DENVER GOLD FORUM Tuesday 25 th Sept Octavio Alvídrez, CEO

Transcription

1 DENVER GOLD FORUM Tuesday 25 th Sept 2018 Octavio Alvídrez, CEO

2 DISCLAIMER 2 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 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 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.

3 AGENDA 3 Overview 10 years as a listed business Performance Update The Fresnillo Proposition: Outlook High quality assets Low cost and flexible operations Disciplined approach to development Commitment to sustainable business practices Strong balance sheet

4 FRESNILLO AT A GLANCE A DECADE OF PROGRESS AND ACHIEVEMENT 4 KEY HIGHLIGHTS World s largest silver producer (58.7 moz in 2017) and Mexico s largest gold producer (911.1 koz in 2017) Total assets of US$ 4.7 billion 1 and market cap of US$8.2 billion 2 Silver resources of 2.3 billion ounces and gold resources of 38.5 million are the foundation for creating long term value Growth potential supported by mining concessions of 1.8m hectares in Mexico and 700 thousand hectares in Peru, the largest in both countries Margins sustained by cash costs and AISC amongst the lowest in the industry Production target of 65 moz of silver by 2018, having already surpassed the gold target of 750 koz Substantial, high quality project pipeline and strong commitment to disciplined and sustainable growth Dedicated and experienced management team supported by an international high caliber Board with a commitment to strong governance Focus on greenfield and brownfield projects that can be developed into low-cost, world-class mines 1 As of 31 Dec As at 21 September 2018

5 A CONSISTENT, CONSERVATIVE STRATEGY 5 OPERATE DEVELOP EXPLORE SUSTAIN By optimising capacity and recoveries, generating continuous improvements in productivity and cost controls while leveraging expansion opportunities, we have: Consistently invested over US$4 billion in both existing operations and growing our portfolio of quality assets. Maintained a strategic commitment to continuous exploration across all precious metals price cycles. We work hard to ensure the health and safety of our people and that their communities see a return on their investment of time, skills and commitments. Silver production up 69% Gold production up 225% Majority of operations running consistently above nameplate capacity Two expansion projects successfully implemented, 1 st Dynamic leaching Plant at Herradura and Ciénega Improved recovery rates at Herradura 4 new mines developed & commissioned: Saucito San Julián Noche Buena Soledad & Dipolos Commissioned 2 projects in 2018: Pyrites Plant at Saucito 2nd Dynamic Leaching Plant at Herradura US$ 1.6 billion invested in exploration Silver Resources grown 177% to 2.3 billion ounces Silver Reserves up 23% Gold Resources grown 305% to 39 million ounces Gold Reserves up 225% ~95% Organic Growth Strong pipeline of projects including Juanicipio, due to be commissioned mid 2020 Over US$ 32 million directly invested in local communities Close to US$ 130 million invested in health, safety and environmental initiatives Inclusion into the FTSE4Good UK 50 scheme, amongst others Figures stated relate from IPO to year end 2017

6 BALANCING GROWTH WITH RETURNS 6 INVESTING IN GROWTH GROWTH OUTCOME RETURNS Total Exploration Expenses from the last decade (2008 to 2017) US$ 1,570.0 million Increase in silver equivalent resources ( ) 4,458.5 million ounces* (Increase of 158%) EBITDA (2008 to 2017) Total EBITDA US$ 8,570m Average EBITDA US$ 857m Average EBITDA margin 53% Total CAPEX from the last decade (2008 to 2017) US$ 4,281.8 million Production growth (2007 to 2017) Silver 69% Gold 225% Total Dividends Paid since IPO (2008 to 2017) US$ 2,492.2 million *Measured, Indicated and Inferred resources, consideringa Gold/Silver ratio of 74. Includes resourcesmined and processed.

