REG - Fresnillo Plc - Fourth quarter production report

FresnilloAnnouncement

29/01/2025 07:00

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RNS Number : 0377V  Fresnillo PLC  29 January 2025

 
 
                                       Fresnillo plc

21 Upper Brook Street

London W1K 7PY

United Kingdom

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

 

29 January 2025

 

 

 

FOURTH QUARTER PRODUCTION REPORT

FOR THE THREE MONTHS ENDED 31 DECEMBER 2024

 

Octavio Alvídrez, Chief Executive Officer, said:

 

"I am pleased to report another solid year of production, in line with, or in
the case of gold, slightly ahead of the guidance we gave at the start of the
year. The result highlights our efforts to drive consistency and resilience
across our portfolio. Lead and zinc production were also up strongly over the
year again showing the improved overall result over the course of the year.
Improved cost performance and increased metals prices contributed to strong
profitability in 2024. Our priorities for 2025 are clear. Safety is our key
focus while we continue to drive efficiencies and cost reduction initiatives
across our mine sites."

 

 

HIGHLIGHTS

 

Silver

 

·    Full year attributable silver production (including Silverstream) of
56.3 moz remained flat vs. FY23 and was in line with guidance (55.0 to 62.0
moz). This was mainly explained by the higher ore grades and increased volumes
of ore processed at San Julián Veins and Saucito and, to a lesser extent, the
higher contribution of Juanicipio following the first full year of operation
at the beneficiation plant. These factors were offset by the decreased
production at San Julián DOB as it approached the end of its life, a decrease
in volume of ore processed and lower ore grade at Fresnillo, and lower
contribution from the Silverstream agreement.

 

·    Quarterly attributable silver production of 13.7 moz (including
Silverstream) was down 5.1% vs. 3Q24 primarily due to the cessation of mining
activities at San Julián DOB in November 2024 and a lower ore grade at
Juanicipio. This was partly mitigated by the higher ore grade at Saucito.

 

·    Quarterly attributable silver production (including Silverstream)
decreased 3.3% vs. 4Q23, mainly due the cessation of mining activities at San
Julián DOB and a decreased volume of ore processed and lower ore grade at
Fresnillo, partly offset by the higher ore grades and increased volumes of ore
processed at Saucito and San Julián Veins.

 

 

Gold

 

·    Full year attributable gold production of 631.6 koz, slightly ahead
of guidance (580 to 630 koz), up 3.4% vs. FY23 mainly due to the higher ore
grade at Fresnillo and increased ore processed and higher ore grades at
Saucito and San Julián Veins. This was partly offset by a reduction in gold
ounces recovered from the leaching pads at Noche Buena, following the
cessation of mining activities in May 2023.

 

·    Quarterly attributable gold production of 203.9 koz, up 30.1% vs.
3Q24, primarily due to higher ore grade and recovery rate at Herradura and, to
a lesser extent, higher ore grades at Saucito.

 

·    Quarterly attributable gold production increased 33.6% vs. 4Q23
primarily due to the increased volume of ore processed at Herradura and, to a
lesser extent, a higher ore grade and an increase in volume of ore processed
at Saucito and a higher ore grade at Fresnillo. This was partly offset by the
mine closure plan at Noche Buena.

 

 

By-Products

 

•     Full year attributable by-product lead and zinc production up
14.8% and 8.3% vs. FY23 respectively, mainly due to higher ore grades at
Fresnillo and Juanicipio and increased volume of ore processed and higher lead
ore grade at Saucito, partly offset by the decreased contribution from San
Julián DOB.

 

•     Quarterly attributable by-product lead production decreased 4.8%
vs. 3Q24 due to the lower contribution from San Julián DOB and decreased ore
processed at Fresnillo, partly mitigated by the increased volume of ore
processed and a higher ore grade at Saucito.

 

•     Quarterly attributable by-product zinc production decreased 10.4%
vs. 3Q24 mainly due to the decreased contribution from San Julián DOB, and
decreased volume of ore processed and lower ore grade at Fresnillo.

 

•     Quarterly attributable by-product lead production up 6.1% vs. 4Q23
due to the higher ore grade at Fresnillo and Juanicipio, partly offset by the
decreased contribution from San Julián DOB.

 

•     Quarterly attributable by-product zinc production remained flat
vs. 4Q23 primarily due to a higher ore grade and improved recovery rate at
Fresnillo, offset by the decreased contribution from San Julián DOB and a
lower ore grade at Saucito.

