Fresnillo plc Q2 2026 Production Update: Gold Output Surges 13.8% Sequentially Amid Silver Decline, Full-Year Guidance Maintained

Gold Production Gains Offset Silver Challenges in Q2 at Fresnillo plc

Fresnillo plc delivered what CEO Octavio Alvídrez called a "solid operational performance" in Q2 2026, driven by consistent execution across its eight Mexican mines. Attributable gold production reached 154.8 koz, a 13.8% sequential increase from 136.1 koz in Q1, propelled by higher ore processing volumes at Herradura and improved ore grades and throughput at Fresnillo and Saucito mines.

Conversely, attributable silver production declined 1.7% sequentially to 10.9 moz, mainly due to lower ore grades at Saucito and Ciénega. Year-on-year, Q2 gold production dipped 1.9%, impacted by decreased ore grades at Herradura and San Julián Veins but partially offset by improved grades at Fresnillo. H1 gold production of 290.9 koz fell 7.3% year-on-year, reflecting lower ore grades, reduced processing volumes, and decreased recovery rates at Herradura.

Silverstream Agreement End and Ore Grade Variability Drive H1 Silver Decline

H1 2026 attributable silver production of 22.0 moz declined 11.4% year-on-year, chiefly due to the termination of the Silverstream agreement, which contributed zero silver in H1 2026 compared to 940 koz in H1 2025. In Q2 alone, Silverstream output was nil versus 452 koz in the prior year quarter.

Operational factors also pressured silver output, including lower ore grades and processing volumes at Saucito, Juanicipio (56% attributable interest), and Ciénega mines. These challenges are expected to continue into H2 2026, though operational plans remain on track. Management emphasized ongoing focus on efficiency and cost control to meet full-year guidance.

Lead and Zinc By-Product Production Show Mixed Trends

Q2 attributable lead production rose 13.3% sequentially and 15.1% year-on-year, driven by higher ore grades and processing volumes at Fresnillo and Juanicipio, partially offset by lower grades at Saucito. H1 lead production increased 8.8% year-on-year to 32.8 kt.

Attributable zinc production increased 5.9% sequentially but declined 2.6% year-on-year in Q2, primarily due to lower ore grades at Saucito, partially mitigated by improvements at Fresnillo and Juanicipio. H1 zinc production remained stable, up 0.3% year-on-year at 53.8 kt.

Herradura Mine Sees Gold Output Rise Despite Grade and Maintenance Challenges

Herradura, Fresnillo's largest gold mine, produced 89.3 koz in Q2, a 14.0% sequential increase driven by commissioning of leaching pad XV, which boosted ore processing to 5.36 million tonnes (up 19.0% from Q1). However, Q2 gold production declined 7.0% year-on-year, and H1 output fell 15.1% to 167.6 koz due to lower ore grades, delayed commissioning of leaching pad XV phase II, and adverse weather conditions.

A fissure in the ball mill at the Dynamic Leaching Plant 1 will reduce high-grade ore processing volumes, with scheduled maintenance in Q4 2026 to replace the ball mill shell. Herradura's average gold ore grade for 2026 is expected between 0.50–0.70 g/t. The leaching pad XV commissioning adds capacity expected to support production flexibility in H2 2026.

Fresnillo Mine Achieves Significant Gold Growth Amid Development Delays

The flagship Fresnillo mine reported Q2 attributable gold production of 17.1 koz, an 86.8% year-on-year increase and 40.1% sequential rise, driven by a higher ore grade of 1.28 g/t and increased processing volumes. Silver production also improved, up 4.9% sequentially and 2.8% year-on-year.

However, mine development faced challenges including a structural fault at San Alberto causing access delays and reduced development rates (3,356 metres/month in Q2 vs. 3,513 metres/month in Q1). Ground stability issues prompted additional support measures. For 2026, Fresnillo expects silver ore grades of 160–180 g/t and gold grades of 0.80–1.00 g/t.

