Interim Results August 4, 2015

Transcription

1 Well placed to address cyclical uncertainties Interim Results Six months ended 30 June 2015 Octavio Alvídrez, CEO Mario Arreguín, CFO Roberto Díaz, COO David Giles, VP Exploration August 4, 2015

2 Disclaimer i 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 throughouth t this document and include, but are not limitedit to, statements t t 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 t t 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 i to any forward-looking statements t t in this document thatt may occur due to any change in the Company s expectations or to reflect events or circumstances after the date of this document. 1

3 Agenda Overview > Octavio Alvídrez, CEO Operations Review > Roberto Díaz, COO Financial Review > Mario Arreguín, CFO Growth Pipeline Exploration > David Giles, VP, Exploration Development Projects > Roberto Díaz, COO Conclusions & Outlook > Octavio Alvídrez, CEO Q&A 2

4 Well placed to address cyclical uncertainties Overview

5 H Overview Solid first half operationally Silver production up 11% with start-up of Saucito II more than offsetting lower production at Fresnillo Gold production up 37% with Herradura and its DLP fully operational for the half, and increased contributions from Noche Buena and Saucito 2015 gold production guidance raised to koz from koz (+6.6%); full year silver production remains on track (45-47 moz, including Silverstream) Significantly lower commodity prices (Ag -18.0%; Au -7.4%) impacted financial performance Profit of US$76.4m, down 44.3% EPS US$10.4 cents per share, down 41.2% However, decrease in EBITDA of only 2.0% and profit margins remain attractive with gross margin, operating margin and EBITDA margin of 36.4%, 20.3% and 42.3% respectively Significant cash generation from operations (US$314.9m); strong balance sheet maintained Interim dividend of US$2.1 cents per share recommended by the Board Growth pipeline remains strong Pyrites project remains on track for production to commence in 2017 Positive drill results at Ciénega and Juanicipio, expected to result in an increase in inferred resources Stage 1 of the San Julián project now expected to be commissioned in 1H16 (vs. previous expectation of 4Q15) Capex for the full year 2015 now expected to be in the region of US$570m (from c.us$700m) due to savings in sustaining capex and deferrals of expenditure at Pyrites and Ciénega projects 3

6 Well placed to address cyclical uncertainties Operations Review

7 Fresnillo Mine H1 Summary H1 Performance 1H 15 1H 14 % Ore processed k t 1,206 1,382 (12.7) Production Silver m oz (25.8) Gold k oz (5.0) Ore grade Silver g/t (14.9) Gold g/t Cash cost $/ silver oz (6.2) 1H15 silver production decreased due to: Lower silver ore grade reflecting limited access to high ore grade areas Lower volumes processed due to development delays and stope instability Actions taken: Enhanced contractor supervision Additional contractors Measures to manage stope instability Development rates of 4,150m / month reached in June Looking Forward Actions taken should allow development rates of c.4,000m / month to be maintained Advancing declines in order to reach higher grade veins & regain operating stope flexibility This will create a platform to stabilise ore grades & volumes processed in 3Q15 and begin to see improvement in grades & production volumes in 4Q15 Silver ore grades are expected to move towards reserve grade once operating stope flexibility has been regained AISC $/ silver oz

8 Saucito Mine H1 Summary H1 Performance 1H 15 1H 14 % Ore processed k t 1, Production Silver m oz Gold k oz Ore grade Silver g/t Gold g/t Cash cost $/ silver oz (81.1) AISC $/ silver oz (22.3) 1H15 silver production increased due to: Increase in volume processed due to Saucito II start up Higher silver ore grade resulting from increased ore throughput from higher ore grade veins Improved control of dilution Milling efficiencies at Saucito I plant (vibrating screens) Saucito II now ramped up Significantly ahead of the three year timeframe initially anticipated Saucito I and II now operating at full capacity Looking Forward In 1H16 plan to optimise the capacity of Saucito II Install vibrating screens similar to those installed at Saucito I Total nominal capacity of Saucito expected to increase to 7,200 TPD as a result (vs. originally planned capacity of 6,000TPD) Ore grade and volumes processed were unusually high in 1H15 and are not expected to remain at these levels going forward We will continue to process ore from development and production stopes in 2H15 and expect silver ore grade to average between g/t 5

9 Ciénega Mine H1 Summary 1H15 gold production decreased due to: Expected lower ore grade due to depletion of high gold ore grade areas with wider veins at Ciénega main mine Maintenance delays (mill engine replacement) in June had a smaller impact 1H15 silver production increased due to: Higher silver ore in veins at San Ramón satellite mine Slightly offset by decrease in volume of ore processed H1 Performance 1H 15 1H 14 % Ore processed k t (1.5) Production Gold k oz (15.3) Silver m oz Ore grade Gold g/t (14.0) Silver g/t Looking Forward Evaluation of increasing capacity to either 5,000TPD or 6,000TPD, following good exploration results Intensifying exploration efforts at areas of influence around Ciénega such as the Cebollitas cluster, which are expected to contribute to Ciénega s future production as satellite mines 2H15 expected average gold ore grade of c.2 g/t and average silver ore grade of c.120 g/t Cash cost $/ gold oz AISC $/ gold oz

