Fresnillo profits double to $1bn

1st Mar 2011 07:10

Record gold and silver production coupled with soaring metal prices more than doubled Mexican miner Fresnillo's profits last year to over $1bn."Record levels of silver and gold production, the start-up of a new mine, and substantial progress at development and exploration sites attest to the group's operational execution and robust resource base. Combined with high silver and gold prices, Fresnillo delivered the best year in its history," it said.Pre-tax profits in 2010 soared from $457m to $1.02bn on revenues of $1.47bn, up 73% on an adjusted basis. Gold production jumped 33% to 369,000 ounces, while silver output rose by 2% to 38.6m ounces. The average realised price of silver increased 40% to $21.39 per ounce, while the average gold price reached $1,252.05 per ounce, a 26.6% increase year-over-year. Net profit rose from $322m to $665m."With an average cash cost of $3.3 per ounce of silver and $309.1 per ounce of gold, Fresnillo should be able to produce profitably well below current prices, and do so for years to come given the 1.47bn silver ounces and 20.08m gold ounces in resources," chairman Alberto Baillères said. "As such, I believe we are on course to meet the ambitious target set out at the time of our initial public offering in 2008: that by 2018, Fresnillo will be able to produce 65m ounces of silver and over 400,000 ounces of gold annually," he added.The final dividend is 35.6 US cents per share.