25 September Dedicated to meeting our commitments

Transcription

1 25 September 2017 Dedicated to meeting our commitments 1

2 Disclaimer This document includes statements that are, or may be deemed to be, forward-looking statements. These forward-looking 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 forwardlooking 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 forward-looking 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

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4 Fresnillo at a Glance Location HERRADURA DISTRICT Key Highlights World s largest silver producer (50.3 moz in 2016) and Mexico s largest gold producer (935.5 koz in 2016) ORISYVO SAN JULIÁN Total assets of US$4.5 billion 1 and market cap of US14.6 billion 2 Silver resources of 2.2 billion ounces and gold resources of 38.4 million are the foundation for creating long term value CIÉNEGA DISTRICT FRESNILLO DISTRICT Growth potential supported by mining concessions of 1.8m hectares in Mexico and 350 thousand hectares in Peru Margins sustained by cash costs and AISC amongst the lowest in the industry SOUTH PERU Production target of 65 moz of silver and 750 koz of gold by 2018 Fresnillo plc mines (7 and a satellite mine) 3 Development projects (2) Advanced exploration projects (4) Prospects in drilling Prospects at an early stage Substantial, high quality project pipeline and strong commitment to disciplined and sustainable growth Focus on greenfield and brownfield projects that can be developed into low-cost, world-class mines 1 As of 31 June As at 22 September Operations at Soledad-Dipolos are currently suspended 4

5 5 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 our environmental impact Maintain sound relations with our communities

6 Highlights H17 Silver production moz Gold production koz Revenues US$ million 1, Gross profit US$ million Operating profit US$ million EBITDA US$ million 1, EBITDA margin % Total CAPEX US$ million Exploration expenses US$ million Workforce (employees + contractors) 11,380 13,630 Total Assets US$ million 4,290 4,512 Cash and investments US$ million

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8 Operations Fresnillo Saucito Key operating statistics 1H 2017 Silver production moz 8.9 Gold production koz 20.7 Cost per tonne US$/t 44.1 Cash cost - US$/oz of Ag 1.25 Reserves 2016 * Resources 2016 * 1H17 Achievements Continued signs of progress 4th consecutive quarter of increased ore processed moz Ag, 0.6 moz Au moz Ag, 1.72 moz Au 2H17 targets Continue towards our 4,800m a month of development target On track to reach 7-10% increase in Ag Prod. Expected Ag ore grade of 230g/t for the full year Key operating statistics 1H 2017 Silver production moz 10.8 Gold production koz 33.9 Cost per tonne US$/t 45.2 Cash cost - US$/oz of Ag 1.64 Reserves 2016 * Resources 2016 * 1H17 Achievements 4.3% increase in ore processed vs. 1H moz Ag, 0.9 moz Au moz Ag, 2.1 moz Au 2H17 targets Advance the Jarillas Shaft extension & deepening of 6 development ramps Continue to increase development rates towards 4,000m a month * As of December

9 Operations Cont. Herradura Noche Buena Key operating statistics 1H 2017 Gold production koz Silver production koz 222 Cost per tonne* US$/t 7.1 Cash cost - US$/oz of Au Reserves 2016 ** Resources 2016 ** 1H17 Achievements Inventories at pads further decreased 2nd line of the DLP progressing as expected 5.2 moz Au 10.8 moz Au 2H17 targets Continue to advance construction of the 2nd line of the DLP ready for commissioning next year Key operating statistics 1H 2017 Gold production koz 89.8 Silver production koz 14 Cost per tonne* US$/t 7.0 Cash cost - US$/oz of Au Reserves 2016 ** Resources 2016 ** 1H17 Achievements Increased ore throughput vs 1H16 2H17 targets Continue to focus on efficiencies Continue exploration in surrounding area Advance the construction of Pad number moz Au 0.9 moz Au *Cost per tonne excluding unproductive costs ** As of December

