Fresnillo on pace to hit full year output targets

Silver and gold miner Fresnillo notched up record levels of gold production in the second quarter while silver output was up quarter-on-quarter.

Quarterly and half year attributable gold production reached record levels. Gold production in the second quarter of 2012 was 127,003 ounces, up 15% compared to the second quarter of 2011 (2Q11) and 4% higher than in the first quarter of 2012.

Gold production at the Noche Buena asset reached 10,380 ounces in 2Q12, and is on plan to reach its full capacity and produce 42,000 attributable ounces of gold annually. The group as a whole is on track to achieve the 2012 production target of 460,000 ounces of gold.

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Quarterly silver production, including the Silverstream mine, increased by 4.9% quarter-on-quarter, benefiting from the successful ramp up at Saucito. Compared to a year earlier, however, second quarter silver production was down 9.6%. Nevertheless, the group is confident it will achieve its 2012 production target of 41m ounces of silver, including the Silverstream project, with ramp-up of silver production at Saucito further offsetting lower ore grade at the Fresnillo project.

"We are committed to progressing the group's exploration projects and have intensified our drilling programme. We have also continued the construction of ramps at San Julian, Orisyvo and Centauro Deep," revealed Jaime Lomelin, Fresnillo's Chief Executive Officer.

"We will continue focusing our efforts towards stabilising production at our Fresnillo mine, delivering growth through new operations and discovering new deposits of precious metals. Combined, these actions will enable us to continue to deliver on our short and long term goals," Lomelin said.

JH