REG - Fresnillo Plc - Report on Payments to Governments for 2022

FresnilloAnnouncement

29/06/2023 07:00

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RNS Number : 3092E  Fresnillo PLC  29 June 2023

Fresnillo plc

21 Upper Brook Street

London W1K 7PY

United Kingdom

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

 

29 June 2023

 

Fresnillo plc - Report on Payments to Governments for the year 2022

 

Background

This Report provides an overview of the payments to governments made by
Fresnillo plc and its subsidiaries for the year ended 31 December 2022 as
required under the UK Reports on Payments to Governments Regulation 2014 and
its amendment in December 2015 (the UK Regulations). This Report is also
intended to satisfy the requirements of the Disclosure and Transparency Rules
of the Financial Conduct Authority in the United Kingdom.

This Report is available for download from
http://www.fresnilloplc.com/investor-relations/regulatory-announcements/
(http://www.fresnilloplc.com/investor-relations/regulatory-announcements/)

The 'Basis of Preparation' section below contains information about the
content of the Report, the types of payments included and the principles that
have been applied in preparing the Report.

 

Basis for preparation - Report on Payments to Governments for the year 2022

Reporting entities

In accordance with the UK Regulations, this Report includes payments to
government made by Fresnillo plc and its subsidiary undertakings (Fresnillo).

Activities

Payments made by Fresnillo to governments arising from activities involving
the exploration, prospection, discovery, development and extraction of
minerals (extractive activities) are disclosed in this Report. When payments
cover both extractive and processing activities and cannot be split, the
payment has been disclosed in full.

Government

Government includes any national, regional or local authority of a country to
which Fresnillo has made a payment related to these regulations, and includes
any department, agency or entity that is controlled by such authority.

Project

Payments are reported at project level, except for payments that are not
attributable to a specific project which are reported at entity level. Within
the UK Regulations, a project is defined as being the operational activities
which are governed by a single contract, licence, lease, concession or a
similar legal agreement, and form the basis for payment liabilities with a
government. If agreements of this kind are substantially interconnected (i.e.
forming a set of operationally and geographically integrated contracts,
licenses, leases or concessions) these are treated for the purposes of these
Regulations as a single project. Indicators of integration include geographic
proximity and common operational management. For some payments that cannot be
attributable to a specific project, they were indicated at an entity level.

Materiality

In line with the UK Regulations, where a payment or a series or related
payments have not exceeded £86,000 (US$106,326 1  (#_ftn1) ) they have not
been disclosed.

Reporting currency

Payments disclosed in this report have been disclosed in US Dollars. Where
actual payments have been made in a currency other than US Dollars, i.e.
Mexican pesos (MXN), they have been translated using the annual average
exchange rate MXN / USD issued by The Central Bank of Mexico 2  (#_ftn2) .

Type of payments

a)    Taxes. There are taxes paid by Fresnillo on its income, including
special mining rights. Payments are reported net of refunds. In accordance
with the UK Regulations payments made in relation to consumption, sales or
employee taxes were excluded.

b)    Royalties.

c)    License fees, rental fees, entry fees and other considerations for
licenses or concessions. These are fees paid as consideration for acquiring a
license for gaining access to an area where extractive activities are
performed.

Payments reported are on a cash flow basis and refunds are included in the
year received (i.e. 2022).

Other types of payments that are required to be disclosed in accordance with
the UK Regulations are the following; however, for the year ended 31 December
2022, there were no such reportable payments made by Fresnillo to a
government:

-      Production entitlements

-      Dividends

-      Signature, discovery and production bonuses

-      Infrastructure improvements

 REPORT ON PAYMENTS TO GOVERNMENTS 2022
 SUMMARY REPORT PER COUNTRY (IN USD)
                                                                                                                              Production entitlements  Taxes ((1))  Royalties  Dividends  Bonuses  Licenses & concessions fees      Infrastructure improvements  Total
 MEXICO                                                                                                                       0                        191,609,046  704,652    0          0        30,326,734                       0                            222,640,432
 PERU                                                                                                                         0                        0            0          0          0        1,537,829                        0                            1,537,829
 CHILE                                                                                                                        0                        0            0          0          0        331,701                          0                            331,701
 Total                                                                                                                        0                        191,609,046  704,652    0          0        32,196,264                       0                            224,509,962