7 FRESNILLO AT A GLANCE A DECADE OF PRODUCTION AND RESOURCE GROWTH PER SHARE 7 PRODUCTION PRODUCTION (EQ AG MOZ) Production (Eq Ag oz) per thousand shares Production (Eq Ag oz) per thousand shares RESOURCES RESOURCES (EQ AG MOZ) 6,000 5,000 4,000 3,000 2,000 1,000 Resources (Eq Ag oz) per share Resources (Eq Ag oz) per share Silver : Gold 74 : 1

8 2017 FULL YEAR & 1H18 RESULTS - HIGHLIGHTS 8 PRODUCTION (MOZ) PRODUCTION (KOZ) US$ MILLION 1, US$ MILLION 1, SILVER PRODUCTION GOLD PRODUCTION EBITDA CASH FLOW FROM OPERATIONS PRODUCTION (MOZ) H15 1H16 1H17 1H18 PRODUCTION (KOZ) H15 1H16 1H17 1H18 US$ MILLION H15 1H16 1H17 1H18 US$ MILLION H15 1H16 1H17 1H18 HALF YEAR SILVER PRODUCTION HALF YEAR GOLD PRODUCTION HALF YEAR EBITDA HALF YEAR GROSS PROFIT

9 INVESTMENT PROPOSITION 9 OUR KEY COMPETITIVE ADVANTAGES POSITION US TO MEET NEAR-TERM COMMITMENTS AND DRIVE LONG-TERM VALUE HIGH QUALITY ASSETS LOW COST AND FLEXIBLE OPERATIONS DISCIPLINED APPROACH TO DEVELOPMENT COMMITMENT TO SUSTAINABLE BUSINESS PRACTICES STRONG BALANCE SHEET Largest concession holder in Mexico & Peru Portfolio of low cost gold and silver mines, high potential development projects and advanced exploration prospects High quality assets allow us to extract mineral profitably across the cycle AISC below average realised prices at each of our mines Development projects meet stringent viability criteria, including environmental and social impact, sustaining capital expenditures and rates of return Understand the needs of our local communities Continue to work to ensure the safety and health of our people, and strive for continuous improvement in minimising our environmental footprint Maintain strong financial position with a healthy cash balance and low leverage ratio Balance investment in profitable growth with returns to shareholders while optimising operations

10 HIGH QUALITY ASSETS 10 District consolidation strategy enables us to leverage local knowledge and shared infrastructure Portfolio contains over 2,320 moz of attributable silver resources and 38.5 moz of gold resources GOLD (OZ) MINE MINE TYPE 1H 2018 FY 2017 FRESNILLO UNDERGROUND SILVER 21,384 38,784 SAUCITO UNDERGROUND SILVER 39,788 69,948 CIÉNEGA UNDERGROUND GOLD & SILVER 33,066 71,947 HERRADURA OPEN PIT GOLD 243, ,638 NOCHE BUENA OPEN PIT GOLD 88, ,282 SAN JULIÁN UNDERGROUND SILVER & GOLD 39,888 84,532 TOTAL 465, ,132 SILVER (KOZ) MINE MINE TYPE 1H 2018 FY 2017 FRESNILLO UNDERGROUND SILVER 8,129 16,512 SAUCITO UNDERGROUND SILVER 10,067 21,215 CIÉNEGA UNDERGROUND GOLD & SILVER 2,757 5,394 HERRADURA OPEN PIT GOLD NOCHE BUENA OPEN PIT GOLD SAN JULIÁN UNDERGROUND SILVER & GOLD 7,100 10,534 SILVERSTREAM SABINAS POLYMETALIC - OPERATED BY PENOLES 2,070 4,435 TOTAL 30,764 58,673 1 Operations at Soledad-Dipolos are currently suspended 1

11 LOW COST AND FLEXIBLE OPERATIONS 11 Asset quality enables us to extract mineral profitably across metal price cycles Maximise the potential of each operation by customising mine plans, leveraging technology and sharing personnel, expertise and plant capacity across districts Continual quest for improvement to maintain our position as a low cost producer US$/oz CASH COST US$/oz US$/oz AISC US$/oz Consolidated Cash cost of sales per Ag oz (by-product) (US$/Oz) (RHS) All In Sustaining cost of sales per Ag oz (by-product) (US$/Oz) (RHS) Consolidated Cash cost of sales per Au oz (by-product) (US$/Oz) (LHS) All In Sustaining cost of sales per Au oz (by-product) (US$/Oz) (LHS)

