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Fresnillo cuts gold guidance as coronavirus restrictions hit open-pit mines

Quarterly silver production was up 2.8% on the first quarter, while gold production fell 6.4%

Fresnillo Plc -

Fresnillo Plc (LON:FRES) has cut its gold guidance for the full year due to coronavirus-related restrictions at two of its mines.

More stringent working restrictions at its Herradura and Noche Buena open pit gold mines in the north of Mexico have impacted processing volumes.

READ: The gold-silver ratio narrows, providing boosts to companies like Fresnillo and Alien Metals

Quarterly silver production of 13.6mln ounces (oz) was up 2.8% on the first quarter but down 5.7% versus last year, meaning the first half output of 26.8mln oz was down 2.7% on the same point last year. 

Gold production in the quarter was down 6.4% to 184,400 oz, meaning the first half was down 11.8%, due to a lower volume of ore processed at Herradura and Noche Buena. 

Guidance for silver production has been maintained for the year in a range of 51-56mln ounces, the FTSE 100-listed group said, while gold production is now expected to be around 785,000-815,000 oz, down from 815,000-900,000 oz.

“Our development projects remain on track, with the Pyrites Plant and optimisation of the beneficiation plant, both at Fresnillo, due for completion in the second half of the year while Juanicipio also remains on schedule,” Fresnillo chief executive Octavio Alvídrez said in the production report.

“In the face of an unprecedented health crisis, this has been a positive quarter for Fresnillo, a testament of the excellent commitment of our people and the strength of our operations," he added.

Fresnillo is planning to report interim results on July 28.

Quick facts: Fresnillo Plc

Price: 1255 GBX

LSE:FRES
Market: LSE
Market Cap: £9.25 billion
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