BofAML Global Metals, Mining & Steel Conference May 2015

Transcription

1 Well placed to address cyclical uncertainties BofAML Global Metals, Mining & Steel Conference May 2015 Octavio Alvídrez, CEO Fresnillo plc LSE: FRES BMV: FRES

2 Disclaimer This document includes statements that are, or may be deemed to be, forward-looking statements. These forwardlooking statements can be identified by the use of forward-looking terminology, including the terms believes, estimates, plans, projects, anticipates, expects, intends, may, will, or should or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this document and include, but are not limited to, statements regarding the Fresnillo Group s intentions, beliefs or current expectations concerning, among other things, the Fresnillo Group s results of operations, financial position, liquidity, prospects, growth, strategies and the silver and gold industries. By their nature, 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 forwardlooking 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 exchange 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, political and economic uncertainty. Forward-looking statements may, and often do, differ materially from actual results. Any forward-looking statements in this document speak only as of the date of this document, reflect the Fresnillo Group s current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Fresnillo Group s operations, results of operations, growth strategy and liquidity. Investors should specifically consider the factors identified in this document which could cause actual results to differ before making an investment decision. Subject to the requirements of the Prospectus Rules, the Disclosure and Transparency Rules and the Listing Rules or applicable law, the Fresnillo Group explicitly disclaims any obligation or undertaking publicly to release the result of any revisions to any forward-looking statements in this document that may occur due to any change in the Company s expectations or to reflect events or circumstances after the date of this document. 2

3 Fresnillo at a Glance Location HERRADURA DISTRICT ORISYVO Key Highlights World s largest silver producer and Mexico s second largest gold producer Market cap of US$8 billion* SAN JULIÁN Mining concessions of 2m hectares in Mexico and 370 thousand hectares in Peru CIÉNEGA DISTRICT SOUTH PERU Fresnillo plc mines (6 and a satellite mine)** Development projects (2) Advanced exploration projects (4) Prospects in drilling Prospects at an early stage FRESNILLO DISTRICT Cash costs and AISC amongst the lowest in the industry Production target of 65 moz of silver and 750 koz of gold by 2018 Substantial, high quality project pipeline and strong commitment to disciplined and sustainable growth Strategy of consolidating districts 2014 acquisition of Newmont Mining s 44% in Penmont JV with operating assets and several exploration projects in the prospective Herradura region Focus on projects that can be developed into low-cost, worldclass mines * As at 5 May 2015 ** Operations at Soledad-Dipolos are currently suspended 3

4 Our Business Model and Strategy Our Business Model supported by four strategic pillars to create value 1. Maximise potential of existing operations Operate at 100% capacity Low-cost producer Optimise mining method and metallurgy to maintain high recovery rates 2. Deliver growth through development projects Track record of delivery on time and on budget Focus on CAPEX control Specialised Engineering and Construction team 3. Extend the growth pipeline Evaluate early-state acquisitions Maintain reserves for 10 years Ensure organic growth and assess key acquisition opportunities 4. Advance sustainable development Improve general health Reinforce safety Minimise the environmental impact Maintain sound relations with communities 4

5 Mining Districts HERRADURA DISTRICT Mines: Herradura, Soledad and Noche Buena 2014 production: 394.8k oz gold Resources: 8.95 Moz gold New facilities: Dynamic Leaching Plant Exploration: Centauro Deep, Tajitos, Choya, San Javier, Las Norias, El Nudo, Carina, Cerritos, El Dorado CIÉNEGA DISTRICT Mines: Ciénega and San Ramón satellite mine 2014 production: 108.2k oz gold, 4.1 Moz silver Resources: 1.58 Moz gold, Moz silver Exploration: Cluster cebollitas, Manzanillas, Pereñita, La Huerta FRESNILLO DISTRICT Mines: Fresnillo and Saucito 2014 production: 35.5 Moz silver, 92.9k oz gold Resources: 1,200.2 Moz silver, 3.20 Moz gold Projects: Pyrites plant Exploration: Juanicipio, Las Natalias 5

