REG - Fresnillo Plc - 2025 Half-year Report
Tue 07:02
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RNS Number : 0013U Fresnillo PLC 05 August 2025
Fresnillo plc
21 Upper Brook Street
London W1K 7PY
United Kingdom
www.fresnilloplc.com (http://www.fresnilloplc.com)
5 August 2025
Fresnillo plc interim results
for the six months to 30 June 2025
Octavio Alvídrez, Chief Executive Officer, commented:
"I am pleased to report a strong operating and financial result in the first
half of 2025. Our profitability has significantly improved, driven not only by
favourable precious metals prices but also by a consistent operational
performance and rigorous cost discipline. This has led to a substantial free
cash flow generation. Our balance sheet remains robust, with ample liquidity,
allowing us to declare an interim dividend of US20.8 cents per share in line
with our policy. On the operational front, gold production saw impressive
growth through optimised operations, particularly at Herradura, while silver
production was partially impacted by the planned closure of San Julián DOB,
and the lower contribution from the Fresnillo mine and the Silverstream.
Looking ahead, we have increased gold production guidance for the year to
reflect the continued strong performance at Herradura, and we have adjusted
silver production guidance to reflect the end of Silverstream contributions
following the buyback agreement with Peñoles. In terms of equivalent silver
ounces, our 2025 guidance remains unchanged. These results highlight our
steadfast focus on productivity, cost control, and creating lasting value for
our shareholders."
First half highlights
Financial highlights (1H25/1H24 comparisons)
· Adjusted Revenues 1 of US$1,982.9m, up 27.1%; mainly due to higher
gold and silver prices, and increased volumes of gold sold, partly offset by a
lower volume of silver sold.
· Revenues of US$1,936.2m, up 30.1%; driven by the increased adjusted
revenues and lower treatment and refining charges.
· Adjusted production costs 2 of US$673.5m, down 20.2% over 1H24
primarily due to the devaluation of the Mexican peso vs. the US dollar, the
net decrease in volumes of ore processed, mainly at Fresnillo, Herradura, and
Ciénega, the decrease in adjusted production as a result of the closure of
San Julián DOB, and the positive impact of efficiencies and cost reduction
initiatives, mainly at Herradura.
· Cost of sales of US$913.2m, down 16.7% mainly as a result of the
lower adjusted production costs and decreased depreciation, partly offset by
the less favourable effect of the variation in change in inventories.
· Gross profit and EBITDA 3 of US$1,022.9m and US$1,102.1m, up 160.7% and
102.5%, respectively.
· Profit from continuing operations before net finance costs and income
tax of US$860.8m, up 266.0%.
· Following operational and financial difficulties impacting silver
production and the long-term viability of the Sabinas mine, and an evaluation
of the options available, Peñoles has agreed to buy back the Silverstream
Contract for US$40.0m, which results in a non-cash Silverstream loss, net of
taxes, of US$133.0 million. See further information below.
· Profit for the period before income tax of US$660.3m, up 137.7%.
· Income tax expense and mining rights of US$192.8m, up 20.4%
· Profit for the period of US$467.6m, up 297.3% from US$117.7m.
· Basic and diluted EPS from continuing operations of US$53.4 cents per
share, up 399.1% from US$10.7 cents per share.
· Adjusted EPS 4 of US$71.5 cents per share, up from US$4.4 cents per
share in 1H24.
· Cash generated from operations, before changes in working capital, of
US$1,103.6m, up 101.4%.
· Free cash flow 5 of US$1,026.1m in 1H25 (US$187.4m in 1H24).
· Strong balance sheet with cash and other liquid funds as at 30 June
2025 of US$1,823.0m (31 December 2024: $1,297.8m).
· Interim dividend of 20.8 US cents per share, totalling US$153.3m
(1H24: US$47.2m).
Operational highlights (1H25/1H24 comparisons)
As disclosed in the 2Q25 production report on 23 July 2025:
· First half attributable silver production of 24.9 moz (including
Silverstream), down 11.7% vs. 1H24 mainly due to the cessation of mining
activities at San Julián DOB, a decrease in volume of ore processed, lower
ore grade and decreased recovery rate at Ciénega and lower ore grade at
Juanicipio.
· First half attributable gold production of 313.8 koz, up 15.9% vs. 1H24
mainly due to the optimisation of mine operation standards for better
selectivity, which led to higher gold ore grade, and the additional gold
contents recovered from the oxidised high grade ore deposited at the Herradura
leaching pads. This was partly offset by the lower ore grade and decreased
volumes of ore processed at Saucito and Ciénega, and the lower volume of ore
processed at Fresnillo.
· Ongoing focus on safety, cost control, and productivity.
Highlights for 1H25
US$ million unless stated H1 25 H1 24 % change
Silver production (koz) * 24,882 28,169 (11.7)
Gold production (oz) 313,840 270,872 15.9
Total revenues 1,936.2 1,488.3 30.1
Adjusted revenues(1) 1,982.9 1,560.2 27.1
Cost of Sales 913.2 1,095.9 (16.7)
Gross profit 1,022.9 392.4 160.7
Adjusted production costs(2) 673.5 844.2 (20.2)
EBITDA(3) 1,102.1 544.2 102.5
Silverstream effects (190.1) 66.5 N/A
Profit for the period 467.6 117.7 297.3
Cash generated by operations before changes in working capital 1,103.6 547.9 101.4
Basic and Diluted EPS (US$)(4) 0.534 0.107 399.1
Basic and Diluted EPS, excluding post-tax Silverstream revaluation effects 0.715 0.044 1525.0
(US$)
Dividend per ordinary share (US$) 0.208 0.064 225.0
* Silver production includes volumes realised under the Silverstream contract
(1) Adjusted revenues are the revenues shown in the income statement adjusted
to add back treatment and refining charges. The Company considers this is a
useful additional measure to help understand underlying factors driving
revenue in terms of volumes sold and realised prices
(2) Adjusted production costs are calculated as cost of sales less
depreciation, profit sharing, hedging, change in inventories and unproductive
costs. The Company considers this a useful additional measure to help
understand underlying factors driving production costs in terms of the
different stages involved in the mining and plant processes, including
efficiencies and inefficiencies as the case may be and other factors outside
the Company's control such as cost inflation or changes in accounting
criteria.
(3) Earnings before interest, taxes, depreciation and amortisation (EBITDA) is
calculated as profit for the year from continuing operations before income
tax, less finance income, plus finance costs, less foreign exchange
gain/(loss), less revaluation effects of the Silverstream contract, less other
operating income plus other operating expenses and depreciation.
(4) The weighted average number of shares for H1 2025 and H1 2024 was 736.9m.
See Note 8 in the Interim Consolidated Financial Statements.
Commentary on the Group's results
Operating results
First half attributable silver production of 24.9 moz (including Silverstream)
decreased 11.7% vs. 1H24, mainly due to the cessation of mining activities at
San Julián DOB, a decrease in volume of ore processed, lower ore grade and
decreased recovery rate at Ciénega and lower ore grade at Juanicipio.
First half attributable gold production of 313.8 koz, increased 15.9% vs. 1H24
mainly due to the optimisation of mine operation standards for better
selectivity, which led to higher gold ore grade, and the additional gold
contents recovered from the oxidised high grade ore deposited at the Herradura
leaching pads. This was partly offset by the lower ore grade and decreased
volumes of ore processed at Saucito and Ciénega, and the lower volume of ore
processed at Fresnillo.
First half attributable by-product lead production decreased 5.2% vs. 1H24
mainly due to the lower ore grade and decrease in volumes of ore processed at
Fresnillo and the cessation of mining activities at San Julián DOB, partly
mitigated by the higher ore grade at Saucito.
First half attributable by-product zinc production decreased 3.2% vs. 1H24
mainly due to the cessation of mining activities at San Julián DOB and the
lower ore grade, decreased recovery rate and lower volume of ore processed at
Ciénega, partly mitigated by the higher ore grade at Saucito.
We are sad to report the tragic loss of two of our colleagues in separate
fatal incidents, one at Ciénega in June and another at Juanicipio in July. We
have redoubled our efforts to instill a safety culture, focusing on
identifying preventive measures, training, and maintaining stringent adherence
to our safety policies to provide a safer environment for our workforce and
contractors.
Our safety indicators improved in 1H25, with the Total Recordable Injury
Frequency Rate (TRIFR) and the Lost-time Injury Frequency Rate (LTIFR)
decreasing to 6.98 (7.59 in FY 2024) and 4.40 (4.75 in FY 2024),
respectively.
Peñoles to buy back Silverstream Contract
Fresnillo has agreed terms for Peñoles to buy back the Silverstream Contract
(or "Agreement") in exchange for US$40 million.
Over the lifetime of the Agreement, Peñoles has paid Fresnillo US$882 million
for the approximately 52 million payable ounces of silver produced by the
Sabinas mine. The Agreement was signed in 2007 and Fresnillo paid an initial
consideration of US$350 million.
Background
On 12 November 2024 Fresnillo announced it had received notification from
Peñoles, the owner and operator of the Sabinas mine, that the mine was
experiencing operational and financial difficulties impacting silver
production and the long-term viability of the mine and consequently of the
Agreement. Under the Agreement, Peñoles has the unilateral right to close the
mine or indefinitely suspend the mine operations. In such a situation, only a
very modest payment, as outlined below, would be due to Fresnillo.
Fresnillo and Peñoles immediately set up a working group to identify a
realistic and sustainable solution for the Sabinas mine and the Agreement.
Strategic options for the mine considered at the time, given the financial
profile of the mine whereby revenues did not cover its operational costs nor
the obligations imposed by the Agreement, were: i) changing the terms and
conditions of the Silverstream Agreement (increasing the strike price), ii)
the transfer of ownership of the mine to Fresnillo (becoming the owner and
operator) and other ownership structures, in lieu of the Agreement, or iii)
immediate suspension of mine operations for an indefinite period.
In January, following a period of thorough analysis, and based on the
information provided by the Sabinas team, including related to the most recent
reserves report at the time and cut-off grade, Fresnillo's technical team,
together with Peñoles, defined a new mine plan and sequencing programme. This
included mine development, ore volumes, ore grade, recovery rates, sustaining
capex, operating costs and cashflow amongst other factors, while also taking
into account potential blue sky growth prospects within the Sabinas licence
area.
Fresnillo reported a revaluation loss of the Agreement, net of its
amortisation and before taxes, of US$182.3 million in its 2024 accounts
(published on 4 March 2025), valuing the Agreement at US$258 million before
taxes, which was consistent with the expected value of the Sabinas mine at
that time.
More recently Fresnillo received an updated reserves report from Peñoles for
the Sabinas mine, certified independently by SRK Consulting, which used a
rigorous criteria, including higher cut-off grades and analysis of new infill
exploration data. This showed a significant reduction in reserves from
previous reports (more than 50%). In light of this new information, a revised
mine plan and sequencing programme were drawn up which materially impacted
future production and free cash flow projections. It became clear the mine was
facing more significant challenges than the January review identified.
Subsequently, using the same modelling exercise to value the Sabinas mine,
with validation from SRK Consulting, which included the working assumption of
Fresnillo as operator being able to increase operating efficiencies by c.35%,
through better equipment utilisation, lower absenteeism and other cost
savings, Fresnillo, together with Peñoles, determined a new value of the
Sabinas mine to be in the range of US$47 to US$50 million (excluding
Silverstream settlement payments), substantially below previous estimates.
Based on the above analysis and after careful consideration, Fresnillo does
not see any realistic prospect of increasing the expected value of the mine in
this way nor the possibility of continuing with the Agreement in its current
form.
The Board of Fresnillo considered all of the strategic options and determined
there to be considerable operational, regulatory, community and financial risk
with taking ownership of the mine and concluded that the risk/reward profile
was not in line with the Company's interests, while a mine closure or
indefinite suspension of mine operations would result in an immediate end to
payments under the Silverstream and only a deferred payment of approximately
US$8.6 million due in 2032.
This narrowed the strategic alternatives considered by both parties to: a
one-off payment (buyback price) to end the Agreement, or immediate mine
closure or indefinite suspension of mine operations, which would have a
material impact on the different stakeholders of the Sabinas mine, including
workforce and communities. Following negotiations, both parties agreed that
US$40 million would be a fair buyback price for ending the Agreement, whilst
removing any associated future risk, and provide optionality to Peñoles to
avoid a disorderly closure, which could also have indirect adverse
consequences for Fresnillo, or suspension of the mine and continue to operate
it if they so choose.
Rationale for the Buyback
The decision to end the Agreement therefore follows a comprehensive review by
Fresnillo and its independent advisers SRK, of the ongoing operational and
financial issues at the Sabinas mine. After carefully considering the
strategic options, the Board has concluded that ending the contract through
this buyback transaction is the best option for the Company and its
shareholders.
The Independent Directors of Fresnillo have received financial advice from
BofA Securities in relation to the consideration payable by Peñoles to
Fresnillo to buy back the Silverstream agreement.
The Independent Directors believe the valuation offered by the buyback of the
Silverstream Agreement is fair and in the best interests of Fresnillo
shareholders given the considerable challenges identified.
Therefore, post period end, Fresnillo will receive a one-off payment (buyback
price) of US$40 million from Peñoles to buy back the Silverstream Agreement
and has written down the value of the Agreement held on the balance sheet to
US$40 million as of 30th of June, creating a non-cash US$133.0 million loss
after tax and net of the period's profit amortisation in the 2025 half year
income statement. The cash effect will be an inflow of US$40 million in 2H25.
This buyback will result in no production from the Silverstream being recorded
in the second half of 2025 nor in subsequent years, though guidance remains
unchanged, with 2025 silver production expected to be in the lower part of the
range.
Financial results
Total revenue increased by 30.1% to US$1,936.2 million in 1H25, mainly due to
higher gold and silver prices and increased volumes of gold sold, partly
offset by the decrease in silver ounces sold.
The average realised silver price increased 21.9% from US$27.6 per ounce in
1H24 to US$33.7 per ounce in 1H25, while the average realised gold price rose
45.8%, from US$2,171.9 per ounce in 1H24 to US$3,167.6 per ounce in 1H25. The
average realised zinc by-product price remained at US$122.3 cents per pound,
while the average realised lead price decreased to US$88.6 cents per pound,
down 7.8% vs 1H24.
Adjusted production costs 6 decreased by 20.2% to US$673.5 million in 1H25.
The US$170.6 million decrease resulted primarily from the devaluation of the
Mexican peso vs. the US dollar, the net decrease in volumes of ore processed,
mainly at Fresnillo, Herradura and Ciénega, the decrease in adjusted
production as a result of the closure of San Julián DOB, and the favourable
impact of efficiencies and cost reduction initiatives, mainly at Herradura.
Depreciation decreased 20.6%, primarily due to the closure of San Julián DOB,
and to a lesser extent, decreased amortisation of capitalised mining works and
lower depletion factors at Saucito and Ciénega.
These favourable effects were partly offset by the less favourable effect of
the variation in the change in inventories in 1H25.
The factors mentioned above resulted in a 16.7% decrease in cost of sales
compared with 1H24.
The increase in revenues, together with the decrease in cost of sales,
resulted in a 160.7% increase in gross profit to US$1,022.9 million in 1H25.
Driven by an increase in gross profit, EBITDA increased by 102.5%, with EBITDA
margin rising from 36.6% in 1H24 to 56.9% in 1H25. Similarly, profit from
continuing operations before net finance costs and income tax increased from
US$235.1 million in 1H24 to US$860.8 million in 1H25.
The total Silverstream effect recorded in the 1H25 income statement was a net
loss of US$190.1 million, before taxes (see "Peñoles to buy back Silverstream
Contract" section below).
Despite the Silverstream effect loss, profit from continuing operations before
income tax increased 137.7% from US$277.8 million in 1H24 to US$660.3 million
in 1H25.
Income tax expense for the period was US$122.2m, up 36.5% from US$89.5 million
in 1H24. The effective tax rate, excluding the special mining rights, was
18.5% (1H24: 32.2%), which was below the 30% statutory tax rate. This variance
resulted from the revaluation of the Mexican peso/US dollar spot exchange rate
on the tax value of assets and liabilities and the effect of the inflation
rate (Mexican Consumer Price Index) that impacted the inflationary uplift of
the tax base for assets and liabilities.
Profit for the period increased from US$117.7 million in 1H24 to US$467.6
million in 1H25, a 297.3% increase half-on-half as a result of the factors
described above. Profit due to non-controlling interests increased 89.0% to
US$73.8 million, reflecting the profit generated at Juanicipio, where MAG
Silver owns 44% of the outstanding shares. Accordingly, the profit
attributable to equity shareholders of the Group was US$393.8 million, a
400.7% increase half-on-half.
Excluding the effects of the Silverstream, profit for the period increased
from US$71.2 million to US$600.6 million, up 743.5%.
Cash generated by operations before changes in working capital increased by
101.4% to US$1,103.6 million, mainly as a result of the higher profit from
continuing operations generated in the year.
Other proceeds included US$149.5 million from the sale of MAG Silver shares
previously held by Fresnillo.
Capital expenditure in 1H25 totalled US$157.9 million, a 7.3% decrease over
1H24. Investments during the period included mine development and stripping,
purchase of in-mine equipment, construction of a leaching pad at Herradura,
the deepening of the Jarillas shaft at Saucito and investments in tailings
dams.
Other uses of funds during the period were dividends paid of US$501.0 million
(US$31.0 million in 1H24), income tax, special mining rights and profit
sharing paid of US$255.4 million (US$71.4 million in 1H24), and dividends paid
to non controlling interests in subsidiaries of US$59.4 million (US$ nil
1H24).
Fresnillo plc continued to maintain a solid financial position during the
period with cash, cash equivalents and short-term investments of US$1,823.0
million as of 30 June 2025, increasing 40.5% versus 31 December 2024 and
163.8% versus 30 June 2024.
Interim Dividend
The Board of Directors has declared an interim dividend of 20.8 US cents per
Ordinary Share totalling US$153.3 million, which will be paid on 17 September
2025 to shareholders on the register on 15 August 2025. The dividend will be
paid in UK pounds sterling unless shareholders elect to be paid in US dollars.
This interim dividend is higher than the previous period due to the increase
in profit in 1H25, and remains in line with the Group's dividend policy. This
decision was made after a comprehensive review of the Group's financial
situation, ensuring that the Group is well placed to meet its current and
future financial requirements, including its development and exploration
projects.
