Fresnillo plc | Annual Report and Accounts 2024
SHAPING OUR BUSINESS FOR THE
CHALLENGES
AND OPPORTUNITIES
AHEAD
Fresnillo plc | Annual Report and Accounts 2024
2024
Fresnillo plc | Annual Report and Accounts 2024
STRATEGIC REPORT
Performance highlights 1
Where we operate 2
Chairman’s statement 4
Chief Executive’s statement 8
Business model 12
Our strategy 14
Our markets 20
Our stakeholders 22
Section 172 statement 29
Workforce engagement 30
Review of operations 31
Financial review 51
Letter from the Chairman
of the HSECR Committee 58
Sustainability at the core of our Purpose 60
Independent practitioner’s assurance report 114
Managing our risks and opportunities 116
2024 Long-term viability statement 139
Going concern statement 141
Non-financial information statement 142
CORPORATE GOVERNANCE
The Chairman’s letter on Governance 2024 144
Governance at a glance 146
Board of Directors 148
Executive Committee 152
UK Corporate Governance code
compliance statement 153
Board leadership and Company purpose 154
Board roles and responsibilities 158
Board performance evaluation 160
Nominations Committee report 161
Audit Committee report 165
Director’s Remuneration report 178
Fresnillo plc directors’ report 2024 194
Statement of Directors’ responsibilities 198
FINANCIAL STATEMENTS
Independent auditor’s report 199
Consolidated income statement 212
Consolidated statement
of comprehensive income 213
Consolidated balance sheet 214
Consolidated statement of cash flows 215
Consolidated statement of changes in equity 216
Notes to the consolidated financial statements 217
Parent Company balance sheet 261
Parent Company statement of cash flows 262
Parent Company statement of
changes in equity 263
Notes to the Parent Company
financial statements 264
ADDITIONAL INFORMATION
Consolidated audited mineral resource statement
for underground operational properties 282
Consolidated audited mineral resource
statement for Sonora properties 283
Consolidated audited mineral
resource statement of exploration
projects and prospects 284
Consolidated audited ore reserve statement
for underground operational properties 285
Consolidated audited ore reserve statement
for Sonora properties 286
Audited mineral resource for
the Juanicipio property 286
Audited ore reserves for the
Juanicipio property 287
Operating statistics 288
Shareholder information 290
WE ARE THE WORLD’S
LARGEST SILVER PRODUCER
AND MEXICO’S LARGEST
GOLD PRODUCER.
Our purpose is to contribute to the
wellbeing of people through the
sustainable mining of silver and gold.
It springs directly from how we operate as
a business. It guides everything we do and
how we do it, and ensures that we deliver
for all our stakeholders, including our teams,
shareholders, local communities, suppliers,
the authorities and the environment.
Find out more about us. Download our
Annual Report at www.fresnilloplc.com
1
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Strategic Report Governance Financial Statements Additional Information
500
2,705.1
3,496.4
30.9%
24.2%
2023
2022
2024
500
2,869.1
3,639.9
30.9%
24.2%
44.6%
2023
2022
2024
500
1,624.1
1,582.2
30.9%
24.2%
2023
2022
2024
500
2,201.8
2,250.1
30.9%
24.2%
44.6%
2023
2022
2024
300
503.2
1,246.3
30.9%
24.2%
44.6%
2023
2022
2024
300
655.6
1,547.3
30.9%
24.2%
2023
2022
2024
100
142.5
945.8
2023
2022
2024
0.1
0.310
0.364
30.9%
24.2%
44.6%
2023
2022
2024
PERFORMANCE HIGHLIGHTS
OPERATIONAL HIGHLIGHTS
2024 saw solid production, highlighting our efforts to drive consistency and
resilience across our portfolio. Improved cost performance and increased metals
prices contributed to strong profitability in the year.
FINANCIAL HIGHLIGHTS
Attributable gold production
631.6 koz +3.4%
See pages 18-19
Attributable gold resources
38.5 moz +1.4%
See pages 16-17
Attributable gold reserves
7.2 moz +2.5 %
See pages 18-19
Revenue
US$3,496.4m +29.3%
Adjusted revenue
1
US$3,639.9m +26.9%
Adjusted production costs
2
US$1,582.2m -2.6%
Cost of sales
US$2,250.1m -2.2%
Gross profit
US$1,246.3m +147.7%
EBITDA
3
US$1,547.3m +136.0%
Electricity supply from renewable sources
80.6% 2023: 53.3%
See pages 18-19
Attributable silver production
(Silverstream)
56.3 moz +0.0%
See pages 18-19
Attributable silver
resources
2,250.5 moz +1.4%
See page 16-17
Attributable silver
reserves
331.3 moz -7.1%
See pages 18-19
Profit from continuing operations
US$945.8m +563.7%
Basic and diluted earnings per share,
excluding post-tax Silverstream effects
US$36.4cents 17.4%
1 Adjusted revenue is the revenue shown in the income statement adjusted to add back treatment and refining costs and gold, lead and zinc hedging. The Company
considers this a useful additional measure to help understand underlying factors driving revenue in terms of volumes sold and realised prices. The reconciliation of
Adjusted revenue to revenue as shown in the income statement is provided on page 52.
2 Adjusted production costs are calculated as cost of sales less depreciation, profit sharing, hedging, change in inventories and unproductive costs. The Company
considers this a useful additional measure to help understand underlying factors driving production costs in terms of the different stages involved in the mining and
plant processes, including efficiencies and inefficiencies as the case may be, and other factors outside the Company’s control such as cost inflation or changes in
accounting criteria.
3 Earnings before interest, taxes, depreciation and amortisation (EBITDA) is calculated as gross profit plus depreciation less administrative, selling and exploration
expenses. The reconciliation of EBITDA to amounts determined in accordance with IFRS can be found on page 55.
For more information
see pages 51-57
2
Fresnillo plc Annual Report and Accounts 2024
WHERE WE OPERATE
Based in Mexico, Fresnillo draws on the country’s significant geological
resources and strong potential for continued growth. We benefit from
Mexico’s skilled workforce and solid infrastructure and we are proud
to continue playing an important part in a rich mining tradition that
stretches back more than 500 years.
KEY ASSETS
Operating mines
Asset Ownership Type
Main
metal EBITDA
Reserves
(Silver)
4
Reserves
(Gold)
4
Year
2
Mine
life
1
Fresnillo
100%
Fresnillo plc
Underground Silver primary US$229.5m 104.5 moz 263 koz 1554
5.9
years
2
Saucito
100%
Fresnillo plc
Underground Silver primary US$362.9m 111.6 moz 515 koz 2011
6.2
Years
3
Juanicipio
56% Fresnillo plc
44% MAG Silver
Underground Silver primary US$441.1m 73.9 moz 527 koz 2022
7.8
years
4
San Julián
100%
Fresnillo plc
Underground Silver primary US$217.4m 27.6 moz 128 koz 2016
2.8
years
5
Ciénega
100%
Fresnillo plc
Underground Gold/Silver US$79.0m 13.8 moz 122 koz 1992
2.8
years
6
Herradura
100%
Fresnillo plc
Open pit Gold US$322.0m 5,680 koz 1997
9.4
years
7
Soledad-Dipolos
3
100%
Fresnillo plc
Open pit Gold Excluded in 2024 2010 –
8
Noche Buena
100%
Fresnillo plc
Open pit Gold US$4.2m – 2012 –
1 Total economic impact. This is considered to be a social performance measure. For more details see page 102.
2 Represents start of commercial production.
3 Operations at Soledad-Dipolos are currently suspended.
4 As of 30 June 2024.
Advanced exploration projects
Asset
Main metal Resources (Silver)
5
Resources (Gold)
5
9
Orisyvo Gold 12.7 moz 9,575 koz
10
Guanajuato Silver/Gold 370.9 moz 3,249 koz
11
Rodeo Gold 15.3 moz 1,414 koz
12
Tajitos Gold 1,041 koz
5 As of 31 December 2024.
In addition, we have many further early stage projects and prospects located in Mexico, Peru and Chile.
For more on our exploration projects
and prospects see pages 46-50
Approximate mining concessions
1.6m HA
Total workforce
18,095
Annual contribution to
Mexico’s economy
US$2,152.5
1
m
3
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Strategic Report
Governance
Financial Statements
Additional Information
7
6
8
12
9
4
1
11
5
3
2
10
1 Au: Ag ratio of 1:80.
Ciénega
8.0 moz
Silver equivalent
1
produced in 2024
Saucito
21.1 moz
Silver equivalent
1
produced in 2024
Juanicipio
12.1 moz
Silver equivalent
1
produced in 2024
Noche Buena
20.9 koz
Gold produced in 2024
Fresnillo
14.4 moz
Silver equivalent
1
produced in 2024
Herradura
360.6 koz
Gold produced in 2024
Fresnillo
District
Ciénega
District
Herradura
District
San Julián
District
Orisyvo
District
USA
Mexico
San Julián
15.9 moz
Silver equivalent
1
produced in 2024
Mining operations
Advanced exploration
OUR LOCATIONS
4
Fresnillo plc Annual Report and Accounts 2024
SHAPING OUR BUSINESS
FOR THE OPPORTUNITIES
AND CHALLENGES AHEAD
CHAIRMAN’S STATEMENT
ALEJANDRO BAILLÈRES
This year we delivered
a welcome increase in
profitability as our positive
production performance
was complemented
by high silver and gold
prices. While we expect to
continue facing challenges
in the years ahead, the
encouraging attitude
towards mining shown
by the new administration
in Mexico, coupled with our
own operational efficiencies
and exciting project
pipeline, are sources
for cautious optimism.
