower processed ore volumes at San Julian.
Gold production fell 7.7% annually to 159,205 ounces from 172,534 ounces. It edged up 0.2% from the second quarter, however.
The annual decline was ‘mainly due to a lower recovery rate as higher volumes of sulphide ore are processed and lower ore grade at Herradura, and a decrease in volume of ore processed and lower ore grade at Noche Buena and Cienega’, Fresnillo said.
These factors were slightly offset by higher ore grades at Saucito.
Lead and zinc production rose 3.1% and 12% annually, but fell 7.7% and 4.7% from the second quarter.
Fresnillo noted a ‘challenging’ operating environment, in light of a tight labour market in Mexico following labour reforms introduced last September, as well as industry-wide supply bottlenecks.
‘Contractor uptake varied across the group, resulting in staff vacancies and lower equipment availability at our underground mines. Recruitment and training campaigns continue, albeit at a slightly slower pace than initially anticipated,’ it explained.
It expects the staffing process at Fresnillo District, San Julian and Cienega to be complete by year-end.
Despite the challenges, the miner said it remains on track to meet annual guidance of 50.5 to 56.5 million ounces of attributable silver and silverstream, and 600 to 650,000 ounces of attributable gold.
‘Our focus in the final quarter is to achieve our 2022 targets, continue to drive volumes in the Fresnillo District, and deliver a rapid ramp-up of our new Juanicipio mine, while always prioritising the safety and wellbeing of our people,’ said Chief Executive Officer Octavio Alvidrez.
Alvidrez added that the additional testing required by the state energy regulator is on track, relating to the final tie-in to the grid at Juanicipio.
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