 

 

 

                     4Q24     3Q24     % Change  4Q23     % Change  FY24     FY23     % Change
 Silver (koz)        13,219   13,886   (4.8)     13,548   (2.4)     54,260   53,454   1.5
 Silverstream (koz)  481      552      (12.9)    612      (21.5)    2,047    2,828    (27.6)
 Total Silver (koz)  13,700   14,439   (5.1)     14,161   (3.3)     56,307   56,282   0.0
 Gold (oz)           203,942  156,759  30.1      152,605  33.6      631,573  610,646  3.4
 Lead (t)            16,863   17,707   (4.8)     15,895   6.1       66,400   57,833   14.8
 Zinc (t)            28,951   32,297   (10.4)    28,844   0.4       116,646  107,705  8.3

 

Expressed in silver equivalent ounces 1 , production was 106.8 moz, up 1.6%
(105.1 moz).

 

SAFETY PERFORMANCE

 

Safety remains our key priority. Our work to identify preventive measures,
focusing on training and maintaining stringent adherence to our safety
policies to provide a safer environment for our workforce, is continuous. We
are committed to instilling a true culture of safety across our business and
to meeting our Zero Fatalities target.

 

 
 

OUTLOOK

 

                                                           ACTUAL 2024  GUIDANCE 2025  EXPECTED 2026  EXPECTED 2027
 Attributable silver production, incl. silverstream (moz)  56.3         49 to 56       47 to 53       47 to 53
 Attributable gold production (koz)                        632          525 to 580     515 to 565     535 to 595
 Attributable lead production (kt)                         66           56 to 62       54 to 59       51 to 57
 Attributable zinc production (kt)                         117          93 to 103      85 to 95       93 to 103
 Silver eq. (moz)(1)                                       107          91 to 102      88 to 98       90 to 101

 

2025 silver guidance and 2026 expected silver production are unchanged.

 

In line with our strategy to focus on profit margins at the mines, the
decrease in the 2025 gold guidance reflects an adjustment to the mine plan at
Herradura, whereby the most profitable gold ounces will be extracted and
volumes of waste material moved decreased. In parallel, metallurgical and
underground mining optimisation projects continue, together with the ongoing
analysis of brownfield projects, to further enhance the production platform
and cost base for the 2026-2030 period, while we continue advancing our
greenfield projects, Rodeo, Tajitos, Orisyvo and Guanajuato.

 

RESERVES AND RESOURCES

Estimated Mineral Resources 2  are presented on an inclusive basis at all
mines except for exploration. Silver in consolidated overall mineral resources
of 2.25bn oz (+1.2% vs 2023) due to additional drill hole information and
revised economic assumptions at the Guanajuato and Lucerito exploration
projects and the Fresnillo mine, offset by depletion at most of our mines.
Gold in consolidated overall mineral resources of 38.5 moz, up 1.4% vs 2023,
primarily driven by the positive exploration results at Guanajuato, Lucerito
and Candameña, partly offset by depletion at our underground mines.

Silver in consolidated overall ore reserves 3  of 331.3moz, down 7.1% vs 2023,
mainly driven by mining depletion, revised economic assumptions and a more
conservative approach to reserve estimation at San Julián and Ciénega. Gold
in consolidated overall ore reserves of 7.2 moz, up 2.5% vs 2023, mostly due
to the higher price, revised economic assumptions and cut-off grades at
Herradura.

Following several years of refining our geotechnical models and improving our
ore control and grade reconciliation process, the Company will report proven
reserves at all its underground mines this year.

As in previous years, SRK and AMC continue the final stages of their audit and
further detail of the Company's exploration results, together with an analysis
of the figures above will be provided with the Full Year Results.

 

ITEMS IMPACTING THE FINANCIAL STATEMENTS

 

Ahead of the release of the Company's Full Year Results, we are providing an
update on factors expected to impact several items in the financial
statements, subject to the conclusion of the audit over the coming weeks.

 

Income and cash flow statements

 

The average realised gold and silver prices increased 25.3% and 21.7% vs 2023,
respectively. The average realised zinc price also increased 8.7%
year-on-year, while the average realised lead price decreased 2.7%. These
variations, combined with the increase in the volumes of all metals sold, and
lower treatment and refining charges, are expected to result in an increase in
Revenues of between 25-35% vs 2023.

 

The cost reduction initiatives across our mines, and to a lesser extent, the
positive effect of the devaluation of the Mexican peso against the US dollar
during the second half of the year which resulted in a 3% average devaluation
of the Mexican peso against the US dollar across the full year, is expected to
have a 2-3% reduction in the Group's consolidated adjusted production costs
when compared to 2023.