10 Herradura Mine H1 Summary 1H15 gold production increased due to: Increase in ore processed with mine being fully operational post suspension in 1H14 DLP operational for full half post start-up in March 2014, resulting in increase in ore processed & higher ore grades Higher overall average speed of recovery Increase in ore grade H1 Performance 1H 15 1H 14 % Ore processed m t Total volume hauled m t Production Gold k oz Ore grade Gold g/t Cash cost $/ gold oz AISC $/ gold oz Looking Forward On track to reach steady state production in 4Q15 after ramp-up post suspension and resolution of solution processing issues Controlling planned inventory increase at pads appropriately given temporary solution processing constraints Gold inventory levels of c.170koz (vs. 200koz expected previously) should allow optimal balance between efficiency of leaching process and production costs Inventory levels to move towards this level in H2 once steady state reached 2H15 expected average gold ore grade of around 0.7 g/t 7

11 Noche Buena Mine H1 Summary 1H15 gold production increased due to: Higher volume of gold recovered, driven by increased irrigation area Higher volumes of ore deposited on the leaching pads resulting from lower than expected stripping ratio at mined areas Partly offset by lower ore grade as ore deposited from higher benches to reduce haulage costs, rather than deeper higher ore grade areas H1 Performance 1H 15 1H 14 % Ore processed m t Total volume hauled m t (6.3) Production Looking Forward Continue to focus on containing costs 2H15 expected average gold ore grade of around 0.45 g/t Gold k oz Ore grade Gold g/t (11.0) Cash cost $/ gold oz AISC $/ gold oz (2.9) 8

12 Advancing our Sustainable Development Greenhouse Gas Intensity (tonnes of CO2e per tonne of mineral processed) Social Investment and Community Engagement FY % 28% Environmental awareness Education FY % Social welfare 1H % Capacity building Zero fatalities and zero new cases of occupational diseases Fresnillo included in the new Euronext Vigeo EM 70 Environment, Social and Governance (ESG) Index 9

13 Well placed to address cyclical uncertainties Financial Review

14 H Financial i Highlights ht Adjusted revenue of US$822m, up 9.6% due to the increase in volumes produced and sold, partly offset by lower prices (Au -7.4%; Ag -18.0%) Cost deflation in US$ terms of 6.8% due to peso devaluation Increase in production costs of 8.5% as a result of increased ore throughput at Saucito II, Noche Buena, and Herradura and its DLP; offset by peso devaluation, the decrease in production at Fresnillo and Ciénega and lower energy prices Gross profit and EBITDA of US$274m and US$318m, down 7% and 2% respectively Exploration expenses of US$75m Effective tax rate of 44% (including Mining Right); 36% (excluding), due to an increase in deferred taxes resulting from the adverse effect of the Mexican peso devaluation on assets which are denominated in Mexican pesos for Mexican tax purposes Profit of US$76m, down 44%, and EPS of 10.4 US cents, down 41% Capex of US$229m Strong balance sheet maintained with a cash balance of US$476 million and net debt of US$321 million 2015 interim dividend of 2.1 US cents per share recommended by the Board 2015 capex budget lowered to around US$570m from US$700m, without compromising our profitable growth pipeline 2015 budget for risk capital invested in exploration reduced to c.us$160 million (from c.us$170 million) 10

15 Income Statement t t (IFRS) ACCUM JUNE CHANGE C O N C E P T 1H 2015 % 1H 2014 % $ % ADJUSTED REVENUES HEDGING (METALS) ,971.1 TREATMENT AND REFINING CHARGES (70.9) (73.3) 2.4 (3.2) REVENUES ADJUSTED PRODUCTION COST (316.2) (42.0) (291.3) (43.0) (24.8) 8.5 PROFIT SHARING (6.0) (0.8) (8.6) (1.3) 2.7 (31.0) DEPRECIATION (159.7) (21.2) (133.3) (19.7) (26.4) 19.8 HEDGING (MXP/USD EXCHANGE RATE) (10.2) (1.4) (0.2) (0.0) (9.9) 4,153.3 N/A CHANGE IN INVENTORIES (47.6) (78.4) UNPRODUCTIVE COST (9.2) (1.4) 9.5 N/A COST OF SALES (478.7) (63.6) (382.0) (56.4) (96.7) 25.3 GROSS PROFIT (21.5) (7.3) ADMINISTRATIVE EXPENSES (17.5) (2.3) (15.4) (2.3) (2.2) 14.1 CORPORATE EXPENSES (15.9) (2.1) (14.5) (2.1) (1.4) 9.99 EXPLORATION EXPENSES (75.4) (10.0) (69.0) (10.2) (6.4) 9.3 OTHER INCOME (EXPENSE) (5.3) (0.7) (7.8) (1.1) 2.5 (32.2) SELLING EXPENSES (6.7) (0.9) (5.1) (0.7) (1.6) 31.9 PROFIT FROM CONTINUING OPERATIONS (30.6) (16.7) SILVERSTREAM REVALUATION (45.5) (96.3) FINANCE INCOME / (EXPENSE) (2.9) (0.4) (24.5) (3.6) 21.6 (88.2) FOREIGN EXCHANGE GAIN / (LOSS) (15.6) (2.1) (17.6) (875.4) PROFIT BEFORE INCOME TAX (72.1) (34.6) MINING RIGHT (11.2) (1.5) (13.1) (1.9) 1.9 (14.5) INCOME TAX EXPENSE (48.6) (6.5) (58.1) (8.6) 9.5 (16.3) PROFIT FOR THE PERIOD (60.7) (44.3) ATTRIBUTABLE TO: EQUITY SHAREHOLDERS OF THE GROUP (53.6) (41.2) MINORITY INTEREST (0.1) (0.0) (7.1) (101.9) (60.7) (44.3) EBITDA (6.7) (2.1) 11