As previously disclosed, the corporate income tax reform introduced in Mexico
in 2014 created a withholding tax obligation of 10% (including to foreign
nationals). The 2025 interim dividend will be subject to this withholding
obligation.
Outlook
Attributable silver production guidance for 2025, and expected production for
2026 and 2027, have been adjusted for the Silverstream buyback, with no
further Silverstream contribution from 2H25 onwards.
Silver production guidance for 2025, and silver production expectations for
2026 and 2027, for all other operations remain unchanged.
2025 gold production guidance has been increased to reflect the better
performance at Herradura. 2025 lead and zinc production guidance remain
unchanged, as well as gold, lead and zinc production expectations for 2026 and
2027.
PREVIOUS GUIDANCE 2025 UPDATED GUIDANCE 2025 EXPECTED 2026 EXPECTED 2027
Attributable silver production, incl. silverstream (moz) 49.0 to 56.0 47.5 to 54.5 45 to 51 45 to 51
Attributable gold production (koz) 525 to 580 550 to 590 515 to 565 535 to 595
Attributable lead production (kt) 56 to 62 56 to 62 54 to 59 51 to 57
Attributable zinc production (kt) 93 to 103 93 to 103 85 to 95 93 to 103
Silver eq. (moz)(1) 91 to 102 91 to 102 88 to 98 90 to 101
Exploration expenses for 2025 are expected to be c. US$190 million.
Capex for 2025 has been revised from US$530 million to US$450 million
primarily due to delays in development and the construction of ventilation
robbins at Saucito and the installation of the conveyor belt at Juanicipio,
the resequencing of sustaining capex and through extending the life of current
in-mine equipment.
Analyst Presentation
Fresnillo plc will be hosting a webcast presentation for analysts and
investors today at 9:00am (GMT). A link to the webcast will be made available
on Fresnillo's homepage: www.fresnilloplc.com or can be accessed directly
here:
https://kvgo.com/IJLO/Fresnillo_1H25_Interim_Results
For those unable to access the webcast, a conference line will also be
provided, please pre-register here:
https://www.netroadshow.com/events/login?show=833d4ea7&confId=84777
(https://www.netroadshow.com/events/login?show=833d4ea7&confId=84777)
For further information, please visit our website: www.fresnilloplc.com
(http://www.fresnilloplc.com) or contact:
Fresnillo plc
London Office Tel: +44(0)20 7339 2470
Gabriela Mayor, Head of Investor Relations
Mark Mochalski
Mexico City Office Tel: +52 55 52 79 3206
Ana Belém Zárate
Sodali Tel: +44(0)20 7250 1446
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 eight operating mines, all of them in Mexico - Fresnillo,
Saucito, Juanicipio, Ciénega, Herradura, Soledad-Dipolos(1), Noche Buena(2)
and San Julián Veins 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.
(2) Mineral extraction concluded in May 2023, however leaching of gold content
inventories at the leaching pads continues.
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.
H1 2025 Operational Review
Production
Production H1 2025 H1 2024 % change
Silver (koz) 23,943 27,155 (11.8)
Silverstream prod'n (koz) 940 1,014 (7.3)
Total Silver prod'n (koz) 24,882 28,169 (11.7)
Gold (oz) 313,840 270,872 15.9
Lead (t) 30,182 31,830 (5.2)
Zinc (t) 53,651 55,397 (3.2)
First half attributable silver production of 24.9 moz (including Silverstream)
decreased 11.7% vs. 1H24, mainly due to the cessation of mining activities at
San Julián DOB, a decrease in volume of ore processed, lower ore grade and
decreased recovery rate at Ciénega and lower ore grade at Juanicipio.
First half attributable gold production of 313.8 koz, increased 15.9% vs. 1H24
mainly due to the higher ore grade and the additional gold inventories
processed at Herradura, partly offset by the lower ore grade and decreased
volumes of ore processed at Saucito and Ciénega and the lower volume of ore
processed at Fresnillo.
First half attributable by-product lead production decreased 5.2% vs. 1H24
mainly due to the lower ore grade and decrease in volumes of ore processed at
Fresnillo and the cessation of mining activities at San Julián DOB, partly
mitigated by the higher ore grade at Saucito.
First half attributable by-product zinc production decreased 3.2% vs. 1H24
mainly due to the cessation of mining activities at San Julián DOB and the
lower ore grade, decreased recovery rate and lower volume of ore processed at
Ciénega, partly mitigated by the higher ore grade at Saucito.
Fresnillo mine production
H1 2025 H1 2024 % change
Ore Processed (t) 1,040,826 1,211,992 (14.1)
Production
Silver (koz) 5,151 5,259 (2.1)
Gold (oz) 19,831 23,155 (14.4)
Lead (t) 10,464 12,625 (17.1)
Zinc (t) 22,213 22,928 (3.1)
Ore Grades
Silver (g/t) 170 151 12.6
Gold (g/t) 0.80 0.80 0.0
Lead (%) 1.20 1.21 (0.8)
Zinc (%) 2.85 2.59 10.0
Pyrite Concentrates Processed (t) 38,606 31,388 23.0
Production
Silver (koz) 754 613 23.0
Gold (oz) 958 671 42.8
First half silver production decreased 2.1% vs 1H24 respectively, driven by
the decrease in volume of ore processed due to the lower contribution from
Candelaria, East and San Alberto, partly mitigated by the higher ore grade.
Mine development rates decreased 2.4% half on half to an average of 3,033m per
month in 1H25 (1H24: 3,109m per month), primarily due to lower equipment
availability in 1Q25, which was reverted in 2Q25.
First half by product gold production decreased 14.4% vs IH24 mainly as a
result of the decrease in volume of ore processed.
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
H1 2025 H1 2024 % change
Ore Processed (t) 1,151,176 1,174,570 (2.0)
Production
Silver (koz) 6,734 6,811 (1.1)
Gold (oz) 31,437 37,658 (16.5)
Lead (t) 13,615 10,566 28.9
Zinc (t) 21,411 15,603 37.2
Ore Grades
Silver (g/t) 206 203 1.5
Gold (g/t) 1.12 1.29 (13.2)
Lead (%) 1.38 1.05 31.4
Zinc (%) 2.38 1.72 38.4
Pyrite Concentrates Processed (t) 34,880 45,034 (22.5)
Production
Silver (koz) 262 233 12.4
Gold (oz) 538 667 (19.3)
First half silver production slightly decreased 1.1% vs. 1H24 mainly due to
the lower volume of ore processed as a result of the reduced contribution from
the West and Central areas and, to a lesser extent, the lower recovery rate.
This was partly mitigated by the higher silver ore grade from additional cut
and fill stopes with high silver content.
First half by-product gold production decreased 16.5% vs. 1H24 respectively,
mainly due to the lower ore grade and decreased volume of ore processed.
Mine development rates decreased 14.5% half on half to an average of 2,439m
per month in 1H25 (1H24: 2,854m per month), primarily due to lower
availability of contractors' bolting equipment.
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.
Juanicipio - Attributable
H1 2025 H1 2024 % change
Ore Processed (t) 380,538 370,875 2.6
Production
Silver (koz) 4,859 5,280 (8.0)
Gold (oz) 11,294 10,744 5.1
Lead (t) 5,619 4,741 18.5
Zinc (t) 9,500 8,510 11.6
Ore Grades
Silver (g/t) 423 488 (13.3)
Gold (g/t) 1.23 1.26 (2.4)
xLead (%) 1.66 1.46 13.7
Zinc (%) 3.12 2.74 13.9
Pyrite Concentrates Processed (t) 3,995 0 N/A
Production
Silver (koz) 54 0 N/A
Gold (oz) 74 0 N/A
Attributable first half silver production decreased vs 1H24 mainly due to the
lower ore grade in accordance with the mine plan, partly offset by the higher
volume of ore processed.
Attributable first half gold production increased 5.1% vs 1H24 due to the
improved recovery rate and higher volume of ore processed, partly offset by
the lower ore grade.
In 2Q25, production of pyrites concentrate at Juanicipio started, with
attributable production of 54,147 silver ounces and 73.5 gold ounces during
the period.
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
H1 2025 H1 2024 % change
Ore Processed (t) 482,599 519,542 (7.1)
Production
Gold (oz) 17,678 20,668 (14.5)
Silver (koz) 1,653 2,581 (36.0)
Lead (t) 484 1,634 (70.4)
Zinc (t) 527 1,644 (67.9)
Ore Grades
Gold (g/t) 1.24 1.34 (7.5)
Silver (g/t) 133 179 (25.7)
Lead (%) 0.22 0.48 (54.2)
Zinc (%) 0.30 0.59 (49.2)
First half gold production decreased 14.5% vs. 1H24 respectively, mainly due
to the lower volume of ore extracted from areas such as Jessica Transversal
and Vetas Angostas with higher ore grades, and the depletion of Taspana.
First half silver production decreased 36.0% vs. 1H24 driven by the lower ore
grade and decreased recovery rate due to the higher portion of oxides
processed at the flotation plant following the depletion of sulphides from the
Taspana. The lower volume of ore processed also contributed to the decrease in
silver production.
While metallurgical testwork is ongoing to find alternatives to increase
recovery in oxides, positive exploration results are expected to provide
higher gold production than had been anticipated during 2H25, partly
offsetting lower silver production.
The gold and silver ore grades for 2025 are estimated to be in the ranges of
1.1-1.3 g/t and 130-150 g/t, respectively.
San Julián Veins production
H1 2025 H1 2024 % change
Ore Processed Veins (t) 616,058 592,646 4.0
Production Veins
Gold (oz) 25,919 24,326 6.5
Silver (koz) 4,218 4,061 3.9
Ore Grades Veins
Gold (g/t) 1.37 1.35 1.5
Silver (g/t) 234 234 0.0
First half gold and silver production increased vs. 1H24 driven by the
increased volume of ore processed due to the ongoing optimisation of the
maintenance programme, and the higher ore grades.
Silver and gold ore grades in 2025 are expected to be in the ranges of 210-230
g/t and 1.10-1.30 g/t, respectively.
Herradura mine production
H1 2025 H1 2024 % change
Ore Processed (t) 10,125,225 10,451,639 (3.1)
Total Volume Hauled (t) 48,504,399 49,234,362 (1.5)
Production
Gold (oz) 197,431 141,686 39.3
Silver (koz) 255 219 16.4
Ore Grades
Gold (g/t) 0.71 0.63 12.7
Silver (g/t) 1.22 1.18 3.4
First half production increased vs. 1H24 driven by the optimisation of mine
operation standards for better selectivity, which led to higher gold ore grade
but lower volume of ore processed. In addition, gold contents recovered from
the oxidised high grade ore deposited at the leaching pads in 4Q24
complemented production.
The average gold ore grade in 2025 is expected to be in the range of 0.50-0.70
g/t.
Noche Buena mine production
First half gold production totalled 8,680 ounces, a 14.9% decrease when
compared with 1H24. As previously announced, mining activities concluded in
May 2023, and the closure plan continues as expected.
Below we provide an update on other projects which are expected to contribute
to our medium and long term growth. These projects have not yet been approved
by the Board and are subject to ongoing internal review. However, certain
minor works and exploration activities might be in progress in preparation for
Board approval and as such, are included within the 2024 approved capex and
exploration budget.
Advanced exploration projects
Rodeo
Rodeo is an open pit, heap leaching gold project located in central Durango
state. 1.4 million ounces of gold occur in a volcanic rock-hosted disseminated
ore body showing thorough oxidation down to depths exceeding 200 metres. Good
metallurgical recoveries have been obtained from ores coming from a projected
low strip ratio open pit.
After formalising agreements with the intervening communities during 2024, a
drilling programme started in 1H25, focused on obtaining additional samples
for detailed metallurgical investigations and to test for extensions of
mineralisation; 5,417 metres have been collared, proving good continuity of
the ore bodies. Additional underexplored targets will be drilled as well
during 2H25.
After completion of the drilling programme and the metallurgical test work, an
update of the mineral resources estimation and associated preliminary economic
assessment will follow, incorporating considerations for development layout,
water and energy supply, and other technical issues currently under
investigation. Results are expected during mid-year 2026. A region-wide
community and government engagement programme continues to be strengthened; an
excellent response from involved parties has been received.
Orisyvo
Orisyvo is a world-class, high-sulphidation epithermal, disseminated gold
deposit located in the Sierra Madre mountains of Chihuahua state, hosting
open-pit constrained total resources of 9.6 million ounces of gold.
Prefeasibility-level studies were completed during 1H25, focusing on the
development of an underground operation targeting the high-grade core of the
ore deposit. Preliminary trade-off studies of energy and water supply, road
access, mineral processing, and tailings storage facilities have been
completed. Although results were positive, it is expected that the Orisyvo
development will take longer than expected, mostly due to challenges
associated with the potentially large capital expenditure and the mining rates
required to increase production volumes, along with the timing of the ongoing
environmental permitting and indigenous consultation processes required.
Additional detailed work is ongoing to address these issues. The land
acquisition strategy and the community and government engagement programme are
advancing as scheduled with good results.
Tajitos
Tajitos is a low strip ratio open-pit, heap-leach, disseminated gold project
located in the Herradura Corridor of northwestern Sonora state, hosting a
resource of 1.0 million ounces of gold, 90% in the indicated category.
In 1H25, a third stage of column metallurgical test work was completed over
three resource domains, yielding positive results that will be applied to the
ongoing update of the mineral resource estimation. Results of a new
preliminary economic assessment are expected at the end of the year.
Environmental studies associated with the potential development of this
project are advancing well, along with our regional community relations
programme and the evaluation of alternatives for water and energy supply and
potential synergies with the existing infrastructure of the Herradura
operations.
The exploration of the western portion of the district continued, collaring
5,755 metres of core and reverse circulation drilling during 1H25, testing
additional targets for both disseminated and vein-type gold mineralisation,
delivering promising results.
Guanajuato
Guanajuato is a historic, world-class gold and silver epithermal vein field
stretching more than 40 kilometres along the central Mexican state of
Guanajuato. During 1H25, exploration was focused on the southern part of the
district, with exploration drilling amounting to 46,442 metres of step-out
holes from the known mineralisation. Simultaneously, scoping level studies are
advancing as scheduled, including metallurgical investigations, environmental
permitting, and mining and processing alternatives, supported by our community
engagement programmes.
Exploration continued in the central portion of the district at a slower pace,
with 3,791 metres of core drilling completed at the Torres and Peregrina
areas.
Exploration
Exploration drilling meterage completed by Fresnillo plc during 1H25 amounted
to 359,268 metres, 82% of which was devoted to brownfields targets. The focus
of the mine exploration teams lies on infill drilling to upgrade the resources
category from inferred to indicated, to foster reserve replenishment, and on
infill drilling of reserves to improve their certainty for short and
medium-term mine planning. At Ciénega, emphasis was also put on resource
extension drilling over a recently discovered new set of veins. Brownfields
exploration is also carried out by the Exploration Division, devoting 40% of
its drilling metres for the period to the evaluation of targets around the
Fresnillo and San Julián districts and the Tajitos and Central Guanajuato
projects.
In 1H25, greenfield exploration in Mexico included 4,027 and 1,499 metres
drilled at the Lucerito and Candameña projects. In Peru, 2,059 metres were
completed at the Chiclayo project with modest results, and a strengthened
community relations plan is active throughout the country, focusing on two
promising projects. In Chile, 1,546 core drilling metres were completed at
Capricornio, a joint-venture project with SQM, and an environmental study was
submitted to allow for continued exploration over several underexplored
targets remaining in the district.
Evaluation of Fresnillo properties in Mexico, Peru, and Chile is advancing to
continue strengthening and optimising our portfolio; some selected third-party
projects are under evaluation as well in the three countries where we operate.
In the first six months, US$76.7 million of exploration expenses were recorded
in the income statement, a similar amount to that invested in 1H24. Total risk
capital invested in exploration for the full year 2025 is expected to be
US$190 million.
Related party transactions
Details of related party transactions that have taken place in the first six
months of the current financial year are detailed in note 16 of the interim
consolidated financial statements.
Sustainability performance
At Fresnillo, our purpose - to contribute to the wellbeing of people through
the sustainable mining of silver and gold - shapes both our long-term vision
and our daily actions, with a clear focus on the issues most material to our
business and stakeholders. Next, we outline the progress we've made in the
first half of 2025, as we continue evolving toward a more responsible,
resilient, and inclusive mining model.
People
Our workforce is essential to fulfilling our organisational purpose. We aim to
foster an inclusive culture that values diversity and empowers all employees
to reach their full potential.
Workforce figures remained largely stable during the first half of 2025, as
shown in Tables 1 and 2.
Table 1. Workforce composition
As at June 30, As at December 31, 2024 % Change
2025
Unionised employees 5,532 5,588 -1.00
Non-unionised employees 1,597 1,591 0.38
Total unionised and non-unionised employees 7,129 7,179 -0.70
Unionised and non-unionised women (%) 14.80 14.57 -
Contractors 10,838 10,916 -0.71
Total workforce 17,967 18,095 -0.71
Total women (%) 12.76 12.46 -
Table 2. Turnover
As at June 30, 2025 As at June 30, 2024
Voluntary turnover (%) 2.06 4.16
Total turnover (%) 3.77 6.87
We met our 2025 gender representation targets ahead of schedule at the end of
2024, reaching 12% of our workforce and 8% of managerial roles held by women.
Building on this momentum, we continued to strengthen female participation
across operations. As of June 2025, women represented 14.80% of unionised and
non-unionised employees (up from 14.57% as of December 2024) and 12.76% of our
total workforce, including contractors (compared to 12.46% as of December
2024). We are currently defining the next phase of our gender equity strategy.
Earlier this year, Herradura received the highest distinction of the Women in
Mining (WIM) Seal - an initiative by WIM Mexico that evaluates workplace
infrastructure, policies, and practices from a gender perspective. Building on
this recognition, we are scaling our efforts through a comprehensive programme
aligned with the Women's Empowerment Principles (WEPs), aiming to embed a
gender lens across processes and decision-making.
As part of this approach, we have established an Inclusion Committee composed
of representatives from all mining units, exploration, and corporate offices.
Its purpose is to drive alignment, prioritise initiatives with operational
relevance, and support the integration and advancement of women in our
industry.
Safety
Safety is a fundamental value - one rooted in our deep respect for life and
embodied in the daily practice of our 'I Care, We Care' philosophy. We
prioritise the health, safety, and overall wellbeing of our workforce by
fostering a culture of care, accountability, and prevention.
