Background on Minera Fresnillo and Its Significance
Minera Fresnillo, a leading global silver producer and a subsidiary of Peñoles, experienced a significant drop in its stock value on the Mexican Stock Exchange (BMV) on Friday. This decline occurred as international prices for precious metals fell and following the company’s announcement of tax payments made in countries where it operates during 2024.
Details of the Stock Performance
- Fresnillo’s Stock Performance: Fresnillo’s shares fell by 16.60% to 318.60 Mexican pesos per title, marking its lowest level since June 5, 2023. In London, where the company is listed, its stocks dropped by 1.13%.
- Peñoles’ Stock Performance: Shares of Industries Peñoles, Fresnillo’s parent company, declined by 0.80% on the BMV to 486.57 pesos each.
Impact of Falling Metal Prices
The decline in Fresnillo’s stocks coincided with expectations of a substantial drop in international metal prices, including gold, silver, and copper, due to the ongoing conflict between Israel and Iran.
- Silver Price Drop: The price of silver fell by 1% to $36.02 per ounce, closing the week with a 0.7% decrease.
- Gold Price Drop: Gold prices also fell on Friday and recorded a weekly loss. Spot gold traded flat at $3,369.63 per ounce, hitting a low since June 12. It dropped by 1.8% during the week. Gold futures in the US fell by 0.7% to $3,385.50 per ounce and declined by 1.88% during the week.
Tax Payments Announcement by Fresnillo
Fresnillo disclosed that during the previous year, it paid $79,377 million 340 thousand in taxes, royalties, and government quotas in Mexico, Peru, and Chile—the countries where it operates.
Market Performance
The BMV’s benchmark index, the S&P/IPC BMV, rose by 0.35% to 56,264.69 points, while the FTSE-BIVA gained 0.30% to 1,136 points on the same day.
Key Questions and Answers
- Q: Who is Minera Fresnillo and why is it significant? A: Minera Fresnillo is a major global silver producer and a subsidiary of Peñoles. Its stock performance impacts investors and reflects the health of the precious metals market.
- Q: What caused the drop in Fresnillo’s stocks? A: The decline was due to falling international precious metal prices and Fresnillo’s announcement of tax payments in operating countries.
- Q: How did other precious metals perform during this period? A: Silver prices fell by 1%, while gold prices dropped by 1.8% during the week. Platinum decreased by 2.6%, whereas palladium rose by 2.1%.
Context on Interest Rates and Geopolitical Tensions
The Federal Reserve maintained interest rates within the range of 4.25% to 4.50%, but slowed its overall perspective on interest rate cuts due to challenging economic outlooks. Donald Trump called for the Fed to lower interest rates, suggesting a reduction of 2.5 percentage points.
