Fresnillo (FRES) perfected the art of underpromising and overdelivering in the first half. It produced 13.6m ounces (oz) of silver in the June quarter, 11 per cent above consensus expectations. This was also ahead of the same period of 2019, although production did fall 3 per cent year-on-year for the half. Its financials for the first half, coming out 28 June, should confirm the positive start to 2020.
At the same time, the silver price has climbed significantly from the depths of March. It has just broken $20 (£15.70) an oz, a two-thirds increase on the March low and multiyear high.
Fresnillo’s steady first half and rampaging silver price has seen the company run right past the 740p level at which we said sell (after falling to around 530p in March), to trade at over 1,200p on the back of its first half production numbers.
Last IC view: Sell, 617p, 03 Mar 2020
