(RTTNews) - Silver and gold producer Fresnillo Plc (FRES.L: News ) reported Wednesday a 1% increase in total silver production and 31.5% increase in gold production for the first quarter of fiscal 2010. The company added that it is continuing its cost reduction efforts and efficiency initiatives. In its interim management statement, the company said total silver production for the three months ended March 31 edged up 1% to 10.21 million ounces from last year's 10.11 million ounces, and also up from fourth-quarter production of 9.96 million ounces. In the first quarter, the company's attributable silver production was 9.45 million ounces, up 3% from 9.22 million ounces in the prior year, excluding the Sabinas Silverstream. The company noted that the growth in attributable silver production was mainly due to increased ore tonnage milled at the Fresnillo mine, together with higher ore grades and increased tonnage milled at Ciénega, thanks to maintenance improvements. Fresnillo accrued 714,000 payable silver ounces under the Silverstream Agreement between Fresnillo plc and Peñoles, down 19.5% than last year's 887 thousand ounces, due to the expected temporary decline in the ore grade at the Sabinas mine. However, ore grades have recovered since the fourth quarter of 2009, resulting in a 19.4% increase in silver ounces accrued quarter on quarter. The second largest gold producer in Mexico said its total gold attributable production increased 31.5% to 85,097 ounces from 64,728 ounces last year, driven by the successful start-up of commercial production at Soledad-Dipolos and increased ore deposited and improved recovery at Herradura. The company added that production was also benefited by higher mill throughput, better grades and recovery at Ciénega. First-quarter gold production was 6.3% higher than 80,080 ounces in the previous quarter, largely due to the start-up of the Soledad-Dipolos mine. In the quarter, by-product lead production increased 6.4% to 4,489 tonnes from last year's 4,220 tonnes as a result of higher ore grades and increased volumes of ore milled at the Fresnillo mine. However, by-product lead production fell 3.5% from fourth-quarter's production of 4,652 tonnes as lead grades declined at Fresnillo. Quarterly by-product zinc production decreased 5.9% to 5,040 tonnes from prior year's 5,358 tonnes, hurt by lower recovery and grades at Fresnillo, while the production grew 8.5% from preceding quarter's production of 4,645 tonnes, as a result of higher grades and recovery at Ciénega.

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