6 Districts of the Future SAN JULIÁN Under construction Silver-gold veins and disseminated ore body Resources: 190 Moz silver, 860 koz gold Approved CAPEX: US$515m Flotation plant with 6,000 tpd capacity Dynamic leaching plant with 3,000 tpd capacity Average expected level of production: 10.3 Moz silver and 44koz of gold ORISYVO Porphyry system Resources: 8.7 Moz gold Preparation of a preliminary economic assessment 6

7 2014 Operational Highlights Maximise the potential of existing operations Annual silver production (including Silverstream) up 4.9% to 45.0 moz Optimised milling capacity to 4,000 tpd at Ciénega Reached full capacity at Noche Buena following plant expansion Deliver growth through development projects Saucito II (silver mine expansion) commenced on time and on budget; San Julián (silver and gold project) on track to start production in 4Q15 Acquired Newmont s 44% stake in Penmont: consolidating assets we operate; entrenching leadership in the Herradura Corridor Construction of pyrites plant to improve precious metal recovery approved 7

8 2014 Operational Highlights Extend the growth pipeline Despite lower price assumptions 1, total gold and silver reserves rose 45% and 21% respectively; gold resources rose 2% Gold reserves and resources at Centauro pit grew 96% and 32% respectively; evaluated Mega Centauro expansion as natural evolution of Herradura pit Continuing exploration at Centauro Deep Preparation of Las Casas-Rosario veins (Ciénega) Good progress at key exploration projects: Cebollitas, Guanajuato, Candameña, Rodeo, Pilarica Advance sustainable development HSECR system reached overall maturity of 84% (vs 77% in 2013) Obtained industry standard OHSAS certification at Penmont, Ciénega and Fresnillo Obtained the Mexican Healthy Company certification at Penmont and exploration HQ in Chihuahua Launched SafeStart at Fresnillo and Ciénega complementing existing behavioural safety initiatives Conducted a Great Place to Work survey and achieved certification 1 Au price: $1,150/oz, Ag price: $18.0/oz 8

9 2014 Production Overview 2014 PRODUCTION* 2013 PRODUCTION* SILVER (Koz) GOLD (Oz) SILVER (Koz) Fresnillo mine Silver underground mine 20,098 35,676 22,764 33,079 Saucito mine Silver underground mine 15,397 57,227 11,581 45,177 GOLD (Oz) Ciénega mine (including San Ramón satellite mine) Gold-Silver underground mines 4, ,211 4, ,053 Herradura mine Gold open pit mine , ,562 Noche Buena mine Gold open pit mine , ,729 Soledad-Dipolos mine Gold open pit mine ,285 Subtotal 40, ,920 38, ,884 Silverstream Sabinas polymetallic underground mine (operated by Peñoles) 4,648 N/A 3,945 N/A Total 45, ,920 42, ,884 *All figures include 100% of production from the Penmont mines (Herradura, Soledad-Dipolos and Noche Buena) 9

10 Cash Costs Cash Costs among the lowest in the industry ESTIMATED LIFE OF MINE CASH COST Traditional* All-in sustaining costs** WEIGHTED AVERAGE MINE UNIT Fresnillo PER OZ. SILVER (2023) Saucito PER OZ. SILVER (2021) Ciénega PER OZ. GOLD (2026) Herradura PER OZ. GOLD (2019) Noche Buena PER OZ. GOLD , , (2019) * Cash cost per ounce is calculated as total cash cost (cost of sales plus treatment and refinning charges less depreciation) less revenues from by-products divided by the silver or gold ounces sold. ** All-In Sustaining Costs (AISC) is calculated as traditional cash cost plus on-site general, corporate and administrative costs, community costs related to current operations, capitalised stripping & underground mine development, sustaining capital expenditures and remediation expenses. 10

