Fresnillo hopes to produce 65 million ounces of silver and more than 400,000 ounces of gold by 2018.

Chief Executive Jamie Lomelin said, "The combination of increased production, strong cost control and high metal prices led 2010 to be the best year in the company's history."

"While continued market volatility and uncertainty regarding the pace of the economic recovery will undoubtedly offer challenges in 2011, I am confident that our focus on increasing productivity, containing costs, expanding the resource and reserve base, and strengthening our growth pipeline will create ongoing and sustainable value to all our stakeholders," he added.

Exploration expenses for the year totaled US$8.21 million, a 67.4% increase over 2009. The company reported an 18% increase in proven and probable silver reserves to 442 million ounces, while proven and probable gold reserves were up 6% to 4.5 million ounces in 2010. Total silver resources were up 14% to 1.5 billion ounces, while total gold resources increased 44% to 20.1 million ounces.

Eoin Treacy's view While costs are likely to remain a concern for precious metal miners generally, the number of companies raising their reserve estimates is encouraging. Record prices for silver, gold and palladium help to make previously unviable projects economic, which is promising from the perspective of long-term reserve life provided costs are kept under control. A significant number of silver miners had previously lagged the silver price but some have now rallied to at least keep pace with the metal price (Also see Comment of the Day on February 21st).

Silver Wheaton, Endeavour Silver Corp, Fortuna Silver Mines and First Majestic Silver all found support above their 200-day MAs in late January broke upwards to new high ground in the last week, in sympathy with the silver price. A clear downward dynamic would be required to check momentum beyond a brief pause. Silvercorp Metals has similar pattern but has not yet broken upwards.

Pan American Silver and Fresnillo also found support near their 200-day MAs in January but has lagged somewhat. They continue to rally towards their December peaks and considering the commonality across the sector, the upside can continue to be given the benefit of the doubt in the absence of a clear downward dynamic.

Coeur D'Alene consolidated in the region of the October 2009 peak from December and reasserted the medium-term uptrend this week. A sustained move back below $25 would be required to begin to question potential for additional upside. Silver Standard Resources has a relatively similar pattern but has not broken upwards yet.

Hecla Mining pulled back sharply this week and needs to hold above $9.75 to indicate that it is receiving the same short-term bullish interest as the above shares.