Fresnillo has slipped back after the Mexican precious metals miner fell just short of its 2013 gold production target.
The company had already cut its forecast for gold by 8.4% in December to 425,900 ounces, due to a ban on the use of explosives at its Minera Penmont mine. In the event it produced a slightly disappointing 425,831. But silver production rose 4.3% on the previous year to 42.7m ounces, ahead of the 41m it had forecast. It expects 43m ounces of silver production in the current year and 450,000 ounces of gold, given the resumption of production at the Herradura mine in March after the explosives issue is resolved.
The news has sent its shares down 29p to 746p, while fellow miner Randgold Resources has fallen 119p to £40.38, not helped by another dip in the gold price.
The result of a court hearing over the Minera Penmont explosives ban, held last week, is expected in the coming days, Fresnillo said. It added:
We are disappointed that we don't yet have a confirmation from the district court hearing on Friday regarding the explosives suspension, but we understand that the request to impede the lifting of the suspension should be denied.
The next stage in the process, if this ruling as expected is favourable to the company, would then be for the company to reiterate its request for the Ministry of Defense to formally lift the suspension before resumption of production at Herradura can take place.
Numis analysts said:
The results look good as always but the ongoing explosives issue remains a concern
.