11 2014 Financial Highlights (variations vs 2013) Adjusted revenue of US$1,545m, down 12.3% as a result of lower prices (Au -10.2%; Ag -18.4%) and the stoppage of operations at Soledad-Dipolos Cost inflation in US$ terms remained subdued (+1.6%) Cost per tonne in the underground mines remained broadly flat, whereas in the open pit mines the increase was mainly due to the increase in the stripping ratios Gross profit and EBITDA of US$521m and US$567m, down 32% and 22% respectively Total risk capital invested in exploration (incl. capitalised exploration expenses) of US$185m, below original budget but, with decline in costs, pace of progress broadly in line with plan Profit for the year of US$117m, down 55% Financial strength and flexibility enabled US$450 million buyout of Penmont JV partner where we have since seen good exploration results Other key uses of cash: US$426m CAPEX; US$87m dividends and US$38m interest paid Year end cash balance of US$449m Total property, plant and equipment of US$1,970 million Total debt of US$796 million Basic and diluted earnings per ordinary share from continuing operations of US$0.147, 55% lower A 2014 final dividend of 3 US cents per share recommended by the Board 11

12 Strong Pipeline Mine Operations Development Projects Advanced Exploration Fresnillo Saucito I & II Herradura (DLP) Nochebuena Ciénega - San Ramón Soledad &Dipolos* San Julián Pyrites Plant Mega Centauro Orisyvo Juanicipio Cluster Cebollitas Centauro Deep Despite lower price assumptions, total gold and silver reserves rose 45% and 21% respectively; gold resources rose 2%; silver resources declined 6% Prospects in drilling Early stage Exploration Fresnillo District Rodeo Lucerito Tajitos Candameña Guachichil Guanajuato San Nicolás Guazapares Coneto Cebadillas La Yesca Cairo Dátil Amata (Perú) Norias Pilarica (Perú) Sonora and Sinaloa : San Javier Nudo Carina Cerritos Dorado Rosario Bellavista Olivos Chihuahua: S. Brígida Rosetillas SJPinal Lucero Tempisque Durango: Pereñita La Huerta El Carmen Zacatecas: Urite Atotonilco Corredor Concha-Nieves Argentum Perú: Huacravilca Sto. Domingo La Pampa Villa García *Operations at Soledad-Dipolos are currently suspended. Arrows show changes from 2014 to 2015 Systematic Project Generation 12

13 Expected Delivery of Growth Investment (US$ million) Expected Avg. Annual Production (1) (2) PROJECT YEAR moz Ag 515 SAN JULIÁN & 44 koz Au CONSTRUCTION LEACHING PLANT CONSTRUCTION FLOTATION PLANT PRODUCTION moz Ag & 13 koz Au PYRITES PLANT (Optimization project) DETAILED ENGINEERING LEACHING PLANT CONSTRUCTION CONSTRUCTION TAILINGS FLOTATION PRODUCTION koz Au & 1.3 moz Ag CIENEGA 5,000 TPD (Optimization project) DETAILED ENGINEERING MINE DEVELOPMENT PLANT CONSTRUCTION PRODUCTION moz Ag FRESNILLO 10,000 TPD (Optimization project) DETAILED ENGINEERING MINE DEVELOPMENT PLANT CONSTRUCTION PRODUCTION koz Au ORISYVO BASIC ENGINEERING MINE DEVELOPMENT DETAILED ENGINEERING PLANT CONSTRUCTION PRODUCTION moz Ag & 30 koz Au JUANICIPIO BASIC ENGINEERING MINE DEVELOPMENT DETAILED ENGINEERING PLANT CONSTRUCTION PRODUCTION koz Au MEGA CENTAURO DEVELOPMENT 2ND DYNAMIC LEACHING PLANT CONSTRUCTION PRODUCTION koz Au CENTAURO DEEP BASIC ENGINEERING DEVELOPMENT DETAILED ENGINEERING PLANT CONSTRUCTION PRODUCTION (1) Estimated. (2) Total average annual production. 13