Throughout our history, Fresnillo plc
has proudly built a track record of
managing the setbacks associated
with mining and weathering storms
not of our own making. Never was that
resilience more relevant than in 2024,
when our teams rose to the production
challenges posed by rising costs and a
range of operational issues, including
decreasing ore grades. In addition, the
possibility of greater regulation and
a political climate not well disposed
towards mining cast a shadow over
our industry.
To have achieved the results outlined in
this report is little short of outstanding,
and I would like to pay tribute to the
management and operating teams
who worked hard to ensure that we
delivered an excellent performance
that repays the trust and support
that all our stakeholders have placed
in our company.
Throughout our history,
Fresnillo plc has proudly
built a track record of
managing the setbacks
associated with mining
and weathering storms
not of our own making.”
Steady production
despite difficulties
Silver production was in line with our
guidance for the year, while production
of gold was marginally above the top
end of guidance. Key factors affecting
silver production included good
performances at San Julián Veins,
Saucito and Juanicipio, which helped
to offset lower output at San Julián
DOB and Fresnillo. Gold production
rose on the back of a strong increase
in production at Fresnillo, Saucito
and San Julián Veins, as well as an
effective turnaround at La Herradura
following heavy rains and changes to
the mine sequence.
The cost reductions and operational
efficiencies we have introduced in
our mines are yielding results in line
with – or in some cases ahead of – our
expectations. Perhaps the greatest
example of turnaround has been at
Ciénega, where both performance and
prospects have been transformed. At
the start of the year we believed that
the mine had only a limited future,
but the situation today could not be
more different due to the successful
execution of a high-quality plan. We
have seen excellent results and positive
cash flow, with exploration activities
opening up new areas that have the
potential to contribute to production
in both the short and long term.
We achieved US$3,639.9 million in
Adjusted revenue during the year.
This represented an increase of 26.9%,
primarily due to the increase in silver
and gold prices, supported by our
positive production performance,
which represented 19.2% of the increase.
Gross profit more than doubled, with
an increase of 147.7% year-on-year
to US$1,246.3 million, mainly driven
by higher Adjusted revenue and
decreased costs, primarily due to cost
reduction initiatives and efficiencies
and, to a lesser degree, by the effect
of a weaker Mexican peso vs US dollar
exchange rate. These factors partially
offset inflationary headwinds during
the year. Cash and other liquid funds
increased from US$534.6 million to
US$1,297.8 million primarily driven
by cash generated from our mining
5
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operations, which more than offset the
use of funds in capital expenditure and
dividend payments. Please see pages
51-57 for further details on our financial
performance.
Our well-established and respected
dividend policy, which is the basis
for continued shareholder returns,
remains unchanged. We aim to pay
out 33-50% of profit after tax each year,
while making certain adjustments
to exclude non-cash effects in the
income statement. Dividends are paid
in the approximate ratio of one-third
as an interim dividend and two-thirds
as a final dividend. Before declaring
a dividend, the Board carries out a
detailed analysis of the profitability
of the business, underlying earnings,
capital requirements and cash flow. Our
goal is to maintain enough flexibility
to be able to react to movements
in precious metals prices and seize
attractive business opportunities.
For 2024, we declared an interim
ordinary dividend of 6.4 US cents per
share, with a final ordinary dividend
of 26.1 US cents per share, bringing
the total for the year to 32.5 US cents
per share.
Following a comprehensive review
of the Group’s financial position, its
strong balance sheet, and in light of
the positive free cash flow that we are
expecting to generate in the coming
years, we have decided to declare a one-
off special dividend of 41.8 US cents per
share, payable at the same time as the
2024 final ordinary dividend.
A changing political climate
We anticipate a more positive approach
to mining from the team working under
President Claudia Sheinbaum, given
their increased focus on dialogue which
bodes well for the future. Our belief and
expectations are that we can now look
forward to a more supportive business
environment – one that will provide
greater certainty over future mining
concessions, while also helping us to
achieve our ambitious targets around
the use of renewable energy.
Preparing for the future
In addition to ongoing operational
efficiencies, we anticipate that we
will begin to reap the rewards of our
exploration pipeline in the near future.
Although Orisyvo may take longer
than initially expected to become an
operational mine, we have made good
progress at Rodeo and Tajitos, as well as
at Guanajuato, where the discovery of
significant silver-rich veins is giving rise
to optimistic forecasts.
We continue to invest in exploration
activities across Mexico, notably on
brownfield sites, as well as in South
America. In Chile, we have progressed
a joint venture with a local company,
while in Peru we have begun drilling
at several of our projects. At the same
time, we are constantly identifying and
evaluating good projects and M&A
opportunities in Mexico and in other
mining jurisdictions, such as Canada,
where we see potential for acquiring
late-stage exploration projects to
complement our existing portfolio.
In a rapidly evolving world, sustainability
remains central to how we create
long-term value for our stakeholders.
We believe that caring for society and
the environment enhances, rather
than detracts from profitability; and
that by focusing on the challenges
and opportunities most material to
our business and the regions where
we operate, we will be able to align our
strategic goals to create meaningful,
lasting and beneficial impact for society
and the environment, as well as for
our business.
The wellbeing of our workforce is the
cornerstone of any sustainable future,
and I am pleased to note that our
underlying safety metrics again showed
improvement. Performance at several
of our mines is at or close to being
within the ranges of the International
Council on Mining and Metal (ICMM)
safety indexes. However, the fact that
we experienced the fatalities of two
contractors during the year shows that
we must do better.
We have continued to make advances
in sustainability matters that are
critical to our business and underline
our commitment to be a responsible
corporate citizen. For example, we
have made significant progress in
increasing our renewable electricity
consumption and replacing freshwater
with municipal treated wastewater in
our industrial processes. Furthermore,
we strengthened partnerships with the
government through our contribution
to the 2024-2030 National Water Plan,
supporting the human right to water
with a voluntary annual return of 300,000
m³ and a US$7 million investment in
water treatment and potabilisation
projects in the Fresnillo district.
One of the key challenges we face is
around the operating environment
in Mexico. As I have mentioned
above, the early indicators of the
new government’s approach are
broadly positive and I look forward to
collaborating with them to ensure that
the work we carry out at Fresnillo plc
benefits all our stakeholders, including
the people and economy of Mexico.
6
Fresnillo plc Annual Report and Accounts 2024
Board activities
During our regular meetings, the Board
discussed a wide range of matters
including operational efficiencies as well
as how possible political developments
could impact the business, as the
election drew closer.
Three key themes guided our
deliberations during the year. The
theme of ‘Re-balancing Focus’
demonstrated our recognition that
Board members should have a full
and detailed understanding of how
Fresnillo plc works as well as the
challenges and opportunities we face.
To this end, the key Board event of the
year was a three-day visit to Mexico in
July when members gained valuable
knowledge of the mines at Saucito and
Juanicipio and held two days of strategy
discussions with the Executive Team.
‘Managing Succession’ was our second
important theme. As I report below, the
Board underwent a number of changes
at the 2024 AGM and this process will
continue, although to a lesser extent,
at the 2025 AGM.
Finally, we focused on ‘Reconnecting’ in
order to identify the most appropriate
balance between online and in-person
meetings. When we come together in
person, for example at the meeting in
July, we are able to forge and enhance
vital personal relationships that will
benefit the Board when it holds
meetings online.
Changes to the Board
The AGM in May saw a number of
changes to the Board.
Bárbara Garza Lagüera stepped down
having served as an independent NED
for ten years. Charlie Jacobs also ceased
to be an independent NED, and Senior
Independent Director, but remains on
the Board as a Non-Independent NED,
while Juan Bordes did not stand for
re-election and therefore ceased to be
a Director. I would like to thank all three
for their past service and I look forward
to continuing to work with Charlie in
the years ahead.
We were pleased to appoint Judith
Macgregor as Senior Independent
Director, and also Ms Luz Adriana
Ramírez and Ms Rosa Vázquez as
Independent Non-Executive Directors.
In addition, Georgina Kessel and
Guadalupe de la Vega were appointed
as members of the Nominations
Committee in place of Bárbara Garza
Lagüera and Charlie Jacobs.
The Board and I believe that these
appointments will underpin the
excellent progress we have made
towards benefiting from a talented,
diverse Board of Directors.
Outlook
We expect global geopolitics to
continue dominating the months
ahead, with the ongoing wars in
Ukraine and the Middle East adding
to the possibility of increased tensions
between the US and China, as well
as greater protectionism following
the recent election in the US. We will
continue to monitor developments
and, where practicable, shape our
business to meet any challenges and
opportunities that emerge.
Closer to home, we anticipate that
a more business-friendly climate
will begin to have an impact during
the latter months of 2025 and in the
following years.
The operational efficiencies initiated
by our teams led to a good production
performance in 2024 and I expect this
to also be the case in 2025, with steady
profitability underpinned by continued
high prices for silver and gold.
The longer-term outlook is encouraging.
We anticipate that at least one of the
prospects in our exploration pipeline
will join our development portfolio in
the coming two to three years, and
expect our investments in exploration
in Mexico, Chile and Peru to also make
good progress.
As always, our efforts will be guided
by our Purpose ‘to contribute to
the wellbeing of people through
the sustainable mining of silver and
gold’ and will be delivered by skilled,
dedicated teams with the experience
and expertise that is the envy of many
of our peers. On behalf of the Board,
I thank every employee at Fresnillo
plc as well as our other stakeholders
– suppliers, local communities, the
government and shareholders – for
their support during what has been
a successful year. I look forward to
working with you all in 2025 as we
continue to navigate the challenges
and opportunities ahead.
Alejandro Baillères
Chairman
CHAIRMAN’S STATEMENT CONTINUED
7
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Strategic Report
Governance
Financial Statements
Additional Information
SHAPING OUR BUSINESS
BY FOCUSING
ON OPERATIONS TO IMPROVE
EFFICIENCIES
The San Carlos shaft is now
operational, reducing haulage
distances and cutting costs.
