REG - Fresnillo Plc - AGM Statement

FresnilloAnnouncement

17/05/2022 08:45

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RNS Number : 7572L  Fresnillo PLC  17 May 2022

 
 
  Fresnillo plc

21 Upper Brook Street

London W1K 7PY

United Kingdom

www.fresnilloplc.com (http://www.fresnilloplc.com)

 

17 May 2022

 

Fresnillo plc - AGM Statement

 

Fresnillo plc (the "Company") will hold its Annual General Meeting today.
Chairman Mr Alejandro Baillères will make the following statement:

 

It is a privilege to be presenting to you today in my first AGM as Fresnillo,
plc's Chairman.

I would like to begin by paying tribute to our former Chairman, and my father,
Alberto Baillères. Don Alberto was a remarkable man who achieved many
milestones in his life, but never forgot what was most important. He led
Fresnillo with distinction for many years. As a Board, we continue to miss his
leadership, and as a son, I continue to miss my father. I am absolutely
committed to building on his legacy to create a stronger and more resilient
company, while remaining faithful to his values.

Our Purpose is to contribute to the wellbeing of people through the
sustainable mining of silver and gold. I am proud to tell you that in 2021, we
remained committed to this purpose which continues to be at the heart of how
we think and act. Our purpose has supported our people and their communities
through what were, at times, difficult and demanding days.

As we anticipated, the pandemic again disrupted our activities in 2021,
although not to the same extent as the previous year. The introduction of new
labour legislation added to the challenges we faced and caused additional
disruption, primarily at our underground mines.

A fourth wave of Covid-19 reached Mexico at the end of the year. Though we are
thankful this variant presented a lesser health risk, it still impacted us due
to higher rates of covid-related staff absenteeism. The safety and well-being
of our people is our priority and our covid protocols were effective in
limiting the spread. Nonetheless, this did have an impact on production,
though I am pleased to say this has now lessened.

A second major challenge to the business was presented by the labour reform in
Mexico restricting the ability to subcontract labour, which came into effect
from 1st September 2021. This resulted in the requirement to internalise a
high proportion of our contractor workforce. Historically, a trained and
motivated contractor workforce has been a key aspect of our way of working and
the reform has necessitated significant work. Ultimately, we believe that
although the move away from outsourcing will be a challenge in the short term,
in the medium and long term it will lead to a more cohesive and resilient
workforce.

Despite these, we delivered a creditable performance. Silver production of
53.1 moz (including Silverstream), was marginally below guidance, but flat
versus 2020. Gold production of 751.2 koz, was ahead of guidance, down 2.4%
versus the previous year. We have started 2022 in line with our expectations
and our guidance is unchanged.

We reported US$2,847.9 million in adjusted revenue, an increase of 9.2%,
primarily due to better precious metals prices. Gross profit rose year-on-year
by 6.5% to US$936.9 million. Generating returns for our shareholders is key
and a priority - we declared an interim dividend of 9.90 US cents per share,
with a final dividend of 24.0 US cents per share, bringing the total for the
year to 33.9 US cents per share, in line with our consistent dividend policy.

We made good progress on our development projects in the year. The new
Juanicipio mine was completed at the end of 2021 as planned. However, approval
to complete the tie-in to the national power grid was not granted by Comisión
Federal de Electricidad (CFE) -a government company- before year end as
expected. The mill commissioning timeline was therefore extended to midyear.
Similar delays also affected the start-up of the new Pyrites Plant at the
Fresnillo mine.

Our long term growth pipeline remains strong. We continue to invest heavily in
our exploration efforts and we are making steady progress with our next
development projects at Rodeo and Orisyvo, which will contribute to gold
production in the following years.

In April 2021, we announced a number of Board changes that took effect at the
AGM in June, including my appointment as Chairman. We were delighted to
welcome two new Directors to the Board, Héctor Rangel and Eduardo Cepeda who
have already brought valuable insights to our meetings. Your Board continues
to function extremely well, providing leadership, insight and challenge to the
executive team, not least a focus on our culture and remaining faithful to our
purpose and values. This includes promoting the participation of women in our
workforce, with the total percentage of women increasing to 11.0% in 2021 from
9.7% in the previous year. Our Board composition during 2021 meant that we
were one of the most gender progressive companies in Mexico according to both
the 50/50 Women on Boards Gender Diversity Index and the Women Corporate
Directors Foundation.

