Fresnillo Quarterly Silver Production Slips 8.4% on Lower Grades

Fresnillo plc reported that attributable silver production for the quarter ended March 31, 2025, declined 8.4% year-on-year to 12.377 million ounces, including 488 koz from its Silverstream arrangement. The company attributed the decrease primarily to the cessation of mining at the San Julián disseminated ore body (DOB) and lower ore grades and processing volumes at several operations.

Operational breakdowns show Saucito as a principal contributor to the quarterly decline: the mine recorded lower processed tonnage and a drop in average silver grade versus prior periods, weighing on output. Ciénega also experienced reduced volumes and grades. Conversely, the Fresnillo mine benefitted from higher ore grades, which helped offset some of the lost volume, while Juanicipio recorded slightly higher attributable production and increased ore processed, supported by pyrite concentrate flows to nearby plants.

Market reaction to the production report was measured. Some broker notes recorded short-term volatility in Fresnillo shares (LSE: FRES) after the release, but the company’s reaffirmation of its 2025 guidance — attributable silver production forecast at 49.0–56.0 moz and attributable gold at 525–580 koz — tempered immediate downside. The interplay between company targets, Silverstream contributions and short-term operational issues shaped investor responses.

In a broader macro context, a quarter-on-quarter reduction in primary silver output from a major producer can tighten supply dynamics, yet metal prices will also reflect industrial demand trends, monetary policy expectations and currency moves. Fresnillo emphasised its focus on operational stability and cost discipline while noting that certain site-specific maintenance and equipment availability issues are being addressed to improve throughput in ensuing quarters.

Analysts say the near-term outlook hinges on the recovery of processed volumes at Saucito and Ciénega and on how quickly developmental projects and shaft connections (notably at Jarillas) restore capacity. Given Fresnillo's maintained full-year ranges and ongoing Silverstream inflows, market watchers expect a gradual normalisation rather than a material revision to guidance, although second-half operational performance will be decisive. Investors are advised to monitor operational bulletins and quarterly updates for confirmation of a sustained recovery.