EDITOR NOTE: As Mexico’s largest gold and silver miner cuts its projection forecast by 17%, it’s likely that other miners will follow suit. COVID-19 restrictions are partly to blame for this decline in production. This is bad news for mining shareholders but good news for gold and silver investors, as a production decline will invariably cut supply. And times of high demand, prices can skyrocket, In short, now’s the time to buy more silver and gold.
Fresnillo has cut its gold production outlook by as much as 17% lower than initially expected for 2020, as coronavirus-related restrictions in Mexico limit the number of people able to work in mines.
Shares in the Anglo-Mexican precious metals miner fell more than 5% in London trading.
The back story. FTSE 100-constituent Fresnillo is Mexico’s largest gold miner and the largest silver producer in the world. Its stock has climbed almost 100% this year, as investors looked to gold as a haven amid the coronavirus economic crisis. Prices for both the yellow metal and silver surged this summer, with gold hitting an all-time high.
In March, Fresnillo said it expected to produce between 815 and 900 koz (thousand ounces) of gold, but reduced its outlook in July to 785 to 815 koz as coronavirus restrictions impacted operations in Mexico. All mining operations were initially halted in the country before the government deemed it an essential industry in May.