New York-based Jefferies says the Mexico headquartered and focused miner is on track to significantly lift silver output by 2021 with delivery of 56%-owned Juanicipio late next year. Expected higher grades early in the life of the 11.7 million-ounce-a-year mine would boost cash flows and returns.

Jefferies says Fresnillo, due to report its June quarter results on July 24 and first-half financials at the end of the month, is the bank's "standout relative to UK-listed peers" with its "superior organic volume and cash flow growth".

"Relative to 2018, we forecast plus-27% increase in silver production by 2021, with the significant step-change occurring between 2020 and 2021. The primary driver of this growth is Juanicipio, formally approved earlier this year, and due to be commissioned in late 2020," analysts said.

The company's Q2 production is forecast to come in at 13.8Moz of silver and 227,000oz of gold, up 5% and 7%, respectively, quarter on quarter, with improved contributions from Fresnillo and San Julian in Mexico.

Fresnillo's shares are down more than 20% in the past 12 months, and off 1% since the start of the year, valuing the company at about £6.47 billion. Jefferies says investors could look to buy at current levels (around 875p) and has a price target of 1,250p on the stock.

"Several large-scale acquisitions since the Denver Gold Forum last September have created ripples throughout the rest of the precious metal industry," the bank said.

"Expectations remain for further M&A in the space with the next leg comprising divestment assets out of the Barrick-Randgold and Goldcorp-Newmont deals. While we do not expect FRES to be a significant player in large-scale corporate or asset M&A, an increase in strategic and well-executed M&A across the industry should bring further investor interest back to the sector, thus benefitting FRES."