Saucito Silver Mine Faces Geological Variability and Shaft Connection Impact

Saucito, the second-largest silver mine, produced 3.04 moz silver in Q2, down 4.6% sequentially and 14.3% year-on-year due to lower ore grades and geological model discrepancies. Increased ore processing from Jarillas shaft interconnection partially offset declines. H1 silver production fell 7.5% year-on-year to 6.23 moz.

Gold production at Saucito rose 17.4% sequentially to 16.2 koz but declined 8.5% year-on-year. Mine development rates improved to 2,736 metres/month in Q2. Expected 2026 grades are 200–220 g/t silver and 0.95–1.15 g/t gold.

Juanicipio JV Shows Gold Growth Amid Silver Grade Pressures

Juanicipio, with 56% Fresnillo ownership, reported Q2 attributable gold production of 7.07 koz, up 10.7% sequentially and 26.6% year-on-year due to higher ore grades and processing volumes. H1 gold output increased 19.1% to 13.5 koz.

Silver production remained stable sequentially at 2.22 moz but declined 5.8% year-on-year in Q2, with H1 silver down 9.0%. Pyrite concentrate processing ceased in Q2. Lead and zinc by-products rose significantly in H1, up 41.0% and 29.7% respectively. 2026 grade guidance is 320–370 g/t silver and 1.1–1.3 g/t gold.

Ciénega and San Julián Veins Report Mixed Gold Gains and Silver Declines

Ciénega produced 10.4 koz gold in Q2, up 3.7% sequentially and 8.8% year-on-year, supported by higher processing volumes and new high-grade areas. H1 gold increased 15.3% to 20.4 koz. Silver output declined sharply by 19.3% sequentially and 28.8% year-on-year to 544 koz, due to lower recovery rates and ore grades. 2026 grade expectations are 1.4–1.6 g/t gold and 110–130 g/t silver.

San Julián Veins recorded Q2 gold production of 10.6 koz, down 9.2% sequentially and 23.6% year-on-year, with H1 gold down 14.4%. Silver production also declined, with H1 output falling 5.8%. Lower ore grades, dilution, and geological model variances contributed. 2026 grades are forecast at 210–230 g/t silver and 0.9–1.1 g/t gold.

Noche Buena Advances Towards 2027 Operations Restart

Noche Buena, where active mining paused in 2024, recovered 3.5 koz gold in Q2, up 20.3% sequentially but down 31.7% year-on-year. H1 recovery totaled 6.3 koz, down 27.2%. Preparations for a potential 2027 restart included personnel recruitment, facility rehabilitation, and engineering studies, reflecting management’s confidence in the asset’s long-term prospects. No specific restart timeline or production targets were disclosed.

2026 Full-Year Production Guidance Reaffirmed Across Metals

Fresnillo reaffirmed its 2026 production guidance: attributable silver 42.0–46.5 moz, gold 500–550 koz, lead 54–59 kt, and zinc 85–95 kt. Expressed in silver equivalent ounces (gold-to-silver ratio 80:1, excluding lead and zinc), total production is projected between 82–91 million ounces.

The guidance reflects operational flexibility amid grade variability and development challenges. The company also confirmed that 2027 and 2028 production expectations remain unchanged, viewing 2026 challenges as temporary. Fresnillo will release its 2026 interim results on 4 August 2026.

Central Region COO Transition Ensures Operational Continuity

Fresnillo announced that Tomás Iturriaga is stepping down as Chief Operating Officer for the Central Region after over five years. Gabriel Durán, Vice President for the Central Region with 30+ years at the company, will assume interim COO responsibilities, reporting to CEO Octavio Alvídrez. This leadership change comes amid operational challenges at Saucito and San Julián Veins involving grade variability and development delays. No timeline was provided for appointing a permanent COO.

Fresnillo Emphasizes Safety as Core Operational Priority

The company reiterated its commitment to workforce safety and zero fatalities, focusing on continuous training, strict safety standards, and proactive risk management. This commitment is critical given operational challenges such as ground stability issues at Fresnillo mine and development delays that could impact extraction costs. Fresnillo aligns with Mexico’s stringent mining safety regulations but did not disclose specific safety metrics in this report.