July 3, 2020, 16:51

Silver Prices Rise but One of World’s Largest Miners of the Metal Sees Shares Slide

Silver Prices Rise but One of World’s Largest Miners of the Metal Sees Shares Slide

Silver prices are belatedly on the rise, reflecting strong performance among other precious metals; however, this hasn’t brought benefits to the mine of the Mexican company Fresnillo, one of the world’s few producers of pure silver; the company has suffered serious losses, according to Bloomberg.

In the first half of the year, Fresnillo’s profit fell 69 percent. Shares values have sunk 10 percent. The company receives more than half of its revenue (52 percent) from gold, about a third from silver, and the rest from by-products, such as zinc and lead. Octavio Alvidres, the head of the company, believes that in the second half of the year things will get better due to rising prices and cost-cutting.

Alvidres also did not rule out that next year silver production will be reduced. He estimated that the situation would stabilise by 2021. Speaking of gold, Alvidres said that the increase in production at the a mine – Herradura – will not be able to compensate for the decrease in production at another mine – Noche Buena.

Prices for precious metals soared against the background of growing tensions in world trade and the associated risks, as well as in anticipation of the Federal Reserve System’s decision on the interest rate. In search of safe-haven assets, investors turned their attention to gold. Investments in the precious metal turned out to be more profitable than the purchase of US government securities. At the end of June, gold prices increased to a six-month high ($1,453 per ounce); silver has increased in value by 15 percent since May, now an ounce is worth $ 16.5.

Fresnillo plc is a Mexican-based precious metal mining company incorporated in the United Kingdom and headquartered in Mexico City. Fresnillo is the world’s largest producer of silver extracted from ore and the second largest gold miner in Mexico.

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