Fresnillo Plc · LSE:FRES
Fresnillo — H1 2024 Earnings Presentation
45 slides from Fresnillo's earnings presentation, Jul 30, 2024
Slide 1: Half Year Interim Results 30 July 2024
HALF YEAR I N T E R I M R E S U LT S 3 0 J U LY 2 0 2 4 LSE: FRES BMV: FRES www.fresnilloplc.com
Slide 2: Disclaimer
DISCLAIMER 2 This document includes statements that are, or may be deemed to be, “forward-looking A number of factors could cause results and developments to differ materially from those statements”. These forward-looking statements can be identified by the use of forward- expressed or implied by th
Slide 3: Agenda
AGENDA 3 01 Investment Proposition 02 HSECR 03 1H24 Highlights 04 Operational performance 05 Financial performance 06 2H24 outlook
Slide 4: Investment Proposition
INVESTMENT PROPOSITION OCTAVIO ALVÍDREZ
Slide 5: Investment Proposition: Delivering Long-Term Value
1 H 2 4 I N T E R I M R E S U LT S – I N V E S T M E N T P R O P O S I T I O N 5 DELIVERING LONG-TERM VALUE WORLD’S #1 SILVER SUBSTANTIAL GOLD HIGH QUALITY PRODUCER PRODUCTION MINING ASSETS 28.2 Moz 270.9 koz 2.2Boz 37.9Moz of silver in 1H24 of gold in 1H24 Silver Resources Gold Resources HEALTHY MA
Slide 6: Positive Industry Dynamics – Silver & Gold Markets
P O S I T I V E I N D U S T RY D Y N A M I C S – S I LV E R & G O L D M A R K E T S 6 D E M A N D F O R S I LV E R A N D G O L D H A S C O N T I N U E D T O I N C R E A S E GLOBAL DEMAND FOR SILVER (MOZ) GROWTH IN DEMAND FOR SILVER HAS CONTINUED TO OUTPACE SUPPLY • Installation of 5G networks. 1500
Slide 7: HSECR
HSECR OCTAVIO ALVÍDREZ
Slide 8: HSECR: Sustainability Is Core to Our Purpose
1 H 2 4 I N T E R I M R E S U LT S – H S E C R 8 S U S TA I N A B I L I T Y I S C O R E T O O U R P U R P O S E : “ T O C O N T R I B U T E T O T H E W E L L B E I N G O F P E O P L E T H R O U G H T H E S U S TA I N A B L E M I N I N G O F S I LV E R A N D G O L D ” HEALTH ENVIRONMENT COMMUNITY & S
Slide 9: 1H24 Highlights
1H24 HIGHLIGHTS OCTAVIO ALVÍDREZ
Slide 10: Operational Performance Highlights
1 H 2 4 I N T E R I M R E S U LT S – O P E R AT I O N A L P E R F O R M A N C E H I G H L I G H T S 10 ATTRIBUTABLE HALF YEAR SILVER ATTRIBUTABLE HALF YEAR GOLD PRODUCTION PRODUCTION 28.2MOZ 270.9KOZ • Short term challenges in Q2 in Herradura have been overcome, with a promising outlook in H2 • Sauc
Slide 11: Financial Performance Highlights
1 H 2 4 I N T E R I M R E S U LT S – F I N A N C I A L P E R F O R M A N C E H I G H L I G H T S 11 GROSS PROFIT (US$) ADJUSTED EPS* (US CENTS PER SHARE) 392.4M 4.4US¢ per share OPERATING PROFIT (US$) EBITDA MARGIN 235.2M 36.6% EBITDA (US$) CASH ON HAND AT 30 JUNE 2023 (US$) 544.2M 691.0M PROFIT FOR
Slide 12: Solid Project Pipeline for the Future
1 H 2 4 I N T E R I M R E S U LT S – P R O J E C T S 12 SOLID PROJECT PIPELINE FOR THE FUTURE ORISYVO (GOLD) RODEO (GOLD) GUANAJUATO (SILVER / GOLD) TAJITOS (GOLD) Promising results in 1H24 from studies Good metallurgical recoveries have Continued exploration in 1H24, with core During 1H24, 10,524 m
Slide 13: Exploration Update