12 DISCLIPINED APPROACH TO DEVELOPMENT - PROJECTS 12 PYRITES PLANT PROJECT IN THE FRESNILLO DISTRICT OVERVIEW Expected avg. annual silver production Expected avg. annual gold production Expected cash cost (average LoM) 3.5 moz 13.0 koz $2.51 /oz Expected IRR at US$20/oz Ag & US$1,200/oz Au 29.3% Leaching plant at Saucito commissioned 2Q18 Fresnillo tailings flotation plant expected commissioning 2019 The plant will froth float pyrite concentrates that will be leached in a 2,000 tpd dynamic leaching plant and Merrill Crowe plant to produce precipitates. First stage completed on time: commissioned the leaching plant at Saucito in 2Q18, following a US$ 50.3 million investment. Second stage continues: Construction of the flotation plant at Fresnillo on track with a US$ 7.3 million investment as of June US$ 46.5 million remains to be invested. This project will improve overall recoveries of gold and silver by processing historical and ongoing tailings from the Fresnillo and Saucito mines.

13 PROJECTS Cont. 13 2ND LINE OF DYNAMIC LEACHING PLANT PROJECT AT HERRADURA OVERVIEW ORE TYPE Final testing is underway and commercial production is expected in 3Q18 The project will enable sulphides occurring deeper in the pit to be processed more efficiently At the time of analysis, this project was expected to extend the LOM at Herradura to 12 years with an average annual gold production of 390 koz With current reserves and the above production rate, the LOM is just over 20 yrs Oxide Mixed Sulphide KEY METRIC ESTIMATES Plant capacity 8,000TPD Pre-operative capex US$ 110m Expected avg. increase in gold production per year 36 koz Expected IRR at US$1,200/oz Au 14.7% At Herradura, gold reserves have increased 48% vs. 2016, to 7.7moz * *As of December 2017

14 PROJECTS Cont. 14 JUANICIPIO (JV WITH MAG SILVER. FRESNILLO: 56%) OVERVIEW 8km from the Fresnillo mine This project will be developed on a stand-alone basis Feasibility study was concluded by AMC KEY METRIC ESTIMATES (100% BASIS)* Expected avg. annual production Indicated & inferred resources 10moz silver 30koz gold 248 moz silver 1.4 moz gold Expected first production Mid 2020 Currently being discussed by the technical committee Approval process to follow Discussions with suppliers of long term delivery equipment as well as construction contractors has been initiated. Exploration & development works continue as planned * According to PFS dated June 2012

15 EXPLORATION 15 STRONG ORGANIC GROWTH PIPELINE Apply stringent viability criteria to all new projects The Pyrites Plant at Saucito has been commissioned and final testing at the Second Dynamic Leaching Plant is on track. Both projects will make a meaningful contribution to overall 2018 production Pipeline allows us to focus on projects that have the potential to be developed into low cost, world-class mines

16 EXPECTED DELIVERY OF GROWTH Investment (US$ million) Expected Avg. Annual Production PROJECT YEAR moz Ag & 13 koz Au PYRITES PLANT (Optimization project) LEACHING PLANT CONSTRUCTION CONSTRUCTION TAILINGS FLOTATION PRODUCTION 110 Extended LoM of 390 koz Au CENTAURO EXTENSION DEVELOPMENT 2ND DYNAMIC LEACHING PLANT CONSTRUCTION PRODUCTION 30 3 moz Ag FRESNILLO 9,000 TPD (Optimization project) DEVELOPMENT & CONSTRUCTION PRODUCTION koz Au & 1.3 moz Ag CIENEGA 5,000 TPD (Optimization project) DEVELOPMENT & CONSTRUCTION PRODUCTION moz Ag & 30 koz Au JUANICIPIO DEVELOPMENT & CONSTRUCTION PRODUCTION koz Au ORISYVO OPTIMISATION - PRE FEASIBILITY STUDY - DEVELOPMENT & CONSTRUCTION PRODUCTION Extended Pit LoM of 470 koz Au & UG 65 Koz Au CENTAURO PIT EXPANSION / CENTAURO UNDERGROUND EXPLORATION PRE-STRIPPING & CONSTRUCTION CENTAURO UNDERGROUND DEVELOPMENT PROD * Represents 100% of the investment ( 56%Fresnillo plc + 44% MAG Silver ). (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

17 EXPECTED ATTRIBUTABLE PRODUCTION PROFILE 17 Million Oz SILVER* Thousand Oz GOLD , *Including Silverstream Target of 65 moz silver by 2018 Target of 750 koz gold by 2018 Thousand Tons BY-PRODUCT LEAD Thousand Tons BY-PRODUCT ZINC

