Fresnillo Plc · LSE:FRES
Fresnillo — Santander Latin America Energy & Materials Conference 2009
15 slides from Fresnillo's conference presentation, Oct 5, 2009
Slide 1: Santander Latin America Energy & Materials Conference
Santander Latin America Energy & Materials Conference October 5 - 6, 2009 Octavio Alvidrez, IR Fresnillo plc
Slide 2: 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 DISCLAIMER “believes”, “estimates”, “plans”, “projects”, “anticipates”, “expects”, “inte
Slide 3: Content
CONTENT 1. Introduction to Fresnillo 2. The Silver Story 3. Operations, Growth Pipeline, Development Projects and Exploration 4. Financial Review 5. Conclusion 3
Slide 4: Introduction
1. INTRODUCTION Listed on the London Stock Exchange: FTSE 100 Company Market capitalization as of 1 October 2009: Approx. US$8.8 billion Largest primary silver producer in the world 2008 total attributable production: 34.8m oz silver and 264,000 oz gold Double digit reserve life at all mines: total
Slide 5: Delivery and growth firmly on track
1. INTRODUCTION Record silver production: 18.8m oz +7.8% Record gold production at Herradura Optimisation at operating mines to reduce cost and increase productivity Growth pipeline: 1H09 Operating results – Soledad - Dipolos gold project to begin production in 1Q10 – Saucito silver project construc
Slide 6: Breakdown of Silver Fabrication Demand
1998 1998 2008 2. THE SILVER 2008 STORY Coins & Investment 6% Medals 3% De-hedging 1% Coins & medals 7% Photography Industrial Industrial 28% Photography applications 12% applications 38% 50% Jewellery & Jewellery & Silverware 24% Silverware 31% 824moz 888moz Breakdown of Silver Yearly Silver Price
Slide 7: Operating mines
Fresnillo - Underground Fresnillo énega é Ciénega - Underground Herradura Herradura – 1 Open pit 3. OPERATIONS, DEVELOPMENT PROJECTS AND EXPLORATION 1H09 Attributable production Silver: 17.9m oz 6.5% 0.7m oz 48.1% 0.1m oz 42.6% Gold: 14.0k oz 18.5% 48.0k oz 25.8% 71.0k oz 12.5% Lead: 8.0kt 3.0kt Ope
Slide 8: Optimisation
3. OPERATIONS, DEVELOPMENT Optimisation Projects PROJECTS AND EXPLORATION Fresnillo Ciénega Herradura Sewage water treatment Leaching circuit optimisation Expansion of beneficiation plant to be concluded in to be concluded at end of plant to be concluded at end 3Q09 2009 of 2009 - reduce costs and p
Slide 9: On target to commence production in 1Q10
3. OPERATIONS, Pre-stripping activities DEVELOPMENT PROJECTS AND EXPLORATION Development projects Soledad-Dipolos gold project Construction of the leaching pads, ponds and admin offices Construction of the Merrill Crowe plant On target to commence production in 1Q10 9
Slide 10: Development projects Saucito silver project
3. OPERATIONS, DEVELOPMENT PROJECTS AND EXPLORATION Development projects Saucito silver project – First Stage Minera Saucito’s veins (100% Fresnillo Plc): Saucito, Mezquite, Madroño, Jarillas, Sta. Natalia, Valdecañas East and West Minera Juanicipio’s veins (56% Fresnillo Plc): Valdecañas Central, J
Slide 11: Saucito silver project pre-feasibility study
3. OPERATIONS, DEVELOPMENT Pre-feasibility study for first stage Saucito project PROJECTS AND EXPLORATION Approved by Board in August 09 Based on audited Total Reserves and Resources at year-end 2008 3,000 tpd operation, expected to increase to 6,000 Development tpd in second stage projects Planned
Slide 12: Exploration at mines and projects
San Julián San Julián 3. OPERATIONS, - 34 diamond drill holes (17,465m) completed DEVELOPMENT - Mineralization extended along strike in the JM PROJECTS AND disseminated silver deposit EXPLORATION - Ramp construction initiated Orisyvo - 9 diamond drill holes (4,675m) completed - North oxide & sulphid
Slide 13: 1H09 Financial Highlights
Silver price US$13.92/oz, down 21.9% 4. FINANCIAL REVIEW Adjusted revenue US$426m, down 13.7% Cost per tonne down in all three mines (MXP devaluation) EBITDA US$203.5m, down 4.1% EBITDA margins up to 53.7% from 50.0% 1H09 Attributable profit US$121.1m, down 14.1% Financial Highlights Cash flow befor
Slide 14: Conclusion: Delivery and growth firmly on track
5. CONCLUSION Focussed on operational excellence to maximize returns throughout cycles Generating solid cash flow from high margin assets Continuing to grow reserves for the long term Strong near and medium term growth pipeline Strong balance sheet to fund growth (greenfiled and acquisitions) Delive
Slide 15: 1H09 Financial Highlights
Full year US$ million 1H09 1H08 % change 2008 ANNEX Silver Production 18,805 17,437 7.8 34,849 (koz) Gold Production1 132.8 139.3 (4.6) 264.00 (koz) Total Revenue 378.9 424.2 10.7 720.48 2 Adjusted Revenue 426.0 493.8 (13.7) 839.60 1H09 3 Financial Highlights EBITDA 203.4 212.1 (4.1) 337.36 Attribut
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