Fresnillo Plc · LSE:FRES
Fresnillo — BofAML Global Metals, Mining & Steel Conference 2018
26 slides from Fresnillo's conference presentation, May 16, 2018
Slide 1: BofAML: Global Metals, Mining & Steel Conference
BofAML: Global Metals, Mining & Steel Conference May 16, 2018
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: Fresnillo at a Glance – A Decade of Progress and Achievement
Fresnillo at a Glance – A Decade of Progress and Achievement Location Key Highlights HERRADURA World’s largest silver producer (58.7 moz in 2017) and Mexico’s largest gold producer DISTRICT (911.1 koz in 2017) ORISYVO Total assets of US$4.7 billion1 and market cap of US$12.9 billion 2 SAN JULIÁN Sil
Slide 4: Develop Explore Operate: a decade of progress and achievement
A decade of progress and achievement Operate Develop Explore Sustain By optimising capacity and • Consistently invested over Maintained a strategic We work hard to ensure the recoveries, generating continuous US$4 billion in both existing commitment to continuous health and safety of our people impr
Slide 5: A decade of Production and Resource Growth per Share
A decade of Production and Resource Growth per Share Production 140 180 Production (Eq Ag oz) per thousand shares 160 Production (Eq Ag oz) per 120 Production (Eq Ag moz) 140 thousand shares 100 120 80 100 60 80 60 40 40 20 20 - - 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Resources 6,00
Slide 6: Growth and Returns
Growth and Returns Investing in Growth Growth Outcome Returns Total Exploration Expenses from Increase in silver equivalent EBITDA the last decade (2008 to 2017) resources (2007-2017) (2008 to 2017) Total EBITDA – US$ 8,570m US$ 1,570.0 million 4,458.5 million ounces* Average EBITDA p.a. – US$ 857m
Slide 7: Health, Safety, Environment & Community Relations
Health, Safety, Environment & Community Relations Health & Safety • 2 Fatal accidents year to date • The enhanced Health & Safety approach piloted at Saucito in 2017 and subsequently adopted at both Fresnillo and Ciénega is set to be rolled out across our other operations, emphasising risk awareness
Slide 8: 2017 Highlights & 2018 Update
2017 Highlights & 2018 Update 70 2017 Highlights Production (moz) Production 60 50 Silver 40 30 Silver production of 58.7 moz (including Silverstream), up 16.6% inline with guidance, and gold production of 911.1 20 10 koz, down 2.6% though above guidance 0 2014 2015 2016 2017 Gold (38.5 moz) & silve
Slide 9: Operations; Development Projects & Exploration
>Operations Development Projects & Exploration
Slide 10: Operations: Fresnillo and Saucito
Operations Fresnillo Saucito Key operating statistics FY 2017 Key operating statistics FY 2017 Silver production – moz 16.5 Silver production – moz 21.2 Gold production – koz 38.8 Gold production – koz 69.9 Cost per tonne – US$/t 47.5 Cost per tonne – US$/t 47.6 Cash cost - US$/oz of Ag 0.71 Cash co
Slide 11: Operations Cont.: San Julián Phase I and II
Operations Cont. San Julián Phase I San Julián Phase II Key operating statistics FY 2017 Key operating statistics FY 2017 Silver production – moz 5.9 Silver production – moz 4.6 Gold production – koz 82.8 Gold production – koz 1.8 Cost per tonne – US$/t 52.1 Cost per tonne – US$/t * 31.9 Cash cost -
Slide 12: Operations Cont.: Ciénega
Operations Cont. Ciénega Key operating statistics FY 2017 Gold production – koz 71.9 Silver production – moz 5.4 Cost per tonne – US$/t 66.5 Cash cost - US$/oz of Au -163.7 Reserves 2017 * 54.1 moz Ag, 0.6 moz Au Resources 2017 * 167.3 moz Ag, 1.7 moz Au FY17 Achievements • Began development of the
Slide 13: Operations Cont.: Herradura and Noche Buena
Operations Cont. Herradura Noche Buena Key operating statistics FY 2017 Key operating statistics FY 2017 Gold production – koz 473.6 Gold production – koz 172.3 Silver production – koz 551 Silver production – koz 31 Cost per tonne* – US$/t 8.0 Cost per tonne* – US$/t 7.5 Cash cost - US$/oz of Au 492
