Glossary
Adit
Entrance to an underground mine which is horizontal or nearly horizontal by which the mine can be accessed, drained of water and ventilated
AGM or Annual General Meeting
The annual general meeting of the Company which is scheduled to be held on Wednesday 17 May 2011 at noon at the offices of Linklaters LLP at One Silk Street, London, EC2Y 8HQ
Annual Report
The annual report of Fresnillo plc for the year ended 31 December 2010 and comprising the Chairman’s Letter, Chief Executive’s Statement, Business Review, Directors’ Report, Financial Statements and accompanying notes
Articles of Association
The articles of association of the Company which took effect on 28 May 2010
Audit Committee
The audit committee of the Board
Beneficiation Plant
Facility where extracted ore is reduced to particles that can be separated into mineral that is suitable for further processing or direct use
Board
The board of directors of the Company
CAMIMEX
Cámara Minera de México, the Mexican Mining Chamber
Cancun Communiqué
Document signed by nearly 1,000 businesses setting out a case for action on climate change
Capex
Capital expenditures; expenditures not classified as operating costs
Carbon Disclosure Project
Independent not-for-profit organisation holding the largest database of primary corporate climate change information in the world
CFE
Comisión Federal de Electricidad, the Mexican state-owned electric utility
CO2
Carbon dioxide
Code of Conduct
The set of principles for ethical behaviour to which all employees of the Company are obliged to adhere
Combined Code
The Combined Code on Corporate Governance published by the Financial Reporting Council dated June 2008 as amended
Company [see also Fresnillo plc]
Fresnillo plc, a company incorporated under the UK Companies Act 1985 and registered in England and Wales with registered number 6344120
Concentrate
A metal-rich product resulting from a mineral enrichment process such as gravity concentration or flotation, in which most of the desired mineral has been separated from the waste material in the ore
Consolidated Financial Statements
The consolidated financial statements of the Company for the year ended 31 December 2010
Diamond Drilling
A drilling method where the rock is cut with a diamond bit attached to hollow rods; it cuts a core of rock, recovered in cylindrical sections for geological analysis
Dilution
Waste, which is unavoidably mined with ore
Directors
The directors of the Company
Disseminated Deposit or Ore Body
A disseminated deposit is that in which the metal is evenly distributed in generally low concentrations throughout large masses of rock.
Doré
An impure alloy of gold and silver, generally the final product of mining and processing; the doré bullion will be refined into high purity metal
EBITDA
Gross profit plus depreciation included within cost of sales, less administrative expenses and exploration expenses
Ejido(s)
In Mexico, the communal farmland of a village, usually assigned in small parcels to villagers to be farmed under a federally supported system of communal land tenure
EPS
The amount of attributable profit available to equity shareholders, as calculated by dividing attributable profit for the period by the weighted average number of Ordinary Shares in issue during the period
ETF
Exchange Traded Funds, investment funds that are traded on a stock exchange
Executive Committee
The executive committee of the Board
Executive Directors
The executive Directors of the Company
Exploraciones Mineras Parreña, S.A. de C.V.
