Fresnillo's Silver, Gold Production Climbs to Record, Poised to Hit Target

Fresnillo Plc, the world’s third- largest silver producer and Mexico’s second-biggest gold company, said second-quarter output of the metals rose to an all-time high, driving its shares to a record.

Attributable silver production increased to 9.62 million ounces from 9.59 million ounces a year earlier, the Mexico City- based company said today in a statement. Attributable gold output jumped 34 percent to 91,254 ounces after the ramp-up of the Soledad-Dipolos project.

“The company is well on track to achieve full-year 2010 production targets,” Fresnillo said in the statement. “We expect to produce approximately 38 million ounces of silver and with the contribution of Soledad-Dipolos we expect to produce approximately 340,000 ounces of attributable gold.”

Fresnillo climbed as much as 2.5 percent to 1,124 pence in London, the highest since it began trading in May 2008. It closed at 1,113 pence, up 1.5 percent from yesterday.

Citigroup Inc. said July 6 Fresnillo’s profit will increase 31 percent this year to $476 million, citing rising gold prices, as well as silver and gold production growth.

Gold for August delivery fell $7.5, or 0.6 percent, to $1,206 an ounce on the Comex in New York. It’s up 31 percent from a year ago.

Construction of Mexico’s Soledad-Dipolos mine was completed in December and commercial output started in January. Annual production is expected to be 100,000 ounces of gold in 2010 and 130,000 ounces from 2011, according to Fresnillo’s website.

To contact the reporter on this story: Amanda Jordan in London at ajordan11@bloomberg.net

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