16 Adjusted Production Cost Analysis (Consolidated) USD MILLION CHANGE 1H 15 1H 14 $ % Adjusted Production Cost * 8.5 Change in inventories Unproductive Costs Depreciation PTU Hedging (mxp/usd exchange rate) * N/A (Loss) 0.2 (Loss) 9.9 N/A Cost of Sales (0.66) (1.14) (1.93) 7.35 (3.22) (4.57) % (7.92) (15.90) * 12 Increased Prod. at Saucito Increased Prod. at NB Increased Pr Increased Pr od. at Herr rod. at DLP Higher cost of contractors Higher cost of personnel Higher cost of operating materials Decreased Prod. at Cien Lower cost of maintenance and repairs Efficiencies Others (all mines) Lower elec. & diesel cost Decreased Prod. at Fres MXP/USD Devaluation effect Incr in Adj. Prod. Cost * Net of unproductive costs

17 Volume Processed (Mton) 1H15 1H14 Chg % Adjusted Production Cost Analysis (Consolidated) CHANGE 1H 15 1H 14 $ % Adjusted Production Cost * * 8.5 Change in inventories Unproductive Costs N/A Depreciation PTU USD MILLION Hedging (mxp/usd exchange rate) 10.2 (Loss) 0.2 (Loss) 9.9 N/A Cost of Sales Volume Processed +25.3% (Mton) (0.66) (1.14) (1.93) H15 1H14 Chg 7.35 (3.22) (4.57) % +14.7% 9.42 (7.92) Volume47.6 Processed -4.8% -3.3% (15.90) (Mton) H15 1H14 Chg % Volume Processed -16.1% Volume Processed (Mton) 27.2 (Mton) H15 1H14 Chg % 0.0 at Saucito Increased Prod. * Net of unproductive costs Increased Prod. at NB od. at Herr Increased Pr rod. at DLP Increased Pr Higher cost of contractors personnel Higher cost of 1H15 1H14 Chg % Volume Processed (Mton) 1H15 1H14 Chg % Higher cost of operating materials Decreased Pro od. at Cien Lowe er cost of mainte enance and repairs Others (all mines) Efficiencies Average spot MXP/USD 1H15 1H14 Chg % Lower elec. & diesel cost Decreased Pro od. at Fres MX XP/USD Devalua ation effect Incr in Adj. Prod. Cost * 13

18 Consolidated Gross Profit Analysis CHANGE USD MILLION H 15 1H 14 $ % Gross Profit 273.6* (1.12) (1.29) (9.15) (10.17) (12.73) (26.41) (41.19) (102.10) * Incr. ore vol. Lower YTD14 Gross Profit processed and higher ore grade at Saucito Normalised operations at Herradura MXP/USD Devaluation effe Ramp-up of Dynamic Leaching Pla Higher Ore grade at Herradura Efficiencies Decr. ore vol. processed at Ciénega Cost Inflation Lower ore grade at Ciénega Others Decr. Ore grade at NB Higher Depreciation r ore vol. processed and lower ore grade Fresnillo Lower Ag, Au and Pb prices YTD15 Gross Profit ct nt at

19 Consolidated Gross Profit Analysis Volume Processed CHANGE Silver,Gold and Lead average (Mton) Ore Grade Noche Buena: Volume Processed 1H 15 1H 14 $ 1H15 1H14 Chg % realised prices (USc/Lb) 1H15 1H14 Chg 1H15 1H14 Chg (Mton) % Au g/t % 273.6* Ag (18.0%) Gross Profit 1H15 1H14 Chg (1.12) (1.29) (9.15) (10.17) Au 1, ,302.1 (7.4%) % (12.73) (26.41) Pb (10.9%) (41.19) (102.10) Ore Grade Herradura: -6.8% H15 1H14 Chg Au g/t % USD MILLION fit YTD14 Gross Prof to Average spot MXP/USD 1H15 1H14 Chg % Volume Processed (Mton) 1H15 1H14 Chg % Incr. ore vol. processed and highe er ore grade at Saucit a Normalised op perations at Herradura MXP/U USD Devaluation effec ct Ramp-up of Dy ynamic Leaching Plan nt a re grade at Herradura Higher O Efficiencie es Ore Grade Ciénega: 1H15 1H14 Chg Au g/t % processed at Ciéneg ga Decr. ore vol. Higher depreciation recorded due to the start of Saucito II and DLP, and a higher depletion factor resulting from increased production Cost Inflatio on r ore grade at Ciéneg ga rs Other Volume Processed (Mton) 1H15 1H14 Chg % Decr. Ore grade at NB Higher Depreciatio on at and lower ore grade a llo r Ag, Au and Pb price es Ore Grade Fresnillo: 1H15 1H14 Chg Ag g/t % Lowe r ore vol. processed a Fresnil Lower Lower fit YTD15 Gross Prof * 15

20 Cost Per Tonne (IFRS) COST PER TONNE * 1H H 2014 % CHANGE MINE UNIT Fresnillo US$/TONNE % Saucito US$/TONNE % Ciénega US$/TONNE % Herradura US$/TONNE 8.71 ** 8.03 ** 8.5% Noche Buena US$/TONNE 8.16 ** 8.89** -8.2% * Cost per tonne is calculated as total production costs less depreciation, profit sharing and the exchange rate hedging effects. ** Cost per tonne excluding unproductive costs 16