 

As a result, Gross profit is anticipated to be within the range of US$1.2-1.3
billion, up more than 135%. Profit from continuing operations is expected to
be further benefitted by the lower administrative, corporate and exploration
expenses and increase to a range of US$930-950 million in 2024, up more than
500%.

 

Free cash flow 4  is estimated to be within the range of US$820-US$850
million, with expected cash and cash equivalents at year end amounting to
US$1.2-US$1.3 billion.

Extraordinary non-cash items

 

As reported on 12th November 2024, Fresnillo received a notification from
Industrias Peñoles that its Sabinas mine is experiencing operational
difficulties impacting silver production. We have initiated a joint analysis
with Peñoles to assess the operational difficulties and financial situation
at the Sabinas mine and the process is expected to continue for four to five
months. However, based on the best information currently available and
applying the same criteria (mechanics) to value the Silverstream that we have
used since the IPO, Fresnillo expects, subject to the results of the external
audit, that the 2024 book value of the Silverstream contract on its balance
sheet will decrease significantly, which will affect the income statement. We
will update the market with any further detail as part of our year-end
financial reporting.

 

The effective tax rate for corporate income tax in the income statement was
negative in the last two years (-179.8% in 2023 and -27.1% in 2022) due to the
favourable impact of the spot revaluation of the Mexican peso against the US
dollar on deferred taxes as a result of the change in tax value of assets and
liabilities 5 . As the Company highlighted in the past, this favourable impact
on deferred taxes has reversed with the significant recent spot devaluation of
the Mexican peso (approximately 20%). As a result, the effective tax rate,
excluding the special mining rights, in 2024 is expected to be higher than
50%, above the 30% statutory tax rate. Note this does not affect actual tax
paid as reflected in the cashflow statement.

 

All the above figures are subject to change until the external audit
procedures are concluded.

 

 

FULL YEAR FINANCIAL RESULTS

 

Fresnillo will announce its full year 2024 results on 4th March 2025.

 

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

 Mark Mochalski
 Mexico City Office                                             Tel: +52 55 52 79 3206

 Ana Belem Zárate
 SODALI

 Peter Ogden                                                    Tel: +44 (0)7793 858 211

 

 

 

MINING OPERATIONS

FRESNILLO MINE PRODUCTION

 

                    4Q24     3Q24     % Change  4Q23     % Change   FY24      FY23       % Change
 Ore Processed (t)  543,457  578,523  (6.1)     609,135  (10.8)    2,333,973  2,618,509  (10.9)

 Production
 Silver (koz)       2,393    2,590    (7.6)     2,781    (14.0)    10,242     12,772     (19.8)
 Gold (oz)          13,922   14,396   (3.3)     8,149    70.8      51,473     36,909     39.5
 Lead (t)           6,938    7,526    (7.8)     5,226    32.8      27,088     21,373     26.7
 Zinc (t)           13,409   14,365   (6.7)     10,592   26.6      50,702     45,386     11.7

 Ore Grades
 Silver (g/t)       151      155      (2.6)     160      (5.6)     152        170        (10.6)
 Gold (g/t)         1.06     1.04     1.9       0.59     79.7      0.92       0.62       48.4
 Lead (%)           1.49     1.50     (0.7)     1.03     44.7      1.35       0.96       40.6
 Zinc (%)           3.25     3.32     (2.1)     2.42     34.3      2.93       2.32       26.3

 

Quarterly silver production decreased vs. 3Q24 and 4Q23 driven by the narrower
veins and increased dilution which decreased volumes of ore processed and
impacted the ore grade.

 

Full year silver production decreased 19.8% vs. FY23 primarily driven by a
decreased volume of ore processed and a lower ore grade due to: i) a higher
proportion of volumes extracted from western areas of the mine which have a
lower silver ore grade, but higher gold and base metal content; ii) lower
dilution control in narrower veins; iii) lower availability of ore to feed the
beneficiation plant as ore was hauled via ramps while the two sections of the
deepened San Carlos shaft were connected and commissioned; iv) changes to the
mine plan as cut-off grades in several areas were adjusted to reflect higher
metal prices.

 

Mine development rates increased to an average of 3,424m per month in 4Q24
(3Q24: 3,296m per month) mainly due to increased availability of contractor's
equipment and the contribution of the tunnel boring machine.