14 Achieving 65moz Silver by 2018 Thousand Oz 100,000 90,000 Juanicipio - 56% Pyrites Plant 80,000 70,000 60,000 San Julián Saucito II 50,000 Saucito I 40,000 Ciénega Expansion 30,000 Ciénega 20,000 10,000 10,000 TPD Fres Expansion Fresnillo Yr 14

15 Achieving 750koz Gold by 2018 Thousand Oz 1,000 Orisyvo 900 Juanicipio - 56% 800 San Julián 700 Pyrites Plant Saucito II 600 Saucito I Ciénega Expansion Ciénega Fresnillo Nochebuena Dynamic Leaching Mega Centauro Herradura Yr 15

16 CAPEX & Exploration Spend CAPEX 2015 US$ Million Sustaining Sustaining $185 Mining Works (Underground) $87 Mining Works (Stripping) $89 New Projects US$ Million San Julián $133 Pyrites Plant $60 Saucito II $53 Merrill Crowe at DLP $25 Others $62 Risk Capital Invested in Exploration US$ Million 1, Sustaining CAPEX New Projects CAPEX (Million USD) Budget Real Change Amount % Operating Units (16.5) (24.7) Advanced Projects (3.1) (4.6) Prospection Regional Prospecting Mining Rights (not related to operating mines) (0.6) (4.1) Total Risk Capital Invested in Exploration (12.3) (6.7) 16

17 San Julián Project The project encompasses an underground mine and the construction of two plants: i) a flotation plant with 6,000 TPD capacity to process ore from the disseminated body ii) a Dynamic Leaching Plant (DLP) to treat 3,000 TPD of ore from the veins Construction progressing with the DLP expected to be commissioned in 4Q15 while the flotation plant will be commissioned in 2H16 In 2014, the construction of the DLP, tailings dam and wastewater treatment plant were initiated. Mining works at the vein system continued Mining works and ventilation raises advanced 11,400m and 2,500m respectively, totalling 63,000m of accumulated development Diamond drilling of approximately 20,000m converted a portion of the mineral resources into the reserve category, equivalent to 126moz silver and 61koz gold Expected Operating Highlights Average Annual Silver Production Average Annual Gold Production Pre-operative CAPEX Life of mine Disseminated Processing Capacity Veins Processing Capacity 10.3 M Oz 43.9 K Oz US$515 M 13 years 6,000 TPD 3,000 TPD Expected Start-up 4Q 2015 Traditional cash cost All-in cash cost US$7.77/oz US$9.33/oz 17

18 Pyrites Project This facility is expected to increase silver and gold recovery by processing on-going tailings from the Fresnillo and Saucito mines, as well as historical tailings from Fresnillo The plant will froth float pyrite concentrates that will be leached in a 2,000TPD DLP and Merrill-Crowe plant to produce precipitates At the current tailings plant at Fresnillo, we plan to install a 13,000TPD tailings plant to process 5,000TPD from the old dams and 8,000TPD of the tailings The project would increase the production of silver for the period by an average of 3.5moz per year, however for the first 5 years ( ), 4.7m additional ounces will be contributed per year Cash cost per ounce of US$2.51/oz Expected Operating Highlights Average Annual Gold Production 12.8 koz Total Gold Production koz Average Annual Silver Production 3.5 moz Total Silver Production 68.7 moz Pre-operatice CAPEX US$153.7 M OPEX Pyrites Plant USD/Ton Expected Start-up 1H