21 Cash Cost (IFRS) CASH COST * 1H H 2014 % CHANGE MINE UNIT Fresnillo PER OZ. SILVER % 62% Saucito PER OZ. SILVER % Ciénega PER OZ. GOLD (By-prod.) % ** PER OZ. GOLD (Equiv.) % PER OZ. GOLD (Co-prod.)** % PER OZ. SILVER (Co-prod.)** % Herradura PER OZ. GOLD % Noche Buena PER OZ. GOLD % * Cash cost per ounce is calculated as total cash cost (cost of sales plus treatment and refining charges less depreciation) less revenues from by-products divided by the silver or gold ounces sold. ** For Ciénega we have also shown the calculation on a co-product basis, and an equivalent ounces basis. The two coproduct lines should be considered together. 17

22 All In Sustaining Cost (US$/Oz)* LIFE OF MINE CASH COST * 1H H 2014 % CHANGE WEIGHTED AVERAGE MINE UNIT Fresnillo PER OZ. SILVER % 6.20 (2023) Saucito PER OZ. SILVER % (2021) Ciénega PER OZ. GOLD % (2026) Herradura PER OZ. GOLD % (2019) Noche Buena PER OZ. GOLD % 1, (2019) * 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. Life of mine weighted average basis is shown from 2015 onwards for each mine 18

23 Margins by mine (Metal price AISC*) (1H15 vs. 1H14) (USD/Oz) Fresnillo Saucito Ciénega Herradura NB 10.2moz 7.4moz 6.1moz 10.6moz 48.6koz 39.8koz 103.8koz 188.3koz 63.8koz 68.4koz Chg % Chg % Chg % Chg % Chg. +7.2% Ounces Sold Stoppage of operations continued at Soledad-Dipolos *All in Sustaining Cost 19

24 Income Statement (IFRS) Foreign Exchange Effects ACCUM JUNE CHANGE C O N C E P T 1H 2015 % 1H 2014 % $ % 15.2% decrease in average MXN/USD (1H15 vs. 1H14) ADJUSTED REVENUES HEDGING (METALS) ,971.1 TREATMENT AND REFINING CHARGES (70.9) (73.3) 2.4 (3.2) REVENUES ADJUSTED PRODUCTION COST (316.2) (42.0) (291.3) (43.0) (24.8) 8.5 PROFIT SHARING (6.0) (0.8) (8.6) (1.3) 2.7 (31.0) DEPRECIATION (159.7) (21.2) (133.3) (19.7) (26.4) 19.8 HEDGING (MXP/USD EXCHANGE RATE) (10.2) (1.4) (0.2) (0.0) (9.9) 4,153.3 N/A CHANGE IN INVENTORIES (47.6) (78.4) UNPRODUCTIVE COST (9.2) (1.4) 9.5 N/A COST OF SALES (478.7) (63.6) (382.0) (56.4) (96.7) 25.3 GROSS PROFIT (21.5) (7.3) ADMINISTRATIVE EXPENSES (17.5) (2.3) (15.4) (2.3) (2.2) 14.1 CORPORATE EXPENSES (15.9) (2.1) (14.5) (2.1) (1.4) 9.99 EXPLORATION EXPENSES (75.4) (10.0) (69.0) (10.2) (6.4) 9.3 OTHER INCOME (EXPENSE) (5.3) (0.7) (7.8) (1.1) 2.5 (32.2) SELLING EXPENSES (6.7) (0.9) (5.1) (0.7) (1.6) % decrease in spot MXN/USD PROFIT FROM CONTINUING OPERATIONS (30.6) (16.7) (30/6/15 vs. 31/12/14) SILVERSTREAM REVALUATION (45.5) (96.3) FINANCE INCOME / (EXPENSE) (2.9) (0.4) (24.5) (3.6) 21.6 (88.2) FOREIGN EXCHANGE GAIN / (LOSS) (15.6) (2.1) (17.6) (875.4) PROFIT BEFORE INCOME TAX (72.1) (34.6) MINING RIGHT (11.2) (1.5) (13.1) 1) (1.9) 1.9 (14.5) INCOME TAX EXPENSE (48.6) (6.5) (58.1) (8.6) 9.5 (16.3) 5.8% decrease in spot MXN/USD (30/6/15 vs. 31/12/14) PROFIT FOR THE PERIOD (60.7) (44.3) ATTRIBUTABLE TO: EQUITY SHAREHOLDERS OF THE GROUP (53.6) (41.2) MINORITY INTEREST (0.1) (0.0) (7.1) (101.9) (60.7) (44.3) EBITDA (6.7) (2.1) 20

