MEXICO CITY |
MEXICO CITY Jan 24 (Reuters) – Mexican mining company
Penoles (PENOLES.MX) quashed speculation on Monday that it
planned to sell its majority-owned subsidiary Fresnillo
(FRES.L), the world’s largest primary silver producer.
A rumor resurfaced earlier this month that Minera Frisco
MFRISCOA1.MX, controlled by Mexican billionaire Carlos Slim,
might bid for the London-listed gold and silver producer,
lifting Frisco’s shares.
“Neither Penoles, nor Fresnillo are for sale. Recent media
reports are not true,” Penoles said in a statement to the
Mexican stock exchange.
Rumors of Slim’s alleged interest in Fresnillo first
emerged several months ago and reappeared in Mexican newspapers
in mid-January, after the world’s richest man listed Frisco as
a separate company on the stock exchange.
Analysts have dismissed the rumors as unlikely since Slim
has a penchant for buying struggling businesses cheaply and
then turn them around to profitability.
Fresnillo produced record levels of gold and silver in
2010, beating its targets at a time of higher precious metal
prices, and said output should continue to rise this year.
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The company’s success would make it an expensive buy.
In the first 11 days of trading, Frisco’s stock rallied 74
percent from its spinoff auction price, Santander said in a
report on Monday, initiating its coverage of Slim’s mining
company with a hold recommendation.
“We believe that the significant growth in production …
is the main driver behind this rally. With silver production
projected to quadruple, and gold production to triple, which
would make Frisco the fastest-growing company in our Latin
American universe of coverage,” wrote Santander’s Victoria
Santaella.
(Reporting by Mica Rosenberg; editing by Gunna Dickson)