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Fresnillo hikes full-year gold guidance

Fresnillo (LSE:FRES) has upped its 2018 gold production guidance after output rose in the June quarter.
Fresnillo hikes full-year gold guidance Fresnillo hikes full-year gold guidance Fresnillo hikes full-year gold guidance Fresnillo hikes full-year gold guidance Fresnillo hikes full-year gold guidance

The ramped up San Julián operation helped boost Fresnillo's silver production in the first half of 2018

Staff reporter

Gold production for the quarter was up 4.6% year-on-year at 233,841 ounces due to a higher ore grade, throughput and recovery rate at Saucito and better grades at the Noche Buena, Herradura and Fresnillo operations.

This brought output for the January-June period to 24,853oz, up 8.8% on the year.

Fresnillo hiked up its full-year gold guidance to 900,000-930,000oz from the previous 870,000-900,000oz, citing a better than expected gold production performance on ongoing reduction of inventories at Herradura.

Ongoing tests at the Herradura leaching pads had resulted in an increase of 98,900oz of gold in the inventory at the start of the year.

Quarterly silver production jumped 5.7% on the year to 15.3 million ounces, due to the start-up of the second phase of the San Julián JM operation in July last year, which had been ramped up to reach full capacity.

Silver output for the six-month period was 28Moz, up 9.7% from the first half of 2017.

Despite the strong silver performance, Fresnillo lowered its full-year silver output guidance to 64.5-67.5Moz from 67-70Moz, with CEO Octavio Alvídrez chalking this up to "issues associated with less availability of process water at San Julián".

He pointed out, however, that the company's full year consolidated guidance in silver equivalent ounces was unchanged.

Fresnillo's lead production for the half-year was 22,846 tonnes, up 8.8% year-on-year, with zinc output for the six-month period 42.9% higher at 28,725t.

Alvídrez said good progress had been made on Fresnillo's pipeline, with the Pyrites plant commissioned and at the final testing stage, while the second dynamic leaching plant was on track.

Fresnillo's shares slipped 5.2% Wednesday to £10.485 (US$11.79).