Fresnillo Exceeds 2025 Gold Guidance but Signals Lower Output in the Near Term

Fresnillo (LSE:FRES) delivered a solid operational performance in 2025, with attributable gold production of 600.3 thousand ounces, exceeding full-year guidance despite a 5% decline compared with the prior year. Attributable silver production, including volumes from the now-concluded Silverstream, fell 13.5% year on year to 48.7 million ounces, broadly in line with guidance.

Fourth-quarter results were mixed. Silver, lead and zinc output increased compared with the previous quarter, but gold and silver volumes declined sharply year on year. The performance reflected lower grades and reduced ore throughput at several key operations, including Herradura, Saucito, Ciénega and San Julián. Additional factors included the cessation of mining at San Julián DOB and the discontinuation of zinc concentrate production at Ciénega.

Looking ahead, the company’s 2026 guidance points to lower expected silver and gold output than previously indicated. Management attributed this to mine plan adjustments at Fresnillo, lower grades and throughput at Ciénega, and delays to infrastructure development at Saucito. Despite the near-term reduction, Fresnillo indicated that production is expected to recover from 2027 onwards as new high-grade zones and development projects come on stream, supporting a more positive medium-term outlook.

From an investment perspective, Fresnillo’s outlook is underpinned by strong financial performance, including improved margins, low leverage and significantly stronger cash flow, alongside a supportive tone from the latest earnings update. These strengths are balanced by a technically overbought share price and a demanding valuation, with a relatively high P/E ratio reducing near-term margin of safety.

More about Fresnillo

Fresnillo plc is a London-listed precious metals mining company primarily focused on silver and gold production from operations in Mexico. The group also produces lead and zinc as by-products and is one of the world’s largest primary silver producers. Its strategy emphasises disciplined mine planning, operational efficiency and safety, supported by exposure to a favourable precious metals price environment.