Fresnillo, the London-listed precious metals miner, has reiterated its full-year production guidance after reporting a mixed set of second-quarter results. The company said gold output rose 3.4% year-on-year to 153,000 ounces, driven by higher ore grades at its Noche Buena mine. However, silver production slipped 4.2% to 13.2 million ounces, reflecting planned lower grades at the Saucito and San Julián operations.
The FTSE 100 group, which is the world’s largest primary silver producer, said it remains on track to meet its 2026 targets of between 55 million and 62 million ounces of silver and 600,000 to 650,000 ounces of gold. The update comes as Fresnillo continues to contend with higher operating costs and inflationary pressures across its Mexican mining portfolio.
Shares in Fresnillo fell 1.8% to 1,142p in early London trading on Thursday, underperforming the wider FTSE 100, which was broadly flat. The mining sector faced headwinds from a stronger US dollar and lower base metal prices, with the FTSE 350 mining index dipping 0.6%. Analysts at RBC Capital Markets noted that while the production figures were broadly in line with expectations, the lack of an upgrade to guidance may have disappointed some investors looking for a catalyst.
For UK investors and pension holders, Fresnillo’s performance is closely watched as a bellwether for precious metals exposure within diversified portfolios. The company’s fortunes are tied to the gold and silver prices, which have been volatile this year amid shifting interest rate expectations and geopolitical uncertainty. A sustained rally in precious metals could support Fresnillo’s earnings, but cost inflation remains a drag on margins.
The broader mining sector has faced scrutiny over environmental and social governance issues, with Fresnillo recently committing to reduce its carbon footprint by 30% by 2030. The company has also been investing in automation and efficiency improvements at its Mexican operations to offset rising labour and energy costs.