It’s been a busy morning in the mining sector with a whole host of updates from FTSE 100 and FTSE 250 firms.

A number of gold, silver and copper miners gave the market reassurance by sticking to their production numbers, something which always relieves investors given the operational problems that plague many of them.

GOLD MINERS ON THE UP

Leading the risers in the FTSE 350 was Egyptian gold miner Centamin (CEY), whose shares were up 4.7% to 112p after it reiterated its full year guidance in a third quarter production update.

At 490k ounces of gold, its production guidance is at the bottom of its previous range of 490-520k ounces but it seems the market is pleased the firm is at least sticking to its targets.

Centamin also expects its all-in sustaining cost (AISC) of production to stay between $890-950 per ounce sold, albeit at the top end of this guidance.

However that’s still not bad when the average realised price of gold was $1,478 per ounce during the quarter.

An AISC below $1,000 per ounce is generally considered good going for gold miners.

Sticking with gold, Hochschild Mining (HOC) also had a strong third quarter in terms of production, with its 67,797 ounces of gold produced.

That has led the gold and silver miner to stick to its full year target of 457k ounces, with its AISC still on track to hit $960-$1,000 per ounce. Hochschild shares gained 1.4% to 189p.

ANTO STICKS TO NUMBERS DESPITE UNREST

Elsewhere, Chilean copper miner Antofagasta (ANTO) moved up 2.2% to 877p as maintained its full year production guidance despite civil unrest in Chile potentially disrupting operations.

Guidance for 2019 was maintained at 750,000-790,000 tonnes of copper with costs expected to be below $1.25 per pound, highlighting its operational strength.

Copper currently trades around $2.65 per pound.

The positive sentiment lifted other mining majors, with Anglo American (AAL) shares rising over 2% to £20 and Evraz (EVR) rallying 2.8% to 391p.

RIO REVIEWS ALUMINIUM ASSET AFTER INDUSTRY WOES

Rio Tinto (RIO) also gained ground, moving up 1.4% to £40.84 as it announced a review of its interest in New Zealand’s Aluminium Smelter ‘to determine the operation’s ongoing viability and competitive position’.

Usually when supply of a metal goes down, the price goes up but the aluminium industry has struggled of late as production has decreased but demand has also fallen, sending the metal price down with it.

Therefore it’s no wonder that Rio Tinto said in its statement it expects the short- to medium-term outlook for the aluminium industry to remain ‘challenging’ and the smelter in New Zealand ‘to continue to be unprofitable.’

FRESNILLO DISAPPOINTS

Not all miners were up though, as Mexican miner Fresnillo (FRES) dropped 3% to 630p after characteristically disappointing the market with another warning over its production guidance.

For the three months to 30 September, it said that gold production dropped by 7% and its output of silver slumped by 14.5%.

It means the firm’s 2019 silver and gold production is now likely to be at the lower end of the guided ranges of 55m-58m ounces of silver and 880,000-910,000 ounces gold.

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Issue Date: 23 Oct 2019