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Fresnillo 2011 profit boosted by silver price

Tuesday, March 6th

Fresnillo, the world's largest primary silver producer, said robust metals prices boosted 2011 profit and helped more than double its final dividend, offsetting rising electricity prices, wages and the cost of tighter safety controls.

The Mexican miner has no debt and $685 million in cash on its balance sheet at the end of 2011, but said it was unlikely to repeat December's extraordinary dividend this year because of its exploration push and spending on new mines to offset lower grades at its flagship Fresnillo mine, active for 500 years.

London-listed Fresnillo also poured cold water on deal speculation, almost three years after withdrawing its bid for smaller Canadian rival MAG Silver, still its partner in the Juanicipio project.

"Prices at this moment are very high, it is very expensive to buy anything. And on top of that, the quality of many of the projects that we have evaluated (means they) do not give proper value to our shareholders," Chief Executive Jaime Lomelin said.

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