19 Conclusions and Outlook Outlook We have had a strong start to 2015, with operations performing well and providing a good platform for growth Financial and operational flexibility maintained Defined strategic plan to address cyclical uncertainties We will maintain focus on stringent cost control across all operations We continue to invest prudently to achieve additional low cost ounces We continue to balance quality growth with returns to shareholders We continue identifying and adopting best practices in stakeholder engagement Despite current markets and decline in precious metal prices, our strong balance sheet, high quality assets, operational flexibility and conservative approach will support our goals of optimising performance and delivering returns On track to meet 2018 production guidance of 65 moz silver (incl. Silverstream) and 750,000 oz gold 19

20 Looking beyond the cycle Appendix

21 Fresnillo Mine: Summary Change % Ore processed k t 2, , Ore grade Silver g/t Gold g/t Lead % Zinc % Total production Silver m oz Gold k oz Lead kt Zinc kt SILVER Ore Grade World s largest primary silver mine; one of oldest continuously operating mines Development rates reached 3,300m/month in 2014, aiming to 4,000m/month Reserves of 229moz silver Resources of 753moz silver AISC (LoM basis): US$6.20/oz (2023) Resource base of c.25 years 21

22 Saucito Mine: Summary (Gms/Ton) SILVER Ore Grade Saucito, including Saucito II, is one of the key growth drivers to achieve our 2018 production target Saucito II commenced operations on time & on budget in 4Q14, contributing low cost ounces to group profile Reserves of 116moz silver & resources of 447moz silver AISC (LoM basis): US$6.00/oz (2021) Resource base of c.25 years Change % Ore processed k t 1, , Ore grade Silver g/t Gold g/t Lead % Zinc % Total production Silver m oz Gold k oz Lead kt Zinc kt

23 Ciénega Mine: Summary Change % Ore processed k t 1, , Ore grade Gold g/t Silver g/t Lead % Zinc % Total production Gold k oz Silver m oz Lead kt Zinc kt Optimised milling capacity reached 4,000TPD Reserves of 0.89moz gold & resources of 1.58moz gold Reserves of 75moz silver & resources of 142moz silver AISC (LoM basis): US$803/oz (2026) (per gold ounce) Resource base of c.22 years GOLD Ore Grade (Gms/T) SILVER Ore Grade

24 Herradura Mine: Summary GOLD Ore Grade Change % (Gms/T) Total Ore processed k t 22, , , Ore grade Gold g/t Silver g/t Total production Gold k oz Silver k oz Full mining activities resumed in March 2014 post temporary stoppage DLP commissioned in March % Fresnillo post acquisition of Newmont s 44% stake in Penmont Reserves of 5.3moz gold (+96%) & resources of 6.8moz gold (+32%) AISC (LoM basis): US$717/oz (2019) Resource base of c.12 years Based on current mine plan, Herradura to move 120m TPY Potential for future growth as an underground mine 24

25 Noche Buena Mine: Summary Change % Total Ore processed k t 15, , , Ore grade Gold g/t Silver g/t Total production Gold k oz Silver k oz (Gms/T) GOLD Ore Grade E 2016 E 2017 E 2018 E 100% Fresnillo post acquisition of Newmont s 44% stake in Penmont Merrill Crowe Plant capacity increased from 750 to 1,600 m 3 /h Completed construction of 4th and 5th leaching pads Reserves of 1.1moz gold & resources of 1.3moz gold AISC (LoM basis): US$1,124/oz (2019) Resource base of c.5 years 25

