Fresnillo Plc · LSE:FRES
Fresnillo — Denver Gold Forum 2017
25 slides from Fresnillo's conference presentation, Sep 25, 2017
Slide 1: Dedicated to meeting our commitments
25 September 2017 Dedicated to meeting our commitments 1
Slide 2: Disclaimer
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”, “inte
Slide 3: Overview
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Slide 4: Fresnillo at a Glance
Fresnillo at a Glance Location Key Highlights HERRADURA World’s largest silver producer (50.3 moz in 2016) and Mexico’s DISTRICT largest gold producer (935.5 koz in 2016) ORISYVO Total assets of US$4.5 billion1 and market cap of US14.6 billion2 SAN JULIÁN Silver resources of 2.2 billion ounces and g
Slide 5: Our Business Model and Strategy
Our Business Model and Strategy Our Business Model… …supported by four strategic pillars to create value 1. Maximise potential of existing operations • Operate at 100% capacity • Low-cost producer • Optimise mining method and metallurgy to maintain high recovery rates 2. Deliver growth through devel
Slide 6: Highlights
Highlights 2016 1H17 Silver production moz 50 28 Gold production koz 936 446 Revenues US$ million 1,906 996 Gross profit US$ million 882 460 Operating profit US$ million 677 378 EBITDA US$ million 1,032 523 EBITDA margin % 54 53 Total CAPEX US$ million 434 264 Exploration expenses US$ million 121 64
Slide 7: Operations
Operations
Slide 8: Operations
Operations Fresnillo Saucito Key operating statistics 1H 2017 Key operating statistics 1H 2017 Silver production – moz 8.9 Silver production – moz 10.8 Gold production – koz 20.7 Gold production – koz 33.9 Cost per tonne – US$/t 44.1 Cost per tonne – US$/t 45.2 Cash cost - US$/oz of Ag 1.25 Cash cos
Slide 9: Operations Cont.
Operations Cont. Herradura Noche Buena Key operating statistics 1H 2017 Key operating statistics 1H 2017 Gold production – koz 224.0 Gold production – koz 89.8 Silver production – koz 222 Silver production – koz 14 Cost per tonne* – US$/t 7.1 Cost per tonne* – US$/t 7.0 Cash cost - US$/oz of Au 483.
Slide 10: Operations Cont.
Operations Cont. Ciénega San Julián Phase I Key operating statistics 1H 2017 Key operating statistics 1H 2017 Gold production – koz 36.4 Gold production – koz 41.0 Silver production – moz 2.8 Silver production – moz 3.0 Cost per tonne – US$/t 64.4 Cost per tonne – US$/t ** 49.0 Cash cost - US$/oz of
Slide 11: San Julián Phase II commissioned
Operations Cont. San Julián Phase II commissioned 11
Slide 12: San Julián (Phase I & II)
Operations Cont. San Julián (Phase I & II) Expected 2017 silver production 11.6 moz Expected 2017 gold production 63.7 koz Expected Cash cost 2017* $0.9/oz Expected Cost per tonne 2017 $46.4/tonne Expected All-in sustaining costs 2017* $4.9/oz Phase II capacity (flotation plant to process 6,000 TPD
Slide 13: Group Consolidated Cash Cost & All In Sustaining Cost (US$/Oz)
Group Consolidated Cash Cost* & All In Sustaining Cost** (US$/Oz) ACCUM JUNE CHANGE CASH COST 2017 2016 % CHG. PER OZ SILVER EQ. As a Silver Company 6.26 6.41 -2.4% Silver Eq. Oz (Moz) Sales Volume 54.88 53.40 2.8% PER OZ GOLD EQ. As a Gold Company 448.59 481.59 -6.9% Gold Eq. Oz (Koz) Sales Volume
Slide 14: Projects & Exploration
Projects & Exploration
Slide 15: Projects
Projects Pyrites Plant Project in the Fresnillo District 2nd Line of Dynamic Leaching Plant Project at Herradura Key operating statistics Key operating statistics Avg. annual silver production 3.5 moz Plant capacity 8,000TPD Avg. annual gold production 13.0 koz Pre-operative capex US$110m Pre-operat
Slide 16: Projects Cont.
Projects Cont. Juanicipio (JV with MAG Silver. Fresnillo: 56%) 8km from the Fresnillo mine; Juanicipio’s mineral zones are located in silver-gold rich sulphide shoots of the veins. This project will be developed on a stand-alone basis Key metric estimates (100% basis) 10moz silver Avg. annual produc
Slide 17: Strong Organic Growth Pipeline
Strong Organic Growth Pipeline 2017/ Budget: US$ 160 m Pipeline Fresnillo allows us to focus on Saucito projects that have the Herradura Mine Operations 36 % potential to be developed Nochebuena Ciénega - San Ramón into low cost, Soledad & Dipolos* world-class mines San Julián Pyrites Plant Cebollit
Slide 18: Growth in Resources
Growth in Resources Attributable silver resources Attributable gold resources (M oz) (M oz) 18
Slide 19: Be 4s
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Slide 20: Expected Delivery of Growth
Expected Delivery of Growth (1) (2) Expected Avg. Investm ent YEAR (US$ million) Annual 2016 2017 2018 2019 2020 2021 2022 Production PROJECT CONSTRUCTION 10.3 m oz oz Ag LEA CHING PLANT 515 & 44 koz Au SAN JULIÁN PRODUCTION FLOTATION PLANT CONSTRUCTION LEACHING PLANT 3.5 m oz Ag & PYRITES PLANT DET
Slide 21: Expected Silver Production Profile
Expected Silver Production Profile Million Oz Attributable 80 70 60 50 40 30 20 10 0 2017 2018 2019 2020 Target of 65 moz silver by 2018 21
Slide 22: Expected Gold Production Profile
Expected Gold Production Profile Thousand Oz Attributable 1,100 1,000 900 800 700 600 500 400 300 200 100 0 2017 2018 2019 2020 Target of 750 koz gold by 2018 22
Slide 23: CAPEX Spend Expectations
CAPEX Spend Expectations 2017 US$ Million Million Usd Sustaining (Operations) 1,000 900 860 Fresnillo 109 M Saucito 119 M 800 740 Herradura 96 M 700 700 Ciénega 61 M Noche Buena 20 M 600 520 San Julián 79 M 500 Others 5 M 434 400 Projects Approved 300 San Julián 35 M 200 Pyrites Plant 58 M 100 Centa
Slide 24: Outlook
Outlook Safety and support of • Introduction of an enhanced safety system at all our mines which was initiated at Saucito in March 2017 the workforce •Ramp up was achieved at San Julián Phase II reaching nameplate capacity, Disciplined growth ‘6,000 tpd’ through exploration and •Maintain Fresnillo m
Slide 25: Investment case
Investment case Strong balance sheet Commitment to sustainable High quality business assets practices Disciplined & consistent Low-cost and approach to flexible growth and operations returns 25