8
Fresnillo plc Annual Report and Accounts 2024
CHIEF EXECUTIVE’S STATEMENT
OCTAVIO ALVÍDREZ
In addition to the good
progress we made with
our existing operations,
we also advanced several
exciting exploration
projects along
our pipeline.”
In addition to the good progress we
made with our existing operations, we
also advanced several exciting exploration
projects along our pipeline. These provide
significant optimism for the medium-
and long-term future of Fresnillo plc,
and we look forward to reporting more
developments in due course.
Production highlights
and price review
Overall, production was stable and
consistent across the year, in line with
the guidelines we set out in January.
Attributable silver production remained
at 56.3 moz, driven by good results at
San Julián Veins, Saucito and Juanicipio,
as well as a strong turnaround at
Ciénega. Although weather-related
issues affected gold production at
La Herradura earlier in the year, a
recovery programme saw performance
at this mine improve rapidly in the
last half which, together with higher
production at Fresnillo, Saucito and San
Julián Veins, led to an increase in gold
production of 3.4% to 631.6 koz.
Attributable by-product lead and zinc
production increased 14.8% and 8.3%
to 66,400 tonnes and 116,646 tonnes
respectively, primarily due to the
increased contribution of Juanicipio
and Saucito and higher ore grades
at Fresnillo.
Please find more details on production
at each of our mines on pages 31-45
During 2024, the increase in silver and
gold prices was even more pronounced
than in the previous year. The average
realised silver price was US$28.78 and
that for gold US$2,453.58, up 21.7% and
25.3% respectively. The average price for
zinc increased by 8.7%, while that for
lead decreased by 2.7%.
Demand for silver outweighed supply
for the sixth consecutive year, driven
by its role as an essential component
in photovoltaic applications, 5G
networks, and electric vehicles and
their infrastructure. Despite some
countries rowing back on their net
zero ambitions, we believe that the
world in general will continue to
pursue these new technologies,
underpinning demand for silver. Silver
is also essential to many applications of
nanotechnology in the food, medical
and electronics sectors, all of which are
forecast to grow in the years ahead.
2024 was a year in which
events in Mexico – and
globally – threatened to
negatively impact our
performance. However, due
to the actions we undertook,
together with a number of
positive economic trends,
we ultimately achieved a
highly satisfactory outcome.
Production was in line
with expectations, while
sustained high prices and
a weaker exchange rate
combined to ensure that
we delivered a positive
financial performance.
As the year began, several factors
beyond our control threatened to make
2024 one of the most challenging years
in Fresnillo plc’s history. Although some
of our assets, such as Juanicipio, were
producing high volumes of good quality
ore, decreasing grades elsewhere,
together with a range of operational
difficulties and external factors,
threatened to come together and lead
to a relatively poor financial outcome.
The response from our teams was to
work diligently to systematically identify
and implement a series of initiatives
that targeted those levers under our
control, such as costs and efficiencies,
while mitigating where possible the
geological factors that could cause
difficulties. Our people worked tirelessly
and with a high degree of skill. Once
again highlighting the value of the
extensive pool of proven talent that
has established Fresnillo plc as a global
leader. The results of their efforts are
reflected in our financial results, which
also benefitted from sustained high
prices for silver and gold throughout
the year as well from a weaker Mexican
peso vs US dollar exchange rate.
A POSITIVE PERFORMANCE,
AN OPTIMISTIC OUTLOOK
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Demand for gold remained healthy,
in line with the increased global
demand for consumer electronics as
well as emerging applications in the
automotive, aerospace and high-speed
computing sectors. Gold is also valued
as an investment and safe haven, and is
vital to the jewellery sector.
For both metals, demand from investors
was exacerbated by geopolitical tensions.
These included the expectation of
interest rate changes at the end of 2023
and again early in 2024, and uncertainties
around the US election – followed by
speculation about the measures that
may or may not be implemented by the
incoming President.
Please see pages 20-21 for more
details on prices and how they have
been influenced by market dynamics
Executing our strategy
Our four strategic pillars guide every
aspect of our actions, and shape
the way in which we aim to seize
the opportunities and rise to the
challenges ahead.
Maximising the potential
of existing operations
Our assets are one of our greatest
strengths. They are the foundation
upon which our past performance
was built as well as the platform for
future success – and we work hard to
ensure that they operate as efficiently
as possible.
During 2024, we made good progress
at many of our mines. At Juanicipio,
for example, the beneficiation plant is
now operating at full capacity and the
flotation plant has been optimised,
leading to an increase in both the
recovery rate and the volume of
ore processed.
While volumes reduced at Fresnillo due
to several factors, the preparation of
new stopes is being expedited by the
purchase and implementation of new
equipment for the narrower veins we
have been encountering. Furthermore,
the commissioning of the new San
Carlos shaft followed by the successful
connection of the two sections of shaft
towards the end of the year is already
paying dividends in terms of reduced
haulage and therefore lower costs.
At Saucito, increased productivity and
greater availability of equipment have
driven a strong comeback from the
mine’s low point in 2023. The Saucito
team is now confident that they can not
only maintain but also build upon the
recent improvements in production.
Given the challenges faced, the most
impressive performance was at
Ciénega. Our previous view was that
this mine had a limited lifespan in
the Fresnillo plc portfolio, with sale or
closure a possibility in the short term.
However, now both performance and
prospects have been transformed by
a team of retrained miners rigorously
implementing a set of efficiency, cost
reduction and mitigation measures.
These miners are now expected to
become future leaders at other mines
across the business.
A similarly important step change
took place at San Julián, where
the Disseminated Ore Body (DOB)
approached the end of its life. Production
at San Julián Veins increased during the
year on the back of higher ore grades
and improved dilution control, partially
compensating for the fall in production
at the DOB. Exploration activities have
identified high grades of silver and
also some gold, giving us renewed
confidence in the future of the mine.
Performance at our open pit La
Herradura mine remained a challenge,
with the loss of skilled people in the
previous year being further aggravated
by floods and changes in the mine
sequence in the first half of the year to
impact preparation and development.
However, a plan was put in place and
production recovered in the fourth
quarter and is now stable. We are
continuing to define how best we can
develop underground activities at La
Herradura and expect operations to
commence towards the end of 2025
or early in 2026, adding important
production that is not currently
included in our projections.
Towards the end of 2024, we received
notification from our parent company
Industrias Peñoles that operational
difficulties at the Sabinas mine could
impact the Silverstream Agreement
between our companies. After assessing
the possible implications of this
situation, and based on the information
available we reassessed the valuation
of the Silverstream Agreement. This
resulted in the recognition of a loss of
US$182.3 million, net of its amortisation
and before taxes, at the end of the year.
Please see page 55 and Note 14 to the
financial statements for further details.
In the year ahead, we will continue
working on increasing productivity and
implementing cost reduction activities
across all our mines with the objective
of prioritising profitability, while
optimising production levels.
Delivering growth through
development projects
As we reported last year, we have a
number of very exciting exploration
projects that are making good progress
through our pipeline.
Many metallurgical and economic
studies are currently underway across
all the projects discussed in the strategic
pillar below, as we work towards
identifying those with the greatest
operational and financial feasibility.
Extending the growth pipeline
We continue to benefit from a range
of mining concessions and exploration
projects in Mexico, Peru and Chile. These
include four advanced exploration
projects that all have the potential to
become development projects.
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Fresnillo plc Annual Report and Accounts 2024
Among these, Guanajuato is expected
to be a stellar performer and to make
an important contribution to the
Group’s silver production. Guanajuato
is a historic, world-class silver and gold
epithermal vein field stretching more
than 40 kilometres along this central
Mexican state.
During the year, we carried out 101,521
metres of core drilling, with a focus on
the emerging southern area where
significant silver-rich veins have been
discovered. A preliminary conceptual
study has highlighted good economic
potential for the development of this
area, and we are therefore ramping
up our step-out drilling, metallurgical,
environmental permitting, and
community engagement activities.
Further exploration and studies will
be carried out over the next five years
with the aim of developing this project
in 2030.
Over the last 12 months we concluded
that the gold project at Orisyvo could
take longer to come to fruition than
previously expected. This is due to
challenges associated with resources
and the recovery rates required
to increase production volumes,
combined with the potentially
large capital expenditure required.
A disseminated gold deposit in the
Sierra Madre mountains of Chihuahua
state, Orisyvo was the subject of
pre-feasibility studies in the first half
of the year, which showed positive
opportunities for an underground
operation and associated infrastructure,
including mineral processing and
tailings storage facilities. We have
also continued to engage with local
communities and authorities around
education, health, environmental care
and entrepreneurship – and we expect
to commence consultations with
indigenous communities in 2025.
Tajitos will be a key focus for our efforts
next year, in parallel with Rodeo. An
open pit, disseminated gold project in
the Herradura Corridor of northwestern
Sonora state, Tajitos was subject to
a full evaluation of the main resource
area in 2024, with encouraging results.
This was followed by an update of the
mineral resources and a preliminary
economic assessment. We drilled
41,640 metres during the year and
also started environmental studies,
as well as continuing our community
relations programme.
At the Rodeo open pit gold project, in
central Durango state, we commenced
exploration activities following positive
engagement with the local Ejidos.
The drilling programme focused on
increasing the resources in the main pit
area and obtaining samples for detailed
metallurgical testing. We expect to
finalise exploration during the middle
part of 2025 and will then be in a position
to evaluate our options.
Brownfield exploration continued
across the portfolio, specifically in the
Fresnillo and San Julián districts, while
greenfield activities at the Lucerito and
Candameña projects showed positive
results for both gold and silver.
