Fresnillo cuts 2019 output targets on lower ore grades

Adds premarket indications, background, Q2 output numbers

July 17 (Reuters) - Miner Fresnillo FRES.L cut its output targets for 2019, citing lower-than-expected ore grades and delays in construction at its Herradura gold mine in Mexico after reporting a drop in second-quarter output from a year earlier.

The FTSE 100-listed company cut its 2019 gold production forecast to 880,000-910,000 ounces from a prior target of 910,000-930,000 ounces and silver production to 55-58 million ounces from 58-61 million ounces.

Fresnillo had said in May that 2019 would be more challenging than 2018 and that it was disappointed in not having met its long-term silver target of 65 million ounces.

The company on Wednesday reiterated the warning and said adjusted production costs for the first half was expected to be $135 million more than the same period a year ago due to lower ore grades and hurdles at its Herradura gold mine.

Fresnillo, Mexico's largest gold producer, said gold production fell 5.4% to 221,307 ounces for the three months ended June 30, while silver production was 6% lower at 14.4 million ounces.

Premarket indicators have pegged the company's shares to fall 4-5% at markets open.

(Reporting by Muvija M in Bengaluru; editing by Patrick Graham and Arun Koyyur)

((Muvija.M@thomsonreuters.com; within U.S. +1 646 223 8780, outside U.S. +91 80 6749 3638; Reuters Messaging: muvija.m.thomsonreuters.com@reuters.net))

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