UPDATE: Fresnillo (LSE: FRES), a key player on the FTSE 100, has seen its stock skyrocket by an astounding 425% in 2025, leaving investors eager to know if this momentum can continue into 2026.
The surge comes as annual silver production is projected to hit around 50 million ounces, with the current silver price reaching approximately $75 an ounce after a remarkable 170% increase last year. This unexpected rise in silver prices is reshaping the market landscape and drawing attention to Fresnillo’s vast silver holdings.
Investors are particularly excited about Fresnillo’s unique position in the market. While many focus on traditional gold investments, Fresnillo’s extensive silver portfolio is positioned to benefit from both industrial demand and monetary investment. Currently, industrial applications account for about 60% of global silver consumption, driven by trends in solar energy, electronics, and electrification.
The disparity between demand and supply adds to the urgency. With new mines taking over a decade to develop, any increase in investment demand could trigger significant price fluctuations. This dual demand from industrial and investment sectors suggests a buoyant outlook for Fresnillo.
Investors are not just watching for price increases; they are also excited about dividends. Fresnillo recently announced a staggering 225% hike in its interim dividend, a clear signal of its robust financial health. The company is expected to release its full-year results soon, with many anticipating another remarkable payout.
“This isn’t just about chasing the next big gain; it’s about owning a scarce asset at a pivotal moment in the market,” said an industry expert.
However, potential investors should be aware of the risks. Silver is notoriously volatile, often experiencing sharp pullbacks without warning. Additionally, mining operations face inherent risks such as rising costs and regulatory changes, especially since operations are heavily concentrated in Mexico.
Commodity cycles can lead to dramatic price swings, and while Fresnillo’s exposure to both industrial and investment demand can enhance returns, it can also increase volatility. This stock may not suit those with a low-risk tolerance or short-term investment horizons.
The bottom line? Fresnillo embodies the extremes of silver’s market. For investors with a long-term strategy within a Self-Invested Personal Pension (SIPP), patience could yield significant rewards if the underlying demand trends remain strong. As the green transition and AI revolution continue to escalate electricity demands, Fresnillo appears well-positioned to capitalize on these structural shifts in the market.
As we look to 2026, the question remains: Can Fresnillo sustain its explosive growth? Investors are watching closely, and the forthcoming results will likely be pivotal in shaping future expectations.
Stay tuned for updates as Fresnillo prepares for its next chapter in this high-stakes investment landscape.
