Within the two buying and selling days following Liberation Day (2 April), the Fresnillo (LSE: FRES) share price fell 14%. That turned out to be an unbelievable buy-the-dip second, as this FTSE 100 inventory has risen 29% since then. However is the transfer over, or can it proceed to maneuver larger?

Star performer

I’ve been banging the drum on Fresnillo for a while now. In simply over a 12 months, it has risen 142%, making it one of many FTSE 100’s greatest performers. As gold costs have surged to successive file highs, traders are starting to wake up to how low cost the inventory is.

At its FY24 outcomes again in March, the miner highlighted simply how a lot of a money cow it had turn into. Internet money from working actions surged 205% to $1.3bn.

Final 12 months, the common realised price for the gold it offered was $2,453, and for silver it was $28.78. To me, that gives some perspective about the place its future earnings are heading.

Gold costs have constantly sat above $3,000 for a while. For every troy ounce of gold it mines, its all-in sustaining value is $1,800. Including on remedy and refining fees and ancillary bills, and I estimate that Fresnillo’s revenue at the moment is within the ballpark of $1,000.

Silver transfer

In 2024, revenues between gold and silver have been just about break up 50:50. It is because it mines about 100 instances extra silver than gold. Certainly, it’s the world’s largest major silver producer.

As a continued silver bull, what I discover fairly superb is that Fresnillo’s price has stalled over the previous couple of months. Who is aware of when its massive transfer will come. However I stay satisfied that it’ll pop. And historical past has taught us that when it does transfer, it’s actually a blink-and-miss motion.

Silver is a much more versatile steel than gold. As an industrial steel, it finds use in a mess of various purposes. With its glorious electrical conductivity, it’s a key part of photo voltaic photovoltaics, EVs, and supporting infrastructure for EV charging stations. It’s additionally a significant part of digital items and 5G networks.

Dangers

The inventory has moved so explosively recently, that any sizeable pullback in valuable metals costs is more likely to result in a decline within the share price.

If steel costs ought to proceed their inexorable rise, although, there’s a actual threat that governments could take away mining concessions or add burdensome rules. We have now already seen China halt exports of uncommon earth minerals to the US. As geopolitical tensions rise, gold and silver are more and more changing into essential strategic property for nation states.

Finally, I imagine that the inventory will push larger within the years forward. Ought to silver actually get away, that’s after I would anticipate a serious transfer. Within the wake of the worldwide monetary disaster, hovering silver costs propelled the inventory 22 instances larger in simply two years.

Over the previous 10 years, sentiment in direction of valuable metals miners has been atrocious. That is quickly undoing, although, as extra traders realise simply how low cost the whole business has turn into. I definitely haven’t any intention of promoting my holding any time quickly. Certainly, if I didn’t maintain such a sizeable place in my Shares and Shares ISA, I might positively be shopping for extra.