Between 2018 to June 2025, we achieved a 66% reduction in Total Recordable
Injury Frequency Rates (TRIFR), and a 49% reduction in Lost Time Injury
Frequency Rates (LTIFR) per million hours worked. In the first half of 2025,
we continued to improve our performance compared to the previous year:
· TRIFR decreased to 6.98, from 7.59 in 2024
· LTIFR decreased to 4.40, from 4.75 in 2024
Despite this progress, our results are overshadowed by the loss of two of our
colleagues - one at Ciénega, and another at Juanicipio in July. We extend our
deepest condolences to their family, friends and colleagues. These losses
confront us with a painful truth: our work remains unfulfilled as long as
lives are at risk. We are conducting thorough investigations to determine the
root causes and to ensure the conditions that led to these regrettable events
are not repeated.
Table 3. TRIFR and LTIFR performance*
As at June 30, As at December 31, 2024 % Change
2025
Total Recordable Injury Frequency Rates (TRIFR) 6.98 7.59 -8.04
Lost Time Injury Frequency Rates (LTIFR) 4.40 4.75 -7.37
Fatal accidents 1 2 -50.00
* Frequencies for every 1,000,000 hours worked
Our 'I Care, We Care' philosophy addresses inherent risks through five
strategic pillars: leadership, accountability, behaviours risk competencies,
system risks competencies, and learning environment. The technical components
prioritise critical risk management - those with the potential for fatalities
or serious harm - whilst the operational framework ensures that all risks are
addressed systematically. They also aim to establish critical controls and
performance standards across all business process, empowering personnel to
make responsible decisions in their daily work. Some of the highlights of the
period across these pillars are:
1) Leadership:
· Advanced the deployment of Leadership Practices across the chain of
command, including business partners.
· Continued to consolidate Leadership Practices' quality by coaching
team leaders, including union representatives and health and safety
commissions.
· Launched pilots to assess the quality of Leadership Practices.
2) Accountability:
· Strengthened engagement with business partners - both contract owners
and representatives - through quarterly performance reviews, recognition
schemes, and accountability processes.
3) Behaviour risk competencies:
· Held operational workshops on 'Behaviours in the Face of Risk',
combining classroom theory, practical field exercises, and one-on-one coaching
sessions with safety specialists.
· Conducted capacity building training for middle management and
business partners on risk recognition and management.
· Developed and rolled-out the 'I Care, We Care' verification process
and standard.
4) System risk competencies:
· Implemented pilots to begin testing job-specific verification tools.
· Issued updates to key safety standards (Leadership Practices,
Incident Management, and Safe Work Protocols) focused on both critical and
general risks.
· Introduced a new technical performance standard for the safe handling
of explosives and blasting operations.
5) Learning environment:
· Continued reinforcement of transversal learning from significant
safety events.
· Strengthened the 'I Care, We Care' Operational Committee, including
binding commitments and participatory verifications to evaluate risk control
performance and the implementation of technical standards.
We strive toward our aspirational goal of zero fatalities by continuously
strengthening the systems and practices that bring our 'I Care, We Care'
philosophy to life. This approach reflects our unwavering commitment to safe
operations, supports a mature preventive safety culture, and protects the
wellbeing of our workforce.
Health
We prioritise the health, safety, and overall wellbeing of our workforce by
fostering a safe and healthy work environment.
In recent years, our health strategy has evolved beyond traditional
occupational health programmes, establishing five lines of action to promote a
healthier, safer, and more productive workplace:
1. Health surveillance
2. Integral wellbeing
3. Industrial care
4. Development and innovation
5. Emergency preparedness
Mental health continues to be a growing area of focus in the company. To
support this commitment, we hired full-time psychologists and a mental health
coordinator to lead all related initiatives. This team also delivers
Behavioural Awareness Process (BAP) workshops - a group intervention based on
a cognitive-behavioural approach, designed to strengthen participants'
psychological, emotional, and social capabilities, fostering mature behaviour
and an assertive attitude. Additional responsibilities include brief and
emergency care, emotional crisis support, psychological consultations, and
psychometric assessments for new hires.
Under our health surveillance strategy, we conducted periodic medical
screenings and examinations in 1H25, representing 24% of our annual target. We
also continued preventive efforts focused on female-specific conditions
through gynaecological check-ups. To help ensure safe operations and workforce
alertness, regular alcohol and drug testing was carried out across our
operations.
Environment
We optimise resource consumption to reduce environmental impact and take
accountability for our footprint.
As part of our ongoing efforts to replace groundwater consumption with treated
wastewater in the Fresnillo District, the Proaño water potabilization plant
was inaugurated earlier in the year, with the participation of state
government officials and company representatives. The project will benefit
families in the region by improving access to clean water, as treated mine
water will supplement the local potable water system.
Beyond water resource management, we continued advancing our biodiversity
commitments. During the period, Herradura renewed its agreement with the
Sonora State Commission for Ecology and Sustainable Development (CEDES) to
conserve the Sonoran pronghorn, a protected species native to the region. The
agreement sets out joint actions to preserve and restore the pronghorn
population in its natural habitat through monitoring, ecosystem protection,
environmental education, and sustainable management programmes.
Marking the launch of our high-potential environmental strategy, we released
the Critical Environmental Risk Portfolio - a tool designed to help each site
identify its most critical environmental risks and implement standardised and
consistent critical controls to prevent adverse impacts.
In parallel, we are sustaining our efforts on climate mitigation and energy
transition. We maintained renewable electricity consumption at similar levels
to 2024 ( 86.6%), exceeding our 2030 target of 75%. Nevertheless, we
anticipate a small decrease towards the year end, due to the depletion of the
energy inventory of Eólica de Coahuila windfarm, but do not consider this
decrease material.
Understanding future consumption patterns is also essential to support our
decarbonisation targets, we are also strengthening and documenting our energy
demand forecasting through a multidisciplinary approach, aligned with mine
development and expected consumption increases tied to infrastructure changes
in our mines and plants. As we continue to refine this process in connection
with our Life of Mine (LOM) plans, we aim to gain greater clarity on potential
growth scenarios and future energy needs.
Tailings Storage Facilities
We implement best practices in governance and engineering across our Tailings
Storage Facilities (TSFs), with a firm commitment to safeguarding local
communities and the environment through responsible waste management.
Our facilities are developed in accordance with our Tailings Management System
(TMS), which incorporates international best practices from the Canadian Dam
Association (CDA), Mining Association of Canada (MAC), International
Commission on Large Dams (ICOLD) and the International Council on Mining and
Metals (ICMM). The TMS ensures designs are grounded in site-specific data and
tailings characterisation, applying the best available technologies and
standards.
In recent years, we have strengthened our approach to TSF planning and design,
with a focus on long-term capacity, operational safety, and alignment with the
LOM of each site. Reflecting this long-term approach, several strategic
milestones were achieved during the first half of 2025:
· At Juanicipio, the construction of cell 2 was completed in June.
Planning is already underway for the next facility.
· At Herradura, the construction of TSF2 Stage 1 began in early 2025,
with additional stages to follow.
· At Ciénega, elevation works of TSF3 were completed in May,
increasing storage capacity.
· At San Julián, we finalised the engineering design for its next
raise, with construction set to begin shortly.
· At Fresnillo, construction of the new TSF Fátima Norte is underway.
This will enable development of Fátima Sur, a larger, long-term facility.
Community Relations
We earn and maintain the trust of local communities through meaningful
engagement, support for their most pressing priorities, and accountability for
our impacts - strengthening our social licence to operate.
We maintain our social licence to operate by engaging local communities
through respectful, trust-based relationships rooted in a deep understanding
of their culture, traditions, and local priorities. Community participation
begins in the early stages of exploration and continues throughout the
lifecycle of our operations - extending beyond mine closure.
In collaboration with civil society and government partners, we implement
strategic programmes aligned with the UN Sustainable Development Goals (SDGs).
These initiatives focus on improving access to education, supporting
development and wellbeing, strengthening public health, expanding water
access, and conserving biodiversity and ecosystems.
During the first half of 2025, we continued to advance our Social Involvement
programme, which is designed to reinforce the connection between our personnel
and local communities. Through clear, values-based communication, we aim to
highlight our role as a responsible corporate citizen. We also involved our
business partners in these efforts, encouraging their participation in
community engagement activities and the promotion of human rights and
responsible conduct.
The following initiatives reflect our alignment with the UN Sustainable
Development Goals, structured across key themes relevant to our operations'
local context. Together, these efforts reflect our commitment to creating
long-term value for people, the environment, and the communities where we
operate.
SDG 3: Good Health and Wellbeing
In collaboration with the UNAM Foundation, we conducted Community Health
Campaigns in Ciénega, San Julián, and the Fresnillo District. These
campaigns provided dental services, optometry consultations - including the
distribution of corrective lenses - and physiotherapy sessions, benefitting
nearly 4,500 individuals.
We also continued implementing the Leaders on the Horizon programme with our
partner FutbolMas, which promotes community development through sports. The
programme fosters values such as peace, resilience, self-esteem, leadership,
and integrity among children and youth. During the period, we concluded the
first phase of the programme in La Lagunita, near San Julián. In Guanajuato,
implementation neared completion, while in Herradura, we continued to organise
socio-sports activities and manage an inter-school sports league. We also
maintained operations at our baseball and basketball academies, along with the
Santos-Fresnillo football academy.
SDG 6: Clean Water and Sanitation
To help address water scarcity in high-stress regions, we advanced
infrastructure projects and collaborated with civil society and government
partners. In Herradura, we completed the rehabilitation of wells in the La
Almita and 15 de Septiembre communities and continued supporting water access
for Mineral de Peregrina, Mineral del Cedro, and Calderones.
In Ciénega, we maintained water delivery to local collection points. In San
Julián, we are making progress on consolidating a collective water system in
partnership with AC FORMAC and the Chihuahua state government. In Saucito del
Poleo, we continue to support local authorities in securing a replacement well
to ensure continued water availability.
Sustainable Development Goal 4: Quality Education
We sponsored five teams in the Laguna Regional FIRST Robotics competition.
Notably, Kanaritech 9499, composed of Tarahumaran students from the Sierra of
Chihuahua and linked to our Orysivo project, received the Judges' Award for
outstanding performance.
Through our Excellence Scholarship Programme, which now includes additional
universities via new collaboration agreements, we continued to support
academic achievement. During the 2024-2025 academic year, ten students
graduated from partner public universities. 17 more are currently enrolled at
La Salle University (Laguna and Northwest campuses), including one recent
graduate from Caborca, Sonora.
We continued delivering educational programmes in partnership with academic
institutions and local education authorities. Under the 'PREST MATH'
initiative - implemented with INNOVEC and the education ministries of
Chihuahua and Sonora - we delivered training and digital learning modules to
strengthen primary-level mathematics in Herradura and San Julián. In the
Fresnillo District, the programme was temporarily paused due to internal
adjustments within the Zacatecas Education Ministry.
The 'Picando Letras' programme remained active in Herradura and Ciénega, in
partnership with Ensamble Alejandría. This initiative promotes reading
comprehension and includes the 'Tools for Peacebuilding' module, which
supports stress reduction and emotional wellbeing for children and youth in
vulnerable settings. In the Fresnillo District, the programme remains paused
due to similar circumstances.
Sustainable Development Goal 8: Decent Work and Economic Growth
We promote sustainable local development by supporting entrepreneurship and
skills-building initiatives in partnership with NGOs, civil society, and all
levels of government. In Herradura, we launched training workshops for 20
entrepreneurs in collaboration with Pro Empleo, with a second group starting
in the Fresnillo District. Development consultancies for small businesses
remained ongoing in Ciénega and San Julián.
In the Fresnillo District, we also continued skills development programmes in
coordination with the Rural Development Education Brigade 46 and the municipal
DIF, contributing to the entrepreneurial skills.
Sustainable Development Goal 15: Life on Land
In recognition of World Environment Day, we organised our annual Environmental
Fairs across all mining units. These events featured educational and cultural
activities aimed at fostering environmental awareness and promoting
sustainable practices.
In Ciénega, we led a clean-up campaign with participation from employees,
business partners, students, and community members. At our exploration offices
and the Guanajuato project, we carried out a reforestation campaign in
collaboration with the University of Guanajuato and local communities. In
Herradura and the Fresnillo District, efforts focused on school-based
environmental talks and awareness activities delivered in partnership with
local governments and NGOs.
FINANCIAL REVIEW
The interim consolidated financial statements of the Group for the six months
ended 30 June 2025 have been prepared in accordance with IAS 34 Interim
Financial Reporting as issued by the IASB and as adopted by the UK. All
comparisons refer to the first halves of 2025 and 2024, unless otherwise
noted. The financial information and half year on half year variations are
presented in US dollars, except where indicated. Management recommends reading
this section in conjunction with the Interim Financial Statements and their
accompanying Notes.
INCOME STATEMENT
1H 2025 US$ million 1H 2024 US$ million Amount Change US$ million Change %
Adjusted revenue 7 1,982.9 1,560.2 422.7 27.1
Total revenue 1,936.2 1,488.3 447.9 30.1
Cost of sales 913.2 1,095.9 (182.7) (16.7)
Gross profit 1,022.9 392.4 630.6 160.7
Exploration expenses 76.7 77.2 (0.5) (0.7)
Operating profit 860.8 235.2 625.6 266.0
EBITDA 8 1,102.1 544.2 557.9 102.5
Income tax expense, including special mining rights 192.8 160.1 32.7 20.4
Profit for the period 467.6 117.7 349.9 297.3
Profit for the period, excluding post-tax Silverstream effects 600.6 71.2 529.4 743.5
Basic and diluted earnings per share (US$/share) (5) 0.534 0.107 0.427 399.1
Basic and diluted earnings per share, excluding post-tax Silverstream effects 0.715 0.044 0.671 1525.0
(US$/share)
The Group's financial results are largely determined by the performance of our
operations. However, there are other factors such as a number of macroeconomic
variables, that lie beyond our control and which affect financial results.
These include:
METALS PRICES
The average realised silver price increased 21.9% from US$27.6 per ounce in
1H24 to US$33.7 per ounce in 1H25, while the average realised gold price rose
45.8%, from US$2,171.9 per ounce in 1H24 to US$3,167.6 per ounce in 1H25. The
average realised lead by-product price decreased to US$88.6 cents per pound,
down 7.8% vs 1H24, while the average realised zinc by-product price remained
stable at US$122.3 cents per pound.
MX$/US$ EXCHANGE RATE
Spot exchange rate at 30 June 2025 Spot exchange rate at 31 December 2024 Impact
$18.89 per US dollar $20.27 per US dollar The 6.8% spot devaluation had an adverse effect on deferred taxes and special
mining rights.
Average Mexican peso/US dollar exchange rate 1H25 Average Mexican peso/US dollar exchange rate 1H24 Impact
$19.98 per US dollar $17.10 The 16.8% devaluation had a positive effect of US$85.9 million on the Group's
costs denominated in Mexican pesos (approximately 45% of total costs) when
converted to US dollars.
COST deFLATION
The Mexican Consumer Price Index for 1H25 was 1.8%. However, to evaluate the
Group´s cost inflation for the period, we calculate the unit price increase
for each component of adjusted production costs and take into consideration
their weighted average within the Group's basket. In 1H25, this resulted in a
cost deflation (decrease in unit price) of 8.2% (including the positive effect
of the average devaluation of the Mexican peso vs. US dollar). Underlying cost
inflation (cost inflation excluding the devaluation of the Mexican peso vs. US
dollar) was 2.3%. The main components of our cost inflation (including the
effect of the devaluation of the Mexican peso vs. US dollar) basket are listed
below:
Labour
Unionised employees received on average a 7% increase in wages in Mexican
pesos, while non-unionised employees received on average a 6% increase in
wages in Mexican pesos; when converted to US dollars, this resulted in a
weighted average labour deflation of 8.8%.
Energy
Electricity
The weighted average cost of electricity in US dollars decreased 7.2% from
US$8.50 cents per kw in 1H24 to US$7.89 cents per kw in the same period of
2025, reflecting the average generating cost of the Comisión Federal de
Electricidad (CFE), the national utility.
Diesel
The weighted average cost of diesel in US dollars decreased 12.5% to 103.24 US
cents per litre in 1H25, compared to 117.97 US cents per litre in 1H24. This
resulted primarily from the devaluation of the Mexican peso vs. US dollar.
Contractors
Agreements are signed individually with each contractor company and include
specific terms and conditions that cover not only labour, but also operating
materials, equipment and maintenance, amongst others. Contractor costs are
mainly denominated in Mexican pesos and are an important component of our
total production costs. In 1H25, increases per unit (i.e. per metre developed/
per tonne hauled) granted to contractors, resulted in a weighted average
decrease of 2.6% in US dollars, after considering the devaluation of the
Mexican peso vs. US dollar.
Maintenance
Unit prices of spare parts for maintenance decreased by 9.3% on average in US
dollar terms.
The effects of the above external factors, combined with the Group's internal
variables, are further described below through the main line items of the
income statement.
REVENUE
CONSOLIDATED REVENUE( 1)
1H 2025 1H 2024 Amount Change %
US$ million
US$ million
US$ million
Adjusted revenue (( 9 )) 1,982.9 1,560.2 422.7 27.1
Treatment and refining charges (46.8) (72.0) 25.2 (35.0)
Total revenue 1,936.2 1,488.3 447.9 30.1
Adjusted revenue increased by US$422.7 million mainly due to the higher gold
and silver prices and increased volumes of gold sold, partly offset by the
decrease in silver ounces sold. Total revenue increased by 30.1% to US$1,936.2
million in 1H25.
ADJUSTED REVENUE(11) BY METAL
H1 2025 H1 2024
US$ million % US$ million % Volume Variance Price Total net
US$ million
Variance
change
US$ million
US$ million
%
Gold 959.8 48.4 580.3 37.2 117.2 262.4 379.5 65.4
Silver 827.7 41.7 774.0 49.6 (121.7) 175.4 53.6 6.9
Lead 59.6 3.0 67.7 4.3 (3.0) (5.1) (8.1) (12.0)
Zinc 135.9 6.9 138.2 8.9 (0.5) (1.9) (2.3) (1.7)
Total adjusted revenue 1,982.9 100 1,560.2 100 (8.7) 431.4 422.7 27.1
ADJUSTED REVENUE BY Mine
The contribution by mine to Adjusted revenues is outlined in the table below.
This is expected to change further in the future, as new projects are
incorporated into the Group's operations and as precious metals prices
fluctuate.
