UPDATE 1-Mexican miner Penoles reports steep profit drop

Tue Mar 4, 2014 12:20pm EST

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MEXICO CITY, March 4 (Reuters) - Mexican mining company Industrias Penoles reported a sharply lower fourth-quarter profit on Tuesday, pointing to a drop in precious-metal prices, a charge taken on certain assets, and a new mining tax.

Penoles, which runs the world's largest primary silver producer, Fresnillo, said lower metals prices pulled down its revenue by 32 percent to 14.94 billion pesos ($1.14 billion).

The miner and metals processor reported a profit of 152.4 million pesos, compared with 2.934 billion pesos in the year-earlier period.

The company's net profit was also dampened by a one-time charge on the value of its Madero and Milpillas mining units, as well as a mining tax payment Penoles said it had to make under a new tax regime in Mexico. The charge and the tax payment totaled 1.427 billion pesos, the company said.

Fresnillo, which is listed on the London Stock Exchange, earlier on Tuesday reported a 64 percent drop in profit, sending its shares down 10 percent.

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