Outside Mexico, we began drilling at
some of our prospects in Peru, and
we made progress in Chile with our
joint gold-silver venture with Sociedad
Química y Minera de Chile (SQM), the
world’s biggest lithium producer. We
continue to monitor opportunities to
acquire projects in the later stages of
exploration, with recent efforts focusing
on Canada.
At the end of the year, silver in
consolidated overall mineral resources
increased 1.4% vs 2023 at 2.25bn oz as
the positive exploration results at the
Guanajuato and Lucerito exploration
projects and Fresnillo were offset by
depletion. Gold in consolidated overall
mineral resources also increased 1.4% vs
2023 to 38.5 moz primarily driven by the
positive exploration results at Guanajua-
to, Lucerito and Candameña, partly offset
by depletion at our operating mines.
CHIEF EXECUTIVE’S STATEMENT
CONTINUED
In the year ahead, we
will continue working on
increasing productivity
and implementing cost
reduction activities
across all our mines
with the objective of
prioritising profitability.”
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Silver in consolidated overall ore reserves
decreased 7.1% to 331.3 moz mainly
from mining depletion and a more
conservative approach to resource
estimation at San Julián and Ciénega.
Gold in consolidated overall ore reserves
increased 2.5% to 7.2 moz mostly as a
result of the higher price and lower costs
and cut-off grades at La Herradura.
For 2025, the exploration budget will
increase to US$190 million.
Advancing and enhancing the
sustainability of our operations
Although our injury frequency rates
continue to move in a positive direction,
with a steady overall improvement since
2017 – a 37.2% reduction in TRIFR (7.59)
and a 35.8% reduction in LTIFR (4.75)
– we sadly experienced two fatalities
during the year. No loss is acceptable,
and we remain deeply committed to
ensuring that everyone who works at
our facilities returns home safely at the
end of each day. Our hearts go out to
their families, friends and colleagues
during this difficult time, and we will
honour their memory by continuing
to strengthen our safety culture.
Both fatalities occurred in non-routine
tasks involving contractor personnel,
underlining the urgent need for greater
rigour in planning, risk analysis, and
control of activities both within and
outside our productive value chain.
We are strengthening engagement
with business partners to bring them
up to the same standards we uphold.
Through the ‘I Care, We Care’ strategy,
we will continue to consolidate our
health and safety management system
by minimising risks, improving safety
and enhancing productivity.
Sustainability related issues around
water, community relations, the
environment and the use of renewables
remain critical to Fresnillo plc, but also to
the Mexican incumbent administration.
Continued dialogue with policymakers
following the election supports the
sustainable future of mining in Mexico.
In terms of our environmental
performance, we have already met
and, in fact, exceeded, our ambitious
target for 75% of renewable electricity
consumption by 2030 – recording a
new high of 80.6% during 2024 – and
are continuing our efforts to maintain
future levels above 75%.
Additionally, the dual-fuel infrastructure
at La Herradura is expected to be
commissioned in 2025, further reducing
our overall carbon intensity, which has
already seen a 28% decrease versus 2023.
We earn and maintain the trust of
communities through accountability,
meaningful engagement, and support
for their key concerns. In 2024, we
launched three inaugural programmes
to strengthen community relations:
fostering collaboration between
operational teams and communities,
improving communication about
Fresnillo plc’s performance and
responsible mining practices, and
mitigating local social risks with a strong
emphasis on ethics and human rights.
In 2025, we will have the opportunity
to test our community relations
model further when we accelerate
engagement with several isolated
communities. At Orisyvo, where
alternatives to mining for sustainable
employment are limited, our focus
will be on listening carefully to local
needs and clearly communicating the
economic and social benefits of mining.
While mining has historically been a
male-dominated industry, we have
made significant strides in diversity
and inclusion. Women now represent
12.46% of our total workforce and 9.43%
of managerial positions, surpassing
our 2025 goals. We eagerly anticipate
welcoming a woman as a general
manager of an operating mine in the
near future, reflecting our commitment
to inclusivity and leadership diversity.
We are also proud to maintain our
position as one of the Mexican public
companies with the highest share of
women on our Board of Directors.
Looking ahead
The global economy is in a state of flux,
and as has been the case for several
years, 2025 is expected to be a period of
challenge and uncertainty. Geopolitical
tensions are likely to increase, with
the ongoing wars in Ukraine and the
Middle East continuing to contribute to
instability. Tensions between the US and
China as well as in Korea may intensify,
further fuelling negative sentiment.
Within Fresnillo plc, our challenges will
centre around the structural changes
in some of our mines, specifically at San
Julián where there is greater onus on
its veins now that the DOB has been
depleted. La Herradura could also see
production fall compared to the levels
achieved in 2024.
However, with challenges come
opportunities – and we are committed
to managing our operations efficiently
without compromising on the safety
of our people or on our continued
investment into our longer-term
growth pipeline.
Our financial situation is sound, with
healthy cash flow able to fund the
significant investments that are
necessary in order to drive Fresnillo plc
forward. For example, we will continue
to invest in new operational and cost
reduction measures, while also doing
everything we can to make sure that
our leading exploration prospects can
take that important next step and
become real development projects.
Furthermore, we will remain alert to
acquisition opportunities and work with
the grain of government to ensure that
the voice of mining continues to be part
of the conversations around how best to
support the Mexican economy.
Although metals prices are beyond our
control, demand for silver and gold is
increasing, largely in line with the shift
towards green technologies, and we do
not expect to see this trend reversed.
In our view, prices will, in all probability,
remain at high levels through the
months ahead.
This was a year when our teams
stepped up and showed themselves
to be among the most talented and
dedicated in our industry, and it has
been a privilege to work alongside them.
I would like to thank all stakeholders
– from suppliers, government officials
and local communities to the investors
who continue to place their trust in us
– for their support and encouragement.
Together, we can face the future
with confidence.
Octavio Alvídrez
Chief Executive
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BUSINESS MODEL
1
EXPLORE
With a sustained and realistic exploration strategy that
invests across price cycles, we have a proven track record of
discovering world-class gold and silver mines through our
respected team of 86 geologists in Mexico, Peru and Chile,
supported by 90 specialists across claims management, land
negotiation, safety, community relations and environmental
control. Our team, which also comprises 343 assistants drawn
from local communities, has access to realistic budgets and is
hugely respected across our industry.
For more information
see pages 46-50
2
DEVELOP
We assess each potential operation against a set of strict
criteria including risk, potential returns, and the long-term
sustainability and value to our stakeholders. We only approve
projects with the potential to create value across precious
metals price cycles. Approved projects have the ability to
optimise long-term productivity at minimal risk, drawing
synergistic benefits from our district consolidation strategy
whilst also creating opportunities for costs to be shared
through our association with the Peñoles Group and members’
common requirements across a number of service areas.
STRATEGIC RESOURCES AND RELATIONSHIPS
People
We rely on the skills, experience and
commitment of our people to create
sustainable value. Attracting, developing
and retaining the best people is crucial
in enabling us to meet our business
goals. We have a skilled workforce of
7,179 Unionised workers and employees
and 10,916 contractors who provided
services along our full value chain during
2024, supported by an experienced and
purpose-led leadership team.
Natural resources
Our operations rely on a range of natural
resources, including surface land, water
and energy.
• 1.6 million hectares in mining
concessions in Mexico.
• 61,314 megalitres of reused water
(efficiency of 84.19%).
• 80.6% of our electricity consumption
comes from renewable sources.
Relationships with key
stakeholders
Our stakeholders include governments,
communities, suppliers, customers,
shareholders and our workforce. We
maintain purposeful engagements with
these stakeholders to understand the
issues that matter to them, address them
collaboratively and gain their trust. We
balance the issues that matter to them,
ensuring the social acceptance of our
operations and maintaining our licence
to operate in order to create shared value
and achieve long-term success.
HOW WE OPERATE – OUR COMPETITIVE ADVANTAGE
Our ability to create value is underpinned by the quality of our assets,
the capability of our people, operational performance, mitigation of risks
and disciplined capital allocation.
Fresnillo is a leading precious metals mining company with a world-class portfolio of mining
operations and undeveloped resources.
3
OPERATE
Through our commitment to sustainable business practices,
we have built a portfolio of high-quality assets and ample
mineral resources, sustained through continued investment in
infrastructure and technological improvements. At all times, we
target safe, environmentally-responsible working practices and a
high-performing culture that delivers production at competitive
costs. We aim to improve productivity by evolving our mining
practices, optimising capacity and beneficiation processes.
For more information
see pages 31-45
4
SUSTAIN
Embedded within our business philosophy is the conviction that
mining operations must integrate responsible business practices
at every level of the decision-making process and that stakeholder
concerns are addressed comprehensively. We aim to surpass
expectations in the areas of ethical conduct, health and safety,
environmental stewardship and governance, complemented by a
keen awareness of the needs and aspirations of local communities.
Guided by an ethical culture and an extensive understanding of
Mexico’s economy, culture and communities, we take pride in our
reputation as a trusted corporate leader, committed to sharing the
benefits of mining with wider society.
1 Net cash (Cash and other liquid funds at 31 December 2024 – Debt at 31 December 2024).
For more information
see page 102
SHARING THE BENEFITS
Economic value distributed
is considered to be a social
performance measure.
Wages and benefits to workers (US$)
149.7m
Payments to suppliers (contractors) (US$)
1,773.5m
OUR SUSTAINABILITY FRAMEWORK
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Building Trust
Relationships with key
stakeholders continued
We are active members of several mining
organisations and associations, where
we use our influence to promote greater
recognition of the advantages that
mining brings to society. We believe that
mining must be compatible with high
stakeholder expectations in terms
of ethical, social and environmental
performance. This underlines the
importance of integrating responsible
business practices deeply into our
business model and considering factors
that affect stakeholders at every critical
decision-making level.
