Fresnillo Sees 5% Gain in 2013 Gold Output, Silver Unchanged

Fresnillo Plc, the biggest primary silver producer, expects gold production to expand by about 5 percent next year, while silver output may be little changed.

“We’re expecting that the silver will maintain in the order of 41 million to 43 million ounces and we’re expecting that gold will go up at least another 5 percent,” Chief Executive Officer Jaime Lomelin said in an interview today.

Fresnillo is boosting output at its Saucito mine to counter falling production at its Fresnillo operation. The Mexico City-based company plans 2012 output of 41 million ounces of silver and 460,000 ounces of gold. Production from Noche Buena will boost gold output, Lomelin said.

Fresnillo earlier reported a 25 percent drop in first-half profit after silver production and prices fell. Net income slipped to $366.7 million from $488.7 million a year earlier. The company produced 20.1 million ounces of silver, 6.5 percent less than a year earlier, and said its average selling price dropped 13 percent to $30.97 an ounce in the period.

The stock rose 0.2 percent to 1,456 pence by the close of London trading.

Lomelin, who said last week he will be replaced as CEO by Octavio Alvidrez, said the switch won’t change how the company operates. “There’s not going to be any change, the long-range plan is already fixed,” he said. “He has long experience.”

Before it's here, it's on the Bloomberg Terminal. LEARN MORE