Fresnillo, the world's largest primary silver producer, mined 10.3 million ounces of silver in the third quarter, 11.6% less than a year earlier, as ore grades fell at three mines. It kept its 2026 production targets, saying output is in line with expectations.
At a glance
- Gold output fell 10.7% on the year to 135,053 ounces.
- Fresnillo still expects 42.0 to 46.5 million ounces of silver this year.
- Problems at the Herradura gold mine cut its quarterly output by 18.1%.
Background
Fresnillo is a London-listed miner that operates silver and gold mines in Mexico. Ore grade is the amount of metal in each tonne of rock, so when grades fall a mine produces less metal even if it processes the same amount of ore.
What happened
Fresnillo produced 10.3 million ounces of silver in the July-September quarter, down 5.5% from 10.9 million ounces in the second quarter and 11.6% from a year earlier. Part of the yearly fall reflects 195,000 ounces from its Silverstream contract in the third quarter of 2025, which has since ended.
Gold output fell 12.8% from the previous quarter to 135,053 ounces. For the first nine months, silver production was 32.4 million ounces, down 11.5%, and gold was 425,938 ounces, down 8.4%.
Why output fell
Silver dropped because ore grades were lower at the Juanicipio, Saucito and San Julián mines. Gold was hit by less ore processed at Herradura and Ciénega.
Herradura's gold output fell 18.1% from the previous quarter to 73,069 ounces. Its ball mill needed more frequent maintenance stops after a previously reported fissure. The Fresnillo mine was a bright spot, with gold production up 75% on the year to almost 17,000 ounces on better grades and recoveries.
What it means
Fresnillo kept all its 2026 targets: 42.0 to 46.5 million ounces of silver, 500,000 to 550,000 ounces of gold, 54,000 to 59,000 tonnes of lead and 85,000 to 95,000 tonnes of zinc. Chief executive Octavio Alvídrez said the group is well placed to meet them.
To reach even the bottom of its silver range, Fresnillo needs about 9.6 million ounces in the fourth quarter. That is a little below this quarter's pace, so the target looks reachable, but it leaves little room for further grade problems.
Our read
Outlook: neutral. Output fell, but Fresnillo kept its full-year targets, so expected silver supply from the company is unchanged.
What to watch
- Whether ore grades recover at Juanicipio, Saucito and San Julián in the fourth quarter.
- Repairs and mill performance at Herradura after the fissure.
- Fresnillo's full-year production report in January.
For information only, not investment advice.
Silver price in India
metalscost.com India reference price as of 2026-11-01.
Detailed analysis
Timeline
- 2026-10-21: Fresnillo reports third-quarter production and keeps its 2026 guidance.
Supply Drivers
The world's largest primary silver producer still expects 42.0 to 46.5 million ounces this year.
Mining Production
Lower ore grades at three silver mines cut Fresnillo's quarterly silver output 11.6% on the year.
What could lift prices
- Silver output from the largest primary producer is down 11.5% so far this year.
- Falling ore grades are a lasting problem, not a one-off disruption.
What could weigh on prices
- Fresnillo kept its full-year targets, so expected supply is unchanged.
- The Fresnillo mine is improving, with gold output up 75% on the year.
Country impact
| Country | Impact | Reason |
|---|---|---|
| Mexico | Low | Lower output from Fresnillo's Mexican mines trims silver and gold supply. |
Industry impact
| Industry | Effect | Reason |
|---|---|---|
| Silver Mining | Negative | Falling ore grades are reducing output at major silver mines. |
Who gains, who loses
- Fresnillo mine: Better grades and recoveries lifted its gold output 75% on the year.
- Herradura: Mill stoppages after a fissure cut its gold output 18.1% in the quarter.
Other ways this could play out
- If grades recover in the fourth quarter, Fresnillo could finish near the middle of its silver range.
- If Herradura's problems continue, gold output could land near the bottom of guidance.
Price risks
- A guidance cut in January would signal tighter silver supply than now expected.
- Silver prices are driven far more by interest-rate and dollar moves than by one miner's output.
Technical view
Price is trading below both its 20-period and 50-period moving averages, a bearish alignment.
Computed from metalscost.com's own stored price history.
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