Our Business Model

Business Model and Strategy

FRES AR2017 BMODEL ANNOTATION

Business Model Full View »

Our business model spans the full mining value chain from exploration, development and construction, to mining operations, supported by strategic resources and relationships essential to the effective execution of the business.

Gold and silver mining is the heart of our business model. We generate revenue by selling the metals contained in the ore we extract and process. We ensure the longevity of our business by exploring and developing new projects.

Our Purpose

Our Purpose is to contribute to the wellbeing of people, through the sustainable mining of silver and gold. Based on ethics and caring for our people, the Fresnillo culture aims to foster the necessary mindset and behaviours to deliver on our Purpose. However, we recognise that our culture should also be a driver for innovation and operational excellence in order to achieve productivity improvements and cost reductions, while reducing our environmental footprint. Our objective is to nourish both our current and emerging values, in line with our Purpose.

Value Creation Strategy

Our value creation strategy is intrinsically linked to our business model, spanning the full mining value chain, supported by strategic resources and relationships essential to the effective execution of the business. Our activities create economic value in the regions where we operate through wages and benefits, payments to local contractors and suppliers, and municipal, state and federal taxes.

We seek to create sustained value for stakeholders across precious metals cycles, focusing on high potential silver and gold projects that can be developed into low-cost, world-class mines.

Value Chain B Model

Strategic Business Model Components: A Strong Growth Pipeline

1. Explore » Extend and maintain a robust growth pipeline
Ensure business continuity and growth by replenishing depleted reserves and maintaining growth pipeline. Invest continuously across price cycles to ensure a pipeline of growth projects at different stages.

2. Develop » Deliver growth through development projects
Deliver profitable growth by advancing projects towards commissioning, while optimising cash flow and returns. Develop, build and commission projects that meet stringent criteria for mineral content and associated costs.

3. Operate » Maximise potential of existing operations while maintaining position as a leading low cost producer
Optimise capacity, replenish reserves, improve productivity and cost structure, and leverage expansion opportunities.

4. Sustain » Advance and enhance the sustainability of our business and uphold our licence to operate
Prioritise safety and health, responsible environmental stewardship, the wellbeing of our communities, best governance practices and a strong ethical culture.