1 H 2 4 I N T E R I M R E S U LT S – E X P L O R AT I O N U P D AT E 13 2024 Forecast: US$170m 1H24 Highlights: 51% ▪ Exploration expense of US$77 million in 1H24 (US$97 million in 1H23) Mine Operations ▪ Drilled a total of 391,301 metres, 86% of which was focused on brownfield targets, including in
Slide 14: Operational Performance
O P E R AT I O N A L PERFORMANCE TOMÁS ITURRIAGA & DANIEL DIEZ
Slide 15: Fresnillo
1 H 2 4 I N T E R I M R E S U LT S – O P E R AT I O N S 15 FRESNILLO Production Grade KEY DEVELOPMENTS 16 350 • Connecting of deepened San Carlos shaft in final stage. Million Ounces 300 • Additional bolting equipment arrived on site and orders placed for smaller mine 12 Grams/tonne equipment better
Slide 16: Saucito
1 H 2 4 I N T E R I M R E S U LT S – O P E R AT I O N S 16 SAUCITO Production Grade 20 350 Million Ounces 16 300 Grams/tonne 12 250 8 200 4 150 0 100 2019 2020 2021 2022 2023 2024e KEY OPERATING HIGHLIGHTS 1H24 1H23 Silver production – moz 6.8 5.8 Gold production – koz 37.7 40.0 KEY DEVELOPMENTS Cos
Slide 17: Juanicipio
1 H 2 4 I N T E R I M R E S U LT S – O P E R AT I O N S 17 JUANICIPIO KEY DEVELOPMENTS • Successful ramp up and ongoing operation of plant. • Strong grade performance versus the geological model. • Reduced cost per tonne driven by efficiencies and economies of scale, with mine output consistently im
Slide 18: Ciénega
1 H 2 4 I N T E R I M R E S U LT S – O P E R AT I O N S 18 CIÉNEGA KEY DEVELOPMENTS • Successful cost control program, 35% reduction YoY (AISC basis). • Improved mine plan delivering higher grades (sequence and dilution control). • Exploration continues to deliver positive results (at depth and new
Slide 19: Herradura
1 H 2 4 I N T E R I M R E S U LT S – O P E R AT I O N S 19 HERRADURA Gold Production KEY DEVELOPMENTS Production Gold Ore Grade Grade • Mine development of Phase 2 completed, high grade oxides available for mining in 6 1 2H24 to offset lower production in Q2. 5 0.9 • Herradura District programme ong
Slide 20: San Julián (Vein System and Disseminated Ore Body)
1 H 2 4 I N T E R I M R E S U LT S – O P E R AT I O N S 20 SAN JULIÁN (VEIN SYSTEM) S A N J U L I Á N ( D I S S E M I N AT E D O R E B O D Y ) KEY OPERATING HIGHLIGHTS 1H24 1H23 KEY OPERATING HIGHLIGHTS 1H24 1H23 Gold production – koz 24.3 20.5 Gold production – koz 1.1 1.8 Silver production – moz 4
Slide 21: Financial Performance
FINANCIAL PERFORMANCE MARIO ARREGUÍN
Slide 22: Income Statement (IFRS)
1 H 2 4 I N T E R I M R E S U LT S – I N C O M E S TAT E M E N T ( I F R S ) 22 (MILLION USD) ACCUM JUNE CHANGE CONCEPT 2024 % 2023 % $ % ADJUSTED REVENUES 1,560.2 1,430.8 129.5 9.0 HEDGING (METALS) 0.0 0.0 0.0 N/A TREATMENT AND REFINING CHARGES (72.0) (87.4) 15.5 17.7 REVENUES 1,488.3 100.0 1,343.3
Slide 23: Contribution by Mine and by Metal to Adjusted Revenues
1 H 2 4 I N T E R I M R E S U LT S – C O N T R I B U T I O N B Y M I N E A N D B Y M E TA L 23 TO ADJUSTED REVENUES 1H24 ADJUSTED REVENUES 1 : US$1,560.2M (MILLION USD) ACCUM JUNE CHANGE BY: PRODUCT 2024 2023 VOLUME PRICE TOTAL GOLD 580.3 625.0 (128.1) 83.3 (44.7) SILVER 774.0 632.4 37.7 103.8 141.6