10 Operations Cont. Ciénega San Julián Phase I Key operating statistics 1H 2017 Gold production koz 36.4 Silver production moz 2.8 Cost per tonne US$/t 64.4 Cash cost - US$/oz of Au Key operating statistics 1H 2017 Gold production koz 41.0 Silver production moz 3.0 Cost per tonne US$/t ** 49.0 Cash cost - US$/oz of Au ** Reserves 2016 * 66.3 moz Ag, 0.8 moz Au Reserves 2016 * moz Ag, 0.4 moz Au Resources 2016 * moz Ag, 1.6 moz Au Resources 2016 * moz Ag, 0.8 moz Au 1H17 Achievements Development & preparation of 2 satellite mines for operational flexibility Taspana mine & Tajos mine 2H17 targets Continue development of Rosario & Las Casas Advance the Ciénega expansion evaluation 1H17 Achievements Continuing to ramp up capacity, currently processing at over 3,700 tpd 2H17 targets On track to reach 4,000 tpd target ** San Julián cost per tonne and cash cost figures are not representative as it started up in August 2016 and continues to process ore that came from the development stockpile * As of December

11 Operations Cont. San Julián Phase II commissioned 11

12 Operations Cont. San Julián (Phase I & II) Expected 2017 silver production Expected 2017 gold production Expected Cash cost 2017* Expected Cost per tonne 2017 Expected All-in sustaining costs 2017* Phase II capacity (flotation plant to process ore from disseminated ore body) Pre-operative capex for Phase I & II Life of mine 11.6 moz 63.7 koz $0.9/oz $46.4/tonne $4.9/oz 6,000 TPD $515 m 12 years San Julián phase II was commissioned on time and on budget Commercial production commenced mid-july Ramp up was achieved reaching nameplate capacity, 6,000 TPD Identify, explore and evaluate the District s potential *Cash Cost by product of volume sold 12

13 Group Consolidated Cash Cost* & All In Sustaining Cost** (US$/Oz) ACCUM JUNE CHANGE CASH COST % CHG. PER OZ SILVER EQ. As a Silver Company % Silver Eq. Oz (Moz) Sales Volume % PER OZ GOLD EQ. As a Gold Company % Gold Eq. Oz (Koz) Sales Volume % ALL IN SUSTAINING COST PER OZ SILVER EQ. As a Silver Company % Silver Eq. Oz (Moz) Sales Volume % PER OZ GOLD EQ. As a Gold Company % Gold Eq. Oz (Koz) Sales Volume % * 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. 13 ** All In sustaining cost 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.

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15 Projects Pyrites Plant Project in the Fresnillo District 2nd Line of Dynamic Leaching Plant Project at Herradura Key operating statistics Avg. annual silver production Avg. annual gold production Pre-operative capex Cash cost (average LoM) 3.5 moz 13.0 koz $155 m $2.51 /oz Expected commissioning 2018 Improve overall recoveries of Au & Ag by processing historical and ongoing tailings from the Fresnillo & Saucito mines The plant will froth float pyrite concentrates that will be leached in a 2,000 tpd dynamic leaching plant and Merrill Crowe plant to produce precipitates Key operating statistics Plant capacity Pre-operative capex Increase in gold production per year 8,000TPD US$110m 36koz Expected commissioning 2018 Detailed engineering continued Milling area advanced The project will enable sulphides occurring deeper in the pit to be processed more efficiently As a result of the project, the LOM at Herradura will be extended to 12 years with an annual gold production of 390 koz 15

16 Projects Cont. Juanicipio (JV with MAG Silver. Fresnillo: 56%) 8km from the Fresnillo mine; Juanicipio s mineral zones are located in silver-gold rich sulphide shoots of the veins. This project will be developed on a stand-alone basis Key metric estimates (100% basis) Avg. annual production Indicated & inferred resources 10moz silver 30koz gold 248 moz silver 1.4 moz gold First production 1H % and 9.9% increase in gold and silver resources respectively 20,000 metre drilling programme in