26 Income Statement (IFRS) ACCUM DECEMBER CHANGE C O N C E P T 2014 % 2013 % $ % ADJUSTED REVENUES 1, ,761.9 (216.9) (12.3) HEDGING (METALS) (0.2) (61.1) TREATMENT AND REFINING CHARGES (131.4) (147.0) 15.6 (10.6) REVENUES 1, , (201.5) (12.5) ADJUSTED PRODUCTION COST (678.0) (48.0) (567.7) (35.1) (110.3) 19.4 PROFIT SHARING (12.6) (0.9) (20.2) (1.2) 7.6 (37.4) DEPRECIATION (296.2) (21.0) (239.3) (14.8) (56.8) 23.7 HEDGING (EXCHANGE RATE) (1.1) (0.1) (5.4) N/A CHANGE IN INVENTORIES ,836.6 UNPRODUCTIVE COST AND OTHERS (9.5) (0.7) (26.1) (63.8) COST OF SALES (892.6) (63.1) (847.7) (52.5) (44.9) 5.3 GROSS PROFIT (246.4) (32.1) ADMINISTRATIVE EXPENSES (34.7) (2.5) (29.5) (1.8) (5.2) 17.5 CORPORATE EXPENSES (32.9) (2.3) (32.7) (2.0) (0.1) 0.4 EXPLORATION EXPENSES (168.8) (11.9) (207.8) (12.9) 39.0 (18.8) OTHER INCOME (EXPENSE) (25.5) (1.8) (2.4) (0.1) (23.2) SELLING EXPENSES (INCLUDES EXTRAORDINARY MINING RIGHT) (13.6) (1.0) (7.0) (0.4) (6.7) 95.8 PROFIT FROM CONTINUING OPERATIONS (242.5) (49.7) SILVERSTREAM REVALUATION (65.7) (4.1) N/A SILVERSTREAM AMORTIZATION EFFECTS FOR THE PERIOD FINANCE INCOME / (EXPENSE) (47.2) (3.3) (8.9) (0.6) (38.2) FOREIGN EXCHANGE GAIN / (LOSS) (24.4) (1.7) (6.5) (0.4) (17.9) PROFIT BEFORE INCOME TAX (167.6) (40.0) SPECIAL MINING RIGHT (15.7) (1.1) (36.2) (2.2) 20.5 (56.6) CORPORATE INCOME TAX (118.3) (8.4) (121.5) (7.5) 3.3 (2.7) INCOME TAX EXPENSE (134.0) (9.5) (157.7) (9.8) 23.7 (15.0) PROFIT FOR THE PERIOD (143.9) (55.1) ATTRIBUTABLE TO: EQUITY SHAREHOLDERS OF THE GROUP (132.0) (54.9) MINORITY INTEREST (11.9) (58.0) (143.9) (55.1) EBITDA (162.5) (22.3) 26

27 Cash Flow (IFRS) CHANGE C O N C E P T (Million USD) YTD 2014 YTD 2013 $ % CASH GENERATED BY OPERATIONS BEFORE CHANGES IN WORKING CAPITAL (181.7) (24.2) WORKING CAPITAL (183.4) 34.5 (217.9) N/A INCOME TAX AND PROFIT SHARING PAID (263.5) (338.6) 75.2 (22.2) NET CASH FROM OPERATING ACTIVITIES (324.4) (72.7) OTHER PROCEEDS SILVERSTREAM CONTRACT (5.0) (7.9) PROCEEDS FROM THE SALE OF PROPERTY, PLANT AND EQUIPMENT CAPITAL CONTRIBUTION (0.6) (11.2) SENIOR NOTES (793.9) N/A PLACEMENT OF NEW ORDINARY SHARES (346.1) N/A LOANS FROM PARTNERS (40.9) N/A TOTAL OTHER PROCEEDS ,261.9 (1,184.5) (93.9) PURCHASE OF MINORITY SHARES (450.5) 0.0 (450.5) N/A PURCHASE OF PROPERTY, PLANT AND EQUIPMENT (425.6) (572.1) (25.6) DIVIDENDS PAID (87.0) (505.2) (82.8) NET INTEREST RECEIVED (PAID) (37.6) 6.1 (43.7) N/A OTHERS (1.8) N/A TRANSACTIONS COSTS SENIOR NOTES 0.0 (4.9) 4.9 N/A USES OF CASH (997.2) (1,070.9) 73.7 (6.9) NET INCREASE / (DECREASE) IN CASH DURING THE PERIOD (798.2) (1,435.2) N/A EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS (4.0) 0.9 (5.0) N/A CASH AND CASH EQUIVALENTS AT 01 JANUARY 1, CASH AND CASH EQUIVALENTS AT 31 DECEMBER ,251.7 (802.4) (64.1)