We are committed to playing our part in fighting climate change by mitigating
our environmental impact wherever possible. We have completed our project in
Herradura to install dual fuel engines that run on both Liquid Natural Gas
(LNG) and diesel as planned and anticipate seeing the first environmental and
cost benefits in 2022, as both our diesel consumption and CO(2) footprint
decrease. We are focused on achieving our target of using wind power to
provide 75% of our electricity by 2030 and continue to analyse our Energy
Strategy in order to pursue a decarbonisation pathway that will be
operationally and technologically viable.

The Board has also continued to monitor management's efforts to ensure that
the working environment is a healthy and safe one; both through the ongoing
Covid-19 related measures in place at our sites as well as reinforcing the
implementation of the 'I Care, We Care' safety programme throughout our
operations.

Though we remain cautious, we face the future with confidence. Challenges do
remain - in common with other industry sectors, the labour market remains
tight, with considerable competition for talent in addition to increased cost
pressures and disruption on supply chains. However, I am pleased to say we
have built up our resilience in 2021 and equipped Fresnillo with the strength
and attributes to continue delivering long-term value to all our stakeholders.

As always, I would like to close by thanking all our people for their
commitment and hard work during the year and our shareholders for their
support.

 

-Ends-

 

 

For further information, please visit our website www.fresnilloplc.com
(http://www.fresnilloplc.com) or contact:

 FRESNILLO PLC                                                  Tel: +44 (0)20 7399 2470

 London Office

 Gabriela Mayor, Head of Investor Relations

 Patrick Chambers
 Mexico City Office                                             Tel: +52 55 52 79 3206

 Ana Belem Zárate

 POWERSCOURT                                                    Tel: +44 (0)7793 858 211

 Peter Ogden

 

ABOUT FRESNILLO PLC

Fresnillo plc is the world's largest primary silver producer and Mexico's
largest gold producer, listed on the London and Mexican Stock Exchanges under
the symbol FRES.

Fresnillo plc has seven operating mines, all of them in Mexico - Fresnillo,
Saucito, Ciénega (including Las Casas Rosario & Cluster Cebollitas),
Herradura, Soledad-Dipolos(1), Noche Buena and San Julián (Veins and
Disseminated Ore Body), two development projects - the Pyrites Plant at
Fresnillo and Juanicipio, both of which have been completed but approvals to
operate are pending, and three advanced exploration projects - Orisyvo, Rodeo
and Guanajuato, as well as a number of other long term exploration prospects.

Fresnillo plc has mining concessions and exploration projects in Mexico, Peru
and Chile.

Fresnillo plc has a strong and long tradition of exploring, mining, a proven
track record of mine development, reserve replacement, and production costs in
the lowest quartile of the cost curve for silver.

Fresnillo plc's goal is to maintain the Group's position as the world's
largest primary silver company and Mexico's largest gold producer.

(1) Operations at Soledad-Dipolos are currently suspended.

 

FORWARD-LOOKING STATEMENTS

Information contained in this announcement may include 'forward-looking
statements'. All statements other than statements of historical facts included
herein, including, without limitation, those regarding the Fresnillo Group's
intentions, beliefs or current expectations concerning, amongst other things,
the Fresnillo Group's results of operations, financial position, liquidity,
prospects, growth, strategies and the silver and gold industries are
forward-looking statements. Such forward-looking statements involve risk and
uncertainty because they relate to future events and circumstances.
Forward-looking statements are not guarantees of future performance and the
actual results of the Fresnillo Group's operations, financial position and
liquidity, and the development of the markets and the industry in which the
Fresnillo Group operates, may differ materially from those described in, or
suggested by, the forward-looking statements contained in this document. In
addition, even if the results of operations, financial position and liquidity,
and the development of the markets and the industry in which the Fresnillo
Group operates are consistent with the forward-looking statements contained in
this document, those results or developments may not be indicative of results
or developments in subsequent periods. A number of factors could cause results
and developments to differ materially from those expressed or implied by the
forward-looking statements including, without limitation, general economic and
business conditions, industry trends, competition, commodity prices, changes
in regulation, currency fluctuations (including the US dollar and Mexican Peso
exchanges rates), the Fresnillo Group's ability to recover its reserves or
develop new reserves, including its ability to convert its resources into
reserves and its mineral potential into resources or reserves, changes in its
business strategy and political and economic uncertainty.

LEI: 549300JXWH1UV5J0XV81

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