Financial strength
Our business is underpinned by a
disciplined approach to capital allocation
and strict cost controls. Our balance
sheet is a key strength, providing a
resilient platform to invest though the
cycles to generate sustained returns to
shareholders.
• Total equity of US$4,211.5 million.
• Net cash
1
of US$458.3 million
Property and equipment
Our assets include properties,
infrastructure, processing plants
and mining equipment.
• Net book value of property, plant and
equipment of US$2,860.9 million.
Technology
We adopt smart technology to address
productivity, growth and sustainability
challenges through leveraging the
knowledge of our partners, identifying
and implementing innovative and
effective solutions across our value chains.
Payments to federal government (US$)
221.2m
Payments to local governments (US$)
8.0m
Total economic impact (US$)
2,152.5m
Partnering with our communities
Caring for our people
Protecting the environment
For more information
see pages 62-63
Doing business ethically and responsibly
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4
SUSTAIN
RISK MANAGEMENT FRAMEWORK
2
DEVELOP
3
OPERATE
1
EXPLORE
OUR STRATEGY
Our Purpose is to contribute to the wellbeing of people, through the sustainable
mining of silver and gold.
We engage our people in our long-term strategy to instil a Purpose-led culture where everybody
understands how we do business. The values that are embedded in our culture support our strategy,
inspiring winning behaviours on ethics, safety, innovation and operational excellence.
OUR CULTURE
Our culture is the cornerstone of our safe and successful
operations, and is rooted in our core values of:
• Trust
• Responsibility and Respect
• Integrity, and
• Loyalty
Our culture shapes decisions and actions at every level
of the organisation.
For more details see
Our culture on page 64
ROBUST CORPORATE GOVERNANCE
We recognise that good governance is an important
enabler of a prudent and well-considered approach,
ensuring that short- and long-term decisions
consider the interests of the Group and those of
our stakeholders. At the heart of our governance
framework is the Board of directors consisting of
non-independent and independent Non-Executive
Directors who hold the Executive Management to
account for the effective and sustainable operation
of the Group’s business. We adhere to the principles
of the UK Corporate Governance Code and apply
its Provisions in a way that, we believe, optimises
the oversight exercised by the Board. We keep our
governance structures under review and evolve them
to meet the needs of the business. The Board and its
Committees focus on strategy, evaluate financial and
operational performance and monitor risks and controls
on an ongoing basis to ensure that Fresnillo achieves its
objectives in line with its Purpose and values.
For more details see Corporate Governance
on pages 144-198
RISK MANAGEMENT
We have a structured internal risk management
process in place to identify risks, whilst simultaneously
considering the views and interests of our stakeholders.
The accurate and timely identification, assessment and
management of risks gives us a clear understanding
of the actions required throughout the organisation
in order to achieve our objectives. We ensure that our
networks, systems and data are secure, in accordance
with best practice.
Risk can manifest as opportunities or threats that
can affect our business performance. We balance
mitigating and monitoring our risks with maximising
the potential reward.
For more details see Managing Our Risks
and Opportunities on pages 116-138
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Extend and maintain a robust growth pipeline
• Continue to invest in our exploration pipeline.
• Increase the resource base to drive future growth.
• Increase gold production to replace decreases at
Noche Buena and Herradura.
• Identify silver resources in the Fresnillo, San Julián
and Guanajuato Districts.
• Concentrate on identifying M&A targets, not only
in Mexico but also in the wider region.
Maximise the potential of our operations
• Focus on the profitability of our mines.
EXPLORE
1
OPERATE
3
Deliver profitable growth,optimise
cash flowand returns
• Progress the Orisyvo and Guanajuato projects.
• Identify two further world-class assets with the
potential to complement our portfolio.
• Continue advancing projects in the exploration
pipeline towards development.
Advance and enhance the sustainability
of our business
• Strengthen modern mining practices.
• Empower people.
• Address local and regional priorities.
• Generate shared value.
DEVELOP
2
SUSTAIN
4
OUR LONG-TERM STRATEGIC PRIORITIES
We take a long-term view of our strategic priorities, which are supplemented with nearer-term targets and goals, as set out on
pages 16-19.
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Fresnillo plc Annual Report and Accounts 2024
FINANCIAL
Earnings per share excluding
post-tax Silverstream
revaluation effects
This is calculated as attributable
profit available to equity shareholders,
excluding the revaluation effects of
the Silverstream contract, divided
by the weighted average number
of shares in issue during the period.
It measures net profit levels generated
for equity shareholders.
EBITDA, EBITDA margin and cash flow from operating activities
before changes in working capital
EBITDA is calculated as profit for the year from continuing operations before income tax,
less finance income, plus finance costs, less foreign exchange gain/(loss), less revaluation
effects of the Silverstream contract and other operating income, plus other operating
expenses and depreciation.
EBITDA margin is EBITDA divided by total revenue.
Both EBITDA and cash flow from operating activities before changes in working capital
measure the Group’s ability to generate cash from its core business.
2024 Group KPIs/performance
Earnings per share excluding post-tax
Silverstream revaluation effects
(US$/share)
0.364
Increased profits divided across an unchanged
weighted average number of shares in issue.
0.440
0.572
0.351
0.310
0.364
2023
2022
2021
2020
2024
EBITDA and EBITDA margin
(US$ and %)
1,547.3m 44.3%
Increased vs 2023 due to a higher gross profit, a
decrease in administrative and corporate expenses
and lower exploration expenses.
1,169.1
1,206.3
751.1
655.7
1,547.3
24.2%
44.3%
30.9%
44.6%
48.1%
2023
2022
2021
2020
2024
Cash flow from operating activities
before changes in working capital
(US$)
1,559.8m
Increased vs 2023 due to the higher profits.
1,168.7
1,208.3
743.1
649.3
1,559.8
2023
2022
2021
2020
2024
EXPLORE
1
2024 Goals
• Invest US$190 million with a
continued focus on the Fresnillo and
San Julián districts and advanced
exploration projects.
• Further develop resource modelling
and reserve engineering activities
initiated in 2020, with the aim of
reporting proven reserves for all
operating assets.
• Convert resources into reserves
at all our operating mines.
• Continue the exploration
programme at Juanicipio to fully
delineate the Valdecañas vein at
depth.
• Advance pre-feasibility to feasibility
level studies at Orisyvo.
• Complete the full delineation of
the Tajitos ore bodies and advance
metallurgical, geotechnical and
conceptual studies.
• Accelerate drilling in the Guanajuato
District and conduct detailed
metallurgical investigations.
• Update the Preliminary Economic
Assessment of priority areas.
• Continue discussions with the
local communities at Rodeo and
conduct an intensive infill, step-out,
condemnation and geotechnical
drilling programme upon
completion of agreements.
• Continue drilling several targets at
Capricornio in Chile, resume drilling
at Supaypacha and work towards
permitting the drill-testing of targets
at Santo Domingo and Pilarica in
Peru in 2025.
2024 Progress
• US$165.0 million was invested
in risk capital in exploration.
• Proven reserves were reported
at all mines.
• Mixed results were obtained as
a more conservative approach to
reserve estimates was partly offset by
revised economic assumptions and
costs and cut-off grade strategies
(see pages 46-50).
• Valdecañas vein fully delineated,
confirming the structure continues at
depth, albeit with lower silver grades.
• Several pre-feasibility level studies were
completed at Orisyvo and are currently
under review.
• Conceptual studies continued at
Tajitos and a preliminary economic
assessment is in progress.
• Resources increased at Guanajuato and
a preliminary economic assessment of
priority areas is ongoing.
• Long-term land access with local
communities was reached at Rodeo
and drilling resumed, albeit in the
last quarter.
• Drilling continued at Capricornio in
Chile, and community engagement
progressed at Supaypacha in Peru
in 2024.
2025 Strategic priorities
• Invest US$190 million in our exploration
pipeline, focused on the Fresnillo and
San Julián mines and advanced
exploration projects.
• Continue improving our grade control
and reconciliation process to increase
proven reserves.
• Convert resources into reserves at
all our operating mines.
• Conclude preliminary economic
assessment at Tajitos
• Continue drilling campaign and progress
critical technical work to determine
economic viability at Rodeo.
• Advance permitting and de-risking
the Orisyvo and Guanajuato projects.
• Continue advancing conceptual studies
to conduct a preliminary economic
assessment at Tajitos.
2024 Group KPIs/performance
Quantified, measured, indicated and inferred resources at all our assets; an indicator
of the Group’s growth potential and ability to discover and develop new ore bodies.
2,292.5
2,319.7
2,203.9
2,219.7
2,250.5
2023
2022
2021
2020
2024
Attributable silver resources
1
(millions of ounces)
2,250.5
Increased due to the positive exploration results at
Guanajuato as well as metals prices and operating
costs updates at the Lucerito exploration project
and Fresnillo, partly offset by depletion and a more
conservative approach to resource estimation at
other mines.
1 2024 resources from the mines are presented as
of 30 June 2024. Resources from the exploration
projects are presented as of 31 December 2024.
38.9
39.0
39.1
37.9
38.5
2023
2022
2021
2020
2024
Attributable gold resources
1
(millions of ounces)
38.5
Increased primarily driven by the positive
exploration results at Guanajuato and metal
price and operating costs updates at the Lucerito
and Candameña projects, partly offset by depletion
at our underground mines.
1 2024 resources from the mines are presented as
of 30 June 2024. Resources from the exploration
projects are presented as of 31 December 2024.
DEVELOP
2
2024 Progress
• There are no projects currently under
development and additional work is
required before our projects in the
advanced exploration phase can
become development projects.
2025 Strategic priorities
• Monitor infrastructure projects to make
sure they are developed in accordance
with the mine plans.
• Advance the Rodeo and Tajitos projects.