Slide 14: Projects: Pyrites Plant Project in the Fresnillo District
Projects Pyrites Plant Project in the Fresnillo District Avg. annual silver production 3.5 moz Avg. annual gold production 13.0 koz Cash cost – US$/oz Ag (average LoM) $2.51 /oz Leaching plant at Saucito expected 2Q18 commissioning Fresnillo tailings flotation plant expected 2019 commissioning Overv
Slide 15: Projects Cont.: 2nd Line of Dynamic Leaching Plant at Herradura
Projects Cont. 2nd Line of Dynamic Leaching Plant Project at Herradura Ore type • Detailed engineering continued • Expected to be commissioned in 2Q18 The project will enable sulphides occurring deeper in the pit to be processed more efficiently At the time of analysis, this project was expected to
Slide 16: Projects Cont.: Juanicipio
Projects Cont. Juanicipio (JV with MAG Silver. Fresnillo: 56%) JUANICIPIO RAMP 8km from the Fresnillo mine; Juanicipio’s mineral zones are located in silver-gold rich sulphide shoots of the veins. This project will be developed on a stand-alone basis Key metric estimates (100% basis) 10moz silver Av
Slide 17: Strong Organic Growth Pipeline
Strong Organic Growth Pipeline Fresnillo 2018 Budget: Pipeline Saucito Herradura US$ 180 m allows us to focus on Mine Operations Nochebuena 42% projects that have the Ciénega - San Ramón potential to be developed Soledad &Dipolos* into low cost, San Julián world-class mines Pyrites Plant Cebollitas
Slide 18: 2017 Financial Summary
2017 Financial Summary 2017 Revenue US$m 2,093.3 EBITDA US$m 1,060.1 Adjusted production cost US$m 769.2 Gross profit US$m 925.4 Exploration expenses US$m 141.1 Operating profit US$m 709.3 Basic EPS US cents 0.76 Cash generated by operations before changes in working capital US$m 1,073.7 Income tax
Slide 19: Group Consolidated Cash Cost & All In Sustaining Cost (US$/Oz)
Group Consolidated Cash Cost* & All In Sustaining Cost ** (US$/Oz) ACCUM DECEMBER CHANGE 2017 2016 % CHG. CASH COST PER OZ. SILVER EQ. As a Silver Company 6.13 5.98 2.4% Silver Eq. Oz (Moz) sales volume 115 108 6.8% PER OZ. GOLD EQ. As a Gold Company 453.77 433.48 4.7% Gold Eq. Oz (koz) Sales Volume
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Slide 21: Expected Delivery of Growth
Expected Delivery of Growth (1) (2) (3) (4) (1) Estimated (2) Total average annual production (3) Total investment (of which 56% Fresnillo plc; 44% MAG Silver) according to PFS dated June 2012 (4) On hold Subject to ongoing internal review 21 Approved by the Board (Subject to Board approval)
Slide 22: Expected Silver Production Profile
Expected Silver Production Profile Million Oz Attributable 80 70 60 50 40 30 20 10 0 2018 2019 2020 Target of 65 moz silver by 2018 22
Slide 23: Expected Gold Production Profile
Expected Gold Production Profile Thousand Oz Attributable 1,100 1,000 900 800 700 600 500 400 300 200 100 0 2018 2019 2020 Target of 750 koz gold by 2018 23
Slide 24: CAPEX Spend Expectations
CAPEX Spend Expectations 2018 US$ Million Million Usd 900 Sustaining (Operations) 800 755 Fresnillo 90 M 725 Saucito 100 M 700 Herradura 136 M 605 590 Ciénega 70 M 600 Noche Buena 35 M San Julián 90 M 500 Others 9M 400 Projects Approved 300 San Julián 17 M 200 Pyrites Plant 47 M Centauro Extension 3
Slide 25: Outlook
Outlook Safety and support of the workforce • Role out our enhanced safety system across all our mines • Launch a programme to engage our organisation in defining KPIs in respect of outcomes that are significant to our stakeholders and material to the business Disciplined growth through exploration
Slide 26: Investment Case
Investment Case High quality, low-cost, flexible operations Disciplined approach to development Dedicated and experienced management and workforce Strong balance sheet Commitment to sustainable business practices 26
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