Fresnillo shares drop on lower gold output forecast

Fresnillo cut its full-year gold production outlook twice in 2020 due to covid-19 restrictions at its project in the Herradura district in Mexico, after it was forced to operate with reduced number of workers.

The company expects attributable gold production to be in the range of 675-725 koz in 2021.

Gold output fell to 769.6 kilo ounces (koz) in the full-year ended Dec. 31, down from 875.9koz in 2019.

The company said attributable silver production was expected to be in the range of 53.5-59.5 moz for this year, as it produced 53.1 moz of silver last year.

According to the company, continued progress was achieved on the construction of the Juanicipio processing plant during the last quarter. Commissioning of the plant is now expected by 4Q21.

Construction of the Pyrites plant (phase II) at the Fresnillo district was commissioned on time in 4Q20 and in line with the budget, the company reported on a press release.

“As previously disclosed, the start of operations has been deferred due to a delay in final inspections by the authorities as a result of covid-19 restrictions,”, the company said.

“Given the current covid-19 situation in Mexico, we do not foresee inspections taking place in the first half of the year, and this is reflected in our 2021 production outlook.”

The company has a $9.3 billion market capitalization.

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