OUR STRATEGY CONTINUED
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FINANCIAL
Earnings per share excluding
post-tax Silverstream
revaluation effects
This is calculated as attributable
profit available to equity shareholders,
excluding the revaluation effects of
the Silverstream contract, divided
by the weighted average number
of shares in issue during the period.
It measures net profit levels generated
for equity shareholders.
EBITDA, EBITDA margin and cash flow from operating activities
before changes in working capital
EBITDA is calculated as profit for the year from continuing operations before income tax,
less finance income, plus finance costs, less foreign exchange gain/(loss), less revaluation
effects of the Silverstream contract and other operating income, plus other operating
expenses and depreciation.
EBITDA margin is EBITDA divided by total revenue.
Both EBITDA and cash flow from operating activities before changes in working capital
measure the Group’s ability to generate cash from its core business.
2024 Group KPIs/performance
Earnings per share excluding post-tax
Silverstream revaluation effects
(US$/share)
0.364
Increased profits divided across an unchanged
weighted average number of shares in issue.
0.440
0.572
0.351
0.310
0.364
2023
2022
2021
2020
2024
EBITDA and EBITDA margin
(US$ and %)
1,547.3m 44.3%
Increased vs 2023 due to a higher gross profit, a
decrease in administrative and corporate expenses
and lower exploration expenses.
1,169.1
1,206.3
751.1
655.7
1,547.3
24.2%
44.3%
30.9%
44.6%
48.1%
2023
2022
2021
2020
2024
Cash flow from operating activities
before changes in working capital
(US$)
1,559.8m
Increased vs 2023 due to the higher profits.
1,168.7
1,208.3
743.1
649.3
1,559.8
2023
2022
2021
2020
2024
EXPLORE
1
2024 Goals
• Invest US$190 million with a
continued focus on the Fresnillo and
San Julián districts and advanced
exploration projects.
• Further develop resource modelling
and reserve engineering activities
initiated in 2020, with the aim of
reporting proven reserves for all
operating assets.
• Convert resources into reserves
at all our operating mines.
• Continue the exploration
programme at Juanicipio to fully
delineate the Valdecañas vein at
depth.
• Advance pre-feasibility to feasibility
level studies at Orisyvo.
• Complete the full delineation of
the Tajitos ore bodies and advance
metallurgical, geotechnical and
conceptual studies.
• Accelerate drilling in the Guanajuato
District and conduct detailed
metallurgical investigations.
• Update the Preliminary Economic
Assessment of priority areas.
• Continue discussions with the
local communities at Rodeo and
conduct an intensive infill, step-out,
condemnation and geotechnical
drilling programme upon
completion of agreements.
• Continue drilling several targets at
Capricornio in Chile, resume drilling
at Supaypacha and work towards
permitting the drill-testing of targets
at Santo Domingo and Pilarica in
Peru in 2025.
2024 Progress
• US$165.0 million was invested
in risk capital in exploration.
• Proven reserves were reported
at all mines.
• Mixed results were obtained as
a more conservative approach to
reserve estimates was partly offset by
revised economic assumptions and
costs and cut-off grade strategies
(see pages 46-50).
• Valdecañas vein fully delineated,
confirming the structure continues at
depth, albeit with lower silver grades.
• Several pre-feasibility level studies were
completed at Orisyvo and are currently
under review.
• Conceptual studies continued at
Tajitos and a preliminary economic
assessment is in progress.
• Resources increased at Guanajuato and
a preliminary economic assessment of
priority areas is ongoing.
• Long-term land access with local
communities was reached at Rodeo
and drilling resumed, albeit in the
last quarter.
• Drilling continued at Capricornio in
Chile, and community engagement
progressed at Supaypacha in Peru
in 2024.
2025 Strategic priorities
• Invest US$190 million in our exploration
pipeline, focused on the Fresnillo and
San Julián mines and advanced
exploration projects.
• Continue improving our grade control
and reconciliation process to increase
proven reserves.
• Convert resources into reserves at
all our operating mines.
• Conclude preliminary economic
assessment at Tajitos
• Continue drilling campaign and progress
critical technical work to determine
economic viability at Rodeo.
• Advance permitting and de-risking
the Orisyvo and Guanajuato projects.
• Continue advancing conceptual studies
to conduct a preliminary economic
assessment at Tajitos.
2024 Group KPIs/performance
Quantified, measured, indicated and inferred resources at all our assets; an indicator
of the Group’s growth potential and ability to discover and develop new ore bodies.
2,292.5
2,319.7
2,203.9
2,219.7
2,250.5
2023
2022
2021
2020
2024
Attributable silver resources
1
(millions of ounces)
2,250.5
Increased due to the positive exploration results at
Guanajuato as well as metals prices and operating
costs updates at the Lucerito exploration project
and Fresnillo, partly offset by depletion and a more
conservative approach to resource estimation at
other mines.
1 2024 resources from the mines are presented as
of 30 June 2024. Resources from the exploration
projects are presented as of 31 December 2024.
38.9
39.0
39.1
37.9
38.5
2023
2022
2021
2020
2024
Attributable gold resources
1
(millions of ounces)
38.5
Increased primarily driven by the positive
exploration results at Guanajuato and metal
price and operating costs updates at the Lucerito
and Candameña projects, partly offset by depletion
at our underground mines.
1 2024 resources from the mines are presented as
of 30 June 2024. Resources from the exploration
projects are presented as of 31 December 2024.
DEVELOP
2
2024 Progress
• There are no projects currently under
development and additional work is
required before our projects in the
advanced exploration phase can
become development projects.
2025 Strategic priorities
• Monitor infrastructure projects to make
sure they are developed in accordance
with the mine plans.
• Advance the Rodeo and Tajitos projects.
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Fresnillo plc Annual Report and Accounts 2024
OPERATE
3
2024 Goals
• Prevent fatal or serious accidents.
• Produce between 55-62 moz silver
and 580-630 koz gold.
• Focus on cost reduction initiatives.
• Improve short- and mid-term
planning processes at the
Fresnillo district.
• Implement contractor cost
improvement initiative.
2024 Progress
• Two fatal accidents during the year,
one at Fresnillo and one at Ciénega.
• Produced 56.3 moz of silver
(including Silverstream) and 631.6 koz
of gold.
• Achieved US$40.0 million in cost
reduction initiatives and efficiencies.
• Cross-functional teams worked to
improve the short- and mid-term
planning process.
• Rationalised the contractor base
across the mines, with the number
of contractors decreasing from 12,516
to 10,916.
2025 Strategic priorities
• Prevent fatal or serious accidents.
• Produce between 49-56 moz silver
and 525-580 koz gold.
• Continue our focus on initiatives to
capture efficiencies and reduce costs.
• Improve the short- and medium-term
planning processes.
• Maintain ore throughput and improve
ore grades, primarily in the Fresnillo
district.
• Continue assessing optimisation
projects and define implementation
phases at Herradura.
• Implement the mine closure plans at
Noche Buena and San Julián DOB.
Production: Monitors total production
levels at our mines and contributions
from advanced development projects.
2024 Group KPIs/performance
2.0
2.8
2.7
3.1
2.8
54.3
53.5
51.1
50.0
50.3
56.3
56.3
53.7
53.1
53.1
2023
2022
2021
2020
2024
Attributable silver production
(millions of ounces)
56.3
Remained stable vs 2023 as the higher ore grades
and increased volumes of ore processed at San Julián
Veins and Saucito and the higher contribution of
Juanicipio following the first full year of operation at
the beneficiation plant were offset by the decreased
production at San Julián DOB as it approached
the end of its life, a decrease in volume of ore
processed and lower ore grade at Fresnillo, and lower
contribution from the Silverstream agreement.
The graph illustrates silver production from our own
mines, with shaded portion representing additional
ounces accrued under the Silverstream contract.
769.6
751.2
635.9
610.6
631.6
2023
2022
2021
2020
2024
Attributable gold production
(thousands of ounces)
631.6
Increased mainly due to the higher ore grade at
Fresnillo and increased ore processed and higher
ore grades at Saucito and San Julián Veins. This was
partly offset by a reduction in gold ounces recovered
from the leaching pads at Noche Buena, following
the cessation of mining activities in May 2023.
Proven and probable reserves:
A measure of the quality of the Group’s
operating assets and our ability to
extend the life of operating mines
at profitable levels.
457.4
419.8
396.1
356.6
331.3
2023
2022
2021
2020
2024
Attributable silver reserves
1
(millions of ounces)
331.3
Decreased primarily due to mining depletion and a
more conservative approach to resource estimation at
San Julián and Ciénega.
1 2024 reserves are presented as of 30 June 2024.
8.4
7.8
8.2
7.1
7.2
2023
2022
2021
2020
2024
Attributable gold reserves
1
(millions of ounces)
7.2
Increased mostly as a result of the higher price and
lower costs and cut-off grades strategy at Herradura.
1 2024 reserves are presented as of 30 June 2024.
SUSTAIN
4
2024 Goals
• Reduce TRIFR and Fatality rate.
• Use water efficiently and reduce
freshwater consumption.
• Increase our consumption of
renewable electricity.
• Implement Tailings Management
Systems across all mines.
2024 Progress
• Reduced TRIFR to 7.59 and Fatality
frequency rate to 0.044.
• Increased proportion of municipal
wastewater consumption to 30.2%.
• Increased renewable electricity
consumption to 80.6%, and reduced
our GHG emission intensity index to
0.0182 tCO
2
e per tonne of mineral
processed.
• Made progress in risk evaluation
and management of Tailings
Storage Facilities (TSFs).
2025 Strategic priorities
• Reduce TRIFR and Fatality rate to the
ICMM range by 2026.
• Reduce freshwater consumption.
• Consume (at least) 75% of renewable
electricity by 2030.