 

Quarterly gold production decreased 3.3% vs 3Q24 mainly due to a reduction in
the volume of ore processed, partly mitigated by the higher ore grade and
improved recovery rate.

 

Quarterly and full year gold production increased significantly vs. 4Q23 and
FY23 driven by the higher ore grade and recovery rate, partly offset by the
decreased volume of ore processed.

 

By-product lead and zinc production also increased substantially year on year
mainly due to the higher ore grades in the western areas of the mine, as
mentioned above.

 

The silver ore grade in 2025 is expected to be in the range of 160 to 180 g/t,
while the gold ore grade is estimated to be between 0.60 to 0.70 g/t.

 

SAUCITO MINE PRODUCTION

 

                    4Q24     3Q24     % Change  4Q23     % Change  FY24        FY23      % Change
 Ore Processed (t)  599,028  590,362  1.5       576,189  4.0       2,363,960  2,163,982  9.2

 Production
 Silver (koz)       3,967    3,697    7.3       3,399    16.7      14,474     12,102     19.6
 Gold (oz)          25,205   19,856   26.9      17,256   46.1      82,718     72,763     13.7
 Lead (t)           6,425    5,738    12.0      6,311    1.8       22,729     19,535     16.4
 Zinc (t)           9,213    9,280    (0.7)     10,335   (10.9)    34,097     32,991     3.4

 Ore Grades
 Silver (g/t)       231      219      5.5       204      13.2      214        195        9.7
 Gold (g/t)         1.67     1.35     23.7      1.20     39.2      1.40       1.34       4.5
 Lead (%)           1.25     1.13     10.6      1.27     (1.6)     1.12       1.06       5.7
 Zinc (%)           1.96     1.99     (1.5)     2.29     (14.4)    1.85       1.96       (5.6)

 

Quarterly and full year silver production increased vs. all comparable periods
primarily due to the higher ore grade mainly in the El Roble vein, Alamito,
Mezquite, Central and Natalias areas and an increased volume of ore processed
as a result of an increase in productivity and availability of equipment,
enabling a closer adherence to the mine plan.

 

Quarterly and full year by-product gold production increased vs. all
comparable periods mainly due to a higher ore grade and the increase in volume
of ore processed.

 

Mine development rates remained broadly stable at 2,527m per month in 4Q24
(3Q24: 2,500m per month). Activities to timely prepare the areas for
development and increase equipment availability continued during the quarter.

 

The silver ore grade for 2025 is expected to be in the range of 200-220 g/t,
while the gold grade is estimated to be between 0.90-1.10 g/t.

 

PYRITES PLANT

 

                                    4Q24*   3Q24*   % Change  4Q23*   % Change  FY24*    FY23*    % Change
 Pyrite Concentrates Processed (t)  40,917  39,845  2.7       48,167  (15.1)    157,184  162,344  (3.2)

 Production
 Silver (koz)                       566     527     7.4       328     72.6      1,940    861      125.3
 Gold (oz)                          1,024   790     29.6      599     71.0      3,153    1,960    60.9

 Ore Grades
 Silver (g/t)                       590     564     4.6       331     78.2      558      248      125.0
 Gold (g/t)                         2.68    2.14    25.2      1.71    56.7      2.30     1.59     44.7

*Includes concentrates of Fe from Saucito and Fresnillo.

 

 

JUANICIPIO - ATTRIBUTABLE

 

                    4Q24     3Q24     % Change  4Q23*    % Change  FY24     FY23*    % Change
 Ore Processed (t)  186,823  186,082  0.4       194,189  (3.8)     743,780  710,504  4.7

 Production
 Silver (koz)       2,384    2,736    (12.9)    2,523    (5.5)     10,400   9,415    10.5
 Gold (oz)          5,063    6,049    (16.3)    5,931    (14.6)    21,856   20,570   6.3
 Lead (t)           2,510    2,707    (7.3)     2,334    7.5       9,957    7,202    38.3
 Zinc (t)           3,971    4,257    (6.7)     3,832    3.6       16,737   11,368   47.2

 Ore Grades
 Silver (g/t)       417      481      (13.3)    467      (10.7)    468      472      (0.8)
 Gold (g/t)         1.15     1.32     (12.9)    1.37     (16.1)    1.25     1.27     (1.6)
 Lead (%)           1.49     1.58     (5.7)     1.35     10.4      1.50     1.15     30.4
 Zinc (%)           2.79     2.83     (1.4)     2.44     14.3      2.78     2.06     35.0

* Includes ore processed from initial tests during the commissioning of the
Juanicipio plant and ore processed at the Fresnillo and Saucito beneficiation
plants.

