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Top silver miner Fresnillo posts strong financial results; production declines

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(Kitco News) - Fresnillo today announced that its total silver production in 2020 decreased 3% to 53,050 koz compared to 2019 (54,614 koz) and was within the annual guidance.

The company said that the marginally lower silver production compared to 2019 was due to the Covid-19 preventive measures and a lower ore grade at Saucito, mitigated by a higher grade at San Julián disseminated ore body and the processing of development ore from its new Juanicipio mine for the first time.

Fresnillo added that mining operations at the Herradura and Noche Buena open pit gold mines were impacted by Covid-19 operational restrictions affecting the volumes of ore deposited, which combined with reduced workforce levels, resulted in gold production decreasing by 12.1% to 769.6 koz, within the revised guidance.

The company reported a strong financial performance with US$2,608.1 million in adjusted revenue in 2020, an increase of 14.9% on 2019 due mainly to better precious metals prices. Gross profit rose by 90.5% to US$879.4 million, driven by a combination of higher prices and lower costs. Fresnillo declared an interim dividend of 2.3 US cents per share, with a final dividend of 23.5 US cents per share, bringing the total for the year to 25.8 US cents per share.

Fresnillo noted that it remains cautious for 2021 due to the continued impact of the pandemic in Mexico. In 2021, Fresnillo expects attributable production in the range of 53.5 to 59.5 moz of silver (including Silverstream) and 675 to 725 koz of gold.

Fresnillo is the world's largest primary silver producer and Mexico's largest gold producer. Fresnillo has seven operating mines, all of them in Mexico - Fresnillo, Saucito, Ciénega (including the San Ramón satellite mine Las Casas Rosario & Cluster Cebollitas), Herradura, Soledad-Dipolos, Noche Buena and San Julián, three development projects and six advanced exploration projects.

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