• Continue to implement the Tailings
Management System.
Further sustainability objectives are
outlined in our Sustainability section
on pages 62-63.
2024 Group KPIs/performance
Fatalities
(Number of fatal injuries to employees or contractors)
2
1
1
1
4
2
2023
2022
2021
2020
2024
Water intensity
(m
3
per tonne of mineral processed)
0.436
0.132
0.103
0.053
0.056
0.044
0.304
0.287
0.327
0.377
0.328
2023
2022
2021
2020
2024
Greenhouse gas intensity
(Tonnes of CO
2
e per tonne of mineral processed)
0.0182
0.0231
0.0232
0.0244
0.0248
0.0182
2023
2022
2021
2020
2024
Renewable electricity
(Percentage of renewable electricity consumption)
80.6%
48.4%
49.7%
35.6%
53.3%
80.6%
2023
2022
2021
2020
2024
Total recordable injury frequency rate
(TRIFR)
(For every 1,000,000 hours worked)
7.59
13.88
10.42
10.26
12.08
7.59
2023
2022
2021
2020
2024
OUR STRATEGY CONTINUED
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OPERATE
3
2024 Goals
• Prevent fatal or serious accidents.
• Produce between 55-62 moz silver
and 580-630 koz gold.
• Focus on cost reduction initiatives.
• Improve short- and mid-term
planning processes at the
Fresnillo district.
• Implement contractor cost
improvement initiative.
2024 Progress
• Two fatal accidents during the year,
one at Fresnillo and one at Ciénega.
• Produced 56.3 moz of silver
(including Silverstream) and 631.6 koz
of gold.
• Achieved US$40.0 million in cost
reduction initiatives and efficiencies.
• Cross-functional teams worked to
improve the short- and mid-term
planning process.
• Rationalised the contractor base
across the mines, with the number
of contractors decreasing from 12,516
to 10,916.
2025 Strategic priorities
• Prevent fatal or serious accidents.
• Produce between 49-56 moz silver
and 525-580 koz gold.
• Continue our focus on initiatives to
capture efficiencies and reduce costs.
• Improve the short- and medium-term
planning processes.
• Maintain ore throughput and improve
ore grades, primarily in the Fresnillo
district.
• Continue assessing optimisation
projects and define implementation
phases at Herradura.
• Implement the mine closure plans at
Noche Buena and San Julián DOB.
Production: Monitors total production
levels at our mines and contributions
from advanced development projects.
2024 Group KPIs/performance
2.0
2.8
2.7
3.1
2.8
54.3
53.5
51.1
50.0
50.3
56.3
56.3
53.7
53.1
53.1
2023
2022
2021
2020
2024
Attributable silver production
(millions of ounces)
56.3
Remained stable vs 2023 as the higher ore grades
and increased volumes of ore processed at San Julián
Veins and Saucito and the higher contribution of
Juanicipio following the first full year of operation at
the beneficiation plant were offset by the decreased
production at San Julián DOB as it approached
the end of its life, a decrease in volume of ore
processed and lower ore grade at Fresnillo, and lower
contribution from the Silverstream agreement.
The graph illustrates silver production from our own
mines, with shaded portion representing additional
ounces accrued under the Silverstream contract.
769.6
751.2
635.9
610.6
631.6
2023
2022
2021
2020
2024
Attributable gold production
(thousands of ounces)
631.6
Increased mainly due to the higher ore grade at
Fresnillo and increased ore processed and higher
ore grades at Saucito and San Julián Veins. This was
partly offset by a reduction in gold ounces recovered
from the leaching pads at Noche Buena, following
the cessation of mining activities in May 2023.
Proven and probable reserves:
A measure of the quality of the Group’s
operating assets and our ability to
extend the life of operating mines
at profitable levels.
457.4
419.8
396.1
356.6
331.3
2023
2022
2021
2020
2024
Attributable silver reserves
1
(millions of ounces)
331.3
Decreased primarily due to mining depletion and a
more conservative approach to resource estimation at
San Julián and Ciénega.
1 2024 reserves are presented as of 30 June 2024.
8.4
7.8
8.2
7.1
7.2
2023
2022
2021
2020
2024
Attributable gold reserves
1
(millions of ounces)
7.2
Increased mostly as a result of the higher price and
lower costs and cut-off grades strategy at Herradura.
1 2024 reserves are presented as of 30 June 2024.
SUSTAIN
4
2024 Goals
• Reduce TRIFR and Fatality rate.
• Use water efficiently and reduce
freshwater consumption.
• Increase our consumption of
renewable electricity.
• Implement Tailings Management
Systems across all mines.
2024 Progress
• Reduced TRIFR to 7.59 and Fatality
frequency rate to 0.044.
• Increased proportion of municipal
wastewater consumption to 30.2%.
• Increased renewable electricity
consumption to 80.6%, and reduced
our GHG emission intensity index to
0.0182 tCO
2
e per tonne of mineral
processed.
• Made progress in risk evaluation
and management of Tailings
Storage Facilities (TSFs).
2025 Strategic priorities
• Reduce TRIFR and Fatality rate to the
ICMM range by 2026.
• Reduce freshwater consumption.
• Consume (at least) 75% of renewable
electricity by 2030.
• Continue to implement the Tailings
Management System.
Further sustainability objectives are
outlined in our Sustainability section
on pages 62-63.
2024 Group KPIs/performance
Fatalities
(Number of fatal injuries to employees or contractors)
2
1
1
1
4
2
2023
2022
2021
2020
2024
Water intensity
(m
3
per tonne of mineral processed)
0.436
0.132
0.103
0.053
0.056
0.044
0.304
0.287
0.327
0.377
0.328
2023
2022
2021
2020
2024
Greenhouse gas intensity
(Tonnes of CO
2
e per tonne of mineral processed)
0.0182
0.0231
0.0232
0.0244
0.0248
0.0182
2023
2022
2021
2020
2024
Renewable electricity
(Percentage of renewable electricity consumption)
80.6%
48.4%
49.7%
35.6%
53.3%
80.6%
2023
2022
2021
2020
2024
Total recordable injury frequency rate
(TRIFR)
(For every 1,000,000 hours worked)
7.59
13.88
10.42
10.26
12.08
7.59
2023
2022
2021
2020
2024
Fresh water
Waste water
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Fresnillo plc Annual Report and Accounts 2024
SHAPING OUR BUSINESS FOR
THE OPPORTUNITIES AHEAD
Politics and economies are increasingly volatile, shifting more quickly and more
unexpectedly than ever. This is creating new and unpredictable market dynamics
and shaping the key trends that influence our operating environment.
OUR MARKETS
Price volatility
The financial performance of our
business is highly sensitive to
fluctuations in precious metals prices,
which are influenced by a mix of global
production shifts, market demand, and
external economic factors. Gold and
silver prices continued to experience
notable volatility in 2024, driven by a
combination of geopolitical tensions,
inflationary pressures, and fluctuating
global interest rates. Gold, often seen as
a safe-haven asset, has seen increased
demand, reaching significant highs,
as investors seek stability amid
economic uncertainty. Meanwhile
silver prices have been influenced by
both industrial demand, particularly in
the renewable energy sector, and its
role as a precious metal.
Energy transition
The global pivot toward renewable
energy is driving a surge in demand
for critical metals, which are key in the
production of clean energy solutions,
including electric vehicles, solar panels,
and energy storage systems. The mining
sector is under increasing pressure to
ensure the supply of these materials
meets the demand generated by the
accelerating transition toward a carbon-
neutral future.
Cost inflation
The combination of increasing
consumer demand and disruptions
in global supply chains has led to
widespread inflationary pressures.
These rising costs – including labour,
energy, and raw materials – are putting
additional strain on mining operations
and having a financial impact across the
entire industry, driving companies to
focus on innovation and efficiencies.
Labour shortages
Securing a skilled workforce remains
a challenge, especially as the industry
aims to adopt automation and other
technological advancements. The
demand for talent with expertise in
specific areas such as cutting-edge
mining technology, including AI,
robotics, and data analytics, is outpacing
supply, making it crucial to invest in
workforce development and attract and
retain new generations of miners.
Government regulation
Governments are grappling with
the need to foster economic growth
while addressing environmental
and social challenges. Policies are
evolving rapidly, requiring businesses
to navigate increasingly complex
regulatory landscapes. Finding a way
to thrive amid this evolving landscape,
while meeting both financial and
sustainability goals, has become
increasingly challenging.
Advancements in technology
A priority for the mining industry is the
development and integration of new
technologies to enhance planning and
operations, with a strong emphasis on
automation. Innovation is crucial for
long-term growth, not only in terms
of productivity, but also for optimising
maintenance and enhancing safety
and sustainability.
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Strategic Report Governance Financial Statements Additional Information
2,389.70
1,942.67
1,802.37
1,798.89
1,773.73
2023
2022
2021
2020
2024
28.30
23.40
21.78
25.14
20.69
2023
2022
2021
2020
2024
Gold as a safe haven
Opportunities
• Geopolitical tensions and market
instability make gold a reliable
store of value.
• Central banks increasing
gold reserves amid economic
uncertainty.
• Gold as a portfolio diversifier
and risk mitigator during
volatile times.
• Growing demand from emerging
markets as wealth increases.
Threats
• Competition from income-
generating assets like stocks and
real estate.
• Alternative assets, such as
cryptocurrencies, challenging
gold’s dominance.
• High costs of storage, insurance,
and security deterring investors.
GOLD
Industrial applications
Opportunities
• Rising demand for electronics
boosting gold usage in components.
• Growth in sectors like electric
vehicles, aerospace, and advanced
computing.
• Increasing need for gold in wireless
technology.
Threats
• Economic downturns could reduce
electronics demand.
• Supply chain disruptions could
impact gold usage in electronics.
