MEXICO CITY (dpa-AFX) - Silver and gold producer Fresnillo Plc (FRES.L, FNLPF.PK) reported Tuesday a slight increase in fourth-quarter silver production, with growth in Silverstream production. Production of gold, meanwhile, was hurt by the stoppage of operations following the court order regarding the 'El Ejido' litigation process. Looking ahead, the company, which operates mines in Mexico, projects nearly flat silver production for fiscal 2014.
Octavio Alvídrez, Chief Executive Officer, said, 'Over the course of 2013 we continued to focus on operational excellence at each of our operations and to develop our growth projects to meet our long-term production targets and increase our resource base. We are confident that 2014 will see us continue on our path of sustainable and profitable growth.'
For the fourth quarter, total attributable silver production, including Silverstream, edged up 0.8 percent to 10.65 million ounces from last year's 10.57 million ounces.
Silver production from the Sabinas mine related to the Silverstream climbed 33.2 percent from last year to 1.23 million ounces, with higher ore grades, improved recovery rates and higher volumes of ore processed. Attributable silver production, excluding the Silverstream, decreased 2.3 percent, as a result of the lower ore grade at Fresnillo and Ciénega mines.
Gold production declined 22.3 percent year-over-year to 75,645 ounces, mainly reflecting lower production volumes at Soledad-Dipolos, resulting from the stoppage of operations following the court order regarding the 'El Ejido' litigation process.
By-product lead production increased 15.9 percent, and zinc production climbed 21.6 percent.
For fiscal 2013, attributable silver production, including Silverstream of 42.7 million ounces, grew 4.3 percent from last year and was ahead of the 41 million ounces guidance. Meanwhile, gold production declined 10 percent to 425,831 ounces.
Looking ahead for fiscal 2014, the company expects attributable silver production to be 43 million ounces, including 3.5 million ounces from the Silverstream. Attributable gold production is projected to return to 450,000 ounces.
The company added that its cost control initiatives and operating efficiencies will continue across all operations.
Fresnillo further said its annual production target remains 65 million ounces of silver and 500,000 attributable ounces of gold by 2018.
Further, Fresnillo said it is currently awaiting the results of a district court hearing on the underlying merits of the Ejido El Bajío's request to impede the lifting of the explosives suspension in the coming days.
Alvídrez added, 'We are disappointed that we don't yet have a confirmation from the district court hearing on Friday regarding the explosives suspension, but we understand that the request to impede the lifting of the suspension should be denied. Once the district court confirms its ruling on this, we will announce immediately to the market. The next stage in the process, if this ruling as expected is favorable to the Company, would then be for the Company to reiterate its request for the Ministry of Defense to formally lift the suspension before resumption of production at Herradura can take place.'
In London, Fresnillo shares are currently trading at 764.50 pence, down 10.50 pence or 1.35 percent.
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© 2014 AFX News