Slide 24: Adjusted Production Cost Analysis
1 H 2 4 I N T E R I M R E S U LT S – A D J U S T E D P R O D U C T I O N C O S T A N A LY S I S 24 ( C O N S O L I D AT E D , M I L L I O N U S D ) ACCUM JUNE CHANGE CONCEPT 2024 2023 $ % ADJUSTED PRODUCTION COST 844.2 773.9 70.3 9 PROFIT SHARING 6.0 2.9 3.1 110 DEPRECIATION 304.2 236.3 67.9 29 HEDG
Slide 25: 1H24 Gross Profit Analysis
0.0 44.0 88.0 132.0 176.0 220.0 264.0 308.0 352.0 396.0 440.0 1 Higher Metal Prices (Ag +16.0%, Au +14.7% and Pb +2.5%) 188.6 ( C O N S O L I D AT E D , U S D M I L L I O N ) 2 Variation in change of inventories mainly at Herradura and Juanicipio 84.8 3 Efficiencies and economies of scale at Gross P
Slide 26: Income Statement (IFRS) by Operating Unit
1 H 2 4 I N T E R I M R E S U LT S – I N C O M E S TAT E M E N T ( I F R S ) 26 (MILLION USD) ACCUM JUNE 2024 Operating Units ACCUM JUNE Fresnillo CHANGE 9.0 CONCEPT (Million USD) 2024 % 2023 % $ Saucito % 5.7 ADJUSTED REVENUES 1,560.2 1,430.8 Ciénega 129.5 9.0 1.4 HEDGING (METALS) 0.0 0.0 Sa
Slide 27: Cash Flow (IFRS)
1 H 2 4 I N T E R I M R E S U LT S – C A S H F L O W ( I F R S ) 27 (MILLION USD)
Slide 28: Cash Flow (IFRS) – Capex by Mine
1 H 2 4 I N T E R I M R E S U LT S – C A S H F L O W ( I F R S ) 28 (MILLION USD) Fresnillo US$42.9 million • Mine development and mining works • Purchase of mine equipment Saucito US$52.0 million • Mining Works • Purchase of mine equipment Herradura US$20.3 million • Purchase of mine equipmen
Slide 29: Balance Sheet (IFRS)
1 H 2 4 I N T E R I M R E S U LT S – B A L A N C E S H E E T ( I F R S ) 29 (MILLION USD) Change Concept 30-JUNE-24 31-DEC-23 % Assets Cash and Investments 691.0 534.6 29.3 Trade and Other Receivables 518.9 482.4 7.6 Inventories 579.0 532.7 8.7 Prepaid Expenses 11.6 23.2 (50.0) Silverstream 532.0 48
Slide 30: 2H24 Outlook
2H24 OUTLOOK OCTAVIO ALVÍDREZ
Slide 31: Expected Attributable Production Profile
1 H 2 4 I N T E R I M R E S U LT S – E X P E C T E D AT T R I B U TA B L E P R O D U C T I O N P R O F I L E 31 Production guidance range +/- 5% * Including Silverstream production.
Slide 32: Capex Spend Expectations
1 H 2 4 I N T E R I M R E S U LT S – C A P E X S P E N D E X P E C TAT I O N S 32 • Total sustaining capex for 20244 for all of the mines, along with a small part for new projects approved, is expected to be US$410m • Projects not approved are not considered
Slide 33: Consolidated Outlook
1 2 1 H 2 4 I N T E R I M R E S U LT S – C O N S O L I D AT E D O U T L O O K 33 1 Greenfield project development to be complemented with brownfield growth possibilities at the Herradura and Guanajuato Centro Districts. (1) Total annual average production Subject to pre-feasability and feasability a
Slide 34: Concluding Remarks
1 H 2 4 I N T E R I M R E S U LT S – C O N C L U D I N G R E M A R K S 34 CONTINUE ENHANCING DELIVERING COST INCREASED DIVIDEND INVESTING IN CONTINUED THE SAFETY CULTURE REDUCTION AND TO SHAREHOLDERS IN BROWNFIELD PROGRESS AT OUR ACROSS THE OPERATIONAL LINE WITH OUR PROJECTS TO ADVANCED ORGANISATION
Slide 35: Appendix
