Fresnillo (LON:FRES) has slashed its dividend in response to low commodity prices and significantly lower profits in the first half of 2015.
The silver miner’s dividend is being cut by almost 60% to 2.1 cents per share, meanwhile, spending on new projects has been reduced by 19% to US$570mln.
Lower commodity prices were blamed for the 44% drop in profit to US$76.4mln. The average sales price in the first half was down 18% at US$16.61 per ounce of silver, while gold was down 7.4% to US$1,206.10 per ounce.
Octavio Alvídrez, chief executive said: “The pricing environment remains challenging, with ongoing precious metals price volatility.
He added that the company has the “financial and operational flexibility to adapt to market conditions as needed.”
“Our high quality, low cost assets and significant quality growth pipeline, combined with our balance sheet strength, leave us in a strong position even in challenging market circumstances."
Production was in line with expectations, with silver production up 10.6% at 23.8mln ounces compared with the same period last year, and gold production totalled 364,000 ounces, up 37.0%.
There were problems at its San Julián project, with delays in permitting, weather-related issues and a high rotation of contractors resulting in delays.
The San Julián leaching plant, which will process ore from the veins is not expected to be commissioned until next year.
Shares rose 1.6% to 643p.