18 CAPEX SPEND EXPECTATIONS US$ Million MILLION USD 900 SUSTAINING (OPERATIONS) FRESNILLO SAUCITO HERRADURA 90M 100M 136M CIÉNEGA NOCHE BUENA SAN JULIÁN OTHERS 70M 35M 90M 9M PROJECTS APPROVED 200 SAN JULIÁN PYRITES PLANT CENTAURO EXTENSION PROJECTS FOR APPROVAL OTHERS 17M 47M 35M 123M Sustaining CAPEX New Projects - Preoperative CAPEX

19 COMMITMENT TO SUSTAINABLE BUSINESS PRACTICES 19 HEALTH SAFETY ENVIRONMENT COMMUNITY RELATIONS Occupational Health programme ongoing Health weeks across our mining districts benefitting 11,000 people annually I care, we care programme being implemented across all of our operations 60% of electricity consumption comes from wind power, aim to get to 75% by 2H19 Herradura and Saucito obtained the Environmental Excellence Award granted by the Federal Attorney for Environmental Protection recognising the highest level of environmental compliance We partner with the NGO International Board on Books for Young People, currently benefitting 8,186 children in 66 schools. Community projects include working in partnership with health authorities to foster a preventive and self-care culture. Our Environment, Social and Governance (ESG) performance was recognised by the inclusion of Fresnillo in the FTSE4 GOOD UK 50 ranking

20 STRONG BALANCE SHEET (IFRS) JUNE 2018 US$ Million KEY CONCEPTS CASH AND INVESTMENTS SENIOR NOTES NET DEBT TO EBITDA 0.1 x

21 OUTLOOK 21 PRIORITISE SAFETY, SUPPORT OF THE WORKFORCE AND ENVIRONMENT CONTINUED OPERATIONAL FOCUS TO MAXIMISE POTENTIAL OF OUR EXISTING MINES CREATE VALUE THROUGH DISCIPLINED GROWTH, EXPLORATION & DEVELOPMENT

22 APPENDIX

23 OPERATIONS 23 FRESNILLO KEY OPERATING STATISTICS 1H 18 1H 17 Silver production moz Gold production koz Cost per tonne US$/t Cash cost - US$/oz of Ag Reserves 2017 * Resources 2017 * moz Ag, 0.6 moz Au moz Ag, 1.9 moz Au 1H18 SUMMARY 1H18 silver grade of 222 g/t. Full year 2018 silver grade expected to be: g/t US$44.8 million invested in development, infrastructure and sustaining capex Development rate of 3,130 m/m Continued deepening of the San Carlos shaft Reduced costs as a result of vertical conveyor belt 2H18 PRIORITIES Hire a new contractor company Continue investing in infrastructure Tunnel boring machine INCREASE IN ANNUAL SILVER PRODUCTION MILLION OUNCES e *As of December 2017

24 OPERATIONS 24 SAUCITO KEY OPERATING STATISTICS 1H 18 1H 17 Silver production moz Gold production koz Cost per tonne US$/t Cash cost - US$/oz of Ag Reserves 2017 * Resources 2017 * moz Ag, 0.7 moz Au moz Ag, 2.1 moz Au 1H18 SUMMARY 1H18 silver grade of 262 g/t. Full year 2018 silver grade expected to be: g/t US$59.2 million invested in development, infrastructure and sustaining capex Additional contractor to increase development rates successfully hired Purchase of smaller equipment to better control dilution Production from Natalias veins continued to ramp up 2H18 PRIORITIES Further reduce dilution Development of the Huizache veins Ramp up Pyrites plant Initiate the deepening of the Jarillas shaft ANNUAL SILVER PRODUCTION MILLION OUNCES e *As of December 2017