25 Income Statement (IFRS) Mining Rights Ordinary mining rights related to operations Ordinary mining rights related to exploration Extraordinary mining rights Special mining rights ACCUM JUNE CHANGE C O N C E P T 1H 2015 % 1H 2014 % $ % ADJUSTED REVENUES HEDGING (METALS) ,971.1 TREATMENT AND REFINING CHARGES (70.9) (73.3) 2.4 (3.2) REVENUES ADJUSTED PRODUCTION COST (316.2) (42.0) (291.3) (43.0) (24.8) 8.5 PROFIT SHARING (6.0) (0.8) (8.6) (1.3) 2.7 (31.0) DEPRECIATION (159.7) (21.2) (133.3) (19.7) (26.4) 19.8 HEDGING (MXP/USD EXCHANGE RATE) (10.2) (1.4) (0.2) (0.0) (9.9) 4,153.3 N/A CHANGE IN INVENTORIES (47.6) (78.4) UNPRODUCTIVE COST (9.2) (1.4) 9.5 N/A COST OF SALES (478.7) (63.6) (382.0) (56.4) (96.7) 25.3 GROSS PROFIT (21.5) (7.3) ADMINISTRATIVE EXPENSES (17.5) (2.3) (15.4) (2.3) (2.2) 14.1 CORPORATE EXPENSES (15.9) (2.1) (14.5) (2.1) (1.4) 9.99 EXPLORATION EXPENSES (75.4) (10.0) (69.0) (10.2) (6.4) 9.3 OTHER INCOME (EXPENSE) (5.3) (0.7) (7.8) (1.1) 2.5 (32.2) SELLING EXPENSES (6.7) (0.9) (5.1) (0.7) (1.6) 31.9 PROFIT FROM CONTINUING OPERATIONS (30.6) (16.7) SILVERSTREAM REVALUATION (45.5) (96.3) FINANCE INCOME / (EXPENSE) (2.9) (0.4) (24.5) (3.6) 21.6 (88.2) FOREIGN EXCHANGE GAIN / (LOSS) (15.6) (2.1) (17.6) (875.4) PROFIT BEFORE INCOME TAX (72.1) (34.6) MINING RIGHT (11.2) (1.5) (13.1) 1) (1.9) 1.9 (14.5) INCOME TAX EXPENSE (48.6) (6.5) (58.1) (8.6) 9.5 (16.3) PROFIT FOR THE PERIOD (60.7) (44.3) ATTRIBUTABLE TO: EQUITY SHAREHOLDERS OF THE GROUP (53.6) (41.2) MINORITY INTEREST (0.1) (0.0) (7.1) (101.9) (60.7) (44.3) EBITDA (6.7) (2.1) 21

26 Cash Flow (IFRS) CHANGE C O N C E P T (Million USD) 1H H 2014 $ % CASH GENERATED BY OPERATIONS BEFORE CHANGES IN WORKING CAPITAL (21.8) (6.5) WORKING CAPITAL (18.0) (71.5) 53.5 (74.8) INCOME TAX AND PROFIT SHARING PAID (33.5) (110.5) 77.0 (69.7) NET CASH FROM OPERATING ACTIVITIES OTHER PROCEEDS SILVERSTREAM CONTRACT (8.7) (27.6) OTHERS (1.8) (70.3) PROCEEDS FROM THE SALE OF PROPERTY, PLANT AND EQUIPMENT (1.0) (18.1) 1) CAPITAL CONTRIBUTION TOTAL OTHER PROCEEDS (10.0) (24.5) PURCHASE OF PROPERTY, PLANT AND EQUIPMENT (229.1) (212.0) (17.2) 8.1 DIVIDENDS PAID (22.1) (50.1) 28.1 (56.0) NET INTEREST RECEIVED (PAID) (17.1) (19.4) 2.2 (11.6) USES OF CASH (268.3) (281.4) 13.1 (4.7) NET INCREASE / (DECREASE) IN CASH DURING THE PERIOD 26.0 (85.9) (130.2) EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS 0.4 (1.5) 1.9 N/A CASH AND CASH EQUIVALENTS AT 01 JANUARY ,251.7 (802.4) (64.1) CASH AND CASH EQUIVALENTS AND SHORT TERM INVESTMENTS AT 30 JUNE ,164.3 (688.5) (59.1) 22

27 Cash Flow (IFRS) Increase in gold ore inventories at Herradura and Noche Buena $USD 16.1 million Increase in trade and other receivables, $USD 2.2 million due to higher Au and Ag vol. sold to Met- Mex CHANGE C O N C E P T (Million USD) 1H 2015 Increase 1H 2014 of prepayments $ and % other assets CASH GENERATED BY OPERATIONS BEFORE CHANGES IN WORKING CAPITAL $USD million (21.8) (6.5) WORKING CAPITAL (18.0) (71.5) 53.5 (74.8) Provisional tax payment INCOME TAX AND PROFIT SHARING PAID (33.5) (110.5) 77.0 (69.7) NET CASH FROM OPERATING ACTIVITIES MOz proceeds from the 70.3 OTHER PROCEEDS silverstream contract, which SILVERSTREAM CONTRACT do not go through the (8.7) (27.6) Income Statement OTHERS (1.8) (70.3) PROCEEDS FROM THE SALE OF PROPERTY, PLANT AND EQUIPMENT 4.3 San 5.3 Julián Project (1.0) (18.1) Continuous mining and engineering CAPITAL CONTRIBUTION 3.1 works TOTAL OTHER PROCEEDS 30.9 Herradura 40.9 (10.0) (24.5) PURCHASE OF PROPERTY, PLANT AND EQUIPMENT (229.1) Construction of the leaching pads Purchase (212.0) of major (17.2) components 8.1 for trucks DIVIDENDS PAID (22.1) and (50.1) shovels 28.1 (56.0) NET INTEREST RECEIVED (PAID) 2014 Final Dividend of 3.0 US (17.1) Purchase of equipment for the expansion (19.4) 2.2 (11.6) of the Merrill Crowe plant USES OF CASH cents paid on 22 May 2015 (268.3) (281.4) Noche Buena 13.1 (4.7) Construction of leaching pads and Noche NET INCREASE / (DECREASE) IN CASH DURING THE PERIOD 26.0 Buena (85.9) plant expansion (130.2) EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS Construction of an electric facility for fuel (1.5) N/A supply CASH AND CASH EQUIVALENTS AT 01 JANUARY ,251.7 Fresnillo (802.4) (64.1) CASH AND CASH EQUIVALENTS AND SHORT TERM INVESTMENTS AT 30 JUNE ,164.3 Mine development (688.5) and civil works (59.1) and purchase of in-mine equipments and components Ciénega Development and mining works Purchase of in-mine trucks and components for the reconstruction of in- mine equipment 23

