Performance

Production Report - 1Q20

Octavio Alvídrez, Chief Executive Officer, said: “The well-being of our workforce and the communities in which we operate is our first priority and we will continue to do all we can to ensure their safety. I would like to thank everyone at Fresnillo for the calm way in which they have adapted to the new measures we have put in place to combat COVID-19 and their professional conduct during this difficult time. We continue to work with both the Federal and local authorities to agree on best practice protocols under which the mining industry can continue to operate. We will continue to keep full year production guidance under constant review.

Operationally, quarterly silver production was in line with expectations, down slightly against the previous quarter mainly due to lower grades at San Julián DOB. Gold production was also in line with expectations, down against the previous quarter due to lower volumes of ore processed at Herradura. We expect production to be back-end-weighted this year. Our development pipeline progressed as expected with good advances in the construction of Juanicipio and the new Pyrites Plant at Fresnillo.” Read full release »

1Q20 Highlights

Silver

  • Quarterly silver production of 13.2 moz (incl. Silverstream), down 4.0% vs 4Q19 driven by lower ore grade at San Julián Disseminated Ore Body (DOB) and lower volume of ore processed at Saucito.

  • Quarterly silver production (incl. Silverstream), flat (+0.7%) vs 1Q19 due to a higher ore grade at San Julián (DOB) and higher volume of ore processed at Fresnillo, offset by the expected lower ore grade at Saucito.

Gold

  • Quarterly gold production of 197.0 koz down 15.7% vs. 4Q19 as expected, due to a lower volume of ore processed and an increase in stripping at Herradura, in accordance to the mine plan.

  • Quarterly gold production decreased 6.7% vs. 1Q19 due to lower volumes of ore processed at both Herradura and Noche Buena, and to a lesser extent, lower ore grade at Herradura and at San Julián (veins).

By-Products

  • Quarterly by-product lead and zinc production decreased 7.3% and 8.8% respectively vs. 4Q19 driven primarily by lower ore grades and recovery rates at both Fresnillo and San Julián (DOB), mitigated by higher ore grade and recovery rates at Saucito.
  • Quarterly by-product lead production increased 14.7% vs. 1Q19 mainly due to higher ore grades at both Fresnillo and Ciénega.

  • Quarterly by-product zinc production increased 4.2% vs. 1Q19 due to higher ore grades at both Fresnillo and Ciénega, offset by a lower ore grade at San Julián (DOB).

Development Projects

Further progress was achieved at the construction of the Pyrites Plant (Phase II) and the optimisation of the beneficiation plan, both at Fresnillo. Additionally, the Juanicipio project advanced as expected during the quarter, with the first production stope to be fully prepared by the end of 3Q20.

2020 Outlook

As stated, given the evolving situation with regards COVID-19, Fresnillo continues to keep full year production guidance under constant review. The timeline for commissioning of the development projects will also be monitored closely.
 

Total Production

 

1Q20

4Q19

% change

1Q19

% change

FY19

FY18

% change

Silver (koz)

12,547

13,131

-4.4

12,372

-10.4

51,764

58,079

-10.9

Silverstream (koz)

681

643

5.8

766

-25.2

2,850

3,725

-23.5

Total Silver (koz)

13,228

13,775

-4.0

13,138

-11.2

54,614

61,804

-11.6

Gold (oz)

196,963

233,744

-15.7

211,110

0.7

875,913

922,527

-5.1

Lead (t)

13,905

14,997

-7.3

12,125

-1.7

55,722

53,181

4.8

Zinc (t)

22,655

24,832

-8.8

21,752

1.2

92,578

88,520

4.6


Financial Performance

 

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

Total attributable silver
production incl. Silverstream (Moz)

54.6

61.8

58.7

53.0

47.0

45.0

43.0

41.0

41.9

42.1

41.3

34.8

Attributable Gold Production (koz)

875.9

922.5

911.1

935.5

761.7

596.0

425.8

473.0

448.9

369.0

276.6

263.6

EBITDA (millions of US$)

674.0

915.1

1,060.1

1,032.0

547.5

567.3

729.8

1,315.3

1,538.5

945.0

496.6

337.4

Cash flow from operating activities
before changes in working capital
(millions of US$)

685.5

930.7

1,073.7

1,023.3

537.3

568.5

750.2

1,356.7

1,612.1

983.6

548.8

405.8

FRES Financial KPIs AR19 II


Decade of progress and achievement

Prelims 27FEB17 Decade Of Progress And Achievement

Key Commitments and Targets

1. Explore » Ensure business continuity and growth by replenishing depleted reserves and maintaining a robust growth pipeline
Evaluate early-state acquisitions and maintain reserves for 10 years. Ensure organic growth and assess key acquisition opportunities.
2. Develop » Deliver growth through development projects
Deliver profitable growth by advancing new projects towards commissioning, whist optimising cash flow and returns. Maintain track record of delivery on time and on budget and focus on CAPEX control as well as specialised engineering and construction teams.
3. Operate » Maximise the potential of exisiting operations
Maximise our potential of exisiting operations whilst maintaing our position as leading low cost producer. Operate at 100% capacity and remain a low-cost producer whilst optimising mining methods and metallurgy to maintain high recovery rates.
4. Sustain » Advance and enhance the sustainability of our business and uphold our licence to operate
Strengthen our safety performance with zero tolerance for non-compliance, and increase investment and support for training and oversight. Improve general health and minimise environmental impact whilst maintaining sound relations within our communities.