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Fresnillo 2009 revenues climb 18% and profits soar 150% amid record silver production

Mexico City-headquartered precious metals miner and FTSE 100 constituent Fresnillo (LSE: FRES) reported record attributable silver production of 37.9 Moz (million ounces) for the year to end-December 2009, which marked a 9% improvement over the previous year, while gold production rose 5% to 276,584 oz, helping the full year revenues to a 18% increase to US$860 million.

The company’s EBITDA (earnings before interest, taxes, depreciation and amortisation) rose 47% to US$497 million and net attributable profit soared 150% to US$322 million as average realised gold price increased to US$988.9/oz and the silver price improved to an average of US$15.3/oz.

The year also marked a silver and gold resource increase of 15%, while production is set to rise further with the commencement of production from the Saucito project in 2011, in line with the company’s plan to deliver one new mine or mine expansion per year until 2014. Last year, the company poured first gold at the Soledad-Dipolos gold mine in Mexico.

Fresnillo aims to produce 65 Moz of silver and 0.4 Moz of gold per annum by 2018.

“Results in 2009 indicate we are firmly on track, with strong operational performance, quality and sustainable growth across our operations...silver production reached record levels, planned cost reduction and efficiency projects were completed, and progress at exploration and development sites was on target, with the start -up of Soledad-Dipolos ahead of schedule and within budget,” said non-executive chairman of Fresnillo Alberto Bailleres.

Fresnillo has upped its exploration budget by US$77.6 million for 2010, also intending to look at acquisition opportunities.

The debtless company had net cash of US$312 million at the end of the period.

Disclosure: The author holds no positions in the company