28 Balance Sheet (IFRS) Change Concept (Million USD) 30-JUNE DIC-14 % Assets Cash and Investments Trade and Other Receivables (5.6) Inventories Prepaid Expenses (50.0) Silverstream (4.8) Derivative Financial Instruments Property, Plant and Equipment 2, , Other Assets (Long term) (4.7) Total Assets 3, , Liabilities Profit Sharing (46.1) Other Liabilities (Short term) (2.3) Retirement and Pension Plan Reserves Deferred Taxes Senior Notes Other Liabilities ( Long term) Total Liabilities 1, , Share Capital and Share Premium 1, ,522.4 (24.2) Share Capital Subscribed N/A Retained earnings 1, , Other Accounts (513.2) (512.9) 0.1 Stockholder's Equity 2, , Minority Interest Total Stockholder s Equity , , Total Liabilities and Stockholder's Equity 3, ,

29 Well placed to address cyclical uncertainties Growth Pipeline: Exploration & Development Projects

30 Strong Organic Growth Pipeline Mine Operations 2015 Budget: c.us$160m Fresnillo Saucito I & II 34% Herradura (DLP) Noche Buena Ciénega - San Ramón Soledad &Dipolos* Pipeline allows us to focus on projects that have the potential to be developed into low cost, world-class mines Development Projects San Julián Pyrites Plant 1% Advanced Exploration Prospects in drilling Early stage Exploration Orisyvo Juanicipio 35% Cluster Cebollitas Centauro Deep Fresnillo District Rodeo Guanajuato Tajitos Candameña Guachichil Pilarica (Perú) San Nicolás Guazapares Coneto Lucerito Cebadillas La Yesca Cairo Dátil Amata (Perú) Norias 30% 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 Villa García Perú: Huacravilca Sto. Domingo La Pampa * Operations at Soledad & Dipolos are currently suspended. Projects in blue are being prioritised Systematic Project Generation 25

31 H1 Exploration Update Good grades continue to be discovered at depth PEA in progress Focus on South of district Promising results Focus on Cebollitas cluster Positive drilling results: increase in inferred resources + promising results at Pilarica in Peru Drilling continues at several locations around district Good drilling results 26

32 Guanajuato District N León El Gigante GUANAJUATO 21,000 m Dolores Hidalgo Opulencia Sirena Barragana Guanajuato Silao DICIEMBRE DE 2014 Au Eq (000) oz Ag Eq (000) oz Opulencia (Gigante) 24,000 Gloria 120 Las Torres San Gregorio Gloria Potrerillos LA JOYA 16,000 m Co. Blanco 11,000 La Joya Potrerillos 9,000 San Gregorio Prospectos en barrenación Cerro Blanco Km Irapuato 27

33 Expected delivery of growth Investment (US$ million) Expe cte d Avg. Annual Production (1) (2) PROJECT YEAR mill Oz Ag & 44 thds Oz Au SAN JULIÁN CONSTRUCTION LEACHING PLANT CONSTRUCTION FLOTATION PLANT PRODUCTION 30 3 mill Oz Ag FRESNILLO 9,000 TPD (Optimization project) MINE DEVELOPMENT & PLANT ADEQUATION DETAILED ENGINEERING PRODUCTION mill Oz Ag & 13 thds Oz Au PYRITES PLANT (Optimization project) DETAILED ENGINEERING LEACHING PLANT CONSTRUCTION CONSTRUCTION TAILINGS FLOTATION PRODUCTION thds Oz Au & 1.3 mill Oz Ag CIENEGA 5,000 TPD (Optimization project) DETAILED ENGINEERING MINE DEVELOPMENT PLANT CONSTRUCTION PRODUCTION thds Oz Au ORISYVO BASIC ENGINEERING MINE DEVELOPMENT DETAILED ENGINEERING PLANT CONSTRUCTION PRODUCTION mill Oz Ag & 30 thds Oz Au JUANICIPIO BASIC ENGINEERING MINE DEVELOPMENT DETAILED ENGINEERING PLANT CONSTRUCTION PRODUCTION thds Oz Au CENTAURO EXTENSION DEVELOPMENT 2ND DYNAMIC LEACHING PLANT CONSTRUCTION PRODUCTION thdsOz Au CENTAURO DEEP BASIC ENGINEERING DEVELOPMENT DETAILED ENGINEERING PLANT CONSTRUCTION PRODUCTION (1) Estimated. (2) Total average annual production. 28

34 Approved Projects San Julián Pyrites Plant Key metric estimates Avg. annual silver production 10.3 moz Avg. annual gold production Pre-operative capex Cash cost (average LoM) All-in sustaining costs (average LoM) Phase 1 capacity (DLP to treat ore from veins) Phase 2 capacity (flotation plant to process ore from disseminated ore body) 43.9 koz $515 m $7.77 /oz $9.33 /oz 3,000TPD 6,000TPD Key metric estimates Avg. annual silver production moz Avg. annual gold production Pre-operative capex Cash cost (average LoM) Saucito I Life of mine 13 years Fe Mining works at the main ramp concluded & further progress made on plant infrastructure Fresnillo Plant Tailings Plant Old Tailings Plant 12.8 koz $155 m $2.51 /oz Saucito II However, delays in permitting, weather-related issues and high rotation of contractor personnel due to project s remote location together resulted in execution delays Filtration Plant Hauling (Truck) Leaching Plant Phase 1 now expected to be commissioned 1H16; phase 2 remains on track (4Q16) Detailed engineering continues 29