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Slide 36: Noche Buena
1 H 2 4 I N T E R I M R E S U LT S – O P E R AT I O N S 36 NOCHE BUENA KEY DEVELOPMENTS • Mining activities concluded in May 2023 and closure plan continues as expected. • Leaching activities will continue through to 2026, extending the operational life without associated mining costs. KEY OPERATING
Slide 37: Grade Expectations
G R A D E E X P E C TAT I O N S F O R 2 0 2 4 37 GOLD (G/T) MINE MINE TYPE FY 2024e FY 2023 Fresnillo Underground silver 0.70-0.80 0.61 Saucito Underground silver 1.10-1.30 1.34 Juanicipio Underground silver - 1.27 San Julián (veins) Underground silver & gold 1.20-1.40 1.17 San Julián (disseminated)
Slide 38: Consolidated Cost Inflation YTD
1 H 2 4 I N T E R I M R E S U LT S – C O N S O L I D AT E D C O S T I N F L AT I O N Y T D 38 (USD BASED) Consolidated Unit Price Weighted Increase % Weight (*) Average Labour Unionized Personnel 14.8% 9.2% 1.4% Employees 12.9% 4.7% 0.6% Weighted 14.1% Operating Materials -0.8% 16.3% -0.1% Energy El
Slide 39: Contribution by Mine and by Metal to Adjusted Revenues
1 H 2 4 I N T E R I M R E S U LT S – C O N T R I B U T I O N B Y M I N E A N D B Y M E TA L 39 TO ADJUSTED REVENUES 1H24 ADJUSTED REVENUES 1 : US$1,560.2M By mine By metal 4% 20% 17% 9% 37% 10% 21% 4% 1% 7% 50% 20% Fresnillo Saucito Ciénega Herradura Silver Gold Noche Buena San Julián DOB San Julián
Slide 40: Adjusted Production Cost
1 H 2 4 I N T E R I M R E S U LT S – A D J U S T E D P R O D U C T I O N C O S T 1 H 2 4 40 1H24 ADJUSTED PRODUCTION COST : US$884.2M Operating Materials 21% Own 16% Ctrt. 5% Energy 18% Own 16% Ctrt. 2% Maintenance & repairs 21% Own 18% Ctrt. 3% Others 11% Own 10% Ctrt. * 1% Personnel 20% Equipment
Slide 41: Cost per Tonne
ACCUM JUNE 1 H 2 4 I N T E R I M R E S U LT S – C O S T P E R T O N N E ( I F R S ) 41 CHANGE 2024 2023 % CHG. COST PER TONNE * MINE UNIT Fresnillo US$/TON 114.68 91.69 25.1% Saucito US$/TON 139.87 137.67 1.6% Ciénega US$/TON 128.83 141.45 -8.9% San Julián Veins US$/TON 108.19 107.32 0.8% San Julián
Slide 42: Cash Cost
ACCUM JUNE 1 H 2 4 I N T E R I M R E S U LT S – C A S H C O S T ( I F R S ) 42 CHANGE 2024 2023 % CHG. CASH COST MINE UNIT Fresnillo PER OZ. SILVER (Equiv.) 16.41 14.70 11.6% Saucito PER OZ. SILVER (Equiv.) 15.02 14.96 0.4% Ciénega PER OZ. GOLD (By-prod.) 11.96 1,635.42 -99.3% PER OZ. GOLD (Co-prod.
Slide 43: All-In Sustaining Cost
1 H 2 4 I N T E R I M R E S U LT S – A L L I N S U S TA I N I N G C O S T ( U S $ / O Z ) 43 ACCUM JUNE 2024 2023 % CHG. CASH COST * MINE UNIT Fresnillo PER OZ. SILVER (Equiv.) 23.04 20.33 13.3% Saucito PER OZ. SILVER (Equiv.) 20.52 21.75 -5.7% Ciénega PER OZ. GOLD (Equiv.) 1,668.44 2,590.47 -35.6%
Slide 44: Income Statement and Cash Flow Highlights per Operating Unit
ACCUM JUNE 2024 PROFIT FROM CONTINUING OPERATIONS BEFORE CORPORATE EXPENSES 1 H 2 4 I N T E R I M R E S U LT S – I N C O M E S TAT E M E N T A N D C A S H F L O W H I G H L I G H T S 44 P E R O P E R AT I N G U N I T INCOME STATEMENT C O N C E P T (Million Usd) Fresnillo Juanicipio San Julián Ciéneg
Slide 45: Notes
NOTES 45 4