Fresnillo Shares Hit New High as PT Raised on Metals Rally

Fresnillo PLC (LON:FRES) experienced a boost in its share price, primarily driven by the ongoing rally in precious metals. Trading 8.42% higher, the stock reached 2,576p at close, with positive sentiment surrounding gold and silver prices pushing FRES to fresh highs on the day at 2,610p.

HSBC analyst Jonathan Brandt upgraded Fresnillo's rating from “Reduce” to “Hold,” substantially raising the price target from 1,100 GBp to 2,000 GBp. This decision underscores the impact of rising precious metal prices on the company's financial prospects, suggesting increased investor confidence in Fresnillo's ability to capitalize on these favorable conditions.

The upward movement in Fresnillo's stock is closely linked to the performance of precious metals. Silver prices, in particular, surged to a 13-year high of $38 per ounce in July 2025, significantly benefiting mining companies like Fresnillo. This rise was attributed to robust demand from both the jewelry industry and industrial applications, coupled with geopolitical tensions that prompted investors to seek safe-haven assets.

Earlier in August 2025, the company reported a nearly fourfold increase in first-half net profit, showcasing the direct impact of favorable commodity prices. Net profit for the six months ending June 30 soared to $467.6 million, a substantial increase from $117.7 million in the previous year. Revenue also saw a significant climb of 30.1%, reaching $1.94 billion. This growth was supported by a 45.8% rise in the average realized gold price, reaching $3,167.6 per ounce, and a 21.9% increase in silver prices to $33.7 per ounce.

However, Fresnillo has faced operational challenges, as highlighted in its Q1 2025 production report. Attributable silver production declined by 9.7% to 12.4 million ounces, while gold production fell by 23.5% to 156,100 ounces. These declines were primarily due to lower ore grades and processing volumes at Saucito, the completion of mining at San Julián DOB, and reduced throughput at San Julián Veins.

Despite the production setbacks in the first quarter, the positive outlook for precious metal prices and the company's strong first-half earnings have instilled a sense of cautious optimism in the markets. The company's strategic positioning in the precious metals sector suggests potential for continued growth, provided operational efficiencies can be improved and sustained.