Shares in Fresnillo PLC (LSE:FRES) jumped 8% on Tuesday after the precious metals group lifted its gold production forecast for the year, following a strong first half marked by improved profitability and robust free cash flow.
For the six months to 30 June, Fresnillo reported a 16% rise in gold output to 314,000 ounces, driven by operational improvements at the Herradura mine.
This performance prompted the company to increase its full-year gold production guidance, as it continues to benefit from higher precious metal prices and tight cost discipline.
Revenue climbed 30% to $1.94 billion, with adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) more than doubling to $1.1 billion.
Profit for the period surged almost fourfold to $468 million, helped by a sharp drop in production costs, which fell 20%, and a weaker Mexican peso against the dollar.
Silver output fell 12% as expected, mainly reflecting the planned closure of the San Julián DOB mine and lower grades at several sites. Fresnillo also finalised the buyback of the Silverstream contract with Peñoles for $40 million.
An interim dividend of 20.8 cents was declared. Chief executive Octavio Alvídrez said the results highlighted Fresnillo’s focus on productivity and lasting value for shareholders.
The stock rose 120p to 1,555p.