Shares of Fresnillo Plc (LON: FRES) fell 8.9% after the precious metals mining company said that it expects to produce less gold in 2021 as compared to 2021 due to restricted operations at its Noche Buena mine in Mexico and
Fresnillo, the largest gold producer in Mexico, said that a landslip on a pit wall at the Noche Buena mine had made it impossible to mine the mine’s deeper levels resulting in lower gold production.
The miner slashed its gold output targets twice in 2020 due to the impact of coronavirus restrictions on activities at its mines in the Mexican district of Herradura.
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However, gold production recovered in Q4 2020 coming in at 215,600 ounces, a 24.8% improvement to Q3 figures. Total gold production in 2020 was 769,600 ounces, a 12.1% drop as compared to 2019.
Fresnillo produced 13 million ounces of silver in Q4 2020, a 2.5% decline compared to Q3 bringing the total silver production for the year to 53.1 million ounces, which was 2.9% lower than 2019.
The company expects to produce 675,00 – 725,000 ounces of gold in 2021, while silver production is expected to be 53.5 – 59.5 million ounces.
Fresnillo owns seven mines in Mexico. Today’s forecasts are based on the impact of the coronavirus lockdown measures, which have delayed the development of its Juanicipio mine and the opening of its pyrites plant at Fresnillo.
Fresnillo share price
Fresnillo shares fell 8.94% to trade at 967.5p having dropped from Thursday’s closing price of 1062.5p.