Friday May 9, 09:50 PM
Fresnillo suffers 6% fall during London debut
By Rebecca Bream
Fresnillo, the Mexican silver and gold producer, became the latest foreign miner to list on the London Stock Exchange (LSE: LSE.L - news) and
saw its shares fall 6 per cent. The company raised £905m through the sale of 163m new and existing shares at 555p at the bottom of the expected range of 555p-700p. The shares closed at 520p. Fresnillo, which is being demerged from Mexico's Penoles Group, will use some of the proceeds to develop new mines in Mexico and look for precious metals in Peru and Chile. The listing was co-ordinated by JPMorgan Cazenove, and bankers working on the deal said a fall in silver and gold prices over the past two months had hit the value of Fresnillo's offering. The tabular content relating to this article is not available to view. Apologies in advance for the inconvenience caused. The price of silver peaked in late February and early March at about $21 an ounce and has since dropped to $16.58 an ounce. Gold peaked in March at more than $1,000 an ounce but yesterday was trading at $875 an ounce. Fresnillo said that while demand for silver from the photography industry had dwindled, the long-term outlook was strong thanks to growing use of the metal in electronics, medicine and auto-catalysts. The group is the world's largest primary silver producer. Its main asset is the Fresnillo mine in Mexico, which has been producing silver since the 16th century. The company produced 34.4m ounces of silver and 280,000 ounces of gold last year and aims to double production in the next decade through new mines. Penoles, controlled by Alberto Bailleres, the Mexican billionaire, controls Fresnillo with a stake of about 75 per cent. The listing gave Fresnillo a market capitalisation of almost £4bn, enough to qualify for the FTSE 100.
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