35 Potential Brownfield Expansions Ciénega Optimisation Fresnillo Optimisation Centauro Extension Centauro Deep Description Optimisation project to increase capacity Optimisation project to increase capacity Natural evolution of the Centauro pit at Herradura Potential underground mine beneath the Centauro pit at Herradura Expected avg. annual production 15 koz gold 1.3 moz silver* 3 moz silver 200 koz gold 225 koz Estimated preoperative capex $55 m* $30 m $155 m $365 m Status Evaluation of increasing capacity to either 5,000TPD or 6,000TPD, following good exploration results Post evaluation of alternative options, smaller expansion to 9,000TPD now planned (from previous expectation of 10,000TPD) Evaluation of optimal pit design based on increased reserves as at YE 2014 Additional exploration activities ongoing to accurately de-lineate the ore bodies Expected commissioning * Assuming a 5,000TPD expansion 30

36 Advanced Exploration Projects 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 d on a stand-alone basis Key metric estimates (100% basis) 10 moz silver Avg. annual production 30 koz gold Pre-operative capex $300 m 205 moz silver Indicated & inferred resources 811 koz gold First production 2018 Orisyvo Assessing a 8,000TPD mine with a DLP processing facility; focusing on higher grade zones of the gold resource base Key metric estimates Avg. annual production 136 koz gold Pre-operative capex $350 m 8.7 moz gold Indicated & inferred resources 11.4 moz silver First production 2018 Positive drilling results will result in an increase in inferred resources Preliminary economic assessment in progress 31

37 Achieving 65moz silver by 2018 Thousand Oz 100,000 Attributable Juanicipio - 56% 90,000 Pyrites Plant 80,000 San Julián 70,000 Saucito II 60, Saucito I 50,000 Noche Buena 40,000 Herradura 30,000 Ciénega Expansion 20,000 Ciénega 10,000 9,000 TPD Fres Expansion Yr Fresnillo 32

38 Achieving 750koz gold by 2018 Thousand Oz 1, Attributable Orisyvo Juanicipio - 56% San Julián Pyrites Plant Saucito II Saucito I Ciénega Expansion Ciénega Fresnillo Nochebuena Dynamic Leaching Yr Herradura 33

39 CAPEX & Exploration Spend CAPEX Expectations US$ Million 2015 Million Usd Sustaining New Prior 900 Sustaining $145 $ Mining Works (Underground) $105 $ Mining Works 600 $89 $89 (Stripping) 500 New Projects 400 San Julián $130 $133 Pyrites Plant $1 $ Saucito II $53 $53 Merrill Crowe at DLP $25 $25 Ciénega s exp $4 $30 Others $18 $ * Sustaining Projects Approved Projects for Approval Capex for the full year 2015 now expected to be in the region of US$570m (vs. original budget of c.us$700m) Total risk capital invested in exploration in 2015 now expected to be around US$160m (vs. original budget of c.us$170m) * Includes sustaining capex for projects yet to be approved 34

40 Conclusions & Outlook

41 Immediate Areas of Focus Fresnillo: stabilise and then improve ore grades and production to provide a solid base for potential expansion Saucito: efficiency improvements at Saucito II plant in 1H16 Ciénega: conclude analysis of alternatives for potential expansion Herradura: expect to reach steady state production by 4Q15 Noche Buena: continue to maximise efficiency of production San Julián: leaching plant to be commissioned in 1H16 Pyrites Plant: conclude detailed engineering and initiate construction Prioritise exploration in our operating districts. Consolidate land position Improve safety indicators and engage more actively with communities 35

42 Conclusions and Outlook Pricing environment continues to be challenging However our strategic objectives remain unchanged Invest through the cycle, delivering growth and returns for our shareholders Low cost operating mines to continue to provide a solid platform for growth Development projects to deliver significant growth Investment in exploration to further extend growth pipeline Financial and operational flexibility allows us to adapt to market dynamics Robust contingency plan if prices continue to decline and remain at lower levels for a prolonged period High quality, low cost assets, strong balance sheet and significant growth pipeline Proven track record of delivery Remain on track to reach our production targets: moz of silver and koz of gold in moz of silver and 750 koz of gold in

43 Investment Case World-class assets Strong organic growth pipeline Operational excellence Competitive cash cost performance Financial strength and flexibility Strong community support 37

44 Well placed to address cyclical uncertainties Appendix

45 Contribution by mine and by metal to Adjusted Revenues By mine 10% 1 H Adjusted Revenues : US$822.4m By metal 20% 4% 4% 28% 51% 41% 31% 11% Fresnillo Saucito Ciénega Silver Gold Herradura Noche Buena Lead Zinc Fresnillo Ciénega Herradura Saucito Noche Buena Consol Gold % % % % % % Silver % % % % % % Lead % % % % Zinc % % % % TOTAL % % % % % % 1 Adjusted Revenue is revenue as disclosed in the income statement adjusted to exclude treatment and refining charges. 38

46 Adjusted Revenues (IFRS) ACCUM JUNE CHANGE BY: P R O D U C T (Million USD) 1H H 2014 VOLUME PRICE TOTAL GOLD (29.0) 90.3 SILVER (70.2) (40.7) LEAD (3.2) 10.0 ZINC ADJUSTED REVENUES (101.7)