25 OPERATIONS 25 SAN JULIÁN PHASE I (VEIN SYSTEM) SAN JULIÁN PHASE II (DISSEMINATED ORE BODY) KEY OPERATING STATISTICS 1H 18 1H 17 Gold production koz Silver production moz Reserves 2017 * 30.3 moz Ag, 0.4 moz Au Resources 2017 * moz Ag, 1.3 moz Au KEY OPERATING STATISTICS 1H 18 1H 17 Gold production koz 1.2 NA Silver production moz 4.4 NA Reserves 2017 * moz Ag, 0.1 moz Au Resources 2017 * moz Ag, 0.1 moz Au 1H18 SUMMARY Nameplate capacity of 3,000 tpd Currently operating at c. 3,600 tpd Expected lower ore grade due to less availability of the higher silver grade areas Lower volume of ore processed as a result of the low water availability 1H18 SUMMARY Nameplate capacity of 6,000 tpd Currently operating at 6,400 tpd Extraction of ore from lower grade areas & processing ore from the development stockpile due to low water availability Resulted in temporarily deviating from original production plan 2H18 PRIORITIES Initiatives in place to collect process water now ensure the plant will run at full capacity in 2H18 and going forward Construction of wells for water collection and construction of the water reservoir Continue preparation and development of the mine Identify, explore and evaluate the District's geological potential *As of December 2017

26 OPERATIONS 26 CIÉNEGA KEY OPERATING STATISTICS 1H 18 1H 17 Gold production koz Silver production moz Cost per tonne US$/t Cash cost - US$/oz of Au Reserves 2017 * 54.1 moz Ag, 0.6 moz Au Resources 2017 * moz Ag, 1.7 moz Au 1H18 SUMMARY Lower than expected ore grade following the depletion of higher grade veins Reduced dilution by around 20% Increased availability of equipment One more contractor company hired to develop new areas Increased contribution from Taspana (28,000 tonnes per month) to the overall mine production Total development of 14,700 mts, increased 16.5% half on half 2H18 PRIORITIES Continue development at Taspana and Las Casas Continue construction of third tailings dam Further exploration to support a 2,000 tpd expansion of milling capacity at the main Ciénega mine *As of December 2017

27 OPERATIONS 27 HERRADURA KEY OPERATING STATISTICS 1H 18 1H 17 Gold production koz Silver production koz Cost per tonne* US$/t Cash cost - US$/oz of Au Reserves 2017 ** 7.7 moz Au Resources 2017 ** 10.3 moz Au 1H18 SUMMARY Consistently higher observed resources on the leaching pads lead to inventory re-statement due to higher recovery rates Higher speed of recovery due to an intensive targeted irrigation programme and better dilution 2H18 PRIORITIES Complete the installation of vibrating screens to increase gold recovery by 3-4% Drilling and exploration to continue at Centauro Deep and areas of influence *Cost per tonne excluding unproductive costs ** As of December 2017.

28 OPERATIONS 28 NOCHE BUENA CASH COST 1,000 KEY OPERATING STATISTICS 1H 18 1H 17 Gold production koz Silver production koz Cost per tonne* US$/t Cash cost - US$/oz of Au Reserves 2017 ** 0.8 moz Au Resources 2017 ** 0.8 moz Au US$ /OZ. GOLD H At time of acquisition in 2008, the project was estimated to produce 376,450 Au ounces over the 5 year life of mine To date, Noche Buena has produced 904,273 Au ounces As of YE17, Measures & Indicated resources of 818,506 Au ounces remain 1H18 SUMMARY Contained costs Continued to explore areas of influence, which continued to show limited upside Detailed engineering for a Carbon in Column facility initiated and is expected to be concluded by year end H18 PRIORITIES Maintain comparative low cash cost profile Maximise production *Cost per tonne excluding unproductive costs ** As of December 2017

29 INCOME STATEMENT (IFRS) 29

30 ADJUSTED REVENUES (IFRS) 30 ACCUM JUNE CHANGE BY: VOLUME PRICE TOTAL PRODUCT Gold Silver (23.9) 18.9 Lead Zinc ADJUSTED REVENUES 1, , % 17.3% 100%

31 CONTRIBUTION BY MINE AND BY METAL TO THE ADJUSTED REVENUES 1H H 18 ADJUSTED REVENUES : US$1,189.9M 1 BY MINE BY METAL Fresnillo Saucito Ciénega 8% 8% 18% 9% 5% Gold Silver Zinc Herradura Noche Buena 10% Lead San Julián JM San Julián Veins 21% 50% 36% 28% 8% FRESNILLO CIÉNEGA HERRADURA SAUCITO NOCHE BUENA SAN JULIÁN JM SAN JULIÁN VEINS CONSOL Gold % % % % % % % % Silver % % % % % % % % Lead % % % % % Zinc % % % % % TOTAL % % % % % % % 1, % 1 Adjusted Revenue is revenue as disclosed in the income statement adjusted to exclude treatment and refining charges.

