Fresnillo (LSE:FRES) reported first-quarter 2026 production broadly in line with its full-year targets, although performance varied across metals. Attributable silver production declined to 11.1 million ounces, down 8.5% quarter-on-quarter and 6.5% year-on-year, impacted by lower ore grades and reduced processing rates at key operations, as well as the absence of contributions from the legacy Silverstream agreement. Zinc and lead output showed modest year-on-year gains but were lower compared with the previous quarter.
Gold production remained stable at 136,074 ounces compared with the prior quarter but fell 12.8% year-on-year against a strong comparative period in early 2025. This decline was attributed to weaker grades and reduced throughput at the flagship Herradura mine following earlier inventory releases. Despite these pressures, the company highlighted continued progress across its development and efficiency initiatives, including the commissioning of a new leaching pad at Herradura and ongoing work to connect the Jarillas shaft at Saucito. Management reiterated its production guidance for 2026 through 2028, signalling confidence in operational stability despite ongoing cost pressures and market volatility.
Fresnillo’s outlook is supported by strong financial performance, including a rebound in profitability and cash flow in 2025 alongside low leverage, as well as a solid pipeline of development projects. However, this is tempered by weaker short-term technical momentum, with the share price trading below key moving averages, and a valuation that remains relatively elevated. Additional risks include the transitional nature of 2026, along with higher capital expenditure and tax-related cash outflows highlighted by management.
More about Fresnillo
Fresnillo plc is a London-listed precious metals producer focused primarily on silver and gold mining operations in Mexico. As one of the world’s largest primary silver producers, the company also generates by-product output of gold, lead, and zinc. Its performance is closely linked to global precious metals markets and supported by a portfolio of both underground and open-pit mining assets.
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