A wholly-owned Fresnillo plc company that controls a number of exploration prospects
Financial Statements
The consolidated and parent company financial statements of the Company and accompanying notes for the year ended 31 December 2010
Flotation
A recovery process by which valuable minerals are separated from waste to produce a concentrate; selected minerals are induced to become attached to air bubbles and float
Fresnillo Group [see also Group]
Fresnillo plc and its subsidiary undertakings
Fresnillo plc [see also Company]
A company incorporated under the UK Companies Act 1985 and registered in England and Wales with registered number 6344120
FSA
The Financial Services Authority of the United Kingdom
FTSE 100, 250 or 350
Share indices compiled by FTSE International Limited and comprising the top 100, 250 or 350 companies by full market value
g/t
Grammes per tonne
GAAP
Generally Accepted Accounting Principles
GAAS
Generally Accepted Auditing Standards
GHG
Greenhouse gases
GJ
Gigajoules
Government
Unless otherwise specified the government of the Republic of Mexico
Grade
The measure of concentration of metal within mineralised rock
Gravimetric Concentrator
A fluidised centrifuge that separates heavy material such as gold from lighter background material; applied to materials in which the heavy component to be recovered is a very small fraction of the total material, generally less than 500 grammes/tonne or 0.05% by weight
GRI
The Global Reporting Initiative, a network-based organisation that pioneered the world’s most widely used sustainability reporting framework
Group [see also Fresnillo Group]
Fresnillo plc and its subsidiary undertakings
Haulage
A horizontal underground excavation which is used to transport mined ore
Hectare
A unit of area equal to 10,000 square metres, or 2.47 acres
Hoist
Equipment used in underground mining to raise and lower conveyances within the mine shaft
HSECR
The Fresnillo Group Health, Safety, Environment and Community Relations System (Sistema de Salud, Seguridad, Medio Ambiente y Relaciones con la Comunidad), headed by the HSECR Committee of the Board
HSECR Committee
Health, safety, environment and community relations committee of the Board
IAS
International Accounting Standards
ICMM
International Council on Mining and Metals, founded in 2001 to advocate performance improvement in the mining and metals industry
IETU
Impuesto Empresarial a Tasa Unica, a business tax in Mexico
IFRS
International Financial Reporting Standards
Independent Non-executive Directors
The Non-executive Directors of the Company who are independent of Peñoles as defined by the Relationship Agreement and by reference to Provision A.3.1 of the Combined Code
INIFAP
Instituto Nacional de Investigaciones Forestales, Agrícolas y Pecuarias, a national R&D institute for forestry, agriculture and livestock
International Cyanide Management Code
Voluntary industry and audit-based programme for the gold mining industry to promote responsible management of cyanide used in gold mining
IPO [also Listing]
Initial Public Offering; the admission of the Company’s Ordinary Shares both to the UKLA Official List and to trading on the Main Market of the London Stock Exchange on 14 May 2008
ISO 14001
An international environmental management system standard published by the International Organisation for Standardisation
ITAM
Instituto Tecnológico Autónomo de México, a private research university in Mexico City
JORC
Joint Ore Reserves Committee
JV
Joint venture
koz
Thousand troy ounces
KPI
Key Performance Indicator
Leaching
The process by which soluble constituents are dissolved and carried down through the soil by a percolating fluid
Listing [also IPO]
The admission of the Company’s Ordinary Shares both to the UKLA Official List and to trading on the Main Market of the London Stock Exchange on 14 May 2008
Listing Rules
Rules relating to the admission to the Official List maintained by the UKLA in accordance with the Financial Services and Markets Act 2000
m3
Cubic metres
Met-Mex
Met-Mex Peñoles, S.A. de C.V., the operator of a refining and smelting facility in Torréon (a 100% subsidiary of Peñoles)
Met-Mex Arrangements
A series of contracts between the Company and Met-Mex for the sale of the primary products from the Group’s mines, silver and gold-rich lead and zinc concentrates
Milling or Milled Ore
A general term used to describe the process in which the ore is crushed and ground and subjected to physical or chemical treatment to extract the valuable metals to a concentrate or finished product
Minera Juanicipio, S.A. de C.V.
A joint venture company with MAG Silver Corporation in which Fresnillo plc has a 56% interest
Minera Penmont S. de R.L. de C.V.
A joint venture company with Newmont USA Limited in which Fresnillo plc has a 56% interest
Mineralisation
Any mass of host rock in which minerals of potential commercial value occur
mt
Million tonnes
MXN
Mexican peso
New Services Agreement [also NSA]
New Services Agreement dated 28 October 2009 between Fresnillo and SAPSA for the provision of administrative and non-administrative services to the Fresnillo Group
NGO
Non-governmental organisation
Nominations Committee
The nominations committee of the Board
Non-Executive Directors
The Non-Executive Directors of the Company
OHSAS 18001
An international occupational health and safety management system specification created by a number of leading national standards bodies, certification bodies, and specialist consultancies
Ordinary Shares
Ordinary shares of US$0.50 each in the Company
Ore
Material that contains one or more minerals, at least one of which can be mined and treated profitably under economic conditions deemed to be reasonable
Ore Body
A continuous well-defined mass of material of sufficient mineral content to make extraction economically feasible
Ore Grade
The classification or value of ore
Ounce
Troy ounce
oz
Troy ounce
Payable Silver
The amount of silver in ounces contained in concentrates from Peñoles’ Sabinas mine
Peñoles
Industrias Peñoles, S.A.B. de C.V.