32 CONSOLIDATED COST INFLATION 1H 18 (USD BASED) 32 CONSOLIDATED Unit price increase % Weight (*) Weighted average LABOUR: UNIONIZED PERSONNEL 8.4% 6.3% 0.5% EMPLOYEES 7.3% 2.6% 0.2% WEIGHTED 8.1% OPERATING MATERIALS 3.4% 20.2% 0.7% ENERGY: ELECTRIC ENERGY -7.0% 7.0% -0.5% DIESEL 5.2% 9.4% 0.5% GASOLINE 13.8% 1.1% 0.2% WEIGHTED 0.9% CONTRACTORS 4.8% 31.7% 1.5% MAINTENANCE 1.8% 15.2% 0.3% FREIGHTS 11.4% 1.0% 0.1% INSURANCE -6.2% 0.6% 0.0% OTHERS 1.9% 4.9% 0.1% TOTAL 3.52% Important Note: Excluding the revaluation effect, cost inflation would have been 2.4% (*) Not including Depreciation and Profit Sharing

33 ADJUSTED PRODUCTION COST FY US$ Million Costs from Contractors = 27% Operating Materials 26% Own 20% Ctrt. 6% Maintenance & repairs 17% Own 15% Ctrt. 2% Energy 21% Own 19% Ctrt. 2% Others 11% Own 10% Ctrt. 1% Personnel 16% Own 9% Ctrt. 7% Equipment Ctrt.9% * Includes: Freights, Taxes & Licenses, Insurance Costs, Computer Leasing, Fees and Others.

34 ADJUSTED PRODUCTION COST ANALYSIS (CONSOLIDATED) 34 CHANGE USD MILLION Increase in stripping to cost, maintenance,consumables, services,etc Higher Production 1H 18 1H 17 $ % ADJUSTED PRODUCTION COST CHANGE IN INVENTORIES AND OTHERS N/A DEPRECIATION PTU COST OF SALES % 9.85 Lower volume of ore processed from development at Saucito 7.68 Cost Inflation * MXP/USD Revaluation effect Incr. in Adj. Prod.Cost

35 CONSOLIDATED GROSS PROFIT ANALYSIS 35 CHANGE 1H 18 1H 17 $ % GROSS PROFIT % USD MILLION Increase in inventories at Herradura Higher ore grade Higher Production (4.01) (7.68) Higher Metal Prices MXP/USD Revaluation effect Cost Inflation (9.85) Lower volume of ore processed from development at Saucito (29.16) Higher Depreciation (31.43) Higher Stripping at Herradura * 1H18 Gross Profit

36 CONSOLIDATED GROSS PROFIT ANALYSIS 36 OPERATING UNITS FRESNILLO 7.7 SAUCITO 8.1 CIÉNEGA 7.9 SAN JULIÁN 4.0 HERRADURA 6.8 NOCHE BUENA 1.4 SAN RAMÓN PROJECTS VALLES 0.0 CENTAURO DEEP 3.3 JUANICIPIO 2.3 GUANAJUATO 3.7 ORISYVO 2.1 SAN JAVIER 0.3 CARINA 1.8 CANELAS 1.5 ROSARIO PROSPECTS SONORA 2.2 DURANGO 3.1 CHIHUAHUA 3.5 ZACATECAS 0.1 NAYARIT 0.1 GUERRERO 0.0 PERÚ REGIONAL PROSPECTING 7.8 MINING RIGHTS 9.5 FIXED ASSETS PARREÑA (CAPITALISED) 0.2 TOTAL RISK CAP. INV. EXP CAPITALISED EXP. (3.0) TOTAL EXPLORATION EXP. 78.3