47 Breakdown of Adjusted Production Costs 10.10% 4.85% 1.61% 29.49% Adj Prod Cost: US$316.2m 14.38% 1 Contrac Mainten Op Mat Energy & Diesel Person Others Freights 16.79% 22.79% 1 Contractors are hired to execute specific tasks. Fees paid include labour, operating materials, equipment, diesel and any other items required to fulfill such tasks. Fresnillo Ciénega Herradura Sol & Dip Saucito Noche Buena Other Consol Personnel % % % % % % % Maintenance and repairs % % % % % % % Operating materials % % % % % % % Diesel % % % % % % % Electricity % % % % % % % Total Energy % % % % % % % Contractors % % % % % % (0.28) % Freight % % % % % % % Others % % % (3.59) 0.0% % % % Production Costs % % % (3.59) 0.0% % % % 40

48 Consolidated Cost Inflation (1H15 vs. 1H14, USD Based) Unit Price Weighted Increase % Weight (*) Average Labour Unionized Personnel -8.3% 7.4% -0.6% Employees -9.3% 2.7% -0.3% Weighted -8.5% Operating Materials -2.1% 21.3% -0.4% Energy Electric Energy -31.3% 7.4% -2.3% Diesel -5.9% 9.4% -0.6% Gasoline -5.7% 57% 14% 1.4% -0.1% 01% Weighted -16.1% Contractors -5.7% 29.4% -1.7% Maintenance -4.8% 14.4% -0.7% Freights -0.8% 1.1% 0.0% Insurance -5.0% 0.8% 0.0% Others -3.0% 4.7% -0.1% -3.3% 33% TOTAL % (*) Not including Depreciation and Profit Sharing 41

49 Contribution by mine to Gross Profit CHANGE 1H 15 1H 14 US$ % Fresnillo % % (67.2) (57.2) Herradura % % Ciénega % % (18.3) (64.0) Saucito % % Sol & Dipolos (3.6) -1.3% (5.0) -1.6% 1.4 N/A Noche Buena % % (25.8) (95.9) Total for operating mines % % (33.9) (10.8) MXP/USD exchange rate hedging gains (10.2) (0.2) (9.9) 9) N/A Other subsidiaries 5.0 (17.4) 22.4 N/A Total Fresnillo plc (21.5) (7.3) Gross Profit from operating units: US$

50 Income Statement (IFRS): Exploration Expenses ACCUM JUNE CHANGE C O N C E P T 1H 2015 % 1H 2014 % $ % (Million USD) Centauro Deep 15.7 Lucerito 0.1 Ciénega 8.7 Huacravilca 0.1 Herradura 7.2 Cebadillas 0.1 Orisyvo 6.6 La Yesca 0.1 Fresnillo 5.0 Others 3.8 Saucito 3.5 Noche Buena 2.8 Rodeo 2.7 San Ramón 2.5 Pilarica 2.2 Peru 1.4 Guanajuato 1.1 San Julián 1.11 Guachichil 1.0 Coneto 0.8 Guazaparez 0.7 Tajitos 0.6 Coyotes 0.5 La Joya 0.5 Candameña 0.4 Herradura Corridor 0.4 Manzanillas 0.2 Cairo 0.2 Santo Domingo 0.2 ADJUSTED REVENUES HEDGING (METALS) ,971.1 TREATMENT AND REFINING CHARGES (70.9) (73.3) 2.4 (3.2) REVENUES ADJUSTED PRODUCTION COST (316.2) (42.0) (291.3) (43.0) (24.8) 8.5 PROFIT SHARING (3.9) (0.5) (8.6) (1.3) 4.7 (54.6) DEPRECIATION (164.9) (21.9) (133.3) (19.7) (31.6) 23.7 HEDGING (MXP/USD EXCHANGE RATE) (10.2) (1.4) (0.2) (0.0) (9.9) 4,153.3 CHANGE IN INVENTORIES (47.6) (78.4) UNPRODUCTIVE COST (9.2) (1.4) 9.5 N/A COST OF SALES (481.8) (64.0) (382.0) (56.4) (99.8) 26.1 GROSS PROFIT (24.6) (8.3) ADMINISTRATIVE EXPENSES (17.5) (2.3) (15.4) (2.3) (2.1) 13.4 CORPORATE EXPENSES (15.9) (2.1) (14.5) (2.1) (1.4) 9.9 EXPLORATION EXPENSES (75.4) (10.0) (69.0) (10.2) (6.4) 9.3 OTHER INCOME (EXPENSE) (5.3) (0.7) (7.8) (1.1) 2.5 (32.2) SELLING EXPENSES (6.7) (0.9) (5.1) (0.7) (1.6) 31.9 PROFIT FROM CONTINUING OPERATIONS (33.6) (18.3) SILVERSTREAM REVALUATION (46.9) (99.1) FINANCE INCOME / (EXPENSE) (2.9) (0.4) (24.5) (3.6) 21.6 (88.2) FOREIGN EXCHANGE GAIN / (LOSS) (13.5) (1.8) (15.5) (771.7) PROFIT BEFORE INCOME TAX (74.4) (35.7) MINING RIGHT (12.0) (1.6) (13.1) 1) (1.9) 1.11 (8.3) INCOME TAX EXPENSE (50.0) (6.6) (58.1) (8.6) 8.1 (13.9) PROFIT FOR THE PERIOD (65.2) (47.6) ATTRIBUTABLE TO: EQUITY SHAREHOLDERS OF THE GROUP (58.1) (44.7) MINORITY INTEREST (0.1) (0.0) (7.1) (101.9) (65.2) (47.6) EBITDA (4.5) (1.4) 43