1H 2025 1H 2024
(US$ million) % (US$ million) % Change %
Herradura 623.4 31.4 305.4 19.6 104.1
Juanicipio 377.3 19.0 309.0 19.8 22.1
Saucito 358.6 18.1 327.0 21.0 9.7
Fresnillo 293.3 14.8 260.6 16.7 12.5
San Julián (Veins) 216.0 10.9 159.1 10.2 35.8
Ciénega 98.7 5.0 113.4 7.3 (13.0)
Noche Buena 16.0 0.8 20.7 1.3 (22.7)
San Julián (DOB) (0.3) 0.0 65.0 4.1 (100.5)
Total 1,982.9 100 1,560.2 100 27.1
VOLUMES OF METAL SOLD
1H 2025 % contribution 1H 2024 % contribution % change
of each mine
of each mine
Silver (koz)
Juanicipio 7,714 31.5% 8,267 28.9% (6.7)
Saucito 4,906 20.0% 5,551 19.4% (11.6)
Fresnillo 4,346 17.7% 4,644 16.2% (6.4)
San Julián (Veins) 4,024 16.4% 3,910 13.7% 2.9
Ciénega 1,340 5.5% 2,346 8.2% (42.9)
Pyrites from Saucito 1,073 4.4% 1,437 5.0% (25.3)
Pyrites from Fresnillo 735 3.0% 595 2.1% 23.5
Herradura 254 1.0% 211 0.7% 20.4
Pyrites from Juanicipio 97 0.4% 0 100.0
Noche Buena 1 0.0% 2 0.0% (50.0)
San Julián (DOB)* (5) 0.0% 1,663 5.8% (100.3)
Total silver (koz) 24,485 28,626 100% (14.5)
Gold (oz)
Herradura 195,291 64.5% 134,998 52.0% 44.7
Saucito 25,273 8.3% 33,349 12.8% (24.2)
San Julián (Veins) 24,913 8.2% 23,619 9.1% 5.5
Juanicipio 17,847 5.9% 16,095 6.2% 10.9
Ciénega 15,847 5.2% 19,193 7.4% (17.4)
Fresnillo 15,800 5.2% 18,741 7.2% (15.7)
Noche Buena 4,870 1.6% 9,065 3.5% (46.3)
Pyrites from Saucito 1,952 0.6% 3,353 1.3% (41.8)
Pyrites from Fresnillo 941 0.3% 658 0.3% 43.0
Pyrites from Juancipio 131 0.0% 0 0.0% 100.0
San Julián (DOB)* 17 0.0% 492 0.2% (96.5)
Total gold (oz) 302,882 100% 259,563 100% 16.7
Lead (t)
Fresnillo 9,189 39.1% 11,146 34.9% (17.6)
Saucito 4,906 20.9% 9,589 30.0% (48.8)
Juanicipio 9,045 38.5% 7,698 24.1% 17.5
Ciénega 328 1.4% 1,508 4.7% (78.2)
San Julián (DOB)* 4 0.0% 2,027 6.3% (99.8)
Total lead (t) 23,472 100% 31,968 100% (26.6)
Zinc (t)
Fresnillo 18,640 37.0 18,827 36.8% (1.0)
Saucito 17,575 34.9 13,132 25.6% 33.8
Juanicipio 13,801 27.4 12,286 24.0% 12.3
Ciénega 434 0.9 1,357 2.6% (68.0)
San Julián (DOB)* (53) (0.1) 5,612 11.0% (100.9)
Total zinc (t) 50,397 100 51,214 100% (1.6)
*Final adjustments to sales volumes from 2024.
TREATMENT AND REFINING CHARGES
Similar to previous years, the 2025 treatment and refining charges(( 10 ))
(TRCs) per tonne and per ounce are currently being negotiated with Met-Mex
(Peñoles' smelter and refinery) in accordance with international benchmarks
and will apply retrospectively from January 2025. We expect these negotiations
to conclude in 2H25.
Treatment charges per tonne of lead and zinc concentrate and silver refining
charges decreased in dollar terms by 46.6%, 56.8% and 23.0%, respectively.
These factors, combined with the lower volumes of zinc concentrates, partly
offset by the higher volumes of lead concentrates shipped from our mines to
Met-Mex, resulted in a 35.0% decrease in treatment and refining charges set
out in the income statement in absolute terms when compared to 1H24.
COST OF SALES
1H 2025 1H 2024 Amount Change %
US$ million
US$ million
US$ million
Adjusted production costs (( 11 )) 673.5 844.2 (170.6) (20.2)
Depreciation 241.4 304.2 (62.8) (20.6)
Profit sharing 7.9 6.0 1.9 31.7
Change in inventories (9.6) (58.5) 48.9 (83.6)
Cost of sales 913.2 1,095.9 (182.7) (16.7)
Cost of sales decreased 16.7% to US$913.2 million in 1H25. The main factors
driving the US$182.7 million decrease are listed below:
• Adjusted production costs decreased by US$170.6 million as shown in
the graph below:
The ongoing efforts to implement cost reduction initiatives continued to
generate positive results in 1H25, driving US$23.3 million worth of net
operating efficiencies. These included efficiencies and cost reduction
initiatives (-US$38.9 million) at Herradura driven by the optimisation of
haulage distances, and at Saucito and Ciénega as a result of lower cost of
development contractors. This achievement was partly offset by inefficiencies
(+US$15.6 million) at Fresnillo and Juanicipio due to increased maintenance
costs.
• Depreciation (-US$62.8 million) due to the decreased depreciation of
the asset base at San Julián DOB as it reached the end of its life in 2024,
and to a lesser extent, decreased amortisation of capitalised mining works and
lower depletion factors at Saucito and Ciénega.
These positive effects were partly offset by:
• The variation in the change in inventories had a negative effect of
US$48.9 million versus 1H24 primarily due to an increase in inventories at
Fresnillo, Saucito and Juanicipio net of the consumption of inventories at
Herradura, whereas in 1H24 an increase in the weighted average cost of
inventories on the leaching pads at Herradura was registered (see notes 2c and
5 to the financial statements).
COST PER TONNE, CASH COST PER OUNCE AND ALL-IN SUSTAINING COST (AISC)
Cost per tonne is a key indicator to measure the effects of changes in
production costs and cost control performance at each mine. This indicator is
calculated as total production costs, plus ordinary mining rights, less
depreciation, profit sharing and exchange rate hedging effects, divided by
total tonnage processed. We have included cost per tonne hauled/moved as we
believe it is a useful indicator to thoroughly analyse cost performance for
the open pit mines.
Cost per tonne 1H 2025 1H 2024 % change
Fresnillo US$/tonne milled 123.10 114.68 7.3
Saucito US$/tonne milled 107.26 139.87 (23.3)
Juanicipio US$/tonne milled 110.07 119.72 (8.1)
San Julián (Veins) US$/tonne milled 128.29 108.19 18.6
Ciénega US$/tonne milled 113.49 128.83 (11.9)
Herradura US$/tonne deposited 20.40 26.47 (22.9)
Herradura US$/tonne hauled 4.80 6.02 (20.3)
Fresnillo: Cost per tonne increased 7.3% to US$123.1 in 1H25, driven mainly by
the increase in repairs and maintenance costs, and increased consumption of
milling balls, the lower volume of ore processed, and the underlying cost
inflation. This was mitigated by the favourable effect of the 16.8%
devaluation of the Mexican peso vs the US dollar.
Saucito: Cost per tonne decreased 23.3% to US$107.3, primarily due to the
decrease in the volume of by products with high gold and silver contents
purchased from Met-Mex (smelting and refining company), the favourable effect
of the 16.8% devaluation of the Mexican peso vs the US dollar, and the
decrease in metres developed (see Saucito in 1H25 Operational Review).
Juanicipio: Cost per tonne decreased due to the favourable effect of the 16.8%
devaluation of the Mexican peso vs the US dollar and the increase in volume of
ore processed, partly offset by the higher maintenance costs and the
underlying cost inflation.
San Julián Veins: Cost per tonne increased 18.6% to US$128.3, primarily
driven by the higher development costs and the absorption of shared fixed
costs from San Julián DOB, which was closed in 4Q24, and the underlying cost
inflation. This was mitigated by the favourable effect of the 16.8%
devaluation of the Mexican peso vs the US dollar.
Ciénega: Cost per tonne decreased 11.9% to US$113.5 mainly driven by the
favourable effect of the 16.8% devaluation of the Mexican peso vs the US
dollar and lower haulage and development contractors costs, partly offset by
the decreased volume of ore processed and underlying cost inflation.
Herradura: Cost per tonne of ore deposited decreased 22.9% to US$20.40
primarily due to the initiatives to optimise haulage routes and the favourable
effect of the 16.8% devaluation of the Mexican peso vs the US dollar.
Cash cost per ounce when compared to the corresponding metal price, is an
indicator of the ability of the mine to generate competitive profit margins.
Cash cost per ounce is calculated as the total cash cost (cost of sales plus
treatment and refining charges, less depreciation) divided by the silver or
gold equivalent ounces sold.
Cash cost per ounce 1H 2025 1H 2024 % change
Fresnillo US$ per eq. silver ounce 15.36 16.41 (6.4)
Saucito US$ per eq. silver ounce 11.72 15.02 (22.0)
Juanicipio US$ per eq. silver ounce 7.68 8.33 (7.8)
San Julián (Veins) US$ per eq. silver ounce 12.36 11.10 11.4
Ciénega US$ per eq. gold ounce 1,843.60 1,395.43 32.1
Herradura US$ per eq. gold ounce 1,148.37 1,617.99 (29.0)
Fresnillo: Cash cost per equivalent silver ounce decreased by 6.4% mainly
driven by the higher silver and zinc ore grades, the lower treatment and
refining charges, and the favourable effect of the change in work in progress
due to the lead and zinc concentrates in transit. This was partly offset by
the higher cost per tonne.
Saucito: Cash cost per equivalent silver ounce decreased 22.0% mainly due to
the lower cost per tonne and the favourable effect of the change in work in
progress due to the lead and zinc concentrates in transit, partly offset by
the lower gold ore grade.
Juanicipio: Cash cost per equivalent silver ounce decreased by 7.8% primarily
due to the lower cost per tonne and decrease in treatment and refining
charges, partly offset by the lower gold and silver ore grades.
San Julián Veins: Cash cost per equivalent silver ounce increased 11.4%
mainly due to the higher cost per tonne, partly mitigated by the higher gold
ore grade.
Ciénega: Cash cost per equivalent gold ounce increased 32.1% due to the lower
gold (-7.6%), silver (-25.6%), lead (-54.5%) and zinc (-49.6%) ore grades,
mitigated by the lower cost per tonne.
Herradura: Cash cost per equivalent gold ounce decreased 29.0% mainly due to
the higher gold and silver ore grades and the decrease in cost per tonne. This
was partly offset by the consumption of gold inventories in the leaching pads.
In addition to the traditional cash cost, the Group is reporting All-In
Sustaining Cost (AISC).
This cost metric is calculated as traditional cash cost plus on-site general,
corporate and administrative costs, community costs related to current
operations, capitalised stripping and underground mine development, sustaining
capital expenditures and remediation expenses. Similarly to cash cost, AISC is
calculated using equivalent silver or gold ounces.
We consider AISC to be a reasonable indicator of a mine's ability to generate
free cash flow when compared with the corresponding metal price. We also
believe it is a means to monitor not only current production costs, but also
sustaining costs as it includes mine development costs incurred to prepare the
mine for future production, as well as sustaining capex.
ALL-IN SUSTAINING COST (AISC)
AISC 1H 2025 1H 2024 % change
Fresnillo US$ per eq. silver ounce 22.17 23.04 (3.8)
Saucito US$ per eq. silver ounce 17.19 20.52 (16.2)
Juanicipio US$ per eq. silver ounce 11.35 11.24 1.0
San Julián (Veins) US$ per eq. silver ounce 16.81 16.14 4.2
Ciénega US$ per eq. gold ounce 2,341.63 1,668.44 40.3
Herradura US$ per eq. gold ounce 1,371.84 1,914.73 (28.4)
Fresnillo: All-in sustaining cost decreased 3.8% over 1H24 primarily due to
lower cash cost and a decrease in capitalised mine development per equivalent
ounce.
Saucito: All-in sustaining cost decreased 16.2% due to lower cash cost and a
decrease in capitalised mine development per equivalent ounce.
Juanicipio: All in sustaining cost increased 1.0% primarily driven by an
increase in sustaining capex per ounce, mitigated by the lower cash cost.
San Julián Veins: All-in sustaining cost increased 4.2% due to a higher cash
cost, mitigated by a decrease in capitalised mine development and sustaining
capex per equivalent ounce.
Ciénega: The increase in all-in sustaining cost was primarily driven by the
higher cash cost, together with increased sustaining capex and higher
capitalised mine development per equivalent ounce.
Herradura: All-in sustaining cost decreased by 28.4% mainly due to the lower
cash cost.
GROSS PROFIT
Gross profit is a key financial indicator of profitability at each business
unit and the Fresnillo Group as a whole.
Total gross profit increased by 160.7% from US$392.4 million in 1H24 to
US$1,022.9 million in 1H25.
The main factors driving the US$630.6 million increase in gross profit are
shown in the graphic below:
CONTRIBUTION BY MINE TO CONSOLIDATED GROSS PROFIT
1H 2025 1H 2024 Change
US$ million % US$ million % US$ million %
Herradura 349.4 34.3 38.6 9.9 310.9 805.2
Juanicipio 250.6 24.6 170.3 43.5 79.9 47.2
Saucito 181.4 17.8 85.1 21.7 94.8 113.2
Fresnillo 114.7 11.2 55.0 14.1 59.2 108.5
San Julián 101.1 9.9 32.2 8.2 68.5 214.0
Ciénega 18.7 1.8 11.1 2.8 7.9 68.5
Noche Buena 4.0 0.4 (1.0) (0.3) 5.0 (500.0)
Total for operating mines 1,019.9 100.0 391.3 100.0 626.2 160.6
Metal hedging and other subsidiaries 3.0 1.1 2.0 172.7
Total Fresnillo plc 1,022.9 392.4 628.2 160.7
EBITDA
1H 2025 1H 2024 Amount Change %
US$ million
US$ million
US$ million
Profit from continuing operations before income tax 660.3 277.8 382.5 137.7
- Finance income (42.2) (19.2) (23.0) 119.8
+ Finance costs 31.8 39.1 (7.3) (18.7)
+ Revaluation effects of Silverstream contract 190.1 (66.4) 256.5 N/A
- Foreign exchange gain (loss), net 20.8 3.9 16.9 433.3
- Other operating income (5.4) (6.6) 1.2 (18.2)
+ Other operating expense 5.3 11.4 (6.1) (53.5)
+ Depreciation 241.4 304.2 (62.8) (20.6)
EBITDA 1,102.1 544.2 557.9 102.5
EBITDA margin 56.9% 36.6%
EBITDA is a gauge of the Group's financial performance and a key indicator to
measure debt capacity. It is calculated as profit for the year from continuing
operations before income tax, less finance income, plus finance costs, less
foreign exchange gain / (loss), plus the net Silverstream effects, less other
operating income plus other operating expenses and depreciation. In 1H25,
EBITDA doubled to US$1,102.1 million, primarily driven by the higher gross
profit. As a result, EBITDA margin expressed as a percentage of revenue
increased, from 36.6% in 1H24 to 56.9% in 1H25.
SILVERSTREAM EFFECTS
As mentioned in the "Peñoles to buy back Silverstream Contract" section
above, following a thorough evaluation of strategic options, it was concluded
that terminating the contract via a buyback was in the best interests of
Fresnillo and its shareholders. This resulted in a US$133.0 million net loss
after taxes in the income statement. Further information related to the
Silverstream contract is provided in notes 10 and 18 to the consolidated
financial statements.
NET FINANCE COSTS
Net finance income of US$10.4 million in 1H25 compared favourably to the
US$20.0 million net finance costs in 1H24. This was mainly driven by the
increased interest on short term deposits and investments, net of the interest
paid on the 4.250% Senior Notes due 2050.
FOREIGN EXCHANGE
A foreign exchange loss of US$20.8 million was recorded over the period,
mainly driven by the effect of the variation of the Mexican peso/US dollar
exchange rate on the value of peso-denominated net monetary asset position.
This compared negatively to the US$3.9 million loss registered in 1H24.
TAXATION
Income tax expense for the period was US$122.2 million, which compared
negatively to the US$89.5 million income tax expense in 1H24. The effective
tax rate, excluding the special mining rights, was 18.5%, which was below the
30% statutory tax rate. This variance resulted from the revaluation of the
Mexican peso/US dollar spot exchange rate on the tax value of assets and
liabilities and the effect of the inflation rate (Mexican Consumer Price
Index) that impacted the inflationary uplift of the tax base for assets and
liabilities.
The effective tax rate, excluding the special mining rights, was 32.2% in
1H24.
Mining rights remained unchanged at US$70.6 million in the first half of 2025.
PROFIT FOR THE PERIOD
Profit for the period increased from US$117.7 million in 1H24 to US$467.6
million in 1H25, a 297.3% increase period-on-period due to the factors
described above.
1H25 1H24 Amount change US$ million Change %
US$ million US$ million
Profit for the period 467.6 117.7 349.9 297.3
Profit for the period, excluding post-tax Silverstream effects 600.6 71.2 529.4 743.5
Profit due to non-controlling interests(1) 73.8 39.0 34.8 89.0
Profit attributable to equity shareholders of the Group 393.8 78.6 315.2 401.0
Basic and diluted earnings per share (US$/share)(5) 0.534 0.107 0.427 399.1
Basic and diluted earnings per share, excluding post-tax Silverstream effects 0.715 0.044 0.671 1525.0
(US$/share)
CASH FLOW
A summary of the key items from the cash flow statement is set out below:
1H 2025 1H 2024 Amount Change %
US$ million
US$ million
US$ million
Cash generated by operations before changes in working capital 1,103.6 547.9 555.7 101.4
Decrease/(increase) in working capital 191.9 (76.9) 268.8 N/A
Taxes and employee profit sharing paid (255.4) (71.4) (184.0) 257.7
Net cash from operating activities 1,040.1 399.6 640.5 160.3
Disposal of equity instruments 149.5 0.0 149.5 N/A
Silverstream contract 34.3 13.7 20.6 150.4
Financial interest/(expenses) and foreign exchange effects 22.0 (9.6) 31.6 N/A
Dividends paid to shareholders of the Company (501.0) (31.0) (470.0) 1516.1
Purchase of property, plant and equipment (157.9) (170.3) 12.4 (7.3)
Dividends paid to non-controlling interests in subsidiaries (59.4) 0.0 (59.4) N/A
Repayment of loans (2.0) (43.3) 41.3 (95.4)
Net increase/decrease in cash during the period after foreign exchange 525.1 156.4 368.7 235.7
differences
Cash, cash equivalents and short-term investments at 30 June 1,823.0 691.0 1,132.0 163.8
Cash generated by operations before changes in working capital doubled to
US$1,103.6 million, due to the higher profits generated in the period. Working
capital decreased US$191.9 million, mainly due to: i) a US$103.9 million
decrease in trade receivables from related parties; and ii) an increase in
trade and other payables of US$101.7 million.
