Fresnillo’s Silver Slump and THG’s Stance: Is Now the Time to Take a Position?

The commodities and consumer sectors are serving up two very different stories this quarter. Fresnillo, the silver king of Mexico, is grappling with production headwinds, while THG is doubling down on its independence after rebuffing a bid for its prized Myprotein brand. Let’s dive into the details and see where the value lies.

Fresnillo: Silver Output Dips, But Guidance Holds—Buy the Dip or Wait?

Fresnillo (FRES.L) just reported its Q1 2025 production numbers, and they’re a mixed bag. While gold production surged 11% year-on-year to 156,100 ounces—thanks to higher grades at its Herradura mine—silver output plummeted 8.4% to 12.4 million ounces. The silver decline stems from the shuttering of the San Julian mine and operational challenges at Cienega, where grades and processing volumes took a hit.

But here’s the kicker: Fresnillo still reaffirmed its full-year 2025 guidance. Silver production is expected to stay between 49.0 million and 56.0 million ounces, while gold is projected to land between 525,000 and 580,000 ounces. This suggests management isn’t panicking, even as quarterly results fluctuate due to seasonal factors and mine-specific issues.

Investors should ask: Is this a buying opportunity? The stock has underperformed lately, but Fresnillo remains one of the world’s lowest-cost silver producers. If the long-term guidance holds, and silver prices stabilize (or rise), this could be a rare chance to dip into a top-tier miner at a discount. But be warned—the QoQ drops (gold down 24%, silver down 9.7%) highlight execution risks at its mines.

THG: Rejecting a “Lowball” Bid—Smart Move or Overconfidence?

Now, let’s shift to THG (THG.L), the UK-based e-commerce giant. The company just turned down a “wholly unsolicited, largely unfunded” bid from Selkirk Capital for its Myprotein brand. The offer? A valuation of £400 million–£600 million, mostly in Selkirk shares and some cash. THG’s response? A scathing dismissal, calling the bid “deeply undervaluing” and “lacking credible funding details.”

The key here is context. Myprotein is THG’s crown jewel, a high-margin health supplement brand with strong online traction. If Selkirk’s offer was indeed underwhelming—say, half of what Myprotein’s standalone value might command—THG’s refusal makes sense. But the market will scrutinize THG’s Q1 2025 update (due April 30) for clues on whether Myprotein’s growth is still on track.

THG’s stance also sends a message: it won’t be rushed into a deal that doesn’t maximize shareholder value. For investors, this is a vote of confidence in the brand’s long-term potential—but until we see hard numbers, skepticism remains.

The Bottom Line: Fresnillo for Silver Bulls, THG for Patient Holders

Fresnillo’s story hinges on two variables: silver prices and operational execution. At current prices, silver is trading around $22.50/oz—well below its 2020 peak of $29—but still a critical component in everything from EV batteries to solar panels. If demand stays strong, Fresnillo’s cost advantages could pay off. Meanwhile, investors should monitor its Q2 results to see if the production rebound happens as guided.

For THG, the Selkirk snub isn’t a red flag—it’s a reminder that the company isn’t desperate to sell. But until we see proof that Myprotein is hitting its growth targets, THG’s stock will remain volatile. The April 30 update could be a make-or-break moment.

In conclusion, Fresnillo offers a contrarian play for silver bulls willing to bet on resilient guidance, while THG is a high-risk, high-reward call for those who believe in its brands’ untapped potential. Both companies are at inflection points—so keep a close eye on the data, and don’t let emotion cloud your decisions.

Final Verdict:
- Fresnillo (FRES.L): Hold for now. Wait for a clearer picture on Q2 production and silver price trends.
- THG (THG.L): Avoid until the April update. If Myprotein’s growth accelerates, this could be a diamond in the rough.

Stay vigilant, and keep your powder dry until the facts line up!