Fresnillo reported record full-year profits on the back of higher gold and silver prices on Tuesday, but said production would be lower this year.
The miner has been boosted by surging precious metals prices over the year, as investors flock to haven assets amid geopolitical uncertainty.
Annual pre-tax profits surged 180 per cent last year to $2.08billion in the year ended 31 December 2025.
Meanwhile, adjusted revenues jumped 27.6 per cent to $4.6billion and core earnings increased 80.7 per cent to $2.8billion.
But shares in Fresnillo slipped nearly 5 per cent after it reported a drop in production.
Silver production fell 13 per cent to 48.7million ounces last year, in line with guidance, while gold output slipped 5 per cent to 600,287 ounces, still beating guidance of 525,000-580,000 ounces.
Results: Fresnillo reported record full-year profits on the back of higher gold and silver prices
And Fresnillo expects production to come under pressure this year as costs rise, with demand ‘forecasted to continue to exceed supply’.
It forecasts silver production to be in the range of 42.0 to 46.5 moz and gold production expected to be in the range of 500 to 550 koz.
Chris Beauchamp, chief market strategist at IG said: ‘For shares that have seen such a big jump in valuation, the expected increase in production costs and a lower production forecast mean that investors see little reason to chase the shares at current levels, especially in such a risk-off environment.’
Octavio Alvídrez, the group’s chief executive, said: ‘These results demonstrate our ability to leverage our high-quality asset base while managing costs carefully to expand margins, resulting in significant cash generation and returns to our shareholders’.
Fresnillo shareholders received a record total dividend of 128.92 cents a share, against 32.5 cents in 2024, marking the highest payout since listing.
The FTSE 100-listed business said last year’s dividend payout was above the traditional policy to pay out 50 per cent of the profit attributable, permitted by strong cash generation throughout the year, which resulted in a high cash balance at year end.
Adam Vettese, a market analyst at eToro, said: ‘After a mammoth run, shares are in the red this morning with many investors sitting on outsized gains looking to lock in profits’.
Dan Coatsworth, head of markets at AJ Bell added: ‘There may also be a modicum of disappointment at the lack of a special dividend to reflect an extraordinary year for Fresnillo – even if the ordinary dividend has been hiked substantially and the company has gone over and above its policy of paying out 50 per cent of profit.
‘Fresnillo is swimming in cash like a veritable Scrooge McDuck but wants to keep some of these riches on hand to enable it to invest for future growth and to give it scope to target M&A – an approach which has some logic.’
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