Source: Streetwise Reports 01/26/2019
A BMO Capital Markets report recapped Q4/18 and 2018 gold and silver production figures and compared those to its own estimates.
In a Jan. 23 research note, analyst Andrew Kaip reported Fresnillo Plc (FRES:LSE) was generally in line in terms of production for Q4/18, which resulted in the mining company meeting 2018 guidance for gold but missing guidance for silver “by a hair.”
For gold production, the company exceeded both of BMO’s Q4/18 and 2018 forecasts, Kaip pointed out. During Q4/18, Fresnillo produced 232,000 ounces (232 Koz), slightly above BMO’s expectation of 227 Koz. This was due to stronger-than-expected performance at Herradura, but Noche Buena’s output offset that in part.
During full-year 2018, Fresnillo produced 923 Koz of gold to achieve its revised guidance of 920–940 Koz. Higher grades at Herradura and Noche Buena contributed to the 2018 gold production beat.
Silver production was a mix, Kaip indicated, with output surpassing BMO’s estimate for Q4/18 but not for 2018. Q4/18 silver production was 15.5 million ounces (15.5 Moz), above BMO’s projected 15.2 Moz. This resulted from Cienega and San Julian faring better than anticipated while the Fresnillo mine underperformed expectations.
For full-year 2018, Fresnillo produced 61.8 Moz silver versus revised guidance of 62–64.5 Moz. Lower grades at Saucito were responsible for the 2018 silver production miss, and they are expected to continue this year.
The precious metals company will release its full-year 2018 results on Feb. 26, 2019.
As for 2019, Fresnillo guided gold production of 910–930 Koz, above BMO’s figure of 890 Koz, and silver production of 58–61 Moz, below BMO’s forecast of 66.7 Moz.
BMO has an Outperform rating and a per share target price of £12 on Fresnillo, which is currently trading at around £9.46 per share.
Sign up for our FREE newsletter at: www.streetwisereports.com/get-news
Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.
Disclosures from BMO Capital Markets, Fresnillo, January 23, 2019
IMPORTANT DISCLOSURES
Analyst’s Certification
I, Andrew Kaip, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Analysts who prepared this report are compensated based upon (among other factors) the overall profitability of BMO Capital Markets and their affiliates, which includes the overall profitability of investment banking services. Compensation for research is based on effectiveness in generating new ideas and in communication of ideas to clients, performance of recommendations, accuracy of earnings estimates, and service to clients.
Analysts employed by BMO Nesbitt Burns Inc. and/or BMO Capital Markets Limited are not registered as research analysts with FINRA. These analysts may not be associated persons of BMO Capital Markets Corp. and therefore may not be subject to the FINRA Rule 2241 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.
Company Specific Disclosures
Disclosure 9C: BMO Capital Markets makes a market in Fresnillo in Europe
For Important Disclosures on the stocks discussed in this report, please click here.
( Companies Mentioned: FRES:LSE,
)