Fresnillo Plc · LSE:FRES
Fresnillo — Denver Gold Forum 2015
23 slides from Fresnillo's conference presentation, Sep 21, 2015
Slide 1: Well placed to address cyclical uncertainties
“Well placed to address cyclical uncertainties” Denver Gold Forum September 21, 2015 Octavio Alvídrez, CEO LSE:Fres BMV:Fres www.fresnilloplc.com
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”, “int
Slide 3: Fresnillo at a Glance
Fresnillo at a Glance Location Key Highlights HERRADURA World’s largest silver producer (45 moz in 2014) and Mexico’s DISTRICT second largest gold producer (596 koz in 2014) ORISYVO Market cap of US$6.8 billion* SAN JULIÁN Silver resources of 2 billion ounces and gold resources of 34 million Mining
Slide 4: 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 5: 2014 Highlights
2014 Highlights • Silver production of 45 moz and gold production of 596 koz • Revenues: US$1.4 billion • Continued focus on cost control • Operating profit: US$245.6 million • EBITDA: US$567.3 million; EBITDA margin of 40.1% • Capex of US$425.6 million and total investment in exploration of US$184.
Slide 6: Operations Review
Operations Review Fresnillo Key operating statistics 1H15 Silver production – moz 7.8 Cost per tonne – US$/t 48.5 Gold production – koz 15.1 Cash cost - US$/oz 5.8 Silver ore grade - g/t 220 AISC - US$/oz 11.1 Gold ore grade - g/t 0.50 AISC (LoM) (2023) – US$/oz 6.20 1H15 silver production decreased
Slide 7: Operations Review (Cont'd): Saucito and Ciénega
Operations Review (Cont’d) Saucito Ciénega Key operating statistics 1H15 Key operating statistics 1H15 Silver production – moz 11.4 Gold production – koz 45.7 Gold production – koz 44.7 Silver production – moz 2.1 Silver ore grade - g/t 341 Gold ore grade - g/t 2.25 Gold ore grade - g/t 1.50 Silver
Slide 8: Operations Review (Cont'd): Herradura and Noche Buena
Operations Review (Cont’d) Herradura Noche Buena Key operating statistics 1H15 Key operating statistics 1H15 Gold production – koz 188.1 Gold production – koz 70.5 Gold ore grade – g/t 0.74 Gold ore grade - g/t 0.48 Ore processed – mt 10.9 Ore processed – mt 8.7 Total volume hauled – mt 57.7 Total v
Slide 9: Expected Delivery of Growth
Expected Delivery of Growth Expected Avg. Investm ent YEAR (US$ m illion) Annual 2015 2016 2017 2018 2019 2020 Production (1) (2) PROJECT CONSTRUCTION LEACHING 10.3 m ill Oz Ag (3) PLANT 515 & 44 thds Oz SAN JULIÁN PRODUCTION Au CONSTRUCTION FLOTATION PLANT MINE DEVELOPMENT & PLANT ADEQUATION FRESNI
Slide 10: Approved Projects: San Julián
Approved Projects San Julián Key metric estimates Avg. annual silver production 10.3 moz Avg. annual gold production 43.9 koz Pre-operative capex $515 m Cash cost (average LoM) $7.77 /oz All-in sustaining costs (average LoM) $9.33 /oz Phase 1 capacity (DLP to treat ore from 3,000TPD veins) Phase 2 c
Slide 11: Approved Projects: San Julián: Commissioning 1H16
Approved Projects San Julián: Commissioning 1H16 21/09/2015 11
Slide 12: Approved Projects: Pyrites Plant
Approved Projects Pyrites Plant Key metric estimates Avg. annual silver production 3.5 moz Avg. annual gold production 12.8 koz Saucito I Saucito II Fresnillo Plant Pre-operative capex $155 m Cash cost (average LoM) $2.51 /oz Old Tailings Fe Tailings Plant Plant Hauling Filtration Leaching Plant Pla
Slide 13: Potential Brownfield Expansions
Potential Brownfield Expansions Ciénega Fresnillo Centauro Extension Centauro Deep Optimisation Optimisation Potential underground Natural evolution of Optimisation project to Optimisation project to mine beneath the Description the Centauro pit at increase capacity increase capacity Centauro pit at
Slide 14: Advanced Exploration Projects
Advanced Exploration Projects Juanicipio (JV with MAG Silver. Fresnillo: 56%) Orisyvo 8km from the Fresnillo mine; Juanicipio’s mineral zones are Assessing a 8,000TPD mine with a DLP processing facility; located in silver-gold rich sulphide shoots of the veins. focusing on higher grade zones of the
Slide 15: Strong Organic Growth Pipeline
Strong Organic Growth Pipeline 2015 Budget: c.US$160m Pipeline allows us to focus on Fresnillo projects that have the Saucito I & II Mine Operations 34% potential to be developed Herradura (DLP) Noche Buena into low cost, Ciénega - San Ramón world-class mines Soledad &Dipolos* Development Projects S
Slide 16: Proven Track Record of Delivering on Time and on Budget
Proven Track Record of Delivering on Time and on Budget Saucito I commissioning San Ramón satellite at Ciénega Commissioning of DLP ($273m / 9 moz Ag) ($20m/ 25 koz Au; 2.5 moz Ag) ($116m / 50 koz Au) 2010 2011 2012 2013 2014 Commercial production at Commercial production at Soledad-Dipolos began No
Slide 17: Achieving 65moz Silver by 2018
Achieving 65moz Silver by 2018 Thousand Oz Attributable Juanicipio - 56% 100,000 Pyrites Plant 90,000 San Julián 80,000 Saucito II 70,000 Saucito I 60,000 50,000 Noche Buena 40,000 Herradura 30,000 Ciénega Expansion 20,000 Ciénega 10,000 9,000 TPD Fres Expansion - Fresnillo 2014 2015 2016 2017 2018
Slide 18: Achieving 750koz Gold by 2018
Achieving 750koz Gold by 2018 Thousand Oz Attributable Orisyvo 1,000 Juanicipio - 56% 900 San Julián 800 Pyrites Plant 700 Saucito II 600 Saucito I 500 Ciénega Expansion 400 Ciénega 300 Fresnillo 200 Nochebuena 100 Dynamic Leaching - 2014 2015 2016 2017 2018 Herradura Yr 18
Slide 19: CAPEX & Exploration Spend
CAPEX & Exploration Spend CAPEX Expectations US$ Million 2015 Million Usd 900 Sustaining New Prior • Sustaining $145 $185 800 • Mining Works 700 $105 $87 (Underground) • Mining Works 600 $89 $89 (Stripping) 500 New Projects 400 • San Julián $130 $133 • Pyrites Plant $1 $60 300 • Saucito II $53 $53 2
Slide 20: Advancing our Sustainable Development
Advancing our Sustainable Development Zero fatalities since May 2014 Zero new cases of occupational diseases in 1H15 Fresnillo included in the new “Euronext‐Vigeo EM 70” Environment, Social and Governance (ESG) Index Maintaining sound relations with personnel and unions Focusing on effectively engag
Slide 21: Conclusions & Outlook
“Well placed to address cyclical uncertainties” Conclusions & Outlook
Slide 22: Conclusions and Outlook
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 pro
Slide 23: Investment Case
Investment Case World-class assets Strong organic growth pipeline Operational excellence Competitive cash cost performance Financial strength and flexibility Strong community support 21/09/2015 23