28 Balance Sheet (IFRS) Change Concept (Million USD) 31-DIC DIC-13 % Assets Cash and Investments ,251.7 (64.1) Trade and Other Receivables Inventories Prepaid Expenses (37.0) Silverstream Derivative Financial Instruments Property, Plant and Equipment 1, , Other Assets (Long term) Total Assets 3, ,094.9 (8.6) Liabilities Profit Sharing (43.4) Loans from Partners N/A Other Liabilities (Short term) Retirement and Pension Plan Reserves Deferred Taxes Senior Notes (0.5) Other Liabilities ( Long term) Total Liabilities 1, , Share Capital and Share Premium 1, , Placement of new Ordinary Shares (0.0) N/A Retained earnings 1, ,270.0 (0.3) Other Accounts (512.9) (518.9) (1.2) Stockholder's Equity 2, , Minority Interest (93.3) Total Stockholder s Equity 2, ,672.0 (13.9) Total Liabilities and Stockholder's Equity 3, ,094.9 (8.6) 28

29 Reserves 2014 Tonnes and Grades Metal content Mine / project Tonnes Grades Au Ag Pb Zn Ag Eq. * Cut-off Mt Au gpt Ag gpt % Pb % Zn koz Moz kt kt Moz Fresnillo gpt Ag Eq gpt Ag Eq % Incr. 32.0% -15.8% -1.8% -1.9% -0.3% 7.7% -17.3% -17.4% -16.1% -9.3% -12.5% Saucito gpt Ag Eq gpt Ag Eq % Incr. 49.0% -11.4% -5.8% 1.5% -2.0% 6.4% -16.6% -10.1% -13.2% -5.7% -8.4% Cienega a 3.21 gpt Au Eq a 2.94 gpt Au Eq % Incr. 2.5% 3.6% 6.6% 7.9% 2.6% 2.1% 10.5% 11.8% 6.3% 5.9% 12.2% Herradura 2014 Multiple ** , Multiple *** , % Incr. 97.9% -0.8% 96.4% 95.7% Noche Buena gpt Au Eq , gpt Au Eq , % Incr. 0.0% -1.2% 0.3% -0.9% -1.3% Soledad & Dipolos gpt Au Eq gpt Au Eq % Incr. 0.0% -0.0% 0.6% 0.6% 0.3% San Julian - veins gpt Ag Eq San Julian - disseminated gpt Ag Eq * Metal prices used for 2014: 1,150 USD/oz Au, 18 USD/oz Ag, 0.95 USD/lb Pb and 0.95 USD/lb Zn. For year 2013: 1,250 USD/oz Au, USD/oz Ag, 0.99 USD/lb Pb and 0.88 USD/lb Zn. ** Herradura ore reserves are reported at varied cut-offs dependent on material types and grade. Oxide material above 0.30 gpt Au reports to the heap leach, transitional and sulfide material from 0.35 to 0.60 gpt Au report to the heap leach, oxide material above 1.14 gpt Au reports to the mill, transitional and sulfide material above 0.60 gpt Au reports to the mill. *** In 2013, the cut-off grades for Herradura are: 0.3 gpt Au Eq. for oxides and 0.56 gpt Au Eq. for transitional and fresh ore. 29

