Fresnillo Plc

Fresnillo Plc is a senior gold and silver producer headquartered in London, United Kingdom, operating primarily in Mexico. The company's portfolio consists of 12 projects, comprising 6 operating mines, 4 advanced exploration, 1 suspended, and 1 reclamation project. Key assets include Fresnillo, Juanicipio, Saucito, and Herradura. The business model is centered on a sustained exploration strategy that invests across price cycles, managed by a respected team of geologists and specialists. Potential operations are assessed against strict criteria, including risk, potential returns, and long-term sustainability, with projects only approved if they can create value across precious metals price cycles. The operational approach leverages a district consolidation strategy to create synergies and share costs. A key competitive advantage is the association with the Peñoles Group, which facilitates common requirements across a number of service areas, enhancing cost-efficiency. The organization employs a disciplined approach to capital allocation and maintains strict cost controls, supported by a strong balance sheet that provides a resilient platform for investment. This integrated model, from exploration to operation, is designed to optimize long-term productivity at minimal risk while embedding responsible business practices at every level of the decision-making process.

Strategic priorities are structured around 4 pillars: exploration, development, operations, and sustainability. The long-term growth strategy focuses on extending and maintaining a robust project pipeline through continued investment in exploration and the identification of M&A targets across multiple jurisdictions. A key objective is to increase the resource base to drive future growth and replace depletion from mature assets. Operational strategy emphasizes maximizing the profitability of existing mines through cost reduction initiatives, efficiency improvements, and the implementation of modern mining practices. The development strategy aims to advance projects in the exploration pipeline toward operational status, with a goal of identifying and adding world-class assets to the portfolio. Capital allocation is disciplined, with a focus on optimizing cash flow and returns to support sustained investment and shareholder distributions. The organization also prioritizes enhancing the sustainability of its business by addressing local and regional priorities to generate shared value.

The Board of Directors is composed of 12 members, including 5 female directors (41.7%), and is led by a non-independent Chairman. The Chairman's position is linked to the company's controlling shareholder, Industrias Peñoles S.A.B. de C.V., a relationship governed by a formal agreement to ensure the business is conducted at arm's length. In 2024, the board appointed its first female Senior Independent Director. The governance framework includes 4 committees: Audit; Nominations; Remuneration; and Health, Safety, Environment & Community Relations (HSECR). The Executive Committee, headed by the Chief Executive Officer, is responsible for operational leadership. The CEO has been with the group since 1988, holding numerous senior operational and financial positions. In 2024, the Executive Committee was expanded to include a new Vice President of Business Development role, a strategic move to broaden the focus on development and growth.

The organization's sustainability approach is guided by the 'I Care, We Care' safety philosophy, which aims to minimize risks and align injury frequency rates with ICMM standards. In 2024, the company achieved 80.6% renewable electricity consumption, surpassing its 2030 target of 75%, driven by strategic energy sourcing agreements. Water stewardship is a key focus, with initiatives to increase the use of municipal treated wastewater, which reached 30.2% of total consumption. The company has also committed to a voluntary annual return of 300,000 m³ of water as part of a national plan, supported by a significant investment in water treatment and potabilization projects. A comprehensive Harassment Prevention Programme is actively deployed across all business units to foster a respectful work environment. Governance of tailings storage facilities is managed through a dedicated system and overseen by an Independent Tailings Review Panel that conducts annual reviews to ensure compliance with best practices.

The company is a subsidiary of Industrias Peñoles S.A.B. de C.V., which holds a 74.99% interest. This controlling shareholder relationship is governed by a formal Relationship Agreement designed to ensure the company operates independently and that all transactions are conducted on an arm's-length basis. A key structural arrangement is the Shared Services Agreement with Peñoles, which allows the company to benefit from operational, financial, and administrative synergies by combining resources for common services. The company also has a Silverstream Agreement with its parent company related to the production from a specific mine operated by the parent. In 2024, the organization progressed a precious metals joint venture with Sociedad Química y Minera de Chile (SQM).