Fresnillo shares fall after Q1 production update
(Kitco News) - Fresnillo (FRES:LSE) has released its latest Q1 Output Update. In the report Octavio Alvídrez, Chief Executive Officer, said:
"First quarter silver production was marginally below the previous quarter, with the encouraging contribution of development ore from our new Juanicipio project offsetting lower grades at Saucito. I am also pleased to report continued progress at the Fresnillo mine with development rates showing an improvement. Quarterly gold production was ahead of the last quarter driven by the higher than expected grade at Herradura. Construction of Juanicipio is making good progress and we are on track to commission the plant by the fourth quarter. Though the pandemic continues to present certain operational challenges, Fresnillo has started 2021 well with Q1 operations in line with expectations and our full year guidance remains unchanged."
In the rest of the highlights from the report, gold Output rose to hit 228,200/oz, this was 5.9% higher on the quarter. However, silver production fell 2.4% to reach 12.6M/oz for Q1.
The companies 2021 guidance remains unchanged despite the continued uncertainty presented by Covid-19 in Mexico. The firm says attributable silver production is expected to be in the range of 53.5 to 59.5m/oz (including Silverstream) while attributable gold production is expected to be in the range of 675 to 725k/oz.
Looking at the price chart it seems that investors and traders have not taken to kindly to the update. The share price is now trading 3.16% lower at 858.4 per share. More recently the price had been hanging on to the 900 per share level but after today's update, it could struggle to hang on to the zone. To find the next major support we need to look at the weekly chart and there is a level at 775.8 per share but there is still some way to go until that price could be tested.