Taxes, mining rights and employee profit sharing paid increased to US$255.4
million, up 257.7% vs 1H24, mainly due to: i) the higher final income tax paid
in 1H25, net of provisional taxes paid (corresponding to the 2024 tax fiscal
year); ii) the increase in provisional tax payments paid in 1H25; iii) an
increase in mining rights; and iv) higher profit sharing paid.
As a result of the above factors, net cash from operating activities increased
160.3% from US$399.6 million in 1H24 to US$1,040.16 million in 1H25.
The Group received US$149.5 million from the sale of Mag Silver shares and
US$34.3 million related to the proceeds of the Silverstream contract.
Additionally, net financial interests and foreign exchange effects of US$22.0
million compared favourably to the net financial expenses of US$9.6 million in
1H24. Interest received during the period totalled US$42.1 million (US$19.2
million in 1H24). Financial expenses in 1H25 and 1H24 included the interest
paid on the 4.250% Senior Notes due 2050.
Main uses of funds were:
i) Dividends paid to shareholders of the Group in 1H25 totalled US$501.0
million, comprising the 2024 final dividend of 26.1 cents per share, in line
with our dividend policy, and the extraordinary dividend of 41.8 cents per
share, both paid in May 2025. This compared to dividends of US$31.0 million
paid in 1H24.
ii) The purchase of property, plant and equipment for a total of US$157.9
million, a 7.3% decrease vs 1H24. Capital expenditures for 1H25 are described
below:
PURCHASE OF PROPERTY, PLANT AND EQUIPMENT
1H 2025
US$ million
Fresnillo mine 39.0 Mine development and mining works, tailings dam and purchase of in-mine
equipment.
Saucito mine 37.4 Mine development, purchase of in-mine equipment, deepening of the Jarillas
shaft and expansion of tailings dam.
Herradura mine 27.3 Stripping, construction of leaching pads, tailings dam, and purchase of mine
equipment.
Juanicipio mine 24.4 Mine development, expansion of tailings dam, and equipment
San Julián Veins 18.3 Mining works and purchase of in-mine equipment.
Ciénega mine 11.3 Mining works, tailings dam, and purchase of in-mine equipment.
Other 0.2 Minera Bermejal.
Total purchase of property, plant and equipment 157.9
The sources and uses of funds described above resulted in a net increase in
cash and cash equivalents of US$525.1 million, which combined with the
US$1,297.8 million balance at the beginning of the year resulted in cash, cash
equivalents and short-term investments of US$1,823.0 million at the end of
June 2025.
BALANCE SHEET
Fresnillo plc continued to maintain a solid financial position during the
period with cash, cash equivalents and short-term investments of US$1,823.0
million as of 30 June 2025, increasing 40.5% versus 31 December 2024 and
increasing 163.8% versus 30 June 2024. Taking into account the cash, cash
equivalents and short-term investments of US$1,823.0 million and the US$839.6
million outstanding Senior Notes, Fresnillo plc's net cash is US$983.4 million
as at 30 June 2025. This compares to the net cash position of US$458.3 million
as at 31 December 2024.
GOING CONCERN
The Group's business activities, together with the factors likely to affect
its future development, performance and position are set out above in the
Operational Review, with further detail in the Annual Report 2024. The
financial position of the Group, its cash flows and liquidity position are
described in the Financial Review.
In addition, note 18 to the financial statements includes the Group's
objectives, policies and processes for managing its capital; its financial
risk management objectives; details of its financial instruments; and its
exposures to credit risk and liquidity risk.
In making their assessment of the Group's ability to manage its future cash
requirements, the
Directors have considered the Company and Group budgets, and the cash flow
forecasts for the
period to 31st December 2026 (being the going concern assessment period). In
addition, they reviewed a more conservative cash flow scenario with reduced
silver and gold prices of US$30.2 per ounce and US$2,568 per ounce,
respectively throughout this period, whilst maintaining current budgeted
expenditure while only considering projects approved by the Executive
Committee. This resulted in our current cash balances reducing over time, but
maintaining sufficient liquidity throughout the period.
The Directors have further calculated prices (US$5.0 per silver ounce and
US$445 per gold ounce), which would need to prevail until the end of 2026 to
result in cash balances decreasing to minimal levels by the end of 2026,
without applying mitigations.
Should metal prices remain below the stressed prices above for an extended
period, management has identified specific elements of capital and exploration
expenditures which could be deferred without adversely affecting production
profiles throughout the period. On the other hand, management could amend the
mining plans to concentrate on production with a higher margin to accelerate
cash generation without affecting the integrity of the mine plans. Finally, to
maintain a strong liquidity, in January 2024 management acquired a committed
revolving credit facility of US$350 million, which could be used if needed.
After reviewing all of the above considerations, the Directors have a
reasonable expectation that management has sufficient flexibility in adverse
circumstances to maintain adequate resources to continue in operational
existence for the foreseeable future. The Directors, therefore, continue to
adopt the going concern basis of accounting in preparing the annual financial
statements.
DIVIDENDS
The Board of Directors has declared an interim dividend of 20.8 US cents per
Ordinary Share totalling US$153.3 million, which will be paid on 17 September
2025 to shareholders on the register on 15 August 2025. The dividend will be
paid in UK pounds sterling unless shareholders elect to be paid in US dollars.
This interim dividend is higher than the previous period due to the increase
in profit in 1H25, and remains in line with the Group's dividend policy. This
decision was made after a comprehensive review of the Group's financial
situation, assuring that the Group is well placed to meet its current and
future financial requirements, including its development and exploration
projects.
As disclosed in previous reports, the corporate income tax reform introduced
in Mexico in 2014 created a withholding tax obligation of 10% relating to the
payment of dividends, including to foreign nationals. The 2025 interim
dividend will be subject to this withholding obligation.
OUR APPROACH TO RISK MANAGEMENT
Effective risk management is an essential part of our culture and strategy.
The accurate and timely identification, assessment and management of principal
and emerging risks give us a clear understanding of the actions required to
achieve our objectives. We have embedded a global risk management framework
across Fresnillo plc which aims to always ensure consistency and the
application of the appropriate level of oversight.
Key elements of integrated risk management:
· We recognise that risks are inherent to our business: Only through
adequate risk management can internal stakeholders be effectively supported in
making key strategic decisions and implementing our strategy.
· Exposure to risks must be consistent with our risk appetite: The
Board defines and regularly reviews the acceptable level of exposure to
emerging and principal risks: Risks are aligned with our risk appetite, taking
into consideration the balance between threats and opportunities.
· We are all responsible for managing risks: Each business activity
carries out risk evaluations to ensure the sound identification, management,
monitoring and reporting of risks that could impact the achievement of our
goals.
· Risk is analysed using a consistent framework: Our risk management
methodology is applied to all our operating, projects, exploration activities
and support areas, so that we have a comprehensive view of the uncertainties
that could affect us in achieving our strategic goals.
· We are committed to continuous improvement: Lessons learned, and
best practices are incorporated into our procedures to protect and unlock
value sustainably.
I. How we manage risk.
As explained in our 2024 Annual Report, the Company ended last year with good
progress in risk management, including the implementation of actions that
mitigated our most significant risks. In parallel, the risk department
developed a training programme focused on identifying and mitigating the
Company's most exposed risks, which was rolled out across the business to
increase awareness of our risk culture. During this first half of the year, we
continued to improve our risk framework by increasing the use of metrics and
scenarios to more accurately articulate the risk appetite and tolerance limits
within which we wish to operate.
We maintain a risk register through a robust assessment of the potential
principal risks that could affect the Company's performance. This register
ensures that principal risks are identified in a thorough and systematic way
and that agreed definitions of risk are used.
Defining risk appetite is key in embedding the risk management system into our
organisational culture. The Company's risk appetite statement helps to align
our strategy with the objectives of each business unit, clarifying which risk
levels are, or are not, acceptable. It promotes consistent decision-making on
risk, allied to the strategic focus and risk/reward balance approved by the
Board.
During the first part of 2025, our risk team focused its efforts on
identifying and assessing: "Potential action by governments", "Security",
"Cybersecurity" and "Climate change". For the second part of the year, we will
be assessing: "Fraud", "Safety", "Access to land" and "Community relations"
risks.
II. Key thematic areas to consider in 2025.
The Company's risk profile has been developed based on the most significant
risks in our business profiles. All our principal risks are reviewed at least
twice a year through Key Risk Indicators, which were developed to help embed
the risk appetite framework in the business and enhance the monitoring and
mitigation of risks.
Due to the effects caused by geopolitical instability, it has been necessary
to reassess the principal risks and reorder their materiality, likelihood and
impact, as well as reassess related mitigation actions. Geopolitical
instabilities include those relating to the Israel-Iran and Russia-Ukraine
wars, attacks on commercial shipping in the Red Sea by Iran-backed Houthi
rebels, the effects of global inflation on the cost of operations, as well as
security and violence near business units, cyber-attacks, climatic
disturbances, environmental situations close to our operations and changes to
the laws and regulations in the mining industry in Mexico.
III. Our Principal Risk matrix.
Fresnillo plc is exposed to a variety of risks and uncertainties which may
have a financial, operational or reputational impact on the Company, and which
may also have an impact on the achievement of social, economic and
environmental objectives.
A consistent assessment of the likelihood and impact of risk occurrence is
fundamental to establishing, prioritising and managing the risk profile of the
Company. In common with many organisations and in line with good practice, we
use a probability and impact matrix for this purpose.
The following table presents the risk rating of Fresnillo plc's principal
risks as at 30 June 2025:
1H´25 Principal risks Risk appetite 12 Risk level Change in risk level vs ARA´24
1 Potential actions by the government (political, legal, regulatory, tax & Low Very high Stable
concessions)
2 Security Low Very high Stable
3 Cybersecurity Low High Stable
4 Impact of metals prices and exchange rates High High Stable
5 Safety (incidents due to unsafe acts or conditions could lead to injuries or Low High Increasing
fatalities)
6 Global macroeconomic developments (energy and supply chain disruptions, Medium High Stable
inflation and cost)
7 Access to land (full access to the lands) Low High Stable
8 Union relations (labour relations) Low High Stable
9 Human resources (attract and retain requisite skilled people/talent crisis) Medium High Stable
10 Projects (performance risk) Medium High Stable
11 Licence to operate (community relations) Medium Medium Stable
12 Exploration (new ore resources) High Medium Stable
13 Climate change (comply with international standards and regulations) Medium Medium Stable
14 Tailings dams (overflow or collapse of tailings deposits) Low Medium Stable
15 Environmental incidents (cyanide spills and chemical contamination) Low Medium Stable
1H´25 Principal risks Risk appetite 13 Risk level Change in risk level vs ARA´24
1 Potential actions by the government (political, legal, regulatory, tax & Low Very high Stable
concessions)
2 Security Low Very high Stable
3 Cybersecurity Low High Stable
4 Impact of metals prices and exchange rates High High Stable
5 Safety (incidents due to unsafe acts or conditions could lead to injuries or Low High Increasing
fatalities)
6 Global macroeconomic developments (energy and supply chain disruptions, Medium High Stable
inflation and cost)
7 Access to land (full access to the lands) Low High Stable
8 Union relations (labour relations) Low High Stable
9 Human resources (attract and retain requisite skilled people/talent crisis) Medium High Stable
10 Projects (performance risk) Medium High Stable
11 Licence to operate (community relations) Medium Medium Stable
12 Exploration (new ore resources) High Medium Stable
13 Climate change (comply with international standards and regulations) Medium Medium Stable
14 Tailings dams (overflow or collapse of tailings deposits) Low Medium Stable
15 Environmental incidents (cyanide spills and chemical contamination) Low Medium Stable
IV. Our Emerging Risk matrix.
We define an emerging risk as a: "new manifestation of risk that cannot yet be
fully assessed, a risk that is known to some degree but is not likely to
materialise or have an impact for several years, or a risk that the company is
not fully aware of but that could, due to emerging macro trends in the mid or
long-term future, have significant implications for the achievement of our
strategic plan". Furthermore, we consider emerging risks in the context of
longer-term impact and shorter-term risk velocity.
The following table presents the risk rating of Fresnillo plc's emerging risks
as at 30 June 2025:
1H´25 Emerging risks Risk level Change in risk level vs ARA´24
1 Geopolitical instability High Increasing
2 Technological disruption & the rapid proliferation of artificial Medium Stable
intelligence
3 Transition to a low-carbon future (decarbonization) Medium Stable
4 Increased expectations of society and investors Medium Stable
5 Replacement on depletion of ore reserves Medium Stable
6 Unexpected mine-closure liabilities that have the potential to increase costs Low Stable
***Main Focus:
Statement of directors' responsibilities
The Directors of the Company hereby confirm that to the best of their
knowledge:
· the condensed set of financial statements has been prepared in
accordance with IAS 34 Interim Financial Reporting as issued by the
International Accounting Standards Board IASB and as adopted by UK and gives a
true and fair view of the assets, liabilities, financial position and profit
and loss account of the Fresnillo Group as required by DTR 4.2.4; and
· the interim management report includes a fair review of the
information required by
o DTR 4.2.7 (being an indication of important events that have occurred during
the first six months of the financial year and their impact on the condensed
set of financial statements; and a description of the principal risks and
uncertainties for the remaining six months of the year); and
o DTR 4.2.8 (being related party transactions that have taken place in the
first six months of the current financial year and that have materially
affected the financial position or performance of the entity during that
period and changes since the last annual report).
The Directors of the Company are:
Alejandro Baillères Chairman
Arturo Fernández Non-executive director
Fernando Ruiz Non-executive director
Eduardo Cepeda Non-executive director
Charlie Jacobs Non-executive director
Alberto Tiburcio Independent non-executive director
Dame Judith Macgregor Senior Independent non-executive director
Georgina Kessel Independent non-executive director
Guadalupe de la Vega Independent non-executive director
Héctor Rangel Independent non-executive director
Rosa Vázquez Independent non-executive director
Luz Adriana Ramírez Independent non-executive director
On behalf of the board of directors of Fresnillo plc
Octavio Alvídrez
Chief Executive Officer
INDEPENDENT REVIEW REPORT TO FRESNILLO PLC
Conclusion
We have been engaged by the Company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
June 2025 which comprises Interim Consolidated Income Statement, Interim
Consolidated Statement of Comprehensive Income, Interim Consolidated Balance
Sheet, Interim Consolidated Statement of Cash Flows and the related notes 1 to
18. We have read the other information contained in the half yearly financial
report and considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set of
financial statements.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2025 is not prepared, in all
material respects, in accordance with UK adopted International Accounting
Standard 34 and the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements 2410 (UK) "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity" issued by the Financial Reporting
Council. A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance with
International Standards on Auditing (UK) and consequently does not enable us
to obtain assurance that we would become aware of all significant matters that
might be identified in an audit. Accordingly, we do not express an audit
opinion.
As disclosed in note 2a, the annual financial statements of the group are
prepared in accordance with UK adopted international accounting standards. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with UK adopted International
Accounting Standard 34, "Interim Financial Reporting".
Conclusions Relating to Going Concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for Conclusion section of this report,
nothing has come to our attention to suggest that management have
inappropriately adopted the going concern basis of accounting or that
management have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
International Standard on Review Engagements 2410 (UK) "Review of Interim
Financial Information Performed by the Independent Auditor of the Entity"
issued by the Financial Reporting Council, however future events or conditions
may cause the entity to cease to continue as a going concern.
Responsibilities of the directors
The directors are responsible for preparing the half-yearly financial report
in accordance with the Disclosure Guidance and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
In preparing the half-yearly financial report, the directors are responsible
for assessing the company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to
liquidate the company or to cease operations, or have no realistic alternative
but to do so.
Auditor's Responsibilities for the review of the financial information
In reviewing the half-yearly report, we are responsible for expressing to the
Company a conclusion on the condensed set of financial statements in the
half-yearly financial report. Our conclusion, including our Conclusions
Relating to Going Concern, are based on procedures that are less extensive
than audit procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of our report
This report is made solely to the Company in accordance with guidance
contained in International Standard on Review Engagements 2410 (UK) "Review of
Interim Financial Information Performed by the Independent Auditor of the
Entity" issued by the Financial Reporting Council. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other
than the Company, for our work, for this report, or for the conclusions we
have formed.
