Investing.com -- Fresnillo (LON:FRES) saw a 9.7% decline in attributable silver production in the first quarter to 12.4 million ounces, including contributions from the Silverstream contract. The company’s shares slumped more than 7% in London trading as of 08:03 GMT.
The production drop was largely attributed to lower ore grades and processing volumes at Saucito, the completion of mining at San Julián DOB, and reduced throughput at San Julián Veins.
On a year-over-year basis, silver output fell 8.4%, despite improved grades at the Fresnillo mine and increased contribution from the Silverstream agreement.
Gold production came in at 156,100 ounces, down 23.5% from the previous quarter due to weaker grades and lower ore volumes across several operations, including Herradura, Saucito, and Ciénega.
Gold output rose 10.8% compared to the same period last year, driven by stronger performance at Herradura in terms of grades, processing volumes, and recovery.
Lead and zinc production, both reported as by-products, also declined sequentially—falling 10.9% and 12.8% respectively—due to weaker grades and reduced volumes across multiple operations, compounded by the closure of San Julián DOB.
Lead output was flat versus the first quarter of 2024, while zinc was lower, mainly reflecting decreased contributions from San Julián and Fresnillo.
The company maintained its full-year production guidance, targeting silver production of 49.0 to 56.0 million ounces and gold output between 525,000 and 580,000 ounces.
RBC Capital Markets analysts said they expected "a positive reaction to today’s results given the beat to expectations for the quarter."
"Q1 25 silver and gold volumes represent 24% and 28% of the mid-point of full year guidance leaving FRES on track to achieve the outlook for the year," analysts led by Marina Calero noted.
"We see potential for further rerating as margins expand in the coming two years but see upside more limited following recent outperformance."
Fresnillo reiterated its target for total silver equivalent production this year of between 91 million and 102 million ounces and confirmed that its production outlook for 2026 and 2027 remains unchanged.