LONDON–Fresnillo PLC (FRES.LN), a primarily silver producer and Mexico’s second largest gold producer, Tuesday reported record annual attributable gold production of 473,034 ounces, up 5.4% year on year, mainly due to the successful first year of operations at Noche Buena and continuous ramp-up at Saucito and said it expects 2013 attributable gold production to reach 490,000 ounces due to ramp-up at Noche Buena.
MAIN FACTS:
-Annual attributable silver production of 41 million ounces, or Moz, in line with guidance; the ramp-up at Saucito offset the anticipated natural decrease in silver ore grade at the Fresnillo mine.
-Quarterly attributable silver production of 10.6Moz, (including the Silverstream), slightly above 4Q11.
-Construction of the leaching plant at Herradura remains on track to become operational in 4Q13.
-Significant progress in the construction of the Jarillas shaft at Saucito is on track for commissioning in 1Q13.
-Construction of the $500M San Julian silver mine began immediately after board approval in 4Q12.
-On track to produce 65 million ounces of silver and target of 500,000 attributable ounces of gold annually by 2018
-2013 attributable silver production to remain stable at 41Moz, including 4Moz from the Silverstream, with expected ramp-up to 8.5Moz at Saucito offsetting the expected decrease in silver ore grade at Fresnillo.
-Exploration budget to be increased to $270 million (excluding capitalized exploration expenses), up 15% above the $234 million spent in 2012.
-Production levels will be maintained at Cienega, despite expected lower ore grades, as a result of the increase in ore processed through the optimization of the milling process.
-Cost control initiatives will continue across all operations to compensate for the expected inflation in operating materials, increased stripping ratios and longer haulage distances.
-Shares closed Monday at 1775 pence valuing the company at 12.73 billion pounds.
