Fresnillo profit triples on gold, silver prices rally

AI desk brief

Fresnillo nearly tripled first-half profit as higher realized gold and silver prices overwhelmed weaker production, with revenue up 74.7% to $3.38bn and an increased interim dividend of $0.43/share. The stock rose 3.6% on the print, and management said the balance sheet remains strong enough to fund the Probe Gold acquisition, capex, and exploration while still returning more cash to shareholders.

Operationally, attributable silver output fell 11.4% y/y to 22Moz and gold output slipped 7.3% to 290,900oz, reflecting lower grades, weather disruption, and mechanical issues. Despite those declines, Fresnillo said production was broadly in line with plans; Jefferies called the release a clean beat, noting earnings, cash flow, and sales volumes all exceeded forecasts while 2026 capex guidance was cut to $500m-$550m.

For the metals complex, the takeaway is that current gold and silver pricing remains strong enough to cushion miners through inflation, grade deterioration, and operational noise. Near term, the key watchpoints are whether spot prices can stay elevated enough to sustain margins into H2, and whether lower grades/volumes across mature assets continue to constrain supply growth even as producer cash generation improves.