Archived article
Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
magazineFresnillo suffers as costs surge and precious metals lose some shine
Mixed precious metals prices and disappointing operational news mean Fresnillo (FRES) shares have had a very poor start to 2023, down more than 17%.
Focused on Mexico, the miner is the world’s largest producer of silver from ore and has significant gold output. Prices for both metals have been volatile amid an uptick in bond yields on expectations interest rates might be higher for longer.
Fresnillo has been the author of its own misfortune too. An operational update on 25 January revealed silver production for the final three months of 2022 of 12.5 million ounces, short of Berenberg’s 13.7-million-ounce forecast. The amount of metal contained within the ore at its flagship Fresnillo mine has also been below expectations.
At the same time the company is being hit by higher costs with adjusted production costs up as much as 20% as more ore was processed, it faced wider inflationary pressures, increased waste material was charged to costs and maintenance spend went up.
Full year results on 7 March showed profit more than halved to $248.6 million in 2022, thanks to these pressures.
Important information:
These articles are provided by Shares magazine which is published by AJ Bell Media, a part of AJ Bell. Shares is not written by AJ Bell.
Shares is provided for your general information and use and is not a personal recommendation to invest. It is not intended to be relied upon by you in making or not making any investment decisions. The investments referred to in these articles will not be suitable for all investors. If in doubt please seek appropriate independent financial advice.
Investors acting on the information in these articles do so at their own risk and AJ Bell Media and its staff do not accept liability for losses suffered by investors as a result of their investment decisions.