Ernst & Young LLP
London
5 August 2025
Interim Consolidated Income Statement
Notes For the six months ended 30 June
2025 (Unaudited) 2024 (Unaudited)
(in thousands of US dollars)
| Pre-Silverstream revaluation effect Silverstream revaluation effect Total Pre- Silverstream revaluation effect Silverstream revaluation effect Total
Continuing operations:
Revenues 4 1,936,152 1,936,152 1,488,252 1,488,252
Cost of sales 5 (913,218) (913,218) (1,095,868) (1,095,868)
Gross profit 1,022,934 1,022,934 392,384 392,384
Administrative expenses (55,187) (55,187) (55,299) (55,299)
Exploration expenses (76,698) (76,698) (77,203) (77,203)
Selling expenses (30,414) (30,414) (19,959) (19,959)
Other operating income 5,388 5,388 6,640 6,640
Other operating expenses (5,254) (5,254) (11,410) (11,410)
Profit before net finance costs and income tax 860,769 860,769 235,153 235,153
Finance income 6 42,150 42,150 19,162 19,162
Finance costs 6 (31,777) (31,777) (39,147) (39,147)
Revaluation effects of Silverstream contract 10 (190,055) (190,055) 66,459 66,459
Foreign exchange loss (20,756) (20,756) (3,852) (3,852)
Profit from continuing operations before income tax 850,386 (190,055) 660,331 211,316 66,459 277,775
Corporate income tax 7 (179,232) 57,016 (122,216) (69,576) (19,938) (89,514)
Special mining right 7 (70,552) (70,552) (70,585) (70,585)
Income tax expense 7 (249,785) 57,016 (192,768) (140,161) (19,938) (160,099)
Profit for the period 600,602 (133,039) 467,563 71,155 46,521 117,676
Attributable to:
Equity shareholders of the Company 526,818 (133,039) 393,779 32,125 46,521 78,646
Non-controlling interests 73,784 73,784 39,030 39,030
600,602 (133,039) 467,563 71,155 46,521 117,676
Earnings per share: (US$)
Basic and diluted earnings per ordinary share from continuing operations 8 0.534 0.107
Adjusted earnings per share: (US$)
Adjusted basic and diluted earnings per ordinary share from continuing 8 0.715 0.044
operations
Interim Consolidated Statement of Comprehensive Income
For the six months ended 30 June
2025 2024
(Unaudited) (Unaudited)
(in thousands of US dollars)
Profit for the period 467,563 117,676
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Foreign currency translation 95 1,077
Net other comprehensive income/(loss) that may be reclassified subsequently to 95 1,077
profit or loss
Items that will not be reclassified to profit or loss:
Changes in the fair value of cash flow hedges 653 (172)
Total effect of cash flow hedges 653 (172)
Changes in the fair value of equity investments at fair value through other 53,913 17,593
comprehensive income (FVOCI)
Income tax effect on items that will not be reclassified to profit or loss (16,370) (5,227)
Net other comprehensive income that will not be reclassified to profit or loss 38,196 12,194
Other comprehensive income, net of tax 38,291 13,271
Total comprehensive income, net of tax 505,854 130,947
Attributable to:
Equity shareholders of the Company 431,956 91,937
Non-controlling interests 73,898 39,010
505,854 130,947
Interim Consolidated Balance Sheet
Notes As of 30 June As of 31 December
2025 2024
(Unaudited) (Audited)
(in thousands of US dollars)
ASSETS
Non-current assets
Property, plant and equipment (PPE) 9 2,451,979 2,538,665
Equity instruments at FVOCI 18 39,677 139,968
Silverstream contract 10,18 - 214,437
Deferred tax asset 7 438,771 466,734
Inventories 11 69,760 69,760
Other receivables 12 43,853 5,264
Other assets 3,477 3,101
3,047,517 3,437,929
Current assets
Inventories 11 421,091 412,417
Trade and other receivables 12 532,336 674,211
Prepayments 18,599 13,881
Derivative financial instruments 18 819 -
Silverstream contract 10,18 40,000 44,204
Short-term investments 13 277,869 187,403
Cash and cash equivalents 13 1,545,089 1,110,413
2,835,803 2,442,529
Total assets 5,883,320 5,880,458
EQUITY AND LIABILITIES
Capital and reserves attributable to shareholders of the Company
Share capital 368,546 368,546
Share premium 1,153,817 1,153,817
Capital reserve (526,910) (526,910)
Hedging reserve 421 (92)
Fair value reserve of financial assets at FVOCI 24,333 66,594
Foreign currency translation reserve (7,475) (7,570)
Retained earnings 2,775,090 2,800,956
3,787,822 3,855,341
Non-controlling interests 369,606 355,029
Total equity 4,157,428 4,210,370
Non-current liabilities
Interest-bearing loans 839,609 839,507
Lease liabilities 6,125 7,581
Provision for mine closure cost 253,374 233,748
Provision for pensions and other post-employment benefit plans 13,599 11,454
Deferred tax liability 7 56,224 209,213
1,168,931 1,301,503
Current liabilities
Trade and other payables 317,266 223,779
Notes payable - 2,055
Income tax payable 213,015 113,221
Derivative financial instruments 18 - 189
Lease liabilities 4,722 4,312
Provision for mine closure cost 11,781 11,781
Employee profit sharing 10,177 13,248
556,961 368,585
Total liabilities 1,725,892 1,670,088
Total equity and liabilities 5,883,320 5,880,458
Interim Consolidated Statement of Cash Flows
Notes For the six months ended 30 June
2025 2024
(Unaudited) (Unaudited)
(in thousands of US dollars)
Net cash from operating activities 17 1,040,086 399,574
Cash flows from investing activities
Purchase of property, plant and equipment (157,881) (170,278)
Proceeds from the sale of property, plant and equipment and other assets 258 574
Silverstream contract 10 34,251 13,677
Interest received 42,097 19,162
Disposal of equity instruments at FVOCI(1) 149,458 -
Dividends received from equity instruments at FVOCI 1,752 -
Short-term investments (90,466) -
Net cash used in investing activities (20,531) (136,865)
Cash flows from financing activities
Payment of note payable (2,053) (43,301)
Dividends paid to shareholders of the Company(2) (501,006) (30,978)
Dividends paid to non-controlling interests in subsidiaries (59,400) -
Principal elements of lease payment (2,288) (3,306)
Interest paid(3) (20,134) (24,126)
Net cash used in financing activities (584,881) (101,711)
Net increase in cash and cash equivalents during the period 434,674 160,998
Effect of exchange rate on cash and cash equivalents 2 (4,608)
Cash and cash equivalents at 1 January 13 1,110,413 534,580
Cash and cash equivalents at 30 June 13 1,545,089 690,970
(1) Following the investment strategy of the Group, in May 2025, it was
decided to dispose of the position held in MAG Silver Corp. As of 30 June
2025, the Group has disposed of 8,068,100 out of its 9,314,877 owned shares
and collected US$149.5 million. The gain on the disposal of US$114.3 million
has been transferred from the Fair value reserve of financial assets at FVOCI
to retained earnings, net of tax of US$34.3 million.
Except for the disposal disclosed above, there were no further additions or
disposals of equity investments during the period.
(2) Includes the effect of hedging of dividend payments made in currencies
other than US dollar (note 14).
(3) As of 30 Junes 2025 includes US$0.6 million (30 Junes 2024: US$0.5
million) related to a commitment fee in respect of undrawn amounts of the
syndicated revolving credit facility entered by the Group. No amounts have
been drawdown from the credit facility as of 30 June 2025.
Interim Consolidated Statement of Changes in Equity
Notes Share Share Capital reserve Hedging Fair value Foreign Retained Total attributable Non-controlling interests Total
capital
premium
currency
earnings
equity
Reserve reserve of
translation to shareholders
reserve
financial of the Company
assets at
FVOCI
(in thousands of US dollars)
Balance at 1 January 2024 (Audited) 368,546 1,153,817 (526,910) 50 42,591 (4,204) 2,737,962 3,771,852 295,345 4,067,197
Profit for the period 78,646 78,646 39,030 117,676
Other comprehensive income, net of tax - - - (101) 12,315 1,077 - 13,291 (20) 13,271
Total comprehensive income for the period (101) 12,315 1,077 78,646 91,937 39,010 130,947
Hedging gain transferred to the carrying value of PPE purchased during the - - - (12) - - - (12) 1 (11)
period
Dividends declared and paid 14 - - - - - - (30,950) (30,950) - (30,950)
Balance at 30 June 2024 (Unaudited) 368,546 1,153,817 (526,910) (63) 54,906 (3,127) 2,785,658 3,832,827 334,356 4,167,183
Balance at 1 January 2025 (Audited) 368,546 1,153,817 (526,910) (92) 66,594 (7,570) 2,800,956 3,855,341 355,029 4,210,370
Profit for the period 393,779 393,779 73,784 467,563
Other comprehensive income, net of tax - - - 343 37,739 95 - 38,177 114 38,291
Total comprehensive income for the period - - - 343 37,739 95 393,779 431,956 73,898 505,854
Hedging loss transferred to the carrying value of PPE purchased during the 170 - 170 79 249
period
Transfer of gain on disposal of equity investments at FVOCI to retained - - - - (80,000) - 80,706 706 - 706
earnings (net of tax)
Dividends declared and paid 14 - - - - - - (500,351) (500,351) (59,400) (559,751)
Balance at 30 June 2025 (Unaudited) 368,546 1,153,817 (526,910) 421 24,333 (7,475) 2,775,090 3,787,822 369,606 4,157,428
Notes to the Interim Condensed Consolidated Financial Statements
1 Corporate Information
Fresnillo plc ("the Company", together with its subsidiaries, "the Group") is
a public limited company registered in England and Wales with the registered
number 6344120.
Industrias Peñoles S.A.B. de C.V. ("Peñoles") currently owns 75 percent of
the shares of the Company and the ultimate controlling party of the Company is
the Baillères family, whose beneficial interest is held through Peñoles. The
registered address of Peñoles is Calzada Legaria 549, Mexico City 11250.
Copies of Peñoles' accounts can be obtained from www.penoles.com.mx. Further
information on related party balances and transactions with Peñoles group
companies is disclosed in Note 16.
The interim condensed consolidated financial statements of the Group for the
six months ended 30 June 2025 ("interim consolidated financial statements")
were authorised for issue by the Board of Directors of Fresnillo plc on 4
August 2025.
The Group's principal business is the mining and beneficiation of non-ferrous
minerals, and the sale of related production. The primary contents of this
production are silver, gold, lead and zinc. Further information about the
Group's operating mines and its principal activities is disclosed in Note 3.
2 Significant accounting policies
(a) Basis of preparation and statement of compliance
The interim consolidated financial statements of the Group for the six months
ended 30 June 2025 have been prepared in accordance with IAS 34 Interim
Financial Reporting included in the UK-adopted International Accounting
Standards.
These interim consolidated financial statements do not constitute statutory
accounts as defined in section 435 of the Companies Act 2006. A copy of the
statutory accounts for the year ended 31 December 2024 has been delivered to
the Registrar of Companies. The auditor's report in accordance with Chapter 3
of Part 16 of the Companies Act 2006 in relation to those accounts was
unqualified, did not include a reference to any matters to which the auditor
drew attention by way of emphasis without qualifying the report and did not
contain a statement under section 498(2) or section 498(3) of the UK Companies
Act 2006.
The interim consolidated financial statements have been prepared on a
historical cost basis, except for trade receivables, derivative financial
instruments, equity securities and defined benefit pension scheme assets which
have been measured at fair value.
The interim consolidated financial statements are presented in dollars of the
United States of America (US dollars or US$) and all values are rounded to the
nearest thousand ($000) except where otherwise indicated.
The impact of seasonality or cyclicality on operations is not considered
significant on the interim consolidated financial statements.
(b) Basis of consolidation
The interim consolidated financial statements set out the Group's financial
position as of 30 June 2025 and 31 December 2024, and its operations and cash
flows for the six-month periods ended 30 June 2025 and 30 June 2024.
The basis of consolidation adopted in the preparation of the interim
consolidated financial statements is consistent with that applied in the
preparation of the consolidated financial statements for the year ended 31
December 2024.
(c) Changes in accounting policies and presentation
The accounting policies adopted in the preparation of the interim consolidated
financial statements are consistent with those applied in the preparation of
the consolidated financial statements for the year ended 31 December 2024.
New standards, amendments and interpretations as adopted by the Group
A number of new or amended standards became applicable for the current
reporting period. The Group did not have to change its accounting policies or
make retrospective adjustments as a result of adopting these standards.
Impact of standards issued but not yet applied by the Group
The IASB has issued other amendments resulting from improvements to IFRSs that
management considers do not have any impact on the accounting policies,
financial position or performance of the Group. The Group has not early
adopted any standard, interpretation or amendment that was issued but is not
yet effective.
Significant accounting judgments, estimates and assumptions
Significant accounting judgments, estimates and assumptions are consistent
with those disclosed in the consolidated financial statements for the year
ended 31 December 2024, except for the estimates related to the assessment of
fair value of the Silverstream contract, as explained in note 10.
(d) Going concern
The Group's business activities, together with the factors likely to affect
its future development, performance and position are set out above in the
Operational Review, with further detail in the Annual Report 2024. The
financial position of the Group, its cash flows and liquidity position are
described in the Financial Review. In addition, note 18 to the financial
statements includes the Group's objectives, policies and processes for
managing its capital; its financial risk management objectives; details of its
financial instruments; and its exposures to credit risk and liquidity risk.
In making their assessment of the Group's ability to manage its future cash
requirements, the
Directors have considered the Company and Group budgets, and the cash flow
forecasts for the
period to 31st December 2026 (being the going concern assessment period). In
addition, they reviewed a more conservative cash flow scenario with reduced
silver and gold prices of US$30.2 per ounce and US$2,568 per ounce
respectively throughout this period, whilst maintaining current budgeted
expenditure while only considering projects approved by the Executive
Committee. This resulted in our current cash balances reducing over time but
maintaining sufficient liquidity throughout the period.
The Directors have further calculated prices (US$5.0 per ounce and US$445 per
ounce for silver and gold respectively), which would need to prevail to the
end of 2026 to result in cash balances decreasing to minimal levels by the end
of 2026, without applying mitigations.
Should metal prices remain below the stressed prices above for an extended
period, management have identified specific elements of capital and
exploration expenditures which could be deferred without adversely affecting
production profiles throughout the period. On the other hand, management could
amend the mining plans to concentrate on production with a higher margin to
accelerate cash generation without affecting the integrity of the mine plans.
Finally, to maintain a strong liquidity, in January 2024 management acquired a
committed revolving credit facility of US$350 million, which could be used if
needed.
After reviewing all of the above considerations, the Directors have a
reasonable expectation that management have sufficient flexibility in adverse
circumstances to maintain adequate resources to continue in operational
existence for the foreseeable future. The Directors, therefore, continue to
adopt the going concern basis of accounting in preparing the interim financial
statements.
3 Segment reporting
For management purposes, the Group is organised into operating segments based
on producing mines.
At 30 June 2025 the Group has seven reportable operating segments represented
by seven producing mines as follows:
The Fresnillo mine, located in the State of Zacatecas, an underground silver
mine;
The Saucito mine, located in the State of Zacatecas, an underground silver
mine;
The Cienega mine, located in the State of Durango, an underground gold mine;
The Herradura mine, located in the State of Sonora, a surface gold mine;
The Noche Buena mine, located in the State of Sonora, a surface gold mine;
The San Julian mine, located on the border of Chihuahua / Durango states, an
underground silver-gold mine; and
The Juanicipio mine, located in the State of Zacatecas, an underground silver
mine.
The operating performance and financial results for each of these mines are
reviewed by management. As the Group´s Chief Operating Decision Maker (CODM)
does not review segment assets and liabilities, the Group has not disclosed
this information.
In the six months ended 30 June 2025 99.7% (30 June 2024: 99.8%) of revenue
was derived from customers based in Mexico.
Management monitors the results of its operating segments separately for the
purpose of performance assessment and making decisions about resource
allocation. Segment performance is evaluated without taking into account
certain adjustments included in Revenue as reported in the Interim
Consolidated Income Statement, and certain costs included within Cost of sales
and Gross profit which are considered to be outside of the control of the
operating management of the mines. The table below provides a reconciliation
from segment profit to Gross profit as per the Interim Consolidated Income
Statement. Administrative expenses, Exploration expenses, Selling expenses,
and Other income and expenses not related to production activities included in
the Interim Consolidated Income Statement are not allocated to operating
segments. Also, the Group's financing (including Finance cost and Finance
income) and Income taxes are managed on a Group basis and are not allocated to
operating segments. Transactions between reportable segments are accounted for
on an arm's length basis similar to transactions with third parties.
Operating segments
The following tables present revenue and profit information regarding the
Group's operating segments for the six months ended 30 June 2025 and 2024,
respectively. Revenues for the six months ended 30 June 2025 and 2024 include
those derived from contracts with customers and other revenues, as shown in
note 4.
Six months ended 30 June 2025
US$ thousands Fresnillo Herradura Cienega Saucito Noche San Julian Juanicipio Other(4) Adjustments and eliminations Total
Buena
( )
Revenues:
Third party(1) 250,922 622,594 97,328 376,443 15,947 213,882 359,036 1,936,152
Inter-Segment 22,471 2,664 24,888 (50,023) -
Segment revenues 273,393 622,594 97,328 376,443 15,947 213,882 361,700 24,888 (50,023) 1,936,152
Segment profit(2) 161,736 374,192 43,124 235,132 3,924 137,117 292,108 24,015 877 1,272,225
Depreciation and amortisation (241,425)
Employee profit sharing (7,866)
Gross profit as per the income statement 1,022,934
Capital expenditure(3) 39,050 27,336 11,308 37,360 - 18,315 24,353 159 157,881
(1) During 2025 all segment revenues were related to sales to Met-Mex, except
in Juanicipio which includes sales to other external customers of US$6.3
million.
(2) The Group's CODM primarily uses this measure to monitor the operating
results directly related to the production of its business units separately to
make decisions about resource allocation and performance assessment. Segment
profit excluding foreign exchange hedging gains, depreciation and amortisation
and employee profit sharing.
(3) Capital expenditure represents the cash outflow in respect of additions to
property, plant and equipment, including stripping cost, mine development and
purchase of mine equipment, excluding additions relating to changes in the
mine closure provision. Significant additions include expansion of tailings
dam at Juanicipio and Saucito, mining works at Fresnillo, Saucito and San
Julian, and stripping cost at Herradura mine.
(4) Other inter-segment revenue corresponds to leasing services provided by
Minera Bermejal, S.A. de C.V; capital expenditure mainly corresponds to
exploration entities.
Six months ended 30 June 2024
US$ thousands Fresnillo Herradura Cienega Saucito Noche San Julian Juanicipio Other(4) Adjustments and eliminations Total
Buena
Revenues:
Third party(1) 219,855 305,047 109,958 325,815 20,470 216,491 290,616 - - 1,488,252
Inter-Segment 14,663 152 25,918 (40,733) -
Segment revenues 234,518 305,047 109,958 325,815 20,470 216,491 290,768 25,918 (40,733) 1,488,252
Segment profit(2) 102,952 60,540 43,183 146,493 (408) 110,630 214,756 25,187 (737) 702,596
Depreciation and amortisation (304,230)
Employee profit sharing (5,982)
Gross profit as per the income statement 392,384
Capital expenditure(3) 42,984 21,915 7,659 51,983 - 28,956 16,363 418 170,278
(1) During 2024 all segment revenues were related to sales to Met-Mex, except
in Juanicipio which includes sales to other external customers of US$5.6
million.
(2) The Group's CODM primarily uses this measure to monitor the operating
results directly related to the production of its business units separately to
make decisions about resource allocation and performance assessment. Segment
profit excluding foreign exchange hedging gains, depreciation and amortisation
and employee profit sharing.
