While the incoming Trump administration's actual policy stance towards Mexico remains unclear, 67% of its costs are Peso-based and so the group would be a clear beneficiary of a weaker currency, notes analyst Jonathan Guy.
He says the stock has been upgraded to 'hold' from 'reduce' as the shares are now at the broker's unchanged target price of £14 in the aftermath of a falling back in gold and silver prices since Donald Trump was elected as the new president.
The broker noted that silver production in the third quarter missed expectations at 10.6mln ounces, with a further 1.16 million ounces produced through the Silverstream contracts with miner Penoles, but gold output was in line.
"Despite the issues at the Fresnillo mine we believe that guidance for 2016 of 49-51million ounces of silver and 850 to 870,000 ounces of gold is achievable," said Guy.
He reckons gold and silver are likely to remain under some pressure into the year end as the Fed appears on track to hike rates at its meeting in December.
"We expect the precious metals to then recover in January, as happened after both the commencement of tapering in 2013 and the hike in 2015, supported by stronger demand from China ahead of the lunar new year (28th Jan 2017)," he said.