Fresnillo Plc · LSE:FRES
Fresnillo — H1 2008 Earnings Presentation
21 slides from Fresnillo's earnings presentation, Aug 19, 2008
Slide 1: Fresnillo plc Interim Results 2008
® ® Fresnillo plc Interim Results 2008 August 19, 2008 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‖, ―in
Slide 3: Agenda
® Agenda 1H08 Highlights Jaime Lomelin Development Projects and Exploration David Giles Financial Review Mario Arreguin Conclusion Jaime Lomelin Q and A 3
Slide 4: 1H 2008 Highlights
® 1H 2008 Highlights Increased EBITDA and Cash Flow levels – Stable Production in line with mining plan, Cost Control – Higher price environment Delivering on growth – Resource upgrades • 22% contained silver ounces at Fresnillo • 11% contained gold ounces at Herradura • 6% contained gold ounces
Slide 5: Financial Highlights
® Financial Highlights US$ million 1H 2008 1H 2007 % change Silver Production 450 17,437 17,425 0.1 (koz) 400 1 Gold Production 140 145 (3.6) 350 (koz) 300 Total Revenue 424.21 311.62 36.1 250 Adjusted Revenue 493.83 382.89 29.0 200 150 EBITDA 212.06 144.97 46.3 100 Attributable Profit 140.97 90.11
Slide 6: Highlights – Mines in Operation
® Highlights – Mines in Operation Fresnillo Ciénega Herradura3 Attributable 16.870Moz Ag, 12koz Au 0.5Moz Ag, 64koz Au 0.06Moz Ag, 64koz Au Production 5kt Pb, 6kt Zn 5kt Pb, 6kt Zn Resources Growth1 05 ‗08 – 41.6Mt @ 465.0 g/t Ag 05 ‗08 – 14.2Mt @ 4.81 g/t Au 05 ‗08 – 170.5Mt @ 0.84 g/t Au 01 ‗08 –
Slide 7: Growth Pipeline – delivering on growth
® Growth Pipeline – delivering on growth Key developments in 1H08 Stable production Fresnillo Resources growth Existing mining operations Herradura Ciénega Production cost control Shaft and ramp progress Fresnillo II (Saucito) Development projects Soledad & Dipolos in Resources definition
Slide 8: Agenda
® Agenda 1H08 Highlights Jaime Lomelin Development Projects and Exploration David Giles Financial Review Mario Arreguin Conclusion Jaime Lomelin Q and A 8
Slide 9: Development Projects – Fresnillo II
® Development Projects – Fresnillo II Fresnillo II 7% increase in meters drilled (29,800 m) Resources increased at Fresnillo II. Positive drilling results obtained on the Jarrillas and Valdecañas Veins Two new veins were discovered, Madroño and Mezquite Shaft extended to 530 meters, and on t
Slide 10: Development Projects – Fresnillo II
® Development Projects – Fresnillo II Silver – Gold Veins Shaft Fresnillo Mine Shaft Project Fresnillo II V. Sto. Niño FRESNILLO II Minera Saucito (100% Fresnillo Plc) Saucito Vein Jarillas Vein Extensión Valdecañas Sta. Natalia Vein Lote Madroño Vein Mezquite Vein Juanicipio Minera Juan
Slide 11: Development Projects – Soledad and Dipolos
® Development Projects – Soledad and Dipolos Soledad and Dipolos Infill drilling 67,600 metres reverse circulation and 6,000 metres core Dipolos Soledad Resources upgraded to 606,000 oz measured-indicated, plus 167,000 oz inferred. Potential remains open. Feasibility study in progress Tajo Cen
Slide 12: Advanced Exploration Prospects
® Advanced Exploration Prospects San Julian, Chihuahua Orisyvo, Chihuahua San Juan, Durango Mineralization Silver and Gold Gold Silver and Gold Potential – Veins: 3 to 5 Mt at 250 to 450 g/t – 50 to 100 Mt, 0.5 to 2.0 g/t gold – 2.0 to 4.0 Mt at 200 to 400 g/t silver silver eq eq (Lorena area) – Dis
Slide 13: Exploration Success in 1H2008
® Exploration Success in 1H2008 San Julian Orisyvo LEGEND Diamond drill hole EL BAJIO DE SAN JULIAN Diamond drill hole 78° (Program) 78° SILVER JM DISCOVERY NORTH OXIDE ZONE Au > 1.0 g/t SAN JULIAN Au 0.5 - 0.9 g/t Gold deposit CENTRAL ZONE CORE PIEDRA LARGA S c a l e 0 500 1000 0 100 250 500 M e t
Slide 14: Agenda
® Agenda 1H08 Highlights Jaime Lomelin Development Projects and Exploration David Giles Financial Review Mario Arreguin Conclusion Jaime Lomelin Q and A 14
Slide 15: Consolidated Income Statement
® Consolidated Income Statement Jan-Jun CHG Item (Million dollars) 2008 % 2007 % Amount % Adjusted Revenue¹ 493.8 382.9 110.9 29.0 Treatment & Refining charges (47.2) (40.7) (6.5) 16.1 Hedging (22.4) (30.6) 8.2 (26.8) Net Revenue 424.2 100.0 311.6 100.0 112.6 36.1 Cost of Sales (150.5) (35.5) (113.4
Slide 16: Consolidated Cash Flow Statement
® Consolidated Cash Flow Statement For the six months ended 30 June (in thousands of US dollars) Item 2008 2007 Net cash from operating activities 264,276 192,062 Cash flows from investment activities Purchase of property, plant and equipment (48,152) (31,502) Silverstream contract 16,055 — Repaymen
Slide 17: Consolidated Balance Sheet
® Consolidated Balance Sheet Item (Million dollars) Jun-08 Dec-07 Chg (%) Assets Cash and cash equivalents 286.6 4.8 5,869.2 Trade and other receivables 127.9 254.7 (49.8) Inventories 30.3 36.5 (17.0) Prepayments 337.1 360.8 (6.6) Property, plant and equipment 383.5 357.7 7.2 Other assets (non-curre
Slide 18: Interim Dividend
® Interim Dividend Policy is to pay out between 33% and 50% of profits after tax (excluding minorities) One third at interim, and two thirds at final Cash position as of 30 June 08: US$286.6 m Interim dividend of US$42.31m, equivalent to 5.9 cents (US$0.059) per share, to be paid on 19 Septe
Slide 19: Agenda
® Agenda 1H08 Highlights Jaime Lomelin Development Projects and Exploration David Giles Financial Review Mario Arreguin Conclusion Jaime Lomelin Q and A 25
Slide 20: Conclusion – Delivering on Growth
® Conclusion – Delivering on Growth Strong EBITDA and cash flow from operations – Optimisation of existing mines = stable production and cost control Strong balance sheet with no bank debt Near term growth Resource upgrade at all operating mines (22% silver ounces at Fresnillo, 6% gold ounces
Slide 21: Agenda
® Agenda 1H08 Highlights Jaime Lomelin Development Projects and Exploration David Giles Financial Review Mario Arreguin Conclusion Jaime Lomelin Q and A 27