Precious metals slump weighs on Fresnillo performance

4th Aug 2015 08:36

(ShareCast News) - Mining company Fresnillo blamed lower precious metals prices for a drop in first half profit, as it reduced its capital expenditure forecasts for the year.The gold and silver miner posted profit down 44.3% to $76.4m, and noted silver prices were down by 18%, while gold was down 7.4%.The listed company posted first half revenue up 9.6% to $822.4m from $750.4m.The mining firm said it would now spend about $570m on capital expenditure for the full year, lower than its previous plans to spend about $700m.Fresnillo chief executive Octavio Alvídrez said the pricing environment remained challenging, and it was necessary to defer expenditure to continue profit growth.The 19% drop in capital expenditure compared with previous expectations would still be a 34% increase in capex from financial year 2014, the company noted.Fresnillo produced 23.8moz of silver, up 10.6%, and 364koz of gold, which is a 37% lift against the corresponding six months last year.Alvídrez said production was on track to meet full-year production guidance of 45-47moz of silver and increased guidance of 715-730koz for gold.