37 CASH FLOW (IFRS) 37 Increase in accounts receivables (VAT) - US$49.6 million Decrease in accounts receivables from Met - Mex US$16.2 million Increase in inventories mainly at Herradura - US$23.7 million Decrease in payable accounts - US$ 2.6 million Increase in prepaid payments and other accounts -US$4.2 million Provisional Tax Payments: US$77.9m 2017 Income Tax Payment: US$33.3m Special Mining Right: US$19.8m 2017 Profit Sharing: US$14.3m 1,978,057.9 moz proceeds from the silverstream contract, which do not go through the Income Statement Herradura US$103.3 million Stripping activities and construction of leaching pads Construction of the Second Dynamic Leaching Plant Saucito US$65.1 million Mining works Fe concentrates leaching and flotation plant (Pyrites Plant Project) Construction of the Jarillas shaft Purchase of in-mine equipment Fresnillo US$49.6 million Mine development and mining works Tailings dam construction Purchase of in-mine equipment San Julián US$23.0 million Purchase of in-mine equipment Construction of ramps and mining works Construction of tailings dam Ciénega US$35.1 million Mine development and mining works Purchase of long drilling equipment Purchase of in-mine equipment Noche Buena US$24.6 million Purchase of in-mine equipment Others US$51.5 million

38 BALANCE SHEET (IFRS) 38

39 COST PER TONNE (IFRS) 39 ACCUM JUNE CHANGE % CHG. COST PER TONNE* MINE UNIT Fresnillo US$/TON % Saucito US$/TON % Ciénega US$/TON % Herradura US$/TON 10.25** 7.10** 44.3% Total Vol. Hauled Charged to Costs US$/TON % Noche Buena US$/TON 6.74** 7.00** -3.8% Total Vol. Hauled Charged to Costs US$/TON % *Cost per tonne is calculated as total adjusted production costs divided by total volume of ore processed ** Cost per tonneexcluding unproductive costs

40 CASH COST (IFRS) 40 ACCUM JUNE CHANGE % CHG. CASH COST* MINE UNIT Fresnillo PER OZ. SILVER % Saucito PER OZ. SILVER % Ciénega PER OZ. GOLD (by-prod.) % Herradura PER OZ. GOLD % Noche Buena PER OZ. GOLD % CONSOLIDATED PER OZ. GOLD EQ % Gold Eq. Oz (Koz) % PER OZ. SILVER EQ % Silver Eq. Oz (Moz) % * 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.

41 MARGINS BY MINE (METAL PRICE CASH COST)(1H18 VS 1H17) 41 (USD/Oz) (USD/Oz) Cash Cost FRESNILLO SAUCITO Silver Price Cash Cost CIÉNEGA HERRADURA NOCHE BUENA Gold Price ,630 1,361 1, , , , , , ,630 1, Margin % Margin % Margin % Margin % , Margin 1, % Margin 1, % Margin % Margin % Margin % Margin % 1, OUNCES SOLD OUNCES SOLD 8.2Moz. 7.4Moz Chg. -9.2% 9.9Moz. 9.3Moz. Chg. -6.1% 33.9Koz. Chg. -6.8% 31.6Koz Koz. Chg. 8.4% 241.3Koz. 89.0Koz. Chg. -1.3% 87.8Koz.

42 ALL IN SUSTAINING COST (US$/OZ) 42 ACCUM JUNE % CHG. MINE UNIT Fresnillo PER OZ. SILVER % Saucito PER OZ. SILVER % Ciénega PER OZ. GOLD 1, % Herradura PER OZ. GOLD % Noche Buena PER OZ. GOLD 1, % CONSOLIDATED PER OZ. GOLD EQ % Gold Eq. Oz (Koz) % PER OZ. SILVER EQ % Silver Eq. Oz (Moz) % Note: All In sustaining cost is calculated as traditional cash cost plus on-site general, corporate and administrative costs, community costs related to current operations, capitalisedstripping & underground mine development, sustaining capital expenditures and remediation expenses.

43 MARGINS BY MINE (METAL PRICE ALL IN SUSTAINING COST) (1H18 VS 1H17) 43 (USD/Oz) (USD/Oz) Cash Cost FRESNILLO SAUCITO Silver Price Cash Cost CIÉNEGA HERRADURA NOCHE BUENA Gold Price ,900 1, Margin % Margin % Margin % Margin % ,629 1,357 1, , Margin % 1, , Margin % 1, Margin % 1, Margin % 1, Margin % 1, , Margin % 1,629 1,357 1, OUNCES SOLD OUNCES SOLD 8.2Moz. 7.4Moz. Chg. -9.2% 9.9Moz. 9.3Moz. Chg. -6.1% 33.9Koz. Chg. -6.8% 31.6Koz Koz. Chg. +8.4% 241.3Koz. 89.0Koz. Chg. -1.3% 87.8Koz.

44 INTERNATIONAL COST CURVES 44