Investor Centre

Our strategy is to maximise Shareholder return through production of precious metals – Silver and Gold, on the basis of operational excellence. We focus to preserve the growth of reserves in our mines by consolidating districts and exploration projects with potential to become low cash cost operations.

The company was incorporated on 15 August 2007 and was acquired by the Penoles Group, for nominal consideration, on 11 January 2008. Prior to its acquisition by the Penoles Group, the company had no operations. The company is currently a wholly-owned subsidiary of Penoles.

During 2008, the Group employed an average of 1,606 unionised workers, 330 non-unionised workers and 1,030 contractors

Fresnillo’s objective in terms of mine life based on proven and probable reserves at its mines is minimum of 10 years. Current proven and probable reserves at the end of 2008 contain 410m oz silver and 4.1m oz gold. Total resources measured indicated and inferred inclusive of reserves stand at 1.1 billion oz silver and 12.0m oz gold.

Fresnillo produces lead and zinc concentrates with high contents of precious metals as well as precious metals dore and participates. All of these are sold to Met-Mex under long-term agreements based on international market terms that are negotiated on a yearly basis. As this is a related party transaction the T&Cs are overseen by the Audit Committee.

Our by products are lead and zinc, which we produce and sell in our concentrates.

Depending on the metal prices at any particular time, our adjusted revenue approximately comes from 57% silver, 36% from gold and 7% from lead and zinc.

The silver price is highly correlated to gold. Silver benefits from gold’s strength, the weakness of the U.S. dollar and general growth in investors’ interest in commodities amid a low-interest rate environment. Weakness in the U.S. currency drives the appeal in gold and silver as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies. Silver has grown year on year since 2001 to the onset of the financial crisis. Aside from investment demand, a key driver for 2010 will be for new market places in silver; one of these will include demand in silver-zinc batteries for electric cars, one of the major drivers behind a rise in prices because it may absorb a lot of silver. The ever-expanding industrial sector for silver now includes LCD/plasma television screens, solar panels, water purification and medical and superconductivity applications as well as a critical new use in biocides.

33-50% expected net profit for the year into one-third and two-thirds interim dividend and final payment. Dividends will be declared by the company in US$. Unless a shareholder elects to receive dividends in US$, they will be paid in pounds sterling with the US dollar dividend being converted into pounds sterling at exchange rates prevailing at the time of payment. The company may only pay dividends if distributable reserves are available for this purpose. The company is reliant upon receiving dividends from its subsidiaries in order to pay dividends to its Shareholders and its ability to pay dividends is affected by certain Mexican tax regulations.

Fresnillo looks for additional growth opportunities accretive to investors in all stages from exploration to development and operation.

Our low cash cost position is a combination of the geological characteristics of the ore bodies in our mines. The use of productive mining metals with modern equipment and technology and the operational excellence attitude of our people, which generates solid cash flow from our high margin assets, resulting in a strong balance sheet to fund growth with zero debt.

Our main objective is to maintain our position as the world’s largest primary silver producer with the aim to double production by 2018 reaching approximate level of 65m oz silver and 4k oz gold.

Fresnillo does not hedge any of its precious metals. We head a portion of our by-product of lead and zinc production as well as our currency needs.

During 2010 our gold development project Soledad – Dipolos will start production at the rate of 70,000 oz, ramping up to 100,000 oz per year. Our silver growth will come from Saucito that will begin in 2011 at the rate of 3,000 tonnes per day, expected to increase to 6,000 tonnes per day.

All of the employees in the mining sector in Mexico belong to a national mining union , however, each mine belongs to a section and negotiates with the company French benefits every 2 years and salary on a yearly basis. Fresnillo works very closely with members of the local sections, being aware of their needs and in addition to that we have a very good track record of no strikes in the last six years.

Mexico is supportive of mining as an economic activity. It has a modern mining law reflected in the fact of many exploration mining companies and activity throughout the country. Mexico is among the top 20 most attractive regions in the world for exploration and mining, according to results of a recent survey conducted by The Fraser Institute, an independent Canadian research organization. The country’s appeal to mining companies stems from a combination of factors including a strong mining culture, excellent geology, political stability and favorable tax and permitting structures.

Our shareholder base is composed of large long-term hedging funds as well as retailing investors.

Over the last year, many companies have become aware that their shareholders have received unsolicited phone calls or correspondence concerning investment matters. These are typically from overseas based ‘brokers’ who target UK shareholders, offering to sell them what often turns out to be worthless or high risk shares in US or UK Investments. These operations are commonly known as ‘boiler rooms’. Shareholders are advised to be very wary of any solicited advice, offers to buy shares at a discount or offers of free company reports. If you receive any unsolicited investment advice:

• Ensure you get the correct name of the person and organization
• Check that they are properly authorised by the FSA before getting involved by visiting www.fsa.gov.uk/register
• Report the matter to the FSA either by calling 0845 606 1234 or visiting www.moneymadeclear.fsa.gov.uk
• If the calls persist, hang up

If you deal with an unauthorised firm, you will not be eligible to receive payment under the Financial Services Compensation Scheme.