Precious metals miner hit by delay and gold dip
PRECIOUS metals miner Fresnillo was underground after a new milling plant at one of its projects was hit by delays.
shares in the FTse100 digger sank 2.4pc, or 21p, to 872p following news the plant at the Juanicipio gold and silver mine in Mexico, in which it owns a 56pc stake, had not yet received permission to be connected to the national power grid.
The country’s state-owned electricity operator said the hold up was due to a shortage of workers caused by covid-19.
As a result, the timeline for the plant has been pushed back by six months. To mitigate the damage caused by the delay, the company is planning to use any spare capacity at its Minera Fresnillo and Minera saucito projects to process any material mined from Juanicipio, which will be used to supplement its cash flow until the plant is up and running.
‘While frustrating for all concerned, we recognise this situation is beyond the control of all parties’, said Fresnillo boss octavio Alvidrez.
Fresnillo’s shares were also weighed down by a dip in gold prices, which fell nearly 0.9pc as fading concerns over the omicron variant dampened demand for safer assets. silver prices also dropped by 1.5pc.
The FTSE 100 was up 0.7pc, or 48.59 points, to 7420.69 – the highest since the pandemic struck – while the FTSE 250 bounced 1.1pc, or 246.84 points, to 23,517.27.
Optimism has been boosted over the festive season by a steady stream of reports that omicron may result in lower numbers of patients ending up in hospital. Boris Johnson’s plans not to introduce any new restrictions before New Year’s eve also raised hopes that there will be no harsh lockdown in January.
The optimism lifted retailers, with Next up 2.1pc, or 166p, to 8110p, Primark owner AB Foods climbed 1.3pc, or 24p, to 2014p, and home furnishings seller Dunelm jumped 2pc, or 27p, to 1399p. Pubs and bar stocks also got a boost. JD Wetherspoon added 0.4pc, or 3.5p, to reach 933p, while Revolution Bars flowed 3.4pc, or 0.75p, higher to 23p.
some in the sector were less fortunate, with Wagamama owner The Restaurant Group falling 1.7pc, or 1.6p, to 92.9p after data emerged that sales at pubs, bars and restaurants on christmas Day were 60pc lower than in 2019.
Lockdown measures and travel restrictions in other countries also held back some travel stocks, with British Airways owner IAG down 2.2pc, or 3.18p, at 143.46p while easyJet fell 2.3pc, or 12.8p, to 550.2p and package holiday outfit TUI descended 6.2pc, or 15.2p, to 232.3p. The slump followed data that showed international flights to and from the uK plunged by 71pc in 2021 compared to prepandemic levels.
cruise ship outfit Carnival was also underwater, plunging 4.6pc, or 67p, to 1395.4p as it warned that one of its vessels, the Queen Mary 2, will skip a scheduled stop in New York due to concerns over the omicron variant.
Meanwhile, pharma giant AstraZeneca was looking healthy, rising 0.6pc, or 45p, to 8656p, after it closed a multi-million-pound deal with californian biotech firm ionis Pharmaceuticals.
The companies will jointly develop and sell eplontersen, a drug designed to treat TTr amyloidosis, a rare disease that stops organs from working effectively.
Mid-cap oil rig owner Diversified Energy also added 2.7pc, or 2.8p, to reach 106.4p after it sold a section of undeveloped land in Texas, netting around £26.7m in cash.
The funds will be used to reduce the company’s borrowing.