UPDATE 1-Fresnillo to commission San Julian plant later than expected

miércoles 12 de octubre de 2016 06:04 GYT
 

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Oct 12 (Reuters) - Silver and gold miner Fresnillo Plc said a plant at one of its mines in Mexico would be commissioned later than previously expected, due to a combination of unusually high rainfall, labour issues and delays in the delivery of equipment.

Shares in the miner fell as much as 2.4 percent to 1608 pence on the London Stock Exchange, making them the largest losers on the blue-chip FTSE 100 index.

Fresnillo, which mines silver and gold from six mines in Mexico, said it expects the second phase of the plant at its San Julian mine to be operational in the second quarter of 2017.

The company earlier expected to complete the development by the end of 2016.

The delays at San Julian and the lower grade of ore from the Fresnillo mine could pose risks to the company's guidance for 2017, Numis analyst Jonathan Guy said.

Fresnillo sees 2016 silver production at 49 million-51 million ounces and targets 65 million ounces by 2018. It has not provided a forecast for 2017.

The company reported a 6.7 percent rise in quarterly silver output to 11.8 million ounces for the three months to Sept. 30, boosted by the San Julian mine.

Gold production rose 21 percent on year to 220,000 ounces on faster recovery at its Herradura and Noche Buena mines.

The company's stock was down 2.1 percent at 1612 pence at 0936 GMT. (Reporting by Mamidipudi Soumithri and Sanjeeban Sarkar in Bengaluru; Editing by Sunil Nair)