 

Attributable quarterly silver and gold production decreased 12.9% and 16.3%
vs. 3Q24 respectively, mainly driven by the lower ore grade in accordance with
the mine plan.

 

Attributable quarterly silver and gold production decreased 5.5% and 14.6% vs.
4Q23 respectively, mainly due the to lower ore grades and the decrease in
volume of ore processed. This was partially mitigated by the improved recovery
rate as the flotation process was optimised

Attributable full year silver and gold production increased 10.5% and 6.3% vs.
FY23 respectively, as the commissioning of the flotation plant concluded in
1Q23 and the ramp up of the beneficiation plant took place in 2Q23 and 3Q23.
This compared to a full year of operation at nameplate capacity and process
plant optimisation.

 

The silver ore grade in 2025 is expected to be in the range of 380-430 g/t,
while the gold grade is estimated to be between 1.2-1.4 g/t.

 

CIÉNEGA MINE PRODUCTION

 

                    4Q24     3Q24     % Change  4Q23     % Change  FY24       FY23       % Change
 Ore Processed (t)  267,103  272,133  (1.8)     292,612  (8.7)     1,058,778  1,064,543  (0.5)

 Production
 Gold (oz)          9,866    8,887    11.0      9,187    7.4       39,422     35,934     9.7
 Silver (koz)       1,035    1,218    (15.0)    1,213    (14.7)    4,834      4,335      11.5
 Lead (t)           618      669      (7.6)     693      (10.8)    2,922      2,881      1.4
 Zinc (t)           892      632      41.1      723      23.4      3,168      3,550      (10.8)

 Ore Grades
 Gold (g/t)         1.25     1.14     9.6       1.07     16.8      1.27       1.14       11.4
 Silver (g/t)       141      163      (13.5)    151      (6.6)     166        147        12.3
 Lead (%)           0.39     0.39     0.0       0.39     0.0       0.43       0.44       (2.3)
 Zinc (%)           0.59     0.44     34.1      0.47     25.5      0.55       0.63       (12.7)

Quarterly and full year gold production increased vs. all comparable periods
mainly due to the higher ore grade, partially offset by the lower volume of
ore processed.

Quarterly silver production decreased vs 3Q24 and 4Q23 mainly due to the lower
silver ore grade in accordance with the mine plan.

Full year silver production increased 11.5% vs. FY23 due to the higher ore
grades at the Jessica Transversal and Taspana Sur areas.

The gold and silver ore grades for 2025 are estimated to be in the ranges of
1.1-1.3 g/t and 120-140 g/t respectively.

 

SAN JULIÁN MINE PRODUCTION

 

                                  4Q24     3Q24     % Change  4Q23     % Change  FY24       FY23       % Change
 Ore Processed Veins (t)          329,250  314,786  4.6       291,661  12.9      1,236,682  1,142,309  8.3
 Ore Processed DOB (t)            158,077  435,804  (63.7)    525,081  (69.9)    1,554,108  2,073,847  (25.1)

 Total production at San Julián
 Gold (oz)                        13,573   12,412   9.4       11,034   23.0      51,413     44,487     15.6
 Silver (koz)                     2,683    2,997    (10.5)    3,156    (15.0)    11,836     13,349     (11.3)

 Production Veins
 Gold (oz)                        13,394   11,914   12.4      10,117   32.4      49,633     41,009     21.0
 Silver (koz)                     2,287    2,095    9.2       1,719    33.0      8,443      5,559      51.9

 Production DOB
 Gold (oz)                        179      498      (64.1)    918      (80.5)    1,779      3,478      (48.8)
 Silver (koz)                     396      902      (56.1)    1,437    (72.4)    3,393      7,791      (56.4)
 Lead (t)                         372      1,068    (65.2)    1,332    (72.1)    3,704      6,843      (45.9)
 Zinc (t)                         1,466    3,763    (61.0)    3,362    (56.4)    11,942     14,410     (17.1)

 Ore Grades Veins
 Gold (g/t)                       1.31     1.24     5.6       1.13     15.9      1.31       1.17       12.0
 Silver (g/t)                     234      226      3.5       200      17.0      232        166        39.8

 Ore Grades DOB
 Gold (g/t)                       0.06     0.06     0         0.08     (25.0)    0.06       0.08       (25.0)
 Silver (g/t)                     91       77       18.2      100      (9.0)     81         136        (40.4)
 Lead (%)                         0.39     0.34     14.7      0.33     18.2      0.33       0.43       (23.3)
 Zinc (%)                         1.25     1.14     9.6       0.86     45.3      1.04       0.94       10.6