(3) Capital expenditure represents the cash outflow in respect of additions to
property, plant and equipment, including stripping cost, mine development and
purchase of mine equipment, excluding additions relating to changes in the
mine closure provision. Significant additions include expansions of tailings
damn at Saucito and San Julian, mining works at San Julian, Fresnillo and
Saucito and striping cost at Herradura mine.
(4) Other inter-segment revenue corresponds to leasing services provided by
Minera Bermejal, S.A. de C.V; capital expenditure mainly corresponds to Minera
Bermejal, S. de R.L. de C.V.
4 Revenues
Revenues reflect the sale of goods, being concentrates, doré, slag,
precipitates and activated carbon of which the primary contents are silver,
gold, lead and zinc.
(a) Revenues
Six months ended 30 June
2025 2024
(in thousands of US dollars)
Revenues from contracts with customers 1,931,534 1,491,486
Revenues from other sources
Provisional pricing adjustment on products sold 4,618 (3,234)
1,936,152 1,488,252
(b) Revenues by product sold
Six months ended 30 June
2025 2024
(in thousands of US dollars)
Lead concentrates (containing silver, gold, lead and by-products) 830,678 743,456
Doré and slag (containing gold, silver and by-products) 379,667 288,355
Zinc concentrates (containing zinc, silver and by-products) 163,362 178,156
Precipitates (containing gold and silver) 297,303 235,540
Activated carbon (containing gold, silver and by-products) 258,875 37,162
Iron concentrates (containing silver, gold, lead and by-products) 6,267 5,583
1,936,152 1,488,252
(c) Value of metal content in products sold
Invoiced revenues are derived from the value of metal content which is
determined by commodity market prices and adjusted for the treatment and
refining charges to be incurred by the metallurgical complex of our customer.
The value of the metal content of the products sold, before treatment and
refining charges is considered as an alternative performance measure for the
Group. The Group considers this a useful additional measure to help understand
underlying factors driving revenue in terms of volumes sold and realised
prices. The value of production sold by metal is as follows:
Six months ended 30 June
2025 2024
(in thousands of US dollars)
Silver 827,671 774,027
Gold 959,834 580,296
Zinc 135,866 67,696
Lead 59,572 138,199
Value of metal content in products sold 1,982,943 1,560,218
Refining and treatment charges(1) (46,791) (71,966)
Total revenues(2) 1,936,152 1,488,252
(1) The methodology to determine the refining and treatment charges takes into
account industry benchmark charges and adjustments to reflect ore composition
and transport costs, refer to note 16(b).
(2) Includes provisional price adjustments which represent changes in the fair
value of trade receivables resulting in a gain of US$4.6 million (2024: loss
of US$3.2 million).
The average realised prices for the gold and silver content of products sold
prior to the deduction of treatment and refining charges, were:
Six months ended 30 June
2025 2024
(in US dollars per ounce)
Gold 3,167.62 2,171.91
Silver 33.67 27.62
i. Cost of sales
Six months ended 30 June
2025 2024
(in thousands of US dollars)
Depreciation and amortisation 241,425 304,230
Contractors 156,108 184,292
Operating materials 121,408 158,785
Maintenance and repairs 134,270 156,077
Energy 100,686 134,874
Personnel expenses(1) 112,350 123,172
Mining concession rights and contributions 13,445 13,447
Mine equipment leased 7,637 37,751
Surveillance 9,880 11,054
Insurance 6,460 6,618
IT services 5,325 4,064
Freight 3,350 4,044
Other(2) 10,465 15,964
Cost of production 922,809 1,154,372
Loss on foreign currency hedges - 29
Change in work in progress and finished goods (ore inventories) (9,591) (58,533)
Cost of sales 913,218 1,095,868
(1) Personnel expenses include employees' profit sharing of US$7.9 million for
the six months ended 30 June 2025 (six months ended 30 June 2024: US$6.0
million).
2 Mainly include buildings cleaning and maintenance services,
short-term and low value leases and communications services.
6 Finance income and finance costs
Six months ended 30 June
2025 2024
(in thousands of US dollars)
Finance income:
Interest on short-term deposits and investments 38,481 17,037
Interest on tax receivables 1,787 2,105
Other 1,882 20
42,150 19,162
Finance costs:
Interest on interest-bearing loans and notes payables 19,747 22,904
Interest on lease liabilities 456 511
Unwinding of discount on provisions 10,779 13,210
Other 795 2,522
31,777 39,147
7 Income tax expense
Six months ended 30 June
2025 2024
(in thousands of US dollars)
Current corporate income tax:
Income tax charge 263,121 60,355
Amounts over provided in previous periods (23,049) (158)
240,072 60,197
Deferred corporate income tax:
Origination and reversal of temporary differences (60,839) 9,379
Revaluation effects of Silverstream contract (57,017) 19,938
(117,856) 29,317
Corporate income tax 122,216 89,514
Current special mining right:
Special mining right charge(1) 93,427 21,251
93,427 21,251
Deferred special mining right:
Origination and reversal of temporary differences (22,875) 49,334
Special mining right 70,552 70,585
Income tax expense as reported in the income statement 192,768 160,099
(1) The total mining concession rights paid during the six-month period were
US$11.9 million (2024: US$16.2 million) and have been recognised in the income
statement within cost of sales and exploration expenses.
Tax charged within the six-month period ended 30 June 2025 has been calculated
by applying the effective rate of tax which is expected to apply to the Group
for the period ended 31 December 2025 using rates substantively enacted by 30
June 2025 as required by IAS 34 Interim Financial Reporting. The effective
income tax rate expected for the full financial year is 18.5%, generating an
income tax expense of US$122.2 million.
The effective tax rate for corporate income tax for the six months ended 30
June 2025 is 18.5% (six months ended 30 June 2024: 32.2%) and 29.2% including
the special mining right (six months ended 30 June 2024: 60.4%). The main
factors that decrease the effective tax rate for corporate income tax below
30% are the foreign exchange effect on tax value of assets and liabilities
(3.4)% the uplift of tax values corresponding to fixed assets (3.7)%, the
Special Mining Right credit (3.2)% and the incentive for Northern Border Zone
(3.3)%. The net deferred tax asset increase to US$381.7 million (31 December
2024: net deferred tax asset of US$257.5 million) is primarily due the
increase in the value of tax assets due to effect of the devaluation of the US
Dollar against the Mexican peso.
8 Earnings per share
Earnings per share ('EPS') is calculated by dividing profit for the period
attributable to equity shareholders of the Company by the weighted average
number of ordinary shares in issue during the period.
The Company has no dilutive potential ordinary shares.
For the six months ended 30 June 2025 and 30 June 2024, earnings per share
have been calculated as follows:
Six months ended 30 June
2025 2024
(in thousands of US dollars)
Earnings:
Profit from the period attributable to equity holders of the Company 393,779 78,646
Adjusted profit from the period attributable to equity holders of the Company 526,818 32,125
Adjusted profit is profit for the period as disclosed in the Interim
Consolidated Income Statement adjusted to exclude revaluation effects of the
Silverstream contract of US$190.0 million loss (US$133.0 million net of tax)
(2024: US$66.5 million gain and US$46.5 million net of tax).
Adjusted earnings per share have been provided in order to provide a measure
of the underlying performance of the Group, prior to the revaluation effects
of the Silverstream contract, a derivative financial instrument.
Six months ended 30 June
2025 2024
Number of shares:
Weighted average number of ordinary shares in issue ('000) 736,894 736,894
Six months ended 30 June
2025 2024
Earnings per share:
Basic and diluted earnings per ordinary share (US$) 0.534 0.107
Adjusted basic and diluted earnings per ordinary share (US$)
0.715 0.044
9 Property, plant and equipment
The changes in property, plant and equipment, including right-of-use assets,
during the six months ended 30 June 2025 are principally additions of US$156.7
million (six months ended 30 June 2024: US$135.6 million) and depreciation and
amortisation of US$242.5 million, of which US$0.6 million was capitalised as a
part of the cost of other fixed assets (six months ended 30 June 2024:
US$302.9 million, of which US$0.7 million was capitalised). Significant
additions include expansion of tailings dams at Juanicipio and Saucito, mining
works at Fresnillo, Saucito and San Julian, and stripping cost at Herradura
mine.
As of 30 June 2025, the Group has contractual commitments related to the
construction and acquisition of property, plant and equipment of US$101.8
million (30 June 2024: US$78.9 million).
( )
( )
10 Silverstream contract
On 31 December 2007, the Group entered into an agreement with Peñoles through
which it is entitled to receive the proceeds received by the Peñoles Group in
respect of the refined silver sold from the Sabinas Mine ('Sabinas'), a
base-metal polymetallic mine owned and operated by the Peñoles Group. The
agreement required an upfront payment of US$350 million by Fresnillo. In
addition, a per ounce cash payment of US$2.00 in years one to five and US$5.00
thereafter (subject to an inflationary adjustment that commenced from 31
December 2013) is payable to Peñoles. The cash payment per ounce for the
period ended 30 June 2025 was US$5.83 per ounce (30 June 2024: US$5.74 per
ounce). Under the contract, the Group has the option to receive a net cash
settlement from Peñoles attributable to the silver produced and sold from
Sabinas, to take delivery of an equivalent amount of refined silver or to
receive settlement in the form of both cash and silver. If, by 31 December
2032, the amount of silver produced by Sabinas is less than 60 million ounces,
a further payment is due from Peñoles of US$1.0 per ounce of shortfall.
On 12 November 2024 Fresnillo announced it had received notification from
Peñoles, the owner and operator of the Sabinas mine, that the mine was
experiencing operational and financial difficulties impacting silver
production and the long-term viability of the mine and consequently of the
Agreement. Fresnillo and Peñoles immediately set up a working group to assess
the extent of the challenges faced by the mine and identify a realistic and
sustainable solution for the Sabinas mine and the Agreement. As result,
Fresnillo reported a revaluation loss of the Agreement, net of its
amortisation and before taxes, of US$182.3 million in its 2024 accounts,
valuing the Agreement at US$258.6 million before taxes.
In May 2025 the Group received an updated reserves report that is based on
additional information obtained in 2025 from Peñoles for the Sabinas mine,
audited independently by SRK Consulting in July, which used a rigorous
criteria, including higher cut off grades and analysis new of infill
exploration data. This showed a significant reduction in reserves from
previous reports (more than 50%). In light of this additional information, a
revised mine plan and sequencing programme were drawn up which materially
impacted future production and free cash flow projections.
The Group together with Peñoles assessed strategic options for Sabinas given
the financial profile of the mine whereby revenues did not cover its
operational costs, nor the obligations imposed by the Agreement. These options
included changing the terms and conditions of the Silverstream Agreement
(increasing the strike price), the transfer of ownership of the mine to
Fresnillo (becoming the owner and operator) and other ownership structures, in
lieu of the Agreement, or immediate suspension of mine operations for an
indefinite period. Based on the analysis and after careful consideration, it
was concluded there were no realistic prospect of increasing the expected
value of the mine nor the possibility of continuing with the Agreement in its
current form.
Finally, Peñoles offered US$40 million to buy back the Silverstream agreement
as an additional alternative. Based on the above-mentioned analysis Management
considers this to be the best option in terms of risk and rewards.
The Silverstream contract represents a derivative financial instrument which
has been recorded at Fair Value Through Profit or Loss (FVPL) and classified
within non-current and current assets as appropriate. Changes in the
contract's fair value, other than those represented by the realisation of the
asset through the receipt of either cash or refined silver, are charged or
credited to the Interim Consolidated Income Statement.
As of 30 June 2025, the Group has adjusted the fair value of the Silverstream
contract to reflect the offer of US$40 million from Peñoles to buyback the
Contract.
Judgments and key estimates used to determine the fair value as of 30 June
2025 consider key new information obtained during the period. The various
strategic alternatives were assessed from a financial and operational
perspective, including the assessment of the expected remaining value of the
mine, considering the revised mine plan. The Group has performed relevant
procedures, including financial and operational due diligence, which was
validated by SRK in July, and has held discussions between the parties and
internal governance procedures, comprising Board and Audit Committee meetings.
The Independent Directors of Fresnillo have received financial advice from
BofA Securities in relation to the consideration payable by Peñoles to
Fresnillo to buy back the Silverstream agreement.
The Independent Directors believe the valuation offered by the buyback of the
Silverstream Agreement is fair and in the best interests of Fresnillo
shareholders given the considerable challenges identified.
Although the final acceptance of Peñoles' offer is expected subsequent to the
reporting period, taking into account the due diligence performed and the
external advice taken, the Group has concluded that the offer from Peñoles
represents the fair value of the underlying silver capable of being mined at
Sabinas. This value has been used as the key input into the fair value model
for the Silverstream derivative as at 30 June 2025.
In the six months ended 30 June 2025, total proceeds received in cash were
US$34.2 million (2024: US$13.7 million) of which, US$5.8 million was in
respect of proceeds receivable as at 30 June 2025 (2024: US$16.5 million).
Cash received in respect of the period of US$17.7 million (six months ended 30
June 2024: US$8.6 million) corresponds to 1.6 million ounces of payable silver
(six months ended 30 June 2024: 0.7 million ounces). As at 30 June 2025, a
further US$10.8 million (30 June 2024: US$8.2 million) of cash corresponding
to 194,962 ounces of silver is due (30 June 2024: 346,983 ounces).
A reconciliation of the beginning balance to the ending balance as at 30 June
2025 and 31 December 2024 is shown below.
30 June 31 December 2024
2025
(in thousands of US dollars)
Beginning balance 258,641 482,340
Cash received in respect of the period (17,735) (24,907)
Cash receivable (10,851) (16,515)
Remeasurement gain recognised in profit or loss (190,055) (182,276)
Ending balance 40,000 258,641
Less-Current portion 40,000 44,204
Non-current portion - 214,437
The US$190.0 million unrealised loss recorded in the Interim Consolidated
Income Statement (six months ended 30 June 2024: US$66.4 million gain)
resulted mainly resulted from the decrease in reserves in Sabinas mine which
underlies the change in the expected future proceeds.
As of 31 December 2024, the fair value of Silverstream contract was based on
the following significant assumptions:
- Forecasted volumes (millions of ounces/moz):
- Silver to be produced and sold over the life of mine 29.0 moz
- Average annual silver to be produced and sold 2.9 moz
- Weighted average discount rate 20.1%
- Future silver prices (US$ per ounce)
As at Year 1 Year 2 Year 3 Year 4 Year 5 Long-term
31 December 2024 29.70 31.36 32.74 33.31 33.77 24.5
11 Inventories
As at 30 June As at 31 December 2024
2025
(in thousands of US dollars)
Finished goods(1) 81,977 36,766
Work in progress(2) 242,744 274,936
Ore stockpile(3) 3,370 6,281
Operating materials and spare parts 177,295 177,043
Inventories at lower of cost and net realisable value 505,386 495,026
Allowance for obsolete and slow-moving inventories (14,535) (12,849)
Balance at lower of cost and net realisable value 490,851 482,177
Less-Current portion 421,091 412,417
Non-current portion(4) 69,760 69,760
(1) Finished goods include metals contained in concentrates and doré bars,
and concentrates on hand or in transit to a smelter or refinery.
(2) Work in progress includes metals contained in ores on leaching pads for an
amount of US$212.6 million (2024: US$253.5 million) and in stockpiles US$30.1
million (2024: US$21.4 million) that will be processed in dynamic leaching
plants .
(3) Ore stockpile includes ore mineral obtained at Juanicipio.
(4) Non-current inventories relate to ore in leaching pads where the leaching
process has stopped and is not expected to restart within twelve months. As at
30 June 2025 and 31 December 2024 non-current inventories corresponds to
Soledad & Dipolos mine unit .
12 Trade and other receivables
C As at 30 June As at 31 December 2024
2025
(in thousands of US dollars)
Trade receivables from related parties (Note 16)(1) 457,431 548,760
Value Added Tax receivable(2) 38,732 89,441
Other receivables from related parties 17,675 17,339
Other trade receivables(1) 405 2,079
Other receivables 18,443 16,885
532,686 674,504
Expected credit loss of 'Other receivables' (350) (293)
532,336 674,211
Other receivables classified as non-current assets:
Other receivables 4,769 5,264
Value Added Tax receivable(2) 39,084 -
43,853 5,264
576,189 679,475
(1) Trade receivables from related parties and other trade receivables are
valued at fair value based on forward market prices.
(2) During the first half of 2025, the Group received a new ruling
corresponding to Value Added Tax favourable balances that were already
undergoing a legal process. Based on the latest ruling, the Group expects to
recover the balances in a period that exceeds twelve months; thus, the
corresponding balance has been presented as long-term.
Balances corresponding to Value Added Tax receivables and US$2.3 million
within Other receivables (2024: US$2.3 million) are not financial assets.
13 Cash and cash equivalents
The Group considers cash and cash equivalents when planning its operations and
in order to achieve its treasury objectives.
As at 30 June As at 31 December 2024
2025
(in thousands of US dollars)
Cash at bank and on hand 8,265 2,194
Short-term deposits 1,536,824 1,108,219
Cash and cash equivalents 1,545,089 1,110,413
Cash at bank earns interest at floating rates based on daily bank deposits.
Short-term deposits are made for varying periods of between one day and three
months, depending on the immediate cash requirements of the Group, and earn
interest at the respective short-term deposit rates. Short-term deposits can
be withdrawn at short notice without any penalty or loss in value.
As at 30 June As at 31 December 2024
2025
(in thousands of US dollars)
Short-term investments 277,869 187,403
Short-term investments are made for fixed periods longer than three months and
earn interest at fixed rates without an option for early withdrawal. As at 30
June 2025 short-term investments are held in fixed-term bank deposits of
US$277.9 million (31 December 2024: US$187.4 million).
14 Dividends paid
Dividends declared and authorised by the Company are as follows:
Per share Amounts
US Cents US$ Million
Six months ended 30 June 2025
Total dividends paid during the period(1,2) 67.9 500.3
Six months ended 30 June 2024
Total dividends paid during the period(3) 4.2 30.9
(1) Final dividend for 2024 US$26.1 cents approved at the Annual General
Meeting on 20 May 2025 and paid on 30 May 2025.
(2) Special dividend for 2024 US$41.8 cents approved at the Annual General
Meeting on 20 May 2025 and paid on 30 May 2025.
(3) Final dividend for 2023 approved at the Annual General Meeting on 21 May
2024 and paid on 29 May 2024.