 MEXICO
 GOVERNMENT REPORT (IN USD)
                                                                                                                              Production entitlements  Taxes        Royalties  Dividends  Bonuses  Licenses & concessions fees      Infrastructure improvements  Total
 Ministry of Economics                                                                                                        0                        63,854,879   704,652    0          0        25,196,779                       0                            89,756,309
 Ministry of Finance and Public Credit                                                                                        0                        127,754,167  0          0          0        0                                0                            127,754,167
 National Water Commission                                                                                                    0                        0            0          0          0        5,129,955                        0                            5,129,955
 Total                                                                                                                        0                        191,609,046  704,652    0          0        30,326,734                       0                            222,640,432

 PROJECT REPORT (IN USD)
                                                                                                                              Production entitlements  Taxes        Royalties  Dividends  Bonuses  Licenses & concessions fees      Infrastructure improvements  Total
 PROJECT
 Ciénega                                                                                                                      0                        11,755,408   0          0          0        2,533,214                        0                            14,288,622
 Fresnillo                                                                                                                    0                        30,646,409   0          0          0        3,695,692                        0                            34,342,101
 Herradura / Nochebuena                                                                                                       0                        34,540,933   0          0          0        9,887,771                        0                            44,428,704
 Juanicipio ((2))                                                                                                             0                        26,149,145   0          0          0        144,144                          0                            26,293,289
 San Julián                                                                                                                   0                        22,423,698   704,652    0          0        5,582,809                        0                            28,711,158
 Saucito                                                                                                                      0                        34,606,248   0          0          0        8,483,105                        0                            43,089,353
 ENTITY LEVEL
 Comercializadora de Metales Fresnillo, S.A. de C.V.                                                                          0                        15,278,043   0          0          0        0                                0                            15,278,043
 Exploraciones Mineras Parreña S.A. de C.V.                                                                                   0                        7,974,334    0          0          0        0                                0                            7,974,334
 Fresnillo plc                                                                                                                0                        7,417,721    0          0          0        0                                0                            7,417,721
 Operaciones Fresnillo, S.A. de C.V.                                                                                          0                        633,799      0          0          0        0                                0                            633,799
 Servicios Administrativos Fresnillo, S.A. de C.V.                                                                            0                        183,307      0          0          0        0                                0                            183,307
 Total                                                                                                                        0                        191,609,046  704,652    0          0        30,326,734                       0                            222,640,432

 PERU
 GOVERNMENT REPORT (IN USD)
                                                                                                                              Production entitlements  Taxes        Royalties  Dividends  Bonuses  Licenses & concessions fees      Infrastructure improvements  Total
 Ministry of Energy and Mining                                                                                                0                        0            0          0          0        1,537,829                        0                            1,537,829
 Total                                                                                                                        0                        0            0          0          0        1,537,829                        0                            1,537,829
 PROJECT REPORT (IN USD)
                                                                                                                              Production entitlements  Taxes        Royalties  Dividends  Bonuses  Licenses & concessions fees      Infrastructure improvements  Total
 ENTITY LEVEL
 Fresnillo Perú,                                                                                                              0                        0            0          0          0        1,537,829                        0                            1,537,829
 S.A.C.
 Total                                                                                                                        0                        0            0          0          0        1,537,829                        0                            1,537,829

 CHILE
 GOVERNMENT REPORT (IN USD)
                                                                                                                              Production entitlements  Taxes        Royalties  Dividends  Bonuses  Licenses & concessions fees      Infrastructure improvements  Total
 Ministry of Mining                                                                                                           0                        0            0          0          0        331,701                          0                            331,701
 Total                                                                                                                        0                        0            0          0          0        331,701                          0                            331,701

 PROJECT REPORT (IN USD)
                                                                                                                              Production entitlements  Taxes        Royalties  Dividends  Bonuses  Licenses & concessions fees      Infrastructure improvements  Total
 ENTITY LEVEL
 Fresnillo Chile SpA.                                                                                                         0                        0            0          0          0        331,701                          0                            331,701
 Total                                                                                                                        0                        0            0          0          0        331,701                          0                            331,701

 Notes:
 1: All tax payments made in 2022 to the Ministry of Finance and Public Credit
 (the Mexican Tax authorities) are presented net of refunds received in 2022.
 2: Represents 100% of the payments related to Juanicipio (56% Fresnillo plc,
 44% MAG Silver)

 

 1  (#_ftnref1) Bloomberg 2022 average exchange rate 1.2363 USD/GBP

 2  (#_ftnref2) Banco de México 2022 average exchange rate 20.1250 MXN/USD

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