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Fresnillo profit increased in first half of 2016

Fresnillo plc, the world’s largest silver miner, reported attributable profit of US$167.0 million (US$0.227/share) for the six months ended 30 June 2016, 118% higher than the corresponding period of 2015. However, after adjusting profit for a revaluation of Silverstream contract sales, net profit was US$90.1 million (2015: US$76.5 million).

,Total revenue increased by 17% to US$959.4 million, as silver production rose by 6.1%, to 25.2 Moz and gold production rose to 447.6 koz, a 23% increase. Revenue also benefited from slightly higher gold prices in H1 2016.

The silver production increase was mainly as a result of higher ore grades at the Fresnillo mine as mining returned to higher grade areas; higher grades at Ciénega and increased ore throughput at Saucito. Gold production, meanwhile, benefitted from better recoveries and higher tonnes treated at Herradura.

H1 2016 production costs were reduced 5.2% to US$299.7 million, mainly because of a 16% devaluation of the Mexican peso against the US dollar. Cost of sales (including depreciation), however, rose 2.9% to US$492.5 million mainly due to a decrease in inventories at Herradura.

The company states that production is on track to meet its 2018 production target of 65 Moz of silver and has already surpassed its gold production target of 750 koz.

Fresnillo profit increased in first half of 2016: FRES

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