A reconciliation between dividend declared, dividends recognised in retained
earnings and dividend presented in the cash flow statements is as follows:
Six months ended 30 June
2025 2024
US$ thousands
US$ thousands
Dividends declared and authorised 500,351 30,950
Foreign exchange and hedging effect 655 28
Dividends paid 501,006 30,978
The directors have declared an interim dividend of US$20.8 cents per share and
is not recognised as a liability as at 30 June 2025. Dividends paid from the
profits generated from 1 January 2014 to residents in Mexico and to
non-resident shareholders may be subject to an additional tax of up to 10%,
which will be withheld by the Group.
15 Contingencies
The contingencies in the Group's annual consolidated financial statements for
the year ended 31 December 2024 as published in the 2024 Annual Report, are
still applicable as of 30 June 2025, with the following updates:
(Regarding the 2017 tax audit of Comercializadora de Metales Fresnillo, on 4
April 2025, PRODECON concluded the process, and no agreement was reached
between Comercializadora de Metales Fresnillo and the Mexican tax authorities
(SAT) on the Conclusive Agreement procedure. The SAT must issue its conclusion
on this matter no later than September 2025.
Regarding the 2018 tax audit of Comercializadora de Metales Fresnillo,
findings were shared by the SAT on 10 March 2025, which mainly relate to the
tax treatment of the Silverstream transaction. The Company responded on 4
April 2025 and began a Conclusive Agreement procedure before the Mexican tax
ombudsman (PRODECON).
On 6 November 2024, the SAT initiated an audit of the income tax computation
of Comercializadora de Metales Fresnillo for the year 2019.
The Company has continued to discuss with the SAT the Silverstream transaction
for the years 2016 through 2019, and it is expected that a favourable outcome
for the Company is finalized no later than September 2025.
It is not practical to determine the amount of any potential claims or the
likelihood of any unfavourable outcome arising from this or any future
inspections that may be initiated.).
The Directors and their external tax advisors consider management´s
interpretation of the relevant legislation and assessment of taxation to be
appropriate, that the Group has complied with all regulations and paid or
accrued all taxes and withholdings that are applicable and that it is probable
that the Group's tax position will be sustained.
Regarding Soledad and Dipolos rulings on occupation agreements over land where
no extraction took place, in April 2025 the Agrarian Court issued a highly
irregular order (in form and substance) as it encompasses extraction of
minerals carried out in the Dipolos Pit, which matter was already the subject
of a different and final unappealable judicial ruling which did not include
restitution of any minerals extracted from the Dipolos pit. Fresnillo
strongly refutes the court order and has challenged it before the competent
federal courts where definitive stay orders have been granted in favour of
Minera Penmont with the effect of suspending any payment obligation on behalf
of Minera Penmont until the matter is definitively settled by the federal
courts. At this stage, the Company holds strong arguments to believe that the
Agrarian Court's decision will be overturned by the higher federal courts,
therefore, no provision has been recorded in respect of this matter..
16 Related party balances and transactions
The Group had the following related party transactions during the six months
ended 30 June 2025 and 30 June 2024 and balances as at 30 June 2025 and 31
December 2024.
Related parties are those entities owned or controlled by the ultimate
controlling party, as well as those who have a minority participation in Group
companies and key management personnel of the Group.
(a) Related party accounts receivable and payable
Accounts receivable Accounts payable
As at 30 June 2025 As at 31 December 2024 As at 30 June 2025 As at 31 December 2024
(in thousands of US dollars)
Trade:
Metalúrgica Met-Mex Peñoles, S.A. de C.V. 457,431 548,760 6,622
Other:
Industrias Peñoles, S.A.B. de C.V. 15,597 16,516 8,485 -
Metalúrgica Met-Mex Peñoles, S.A. de C.V. 1,656 322 695 1,791
Servicios Administrativos Peñoles, S.A de C.V. 28,865 6,420
Servicios Especializados Peñoles, S.A. de C.V. 5,299 10,374
Fuentes de Energía Peñoles, S.A. de C.V. 19,141 6,373
Termoeléctrica Peñoles, S. de R.L. de C.V. - 439
Peñoles Tecnología, S.A. de C.V. 4,004 1,640
Eólica de Coahuila S.A. de C.V. 3,483 2,693
Minera Capela, S.A. de C.V. 2 2
Grupo Nacional Provincial, S.A. B. de C.V. 374 357
Other 48 144 2,101 2,849
475,106 566,099 72,075 39,203
Related party accounts receivable and payable will be settled in cash.
Other balances due from related parties:
As at 30 June 2025 As at 31 December 2024
(in thousands of US dollars)
Silverstream contract:
Industrias Peñoles, S.A.B. de C.V. 40,000 258,641
Details of the Silverstream contract are provided in note 10.
(b) Principal transactions with affiliates are as follows:
Six months ended 30 June
2025 2024
(in thousands of US dollars)
Income:
Sales(1):
Metalúrgica Met-Mex Peñoles, S.A. de C.V. 1,929,885 1,482,686
Other income 4,641 915
Total income 1,934,526 1,483,601
( )
Six months ended 30 June
2025 2024
(in thousands of US dollars)
Expenses:
Administrative Services:
Servicios Administrativos Peñoles, S.A. de C.V.(2) 22,367 27,798
Servicios Especializados Peñoles, S.A. de C.V. (3) 2,583 8,852
Peñoles Tecnología, S.A. de C.V. 2,438 2,389
27,388 39,039
Energy:
Fuentes de Energía Peñoles, S.A. de C.V. 19,503 15,183
Termoeléctrica Peñoles, S. de R.L. de C.V. - 9,009
Eólica de Coahuila, S.A. de C.V. 21,215 27,457
40,718 51,649
Operating materials and spare parts:
Wideco Inc 2,688 2,720
Metalúrgica Met-Mex Peñoles, S.A. de C.V. 7,894 29,828
10,582 32,548
Equipment repairs and administrative services:
Serviminas, S.A. de C.V. 311 576
Insurance premiums:
Grupo Nacional Provincial, S.A.B. de C.V. 5,868 2,224
Other expenses 1,824 1,354
Total expenses 86,691 127,390
( )(2 Includes US$0.1 million (2024: US$0.5 million) corresponding to
expenses reimbursed.)
( 3 Includes US$ nill (2024: US$4.2 million) relating to engineering costs
that were capitalised.)
(c) Compensation of key management personnel of the Group
Key management personnel include the members of the Board of Directors and the
Executive Committee who receive remuneration.
Six months ended 30 June
2025 2024
(in thousands of US dollars)
Salaries and bonuses 4,378 2,015
Post-employment pension 197 148
Other benefits 230 248
Total compensation paid to key management personnel 4,805 2,411
17 Notes to the consolidated statement of cash flows
Notes Six months ended 30 June
2025 2024
(in thousands of US dollars)
Reconciliation of profit for the period to net cash generated from operating
activities
Profit for the period 467,563 117,676
Adjustments to reconcile profit for the period to net cash inflows from
operating activities:
Depreciation and amortisation 241,898 304,781
Employee profit sharing 8,024 6,403
Deferred income tax (credit)/expense 7 (140,731) 78,651
Current income tax expense 7 333,499 81,448
Loss on the sale of property, plant and equipment 706 209
Net finance (income)/costs (7,407) 14,732
Foreign exchange gain 11,051 9,668
Difference between pension contributions paid and amounts recognised in the 721 829
income statement
Dividends received from equity instruments at FVOCI (1,752) -
Changes in fair value of Silverstream 10 190,055 (66,459)
Operating cash flow before change in working capital 1,103,627 547,938
Working capital adjustments
Decrease/(increase) in trade and other receivables 103,938 (12,817)
(Increase)/decrease in prepayments and other assets (5,094) 12,154
Increase in inventories (8,674) (46,259)
Increase/(decrease) in trade and other payables 101,693 (30,022)
Cash generated from operations 1,295,490 470,994
Income tax paid(1) (243,772) (69,358)
Employee profit sharing paid (11,632) (2,062)
Net cash from operating activities 1,040,086 399,574
(1) Income tax paid includes US$177.1 million corresponding to corporate
income tax (June 2024: US$46.5 million) and US$63.2 million corresponding to
special mining right (June 2024: US$22.9 million), for further information
refer to note 7.
18 Financial instruments
a. Classification
As at 30 June 2025
US$ thousands
Financial assets: Amortised Fair value through OCI Fair value (hedging instruments) Fair value through profit or loss
cost
Trade and other receivables (1) 12,164 - - 468,282
Equity instruments at FVOCI - 39,677 - -
Silverstream contract 40,000
Derivative financial instruments - - 819 -
Financial liabilities: Amortised Fair value (hedging instruments) Fair value through profit or loss
Cost
Interest-bearing loans - 839,609 -
Trade and other payables - 210,634 -
( )
As at 31 December 2024
US$ thousands
Financial assets: Amortised Fair value through OCI Fair value (hedging instruments) Fair value through profit or loss
cost
Trade and other receivables (1) 8,542 - - 565,276
Equity instruments at FVOCI - 139,968 - -
Silverstream contract - - - 258,641
Financial liabilities: Amortised Fair value (hedging instruments) Fair value through profit or loss
Cost
Interest-bearing loans 839,507 - -
Notes payable(2) 2,055 - -
Trade and other payables 150,094
Derivative financial instruments 189 -
(1 Trade and other receivables and embedded derivative within sales contracts
are presented net in Trade and other receivables in the balance sheet.)
(2 Corresponds to interest-bearing notes payable received from Minera los
Lagartos, S.A. de C.V. which holds a non-controlling interest in Juanicipio
project. The notes were denominated in US Dollars and bear interest at a rate
that ranges between 6.76% to 7.34%. During the period of six months ended June
2025 payments from these notes amounted to US$2.1 million (2024: nil).
Interest paid amount US$0.1 million (2024: US$4.0 million).)
b. Fair value measurement
Fair value hierarchy
The Group uses valuation techniques that are appropriate in the circumstances
and for which sufficient data are available to measure fair value, maximising
the use of relevant observable inputs and minimising the use of unobservable
inputs.
All assets and liabilities for which fair value is measured or disclosed in
the interim consolidated financial statements are categorised within the fair
value hierarchy, described as follows, based on the lowest level input that is
significant to the fair value measurement as a whole:
Level 1 - Quoted (unadjusted) market prices in active markets for identical
assets or liabilities
Level 2 - Valuation techniques for which the lowest level input that is
significant to the fair value measurement is directly or indirectly observable
Level 3 - Valuation techniques for which the lowest level input that is
significant to the fair value measurement is unobservable
For assets and liabilities that are recognised in the financial statements on
a recurring basis, the Group determines whether transfers have occurred
between levels in the hierarchy by re-assessing categorisation (based on the
lowest level input that is significant to the fair value measurement as a
whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Group has determined classes of
assets and liabilities on the basis of the nature, characteristics and risks
of the asset or liability and the level of the fair value hierarchy as
explained above.
The value of financial assets and liabilities other than those measured at
fair value are as follows:
Carrying amount Fair value
30 June 31 December 2024 30 June 31 December 2024
2025 2025
US$ thousands
Financial assets:
Trade and other receivables 12,164 8,542 12,164 8,542
Financial liabilities:
Interest-bearing loans(1) 839,609 839,507 613,734 605,396
Trade and other payables 210,634 150,094 210,634 150,094
Notes payable - 2,055 - 2,055
(1) Interest-bearing loans are categorised in Level 1 of the fair value
hierarchy.
The carrying amounts of all other financial instruments are measured at fair
value.
The financial assets and liabilities measured at fair value are categorised
into the fair value hierarchy as follows:
As of 30 June 2025
Fair value measure using
Quoted prices in active markets Significant observable (Level 2) Significant unobservable (Level 3) Total
(Level 1)
US$ thousands
Financial assets:
Trade receivables - - 457,431 457,431
Other receivables from related parties(1) - - 10,851 10,851
Derivative financial instruments:
Silverstream contract - - 40,000 40,000
Option and forward foreign exchange contracts - 819 - 819
Other financial assets:
Equity instruments at FVOCI 39,677 - - 39,677
39,677 819 508,282 508,282
(1 This balance corresponds to the cash receivable related to the Silverstream
contract, see note 10.)
As of 31 December 2024
Fair value measure using
Quoted prices in active markets (Level 1) Significant observable (Level 2) Significant unobservable (Level 3) Total
US$ thousands
Financial assets:
Trade receivables - - 548,760 548,760
Other receivables from related parties(1) - - 16,516 16,516
Derivative financial instruments:
Silverstream contract - - 258,641 258,641
Other financial assets:
Equity instruments at FVOCI 139,968 - - 139,968
139,968 823,917 963,885
(1 This balance corresponds to the cash receivable related to the Silverstream
contract, see note 10.)
There have been no significant transfers between Level 1 and Level 2 of the
fair value hierarchy, and no transfers into or out of Level 3 fair value
measurements.
A reconciliation of the opening balance to the closing balance for Level 3
financial instruments other than Silverstream and the related receivable with
the contract (which is disclosed in Note 10) is shown below:
2025 2024
US$ thousands
Balance at 1 January 548,760 307,302
Sales 1,931,388 1,491,486
Cash collection (2,027,481) (1,436,436)
Changes in fair value 16,762 5,556
Realised embedded derivatives during the year (11,998) (8,790)
Balance at 30 June 457,431 359,118
The fair value of financial assets and liabilities is included at reflects the
amount at which the instrument could be exchanged in a current transaction
between willing parties, other than in a forced or liquidation sale.
Valuation techniques
The following valuation techniques were used to estimate the fair values:
Option commodity contracts
The Group enters into derivative financial instruments with various
counterparties, principally financial institutions with investment grade
credit ratings. The Level 2 option commodity contracts are measured based on
observable spot commodity prices, the yield curves of the respective commodity
as well as the commodity basis spreads between the respective commodities. The
option contracts are valued using the Black-Scholes model, the significant
inputs to which include observable spot commodities price, interest rates and
the volatility of the commodity.
Option and forward foreign exchange contracts
The Group enters into derivative financial instruments with various
counterparties, principally financial institutions with investment grade
credit ratings. The Level 2 foreign currency forward contracts are measured
based on observable spot exchange rates, the yield curves of the respective
currencies as well as the currency basis spreads between the respective
currencies. The foreign currency option contracts are valued using the
Black-Scholes model, the significant inputs to which include observable spot
exchange rates, interest rates and the volatility of the currency.
Silverstream contract
For further information relating to the valuation techniques were used to
estimate the fair value of the Silverstream contract refer to note 10.
Equity investments
The fair value of equity investments is derived from quoted market prices in
active markets.
Interest-bearing loans
The fair value of the Group's interest-bearing loan is derived from quoted
market prices in active markets.
Trade receivables
Sales of concentrates, precipitates and doré bars are 'provisionally priced'
and revenue is initially recognised using this provisional price and the
Group's best estimate of the contained metal. Revenue is subject to final
price and metal content adjustments subsequent to the date of delivery. This
price exposure is considered to be an embedded derivative and therefore the
entire related trade receivable is measured at fair value.
At each reporting date, the provisionally priced metal content is revalued
based on the forward selling price for the quotational period stipulated in
the relevant sales contract. The selling price of metals can be reliably
measured as these metals are actively traded on international exchanges but
the estimated metal content is a non-observable input to this valuation.
c. Capital management
The primary objective of the Group's capital management is to ensure that it
maintains a strong credit rating and healthy capital ratios that support
its business and maximise shareholder value. Management considers capital to
consist of equity and interest-bearing loans, including loans from related
parties, as disclosed in the balance sheet, excluding net unrealised gains or
losses on revaluation of cash flow hedges and debt instruments. In order to
ensure an appropriate return for shareholder's capital invested in the Group
management thoroughly evaluates all material projects and potential
acquisitions and approves them at its Executive Committee before submission to
the Board for ultimate approval, where applicable. The Group's dividend policy
is based on the profitability of the business and underlying growth in
earnings of the Group, as well as its capital requirements and cash flows,
including cash flows from the Silverstream.
One of the Group's metrics of capital is cash and other liquid assets which as
at 30 June 2025 and 2024 consisted of only cash and cash equivalents.
1 Adjusted revenues are the revenues shown in the income statement adjusted
to add back treatment and refining charges. The Company considers this is a
useful additional measure to help understand underlying factors driving
revenue in terms of volumes sold and realised prices.
2 Adjusted production costs are calculated as cost of sales less
depreciation, profit sharing, hedging, change in inventories and unproductive
costs. The Company considers this a useful additional measure to help
understand underlying factors driving production costs in terms of the
different stages involved in the mining and plant processes, including
efficiencies and inefficiencies as the case may be and other factors outside
the Company's control such as cost inflation or changes in accounting
criteria.
3 Earnings before interest, taxes, depreciation and amortisation (EBITDA) is
calculated as profit for the year from continuing operations before income
tax, less finance income, plus finance costs, less foreign exchange
gain/(loss), less revaluation effects of the Silverstream contract, less other
operating income plus other operating expenses and depreciation.
4 Adjusted earnings per share (EPS) is profit as disclosed in the Interim
Consolidated Income Statement adjusted to exclude the revaluation effects of
the Silverstream contract, divided by the average ordinary number of shares in
issue in the period.
5 Free cash flow calculated as net cash flow after the effect of foreign
exchange on cash, less dividend payments.
6 Adjusted production cost is calculated as total production costs less
depreciation, profit sharing and the effects of exchange rate hedging.
7 Adjusted revenue is revenue as disclosed in the income statement adjusted
to exclude treatment and refining charges.
8 Earnings before interest, taxes, depreciation and amortisation (EBITDA) is
calculated as profit for the year from continuing operations before income
tax, less finance income, plus finance costs, less foreign exchange
gain/(loss), plus revaluation effects of the Silverstream contract, less other
operating income plus other operating expenses and depreciation.
9 Adjusted revenue is revenue as disclosed in the income statement adjusted
to exclude treatment and refining charges.
10 Treatment and refining charges include the cost of treatment and refining
as well as the margin charged by the refiner.
11 Adjusted production costs are calculated as cost of sales less
depreciation, profit sharing, hedging, change in inventories and unproductive
costs. The Company considers this a useful additional measure to help
understand underlying factors driving production costs in terms of the
different stages involved in the mining and plant processes, including
efficiencies and inefficiencies as the case may be and other factors outside
the Company's control such as cost inflation or changes in accounting
criteria.
12 Appetite determined by the Board in January 2025.
13 Appetite determined by the Board in January 2025.
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