LONDON (ShareCast) - (Sharecast News) - Fresnillo reported increased silver production and gold output in line with guidance in an update on Tuesday, despite the nearing end of the Noche Buena mine, although its gross profit took a hit in 2023.

The FTSE 100 precious metals miner, which was holding its annual general meeting, noted the successful ramp-up of the Juanicipio silver mine and the integration of the Pyrites Plant with the electricity grid at Fresnillo among recent highlights.

It recorded adjusted revenue of $2.869bn in 2023, a 10.5% increase from the prior year, but noted that its gross profit was affected by inflation and the revaluation of the Mexican peso against the dollar.

The company maintained its dividend policy, distributing $41.2m to shareholders with an interim dividend of 1.4 cents per share and a final dividend of 4.2 cents per share.

"We continue to operate in a challenging environment," said chairman Alejandro Baillères.

"Though the final effects of the pandemic have now largely dissipated, global geopolitical events have created strains in the supply chain and driven higher costs.

"We have also been affected by changing government policies in Mexico, which have impacted the permitting process, as well as the stronger peso."

Baillères said Fresnillo was addressing those issues by optimising supply chain logistics and improving cost-efficiency.

The company also highlighted its proactive response to Mexico's labour reforms, ultimately strengthening relationships with employees and unions.

Fresnillo said it was committed to community engagement and sustainable development, generating an economic impact of nearly $2.5bn in 2023.

The firm said it was continuing to promote diversity, aiming to increase female workforce participation to 12% by 2025, and launched the first Women in Mining survey in Mexico.

Despite expressing disappointment over safety performance in 2023, Baillères reinforced the company's dedication to improving safety standards and achieving the International Council on Mining and Metals (ICMM) benchmark ranges.

Looking ahead, Fresnillo said it was planning to focus on stable production, cost management, and advancing growth projects.

The company said it was optimistic about its future, underpinned by a strong balance sheet, a capable management team, and a promising development pipeline.

At 0919 BST, shares in Fresnillo were down 1.51% at 629.82p.

Reporting by Josh White for Sharecast.com.

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