Fresnillo half-year profits rise on higher metals prices

Herradura, one of Mexico’s largest open-pit gold mines. (Image courtesy of Fesnillo plc)

Fresnillo plc reported on Tuesday its interim results for the first half of 2021, showing a substantial increase in profitability on the back higher metal prices as well as improved production.

During H1 2021, the precious metals miner generated adjusted revenues of $1.54 billion, up 37.1% over the same six-month period last year, 75.8% of which is due to higher metal prices and 24.2% due to increased volumes.

This resulted in a gross profit and EBITDA of $606.8 million and $747 million, up 88.9% and 59.0%, respectively. Profit for the period came to $308.4 million, representing a 445.8% jump over last year.

Attributable silver production for the half was 27.5 million ounces (including Silverstream), up 2.7% over H1 2020, while attributable gold production of 428,400 ounces was 12.3% better than the comparable period.

“The combination of improved production performance and higher precious metals prices has seen a sharp increase in profitability during the period. This in turn, has enabled us to declare a dividend of $73 million to shareholders, while continuing to invest in both our development and exploration projects,” CEO Octavio Alvídrez commented in a news release.

He also mentioned that the Juanicipio mine remains on track, with commissioning of the processing plant expected by the end of the year. The company is also making strong progress with intensified exploration activities to convert resources into reserves.

Looking forward, Fresnillo expects to meet its full year guidance of 53.5 to 59.5 million ounces of silver (including Silverstream) and 675,000 to 725,000 ounces of gold.

The company, which has seven operating mines and three development projects, is the world’s largest producer of silver from ore and Mexico’s biggest gold producer.