Peñoles Group
Peñoles and its subsidiary undertakings
Porphyry
A variety of igneous rock consisting of crystals embedded in a finer groundmass of minerals
Pre-feasibility Study
A preliminary study undertaken to determine if it would be worthwhile to proceed to the feasibility study stage, which defines the technical and economic viability of a project to support the search for project financing
Pre-IPO Reorganisation
A reorganisation conducted by Peñoles in preparation for the Global Offer which completed on 18 April 2008, whereby the companies comprising the precious metals mining business of Peñoles were reorganised under the Company
Premium Listing
That category of Listing Rules applying conditions for Listing over and above those required under European law
Primary silver producer
A company generating over 50% of its revenue from silver production
PROFEPA
Procuraduría Federal de Protección al Ambiente, the Mexican Federal Environmental Protection Agency
Prospect
A mineral deposit with insufficient data available on the mineralisation to determine if it is economically recoverable, but warranting further investigation
Relationship Agreement
The relationship agreement between Peñoles and the Company dated 8 May 2008 , the purpose of which is to ensure that the Company and its subsidiaries are capable of carrying on business independently of the Peñoles Group
Remuneration Committee
The remuneration committee of the Board
Reserves
The economically mineable portions of mineral resources, which are sub-divided into two categories of increasing confidence: probable reserves relate to indicated mineral resources; and proven reserves relate to measured mineral resources
Resources
A concentration or occurrence of material of intrinsic economic interest in or on the Earth’s crust in such form, quality and quantity that there are reasonable prospects for eventual economic extraction; mineral resources are sub-divided, in order of increasing geological confidence, into inferred, indicated and measured categories
SAPSA
Servicios Administrativos Peñoles, S.A. de C.V.
Scoping Study
A preliminary assessment based on measured, indicated, or inferred mineral resources, or a combination of any of these; includes disclosure of forecasted mine production rates that may contain capital costs required to develop and sustain the mining operation, as well as operating costs and projected cash flows
SEDESOL
Secretaría de Desarrollo Social, Secretariat of Social Development
SEMARNAT
Secretaría de Medio Ambiente y Recursos Naturales, Secretariat of the Environment and Natural Resources
Shaft
An opening cut downwards from the surface for transporting personnel, equipment, supplies, ore and waste
Shotcrete
Concrete or mortar conveyed through a hose and pneumatically projected at high velocity onto any type or shape of surface, including vertical or overhead areas; shotcrete undergoes placement and compaction at the same time due to the force with which it is projected from the nozzle
Silverstream Contract
A series of the 12 agreements between Comercializadora de Metales Fresnillo, S.A. de C.V. and Peñoles pursuant to which the Fresnillo Group has the right to receive all proceeds for the Payable Silver
Six Sigma
A statistics-driven approach to quality control developed originally by Motorola; the methodology aims to improve operational performance, practices and systems by eliminating variability and waste and reducing defects in manufacturing processes to 3.4 defects per million
Smelting
A high temperature pyrometallurgical operation conducted in a furnace, in which the valuable metal is collected to a molten matte or doré phase and separated from the gangue components that accumulate in a less dense molten slag phase
Sterling Deferred Shares
Deferred shares of £1.00 each in the share capital of the Company
Stope
Underground void created by mining
STPS
Secretaría del Trabajo y Previsión Social, Secretariat of Labour and Social Welfare
Strike
Direction of line formed by the intersection of strata surfaces with the horizontal plane, always perpendicular to the dip direction
Tailings Dam
A dammed reservoir to which the slurry is transported, where the solids settle and the supernatant liquid may be withdrawn
The Wild Foundation
International organisation dedicated to wilderness protection and wilderness conservation around the world
Tonne [or t]
Metric tonne = 1,000 kilograms
tpd
Tonnes per day
tpy
Tonnes per year
Treatment Charges
Fees payable by mines to smelters for processing concentrates
Turnbull Guidance
Guidance administered by the UK Financial Reporting Council setting out best practice on internal control for UK listed companies to assist them in applying section C.2 of the UK Combined Code
UK£
United Kingdom pounds sterling
UKLA
The United Kingdom Listing Authority; that section of the FSA acting in its capacity as the competent authority for the purposes of Part VI of the Financial Services & Markets Act 2000 (Official Listing)
UNAM
Universidad Nacional Autónoma de México, a public university in Mexico City
United Nations Global Compact
A strategic policy initiative for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labour, environment and anti-corruption
US$
United States dollar
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