Senior Analyst Patrick Chidley of HSBC says Fresnillo Plc (LON:FRES) is a stock that should be the core part of any precious metals portfolio, as it is a low-cost producer set to deliver great growth.
“Fresnillo is a silver and gold producer. It’s actually the largest silver producer. It’s a very solid company with a long track record, solid management, blue-chip management, and it’s a low cost producer,” Chidley said.
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Chidley says that on a gold-equivalent basis, Fresnillo is one of the lowest-cost producers he covers. He also expects to see improved production numbers in the coming years.
“It’s also got great growth that it will be delivering, with a new expanded mine coming online, around about now, in fact. So we should see better production numbers coming through in 2015 and 2016, and that’s going to help it to show that it’s actually a growth business,” Chidley said.
“Beyond that it’s got one of the largest and most attractive ground positions in Mexico that we think will eventually yield many more deposits to be exploited,” Chidley added.