30 Mineral Resources 2014: Operating Mines & San Julian Project Tonnes and Grades Metal content Mine / project Tonnes Grades Au Ag Pb Zn Ag Eq. * Cut-off Mt Au gpt Ag gpt % Pb % Zn koz Moz kt kt Moz Fresnillo gpt Ag Eq , ,851 1, gpt Ag Eq , ,006 1,961 1,216 % Incr. 24.1% -4.7% -2.8% -1.2% -2.9% -1.0% -7.4% -5.9% -7.5% -5.6% -3.3% Saucito gpt Ag Eq , gpt Ag Eq , , % Incr. 38.8% -11.0% -10.1% -3.0% -8.8% -4.7% -20.0% -13.7% -18.8% -15.2% -13.2% Cienega a 2.64 gpt Au Eq , a 2.05 gpt Au Eq , % Incr. 13.0% -5.7% 4.3% 4.8% 5.5% -0.8% -1.6% -1.1% -0.5% -6.5% -0.1% Herradura 2014 Multiples ** , gpt Au Eq , % Incr. 17.3% 12.6% 32.2% 31.7% Noche Buena gpt Au Eq , gpt Au Eq , % Incr % 1.9% -26.4% -26.6% San Julian - veins gpt Ag Eq % Incr % 9.0% 0.7% -3.8% -11.1% -8.1% San Julian - disseminated gpt Ag Eq % Incr. -4.2% 1.2% 2.7% 2.2% 2.5% -3.0% -1.5% -2.0% -1.8% 1.5% 14,598 1,533 1,711 3,331 3,053 14,004 1,663 1,905 3,627 3,135 * Metal prices used for 2014: 1,150 USD/oz Au, 18 USD/oz Ag, 0.95 USD/lb Pb and 0.95 USD/lb Zn. For year 2013: 1,250 USD/oz Au, USD/oz Ag, 0.99 USD/lb Pb and 0.88 USD/lb Zn. ** Herradura ore resources are reported at varied cut-offs dependent on material types and grade. Oxide material above 0.30 gpt Au reports to the heap leach, transitional and sulfide material from 0.35 to 0.60 gpt Au report to the heap leach, oxide material above 1.14 gpt Au reports to the mill, transitional and sulfide material above 0.60 gpt Au reports to the mill. 30

31 Mineral Resources 2014 (cont): Exploration Projects Tonnes and Grades Metal content Mine / project Tonnes Grades Au Ag Pb Zn Ag Eq. * Cut-off Mt Au gpt Ag gpt % Pb % Zn koz Moz kt kt Moz Orisyvo 2014 Multiple ** , Multiple ** , % Incr. 0.0% -13.1% 1.4% -2.8% -11.9% -15.5% -12.2% Candameña 2014 Multiple *** , Multiple *** , % Incr. 0.0% -2.4% -2.1% -1.0% -4.4% -3.4% -4.2% Rodeo gpt Au % Incr. Pilarica gpt Ag Eq gpt Ag Eq % Incr. 20.0% 49.4% -38.5% -3.9% -12.3% -8.1% 43.6% 30.9% 3.3% Centauro Deep gpt Au Eq , gpt gau Eq , % Incr. 13.3% 5.6% 5.2% 11.1% 10.7% Juanicipio 2014 US$70.27/t US$70.29/t % Incr. -0.0% 2.4% -2.1% -2.9% 0.8% 0.4% 0.3% -0.5% 3.2% 2.8% 3.3% Guanajuato gpt Au-Eq gpt Au-Eq % Incr. 0.0% 138.4% 10.5% 17.0% 163.5% 178.9% 170.9% 6, * Metal prices used for 2014: 1,150 USD/oz Au, 18 USD/oz Ag, 0.95 USD/lb Pb and 0.95 USD/lb Zn. For year 2013: 1,250 USD/oz Au, USD/oz Ag, 0.99 USD/lb Pb and 0.88 USD/lb Zn. ** For 2014 and 2013: 0.20 gpt Au-Eq for oxide material and 0.50 gpt Au-Eq for sulphide material. *** For 2014 and 2013: 0.30 gpt Au-Eq for oxide material and 0.70 gpt Au-Eq for sulphide material. **** For 2014 and 2013: 0.20 gpt Au-Eq for oxide material and 0.70 gpt Au-Eq for sulphide material. 31