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Fresnillo says functional issues at Sabinas mine impacting silver production

Precious metals miner Fresnillo Plc. said on Tuesday that the Sabinas mine, owned by. Mexico's leading silver miner Industrias Penoles, was. experiencing operational difficulties, affecting silver. production.

Shares in the FTSE 100 miner fell more than 5% in. early trade.

Fresnillo did not reveal the nature of the functional. problems at the Mexican mine.

The Sabinas mine is the mineral source as part of the. Silverstream agreement in between Fresnillo and Penoles, checked in. 2007.

The Silverstream contract consists of a series of 12. contracts in between Fresnillo and Penoles, following which the. London-listed miner has the right to get all proceeds from. the payable silver.

The company also stated conversations are continuous with Penoles. to evaluate the level of the problems and any involved influence on. the contract.

Fresnillo, which mainly produces silver and gold, said. there was a reasonable possibility that the issues may lead to. considerable modifications to the Silverstream contract.

Last month, Fresnillo said its 2024 production outlook. remained in line with its previous forecast after posting a 1.5%. quarter-on-quarter drop in silver output for the 3rd quarter.

(source: Reuters)