Shares of Fresnillo PLC (LON: FRES) soared nearly 9% today on higher silver production and the narrowing gold-silver ratio. The ratio (used by traders to measure the values of gold and silver relative to each other) has further narrowed, providing a boost to producers of silver
Fresnillo, a major silver producer, reported quarterly production of the silver metal of 13.6 million ounces, which is 2.8% higher than in the first quarter. Still, this number is a decrease of 5.7% compared to the same period last year. Silver output for the first half of the year is also down 2.7% on a year-to-year basis.
“In the face of an unprecedented health crisis, this has been a positive quarter for Fresnillo, a testament of the excellent commitment of our people and the strength of our operations,” Fresnillo chief executive Octavio Alvídrez said.
Unlike silver, gold production plunged 6.4%, translating into a decrease of 11.8% for the first half of the year. As a result, Fresnillo slashed guidance for gold production to 785,000-815,000 oz, down from 815,000-900,000 oz.
“Our development projects remain on track, with the Pyrites Plant and optimisation of the beneficiation plant, both at Fresnillo, due for completion in the second half of the year while Juanicipio also remains on schedule,” Alvídrez added.
Fresnillo is due to report its interim results next week.
Fresnillo share price surged over 8% to trade above 1160p for the first time since the summer of 2018.