 

SAN JULIÁN VEINS

Quarterly and full year gold and silver production increased vs. all
comparative periods mainly due to the increased volume of ore processed as a
result of the timely preparation of stopes and the implementation of an
operational plant optimisation programme, which increased the processing
capacity. Furthermore, the higher gold and silver ore grades at the San
Antonio, La Dura, Eliza and Última Tierra areas, together with improved
dilution control in wider veins, also contributed to the increase in quarterly
and full year gold and silver production.

Silver and gold ore grades in 2025 are expected to be in the ranges of 200-220
g/t and 1.10-1.30 g/t respectively.

 

SAN JULIÁN DISSEMINATED ORE BODY (DOB)

Quarterly and full year silver production decreased vs. all comparative
periods due to the gradual decrease in production at this mine and the
unforeseen geotechnical behavior of the ore body as it approached the end of
its mine life. Mining activities concluded in November 2024 as per previous
guidance.

 

HERRADURA TOTAL MINE PRODUCTION

 

                          4Q24        3Q24        % Change  4Q23        % Change  FY24        FY23        % Change
 Ore Processed (t)        6,032,903   6,257,754   (3.6)     4,534,745   33.0      22,742,296  20,223,914  12.5
 Total Volume Hauled (t)  22,309,345  26,148,467  (14.7)    24,409,823  (8.6)     97,692,174  99,541,551  (1.9)

 Production
 Gold (oz)                129,882     89,030      45.9      93,432      39.0      360,598     355,485     1.4
 Silver (koz)             187         119         57.1      147         27.2      524         611         (14.2)

 Ore Grades
 Gold (g/t)               0.85        0.70        21.4      0.84        1.2       0.71        0.76        (6.6)
 Silver (g/t)             1.37        1.10        24.5      1.69        (18.9)    1.20        1.57        (23.6)

 

Quarterly gold production increased 45.9% vs. 3Q24 mainly due to the higher
ore grade and improved recovery rate as access to higher grade oxidised ore
areas continued. This was partially offset by the lower volume of ore
processed.

Quarterly gold production increased 39.0% vs. 4Q23 as a result of the higher
volume of ore processed and, to a lesser extent, higher ore grade and improved
recovery rates.

Full year gold production increased slightly vs. FY23 due to a higher volume
of ore processed from the optimisation of equipment utilisation. This was
partially offset by the lower ore grade as a result of the change in the mine
sequence in 1H24 and the greater height of the leaching pads, which increased
the residence time of the solution on the pads and slowed the overall speed of
recovery.

The average gold ore grade in 2025 is expected to be in the range of 0.50-0.70
g/t.

 

NOCHE BUENA

 

5,407 ounces of gold were recovered from the leaching pads at Noche Buena in
4Q24. Full year gold production totalled 20,941 ounces. As previously
announced, mining activities concluded in May 2023, and the closure mine plan
continues as expected.

 

SILVERSTREAM

Quarterly and full year silverstream production decreased vs. all comparable
periods mainly due to the lower ore grade, decrease in volume of ore processed
and recovery rates as a result of a stoppage to change the mining method and
reduce dilution in narrower veins. However, lower availability of equipment to
fill and prepare mine areas with higher silver grades further impacted
production at the Sabinas mine.

 

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 eight operating mines, all of them in Mexico - Fresnillo,
Saucito, Juanicipio, Ciénega, Herradura, Soledad-Dipolos(1), Noche Buena and
San Julián (Veins and Disseminated Ore Body) and four advanced exploration
projects - Orisyvo, Rodeo, Guanajuato and Tajitos 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'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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 1  Silver eq. ounces are calculated converting only gold into silver ounces
with an Au:Ag ratio of 80:1. Lead and zinc production is not included in
silver eq. ounces.

 2  Mineral Resources are based on metal prices of US$1,750/oz Au underground
mines except for Centauro Profundo at US$1,950/oz Au, pit shell at US$1,950/oz
Au and US$23/oz Ag.

 

 3  Ore Reserves are based on metal prices of US$1,750/oz Au and US$23/oz Ag.
for our underground and open pit mines.

 4  Free cash flow calculated as net cash flow after the effect of foreign
exchange on cash, less dividend payments.

 5  In addition to the effect of inflation on monetary assets and liabilities.

 

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