Mexico-focused silver and gold miner Fresnillo has reported a good first-half financial performance despite global supply chain bottlenecks, cost inflation and a tight labour market. These difficulties remain and will have “some impact” in the second half of the year, CEO Octavio Alvidrez says, but stresses that he is confident in the company’s ability to “weather the short-term challenges”.
Fresnillo, which trades on the London Stock Exchange, reported a 14% year-on-year decrease in the half to $1.26-billion, mainly owing to a lower volume of gold sold and a decrease in the silver price. The average silver price decreased by 13.8% year-on-year to $22.80/oz in the first half of this year, while the average realised gold price rose 4.6% to $1 871.10/oz.
At the same time, adjusted costs increased by 7.9% to $659.3-million.
The lower revenue combined with an increase in costs slashed the mining company’s profit. Total profit for the period fell 54% to $141-million.
While Fresnillo expects to meet its production guidance for the year, Alvidrez warned that a fifth wave of Covid-19 has reached Mexico. The company expects to see an increase in Covid-19-related absenteeism in the second half of the year.