17 Strong Organic Growth Pipeline Mine Operations Development Projects PEA - Feasibility 2017/ Budget: US$ 160 m Fresnillo Saucito Herradura 36 % Nochebuena Ciénega - San Ramón Soledad & Dipolos* San Julián Pyrites Plant Cebollitas Cluster Centauro Extension Juanicipio Centauro Deep Orisyvo 16 % Pipeline allows us to focus on projects that have the potential to be developed into low cost, world-class mines 3 % Advanced Exploration Guanajuato Rodeo 5 % Prospects in drilling Early stage Exploration Fresnillo District Tajitos Candameña Guachichil Pilarica (Perú) San Nicolás Guazapares Olivos Coneto Lucerito San Juan San Agustin Minitas Cebadillas La Yesca Dátil Norias Argentum Sonora and Sinaloa : Nudo Lejano Carina Cerritos Rosario Sierra Pinta Elena San Manuel Santo Niño Chihuahua: Rosetillas SJ Pinal Lucero Tempisque Uruachi Durango: Frida Canelas-VTopia El Carmen El Hundido Zacatecas: Urite Atotonilco Corredor Concha-Nieves Villa García Perú: Sto. Domingo La Pampa Supaypacha Alto Dorado 40 % Systematic Project Generation * Operations at Soledad & Dipolos are currently suspended. 17

18 Growth in Resources Attributable silver resources (M oz) Attributable gold resources (M oz) 18

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20 Expected Delivery of Growth (1) (2) Investment (US$ million) Expected Avg. Annual Production PROJECT YEAR moz oz Ag & 44 koz Au SAN JULIÁN CONSTRUCTION LEACHING PLANT FLOTATION PLANT CONSTRUCTION PRODUCTION moz Ag & 13 koz Au PYRITES PLANT (Optimization project) DETAILED ENGINEERING LEACHING PLANT CONSTRUCTION CONSTRUCTION TAILINGS FLOTATION PRODUCTION 110 Extended LoM of 390 koz Au CENTAURO EXTENSION DEVELOPMENT 2ND DYNAMIC LEACHING PLANT CONSTRUCTION PRODUCTION koz Au & 1.3 moz Ag CIENEGA 5,000 TPD (Optimization project) DEVELOPMENT & CONSTRUCTION PRODUCTION 30 3 moz Ag FRESNILLO 9,000 TPD (Optimization project) DEVELOPMENT & CONSTRUCTION PRODUCTION (3) 305* 10 moz Ag & 30 koz Au JUANICIPIO DEVELOPMENT & CONSTRUCTION PRODUCTION koz Au CENTAURO DEEP DEVELOPMENT & CONSTRUCTION PRODUCTION (4) koz Au ORISYVO DEVELOPMENT & CONSTRUCTION PRODUCTION (1) Estimated (2) Total average annual production (3) Total investment(of which 56% Fresnillo plc; 44% MAG Silver) according to PFS dated June 2012 (4) On hold Approved by the Board Subject to ongoing internal review (Subject to Board approval) 20

21 Expected Silver Production Profile 80 Million Oz Attributable Target of 65 moz silver by

22 Expected Gold Production Profile Thousand Oz 1,100 Attributable 1, Target of 750 koz gold by

23 CAPEX Spend Expectations 2017 US$ Million Sustaining (Operations) Million Usd 1,000 Fresnillo Saucito Herradura Ciénega Noche Buena San Julián Others Projects Approved 109 M 119 M 96 M 61 M 20 M 79 M 5 M San Julián Pyrites Plant Centauro Extension Projects for Approval 35 M 58 M 53 M Others 65 M Sustaining CAPEX New Projects - Preoperative CAPEX 23

24 Outlook Safety and support of the workforce Introduction of an enhanced safety system at all our mines which was initiated at Saucito in March 2017 Disciplined growth through exploration and development Ramp up was achieved at San Julián Phase II reaching nameplate capacity, 6,000 tpd Maintain Fresnillo mine at full capacity Advance the Pyrites Plant Continue construction of the 2 nd Line of DLP at Herradura Advancing towards our 2018 production goals Produce moz silver & koz gold in 2017 Continue developing the infrastructure and preparing the mine at Fresnillo for the future expansion Increase milling capacity further at the San Julián leaching plant through optimisation projects Proven strategy delivering results 24

25 Investment case Strong balance sheet Commitment to sustainable business practices High quality assets Disciplined & consistent approach to growth and returns Low-cost and flexible operations 25