February 26, 2019 / 8:20 AM / 23 days ago

Fresnillo shares drop on 2019 warning, full-year profit miss

(Reuters) - Precious metals miner Fresnillo Plc shares fell about 11 percent on Tuesday, after it warned of possible lower prices, higher inflation and worsening foreign exchange rates in 2019.

Mexico’s largest gold producer also reported lower-than-expected full year pretax profit, hurt by weak silver output and higher costs. The company’s shares were down at 869 pence and were the top loser on the UK blue-chip index.

Fresnillo was forced to cut its 2019 silver production forecast last month after 2018 output missed its own estimates, largely because of lower ore grades at the Fresnillo and Saucito mines as well as operational issues.

“We anticipate that 2019 will be a more challenging year than 2018,” Fresnillo said.

The company, which mines gold and silver in Mexico, also said its investments in recent years would lead to greater depreciation costs.

The FTSE-100 company’s pretax profit fell 34.7 percent to $483.9 million for the 12 months ended Dec. 31, below the $581.6 million estimated by analysts, according to Refinitiv Eikon data.

Reporting by Samantha Machado in Bengaluru; Editing by Bernard Orr

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