Fresnillo Keeps Gold Target as Herradura Ball-Mill Repair Looms

Fresnillo has maintained its 2026 gold-production target despite a 12.8% third-quarter decline, putting attention on repairs at its Herradura mine rather than the arithmetic of the annual guidance range. A damaged ball-mill shell is scheduled for replacement in the fourth quarter after maintenance stoppages restricted ore processing at the Mexican operation. The company says those interruptions are already reflected in its production forecast. 7

Attributable gold output fell to 135,053 ounces in the three months ended September 30 from 154,812 ounces in the preceding quarter, and was 10.7% lower than a year earlier. Herradura produced 73,069 ounces, down 18.1% quarter on quarter. Its 16,182-ounce decline accounted for roughly 82% of the group's 19,759-ounce sequential drop before movements at other mines. Herradura remains the clearest operational variable in Fresnillo's near-term gold result. 7

The mine processed 4.996 million tonnes of ore, 6.8% less than in the second quarter. Fresnillo attributed the throughput decline chiefly to more frequent preventive stops at Dynamic Leaching Plant 1's ball mill following a previously reported fissure. Herradura's gold grade was 0.57 grams per tonne, compared with 0.58 grams in the second quarter and 0.69 grams a year earlier. The company also cited a higher proportion of sulphide ore as a factor affecting leach-pad recoveries over the first nine months. 7

Fresnillo retained its annual gold guidance of 500,000 to 550,000 ounces after producing 425,938 ounces in January through September. That leaves 74,062 ounces needed in the fourth quarter for the bottom of the range, or 124,062 ounces for the top. The lower threshold is only about 55% of third-quarter production; the upper threshold is about 92%. This provides a cushion against a weak final quarter at the low end, but little room for another large sequential decline if the group wants to finish near the high end. 7

The wider portfolio offers some offsets, though not a full answer to Herradura's constraints. Gold output at the Fresnillo mine was 16,787 ounces, up 74.9% from a year earlier because of better grades and recovery. At Ciénega, Fresnillo expects ore from the new Victoria area to improve available feed and grades in the fourth quarter after equipment availability and ground-support work restricted processing in the third. These improvements will need to offset the lower contributions from Herradura and Noche Buena. 7

Silver also warrants attention. Total quarterly silver output was 10.322 million ounces, down 11.6% from a year earlier, including the loss of Silverstream production. Fresnillo's unchanged 2026 silver guidance is 42.0 million to 46.5 million ounces, not 47 million. With 32.371 million ounces produced in nine months, the company needs roughly 9.629 million to 14.129 million ounces in the fourth quarter to meet that range. The upper end would require a marked rebound from the third quarter. 7

Management said production remained in line with its expectations. That assessment is plausible for the minimum gold target, but the more useful questions are whether Herradura's mill-shell replacement proceeds as scheduled, how its grade and leach recovery evolve, and whether silver throughput recovers. Fresnillo said it would provide a more detailed update on its 2027 and 2028 production expectations with the fourth-quarter report. 7