Industrias Peñoles SAB de CV

Industrias Peñoles SAB de CV is a senior gold and silver producer headquartered in Mexico City, Mexico, operating primarily in Mexico. The company's portfolio consists of 7 projects, comprising 4 operating mines, 2 advanced exploration, and 1 suspended project. Key assets include Sabinas and Velardeña. The organization's business model is centered on a vertically integrated structure encompassing mining, non-ferrous metallurgy, and chemical production. This integrated chain allows for significant operational synergies and value creation across different stages of the resource lifecycle. The company operates as part of a larger, diversified business conglomerate, Grupo BAL, which provides a broad strategic context. A core component of its structure is a 75% ownership in a major, independently managed subsidiary that is publicly listed on international exchanges. The business philosophy aims for each operational unit to achieve top-quartile performance and profitability within its respective industry. This approach combines disciplined operational execution with a focus on generating superior value for stakeholders through the delivery of essential resources and specialized products. The enterprise is a leading global producer of certain refined precious metals and a significant producer of refined base metals and inorganic chemical products, leveraging its integrated processing capabilities to serve diverse international markets.

Strategic priorities are defined by a 6-pillar plan focused on long-term value creation and operational excellence. A core objective is to enhance efficiency by achieving design capacity at all operations, implementing strict process and cost controls, and optimizing working capital. Capital allocation is guided by a disciplined approach to rationalizing investments and ensuring impeccable execution of projects. Growth is pursued through the dynamic identification of strategic business opportunities and the efficient management of an attractive project portfolio to guarantee continuity. The enterprise has implemented a comprehensive financial health program aimed at systematically controlling costs and expenses, rationalizing capital expenditures, and optimizing the use of resources. Another key strategic pillar involves strengthening the risk management and compliance system through a framework that ensures effective mitigation actions and reinforces accountability. This strategy is designed to ensure sustained profitability and financial stability in a challenging industry environment.

Governance is overseen by a Board of Administration composed of 11 proprietary directors, 4 of whom are independent, representing 36% of the board. The board, which convened 4 times during the 2024 fiscal year, is supported by specialized committees including an Executive Committee, an Audit and Corporate Practices Committee, a Finance and Planning Committee, and a Nominations, Evaluation, and Compensations Committee. These bodies provide oversight on operational performance, financial projections, risk management, and executive compensation. A recent organizational restructure was implemented to improve efficiency, realigning administrative and technical service units to report directly to the CEO and CFO. The leadership philosophy emphasizes developing competent and healthy collaborators to achieve extraordinary results. The compensation package for high-level officials is structured with a base salary supplemented by benefits common to the national industry, aligned with performance evaluations conducted by the nominations committee.

The organization's sustainability approach is integrated into its core strategy, with a focus on environmental stewardship, safety, and community relations. A key environmental initiative is a formal decarbonization program, guided by an ESG Committee, which is evaluating high-impact levers to define achievable reduction targets. The company is strengthening the responsible management of tailings deposits by applying leading international practices and standards. Industrial safety is addressed through a preventive approach, highlighted by the 'Gestión del Alto Potencial' program, which identifies critical risks and reinforces controls. A new safety and environmental standard for contractors was also developed to ensure alignment across the value chain. The entity actively supports community development and well-being, investing in social initiatives to maintain harmonious relationships. Following a cybersecurity incident, protocols were activated and controls were reinforced to enhance resilience and protect operational integrity.

The company is a key entity within Grupo BAL, a diversified conglomerate of businesses. Its corporate structure is defined by a 75% ownership stake in Fresnillo plc, a major subsidiary that is independently listed on the London Stock Exchange and the Bolsa Mexicana de Valores and operates with its own distinct management and governance bodies. The parent company directly owns 100% of its primary mining, chemical, and infrastructure divisions, which include key operational subsidiaries such as Metalúrgica Met-Mex and Química del Rey. The structure also incorporates strategic partnerships, including a 50% ownership in the Línea Coahuila-Durango railway joint venture. Additionally, the organization utilizes long-term supply contracts with third-party operators for certain energy generation assets, including wind and thermoelectric power facilities, to ensure a stable energy supply for its operations.