Fresnillo Q3 production preview: strong H1 momentum faces sustainability test
The precious metals miner delivered 297% net income surge in H1 on favourable prices and cost control, but durability questions loom for upcoming results.
Exceptional H1 performance sets high bar
Fresnillo enters its next reporting cycle and 22nd of October third quarter (Q3) production report off the back of a strong first half of 2025, in which it delivered a striking rebound in profitability amid favourable precious metals prices and an assertive shift in operational priorities.
Over the past five years the Fresnillo share price has had an annualised price return of 15% and a total return (with reinvested dividends) of 18.5%. This equates to a five year price return of around 103% and a total return of 135%.
Fresnillo performance chart
Over the six months ending June, Fresnillo's revenue rose by approximately 30% to about US$1.94 billion, while net income surged roughly 297% to US$467.6 million - up from just US$117.7 million in the same period of 2024.
This performance was underpinned by disciplined cost controls, lower production costs (aided in part by a weaker Mexican peso), and increased gold volumes, particularly at the Herradura mine.
The magnitude of the profitability improvement demonstrates the operational leverage inherent in precious metals mining when prices and production align favourably.
Mixed operational performance across metals
Operationally, Fresnillo has maintained its production guidance for 2025 even in the face of headwinds in its silver operations and the exit from its Silverstream contract.
In its second quarter (Q2), the company reported attributable silver output (including the Silverstream contribution) of around 12.5 million ounces, down about 14.7% year-on-year (YoY).
While gold output increased by 21.3% to approximately 157,700 ounces, largely due to improved ore grades and inventory drawdowns at Herradura.
Silver portfolio undergoes strategic shift
Looking ahead, the key metrics and strategic questions will revolve around how well Fresnillo can sustain its cost momentum, manage volatility in metal prices, and navigate its evolving silver portfolio.
The termination of the Silverstream contract was costly (with a net accounting loss), but it removes a legacy overhang and gives the company more control over its silver economy.
On the gold side, Fresnillo has upgraded its gold guidance, reflecting confidence in continued strength at Herradura mine.
Conversely, silver guidance has been adjusted downward to account for the reduced contribution from Silverstream and weaker silver output across some mines.
Cash generation supports shareholder returns
Investors will scrutinise how margins evolve sequentially, given that much of the cost tailwinds may have already been realised in the first half.
Free cash flow generation is also a focal point - Fresnillo generated over US$1 billion of free cash flow in the first half, supporting a solid interim dividend of 20.8 US cents per share.
Furthermore, the company must manage exploration spend, capital allocation, and balance sheet strength as it approaches the seasonal second half.
This second half is more dependent on consistent execution and metal price resilience rather than one-off cost benefits or inventory adjustments.
Multiple risk factors warrant attention
On the risk front, fluctuations in silver and gold prices, operational interruptions (e.g. equipment, safety, permitting), and FX volatility remain key threats.
Political and regulatory risk in Mexico is also non-trivial, particularly given the country's evolving mining and environmental policies that could affect operating conditions.
Fresnillo analyst rating and technical analysis
Analysts may also question whether Fresnillo's strong first-half performance can be replicated or whether some of its gains were front-loaded.
The sustainability of margin improvements and cash generation will be crucial for determining whether current performance levels represent a new baseline or exceptional conditions.
According to LSEG Data & Analytics, analysts rate Fresnillo as a ‘hold’ with a target at 1,894.42p, around 28% lower than current levels (as of 15/10/2025).
Fresnillo LSEG Data & Analytics chart
TipRanks has a Smart Score of ’9 Outperform’ but also a ‘hold’ rating for Fresnillo (as of 15/10/2025).
Fresnillio TipRanks Smart Score chart
Fresnillo, up over 300% year-to-date, is on track for its third straight month of gains and is trading in record highs around the 2,650p mark.
Fresnillo daily candlestick chart
While the mid-September low at 2,088p underpins, the medium-term uptrend will remain intact with the psychological 3,000p mark remaining in sight.
Much further up sits a 161.8% Fibonacci extension at 3,867p. It is calculated by taking the distance of the November 2008-to-September 2011 uptrend, multiplying it by 1.618, and then projecting it upwards from the March 2024 low.
Investment considerations for precious metals mining
For investors considering Fresnillo, the upcoming results will test whether the company can convert exceptional H1 performance into sustained momentum.
- Research Fresnillo's operational performance, metal price exposure, and strategic portfolio changes to understand both opportunities and risks.
- Consider how precious metal price trends, production execution, and Mexican regulatory environment might affect the company's trajectory.
- Open an account with IG by visiting our website and completing the application process.
- Search for 'Fresnillo' or its ticker 'FRES' on our trading platform or app.
- Implement appropriate risk management given the volatility of mining stocks and their sensitivity to commodity prices.
Share dealing provides direct exposure to Fresnillo's precious metals production for investors who believe in sustained gold and silver price strength.
Spread betting and CFD trading offer flexible approaches for trading around earnings and commodity price movements.
In sum, Fresnillo's upcoming Q3 production update will be a test of durability. Markets will be watching whether the company can translate its H1 momentum into sustained performance, especially in silver where structural shifts are underway.
Important to know
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
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