Gold price chart
(US$ per ounce)
2,389.7
Silver as a safe haven
Opportunities
• Similar trends apply to silver and
gold, as described above, with
silver a cost-effective alternative
to gold for portfolio diversification
and risk management.
Threats
• Competition from income-
generating assets like bonds
and stocks.
• Emerging investments challenge
silver’s appeal.
• High storage and insurance costs.
Advancing technology
Opportunities
• Rising demand for electronics
and 5G networks drives
silver usage.
• Growing potential for silver in
nanotechnology across sectors.
SILVER
Threats
• Economic downturns may reduce
electronics demand.
• Higher silver prices could push
manufacturers to find alternatives.
Climate change
Opportunities
• Growth in solar energy and electric
vehicles increases silver demand.
• Expansion of EV charging
infrastructure supports
silver consumption.
Threats
• Rising silver prices could lead to cost-
cutting by manufacturers.
• Delays in infrastructure investment.
Silver price chart
(US$ per ounce)
28.30
22
Fresnillo plc Annual Report and Accounts 2024
BUILDING TRUST:
RELATIONSHIPS WITH
KEY STAKEHOLDERS
Our continued success relies on earning the trust of our diverse stakeholders.
By establishing meaningful engagement and strong relationships, we create
shared value and contribute to the wellbeing of people through the sustainable
mining of silver and gold.
OUR STAKEHOLDERS
Why we engage
Understanding and addressing
stakeholder concerns enables us to
build long-term relationships and secure
essential support for the Company’s
continued profitable operations, whilst
also driving positive change.
How we engage
We use a variety of engagement
opportunities to gather both direct and
indirect feedback. These insights form
the basis for the Board and Executive
Committee’s discussions and actions.
Information regarding resulting
principal decisions can be found
on pages 154-155.
Who we engage
We have identified our relevant
stakeholders by considering their
influence on the success of our business
model and strategy, including:
• How they are relevant to our
business model and strategy;
• Their interests, needs and concerns;
• How engagement is conducted;
• How management and governance
activities are implemented;
• The actions and outcomes from
engagement;
• The metrics used to monitor our
relationships; and
• What risks could affect our
relationships with them.
EMPLOYEES AND UNIONS
Relevance
Skilled and engaged people drive
our continued success.
Why we engage
To nurture a collaborative
environment that motivates our
workforce to shape our future.
The difference it makes
Long-term relationships enable us
to build a robust pipeline of talent to
progress our goals.
COMMUNITIES
Relevance
Strong, mutually beneficial
relationships foster long-term
trust and shared prosperity.
Why we engage
To understand and address their
priorities, fostering long-term
wellbeing and resilience.
The difference it makes
Positive engagement secures vital
support to pursue our ambitions,
maintaining our licence to operate.
Read more on page 24 Read more on page 25
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Strategic Report Governance Financial Statements Additional Information
23
GOVERNMENT
Relevance
A proactive, transparent and
collaborative dialogue helps
mitigate regulatory risks
and secure long-term
operational stability.
Why we engage
To align key strategic issues of
importance to communities, local
authorities and the mining industry.
The difference it makes
Collaboration helps advance
responsible mining practices,
and contribute to economic
growth through job creation, tax
contributions and infrastructure
development.
CONTRACTORS
AND SUPPLIERS
Relevance
Valued partners that provide
essential expertise and support
to our operations.
Why we engage
To ensure alignment with our
safety standards and ethical
business practices.
The difference it makes
A strong and responsible supply
chain enhances safety, operational
efficiency and sustainability.
MINORITY SHAREHOLDERS
Relevance
A strong and engaged investor
base ensures financial stability
and long-term value creation.
Why we engage
To foster transparency, provide
insights into our performance,
and align our strategy with
investor expectations.
The difference it makes
Engagement strengthens
confidence in our governance,
enhances decision-making,
and supports the long-term
sustainability of our business.
Read more on page 26 Read more on page 27 Read more on page 28
For more information, see the Sustainability at the core of our purpose section on
pages 58-115 and Managing our risks and opportunities section on pages 116-138.
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Fresnillo plc Annual Report and Accounts 2024
OUR STAKEHOLDERS CONTINUED
EMPLOYEES
AND UNIONS
Engaging our stakeholders for the long term to instil a
long-lasting culture where everybody understands our
Purpose and how we do business.
How we engage with
employees and Unions
Management
• Surveys to better understand the
issues that matter to our workforce
(organisational climate, ethics, safety).
• Safety symposium and LEAL survey
in collaboration with the Union.
• Interviews and focus groups to gain
employee perceptions of our social
performance in the communities
where we operate.
Executive Committee and Board
• Our designated Non-Executive
Director for workforce engagement
brings workforce feedback to the
Board through periodic town
hall meetings.
• Executive Committee members
engage with Union leaders on safety,
productivity and collaboration.
What issues matter to our
employees and Unions
• Ethics and integrity.
• Health, safety and occupational
wellbeing.
• Security in the regions where
we operate.
• Training and professional
development.
• Remuneration and compensation
(including statutory profit-sharing).
• Labour and Human Rights.
• Preventing and addressing labour
harassment.
• Work-life balance.
• Gender equality.
Outcomes from our engagement
Actions
• Enhance operational discipline
by intensifying efforts in safety
awareness, training, and supervision.
• Increase communication with
Union leaders and conduct review
of contractual benefits.
• Safety training workshops for
Union leadership.
• Promote initiatives that enhance
workforce wellbeing and promote
work-life balance.
• Promote wellness programmes,
preventive care, and healthier
lifestyles.
• Conduct campaigns to highlight
benefits and compensation schemes
through internal newsletters and
workshops.
• Comprehensive programme to
prevent and address harassment
in the workplace.
• Continue promoting initiatives
to improve gender diversity.
Decisions
• Intensify efforts in planning, risk
analysis, and controls to ensure
coverage of all possible risk scenarios.
• Development of region-specific
prevention programmes based on
findings from the latest security
perception survey.
Outcomes
• Increase in near-miss reporting.
• Improved TRIFR and LTIFR.
• Skills development for Union’s
local committee members, new
employees, and aspiring leaders.
• No strikes affecting our business
continuity.
• Steady increase of women in the
workforce and in managerial
positions.
Metrics
• Fatal injuries, TRIFR and LTIFR.
• New cases of occupational diseases.
• Turnover rate.
• Gender diversity and payment gap.
• Ethical conduct and whistleblowing
KPIs.
Associated principal risks
• 2 – Security
• 7 – Union relations
• 8 – Human resources
• 10 – Safety
For more information, please
refer to the Managing our risks
and opportunities section on
pages 116-138
25
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COMMUNITIES
Building trust in the communities where we operate,
acting ethically, being accountable for our impacts and
sharing the benefits of mining.
How we engage with
communities
Management
• Interviews with formal and informal
leaders, local and regional authorities.
• Conduct social studies every two
years to identify and assess issues
that matter to our communities.
• Operate grievance mechanisms to
address the concerns and enquiries
of local communities.
Executive Committee and Board
• Executive Committee members
meet with key Government officials
to establish agreements for long-
term and high impact partnerships
that could benefit communities.
What issues matter
to our communities
• Security.
• Clean water access.
• Quality education.
• Public infrastructure and services.
• Employment and procurement.
• Transparency about our
environmental footprint
and risk management.
• Land negotiations.
Outcomes from our engagement
Actions
• Collaboration with public health and
local authorities to facilitate
free healthcare.
• Partner with civil society and focus
on social investment priorities.
• Regional employment and
procurement.
• Development of strategic
programmes to strengthen
collaboration with communities,
create awareness, and mitigate
social risks.
• Water efficiency and recirculation
to avoid competing for natural
resources.
Outcomes
• No conflicts with communities
affecting our ability to operate
our active mines.
• Social investment portfolio.
• Positive social perception.
Metrics
• Economic value distributed.
• Local employment and
procurement.
• Social investment.
• Environmental performance KPIs.
• Community grievances.
Associated principal risks
• 2 – Security
• 6 – Access to land
• 11 – License to operate
• 14 – Tailings dams
• 15 – Environmental incidents
For more information, please
refer to the Managing our risks
and opportunities section on
pages 116-138
26
Fresnillo plc Annual Report and Accounts 2024
OUR STAKEHOLDERS CONTINUED
How we engage with
governments and regulators
Management
• Meetings with federal authorities
regarding changes on mining, energy
and water regulation, through:
– Trade associations such as the
Mexican Mining Chamber
(CAMIMEX) and state
Mining Clusters.
– Business associations such as
the Mexican Confederation
of Industrial Chambers
(CONCAMIN), the Business
Coordinating Council (CCE),
and the Mexican Employers’
Confederation (COPARMEX).
– Sustainability associations such as
the Mexican Chapter of the World
Business Council for Sustainable
Development (CESPEDES).
• Independent hearings with municipal,
state and federal authorities for
pending permits and authorisations.
• Provide data-based sectorial
information for consideration in
policy making, that conveys mining
contributions to the economy and
provides greater understanding of
our operations.
Executive Committee and Board
• The Executive Committee members
hold meetings with authorities to:
– Collaborate on the feasibility of
potential new projects.
– Establish agreements for
long-term and high impact
partnerships.
– Raise critical issues affecting
our workforce and operations,
ensuring government entities
take appropriate action (security,
regional stability, infrastructure).
What issues matter to
governments and regulators
• Accountability and transparency.
• Sound health, safety and
environmental performance.
• Tax, royalties and other sources of
contributions to local economies,
such as employment and regional
development.
• Public policies, programmes and
social benefits in communities
where we operate.
Outcomes from our engagement
Actions
• Compliance with laws and
regulations.
• Regional employment and
procurement.
Decisions
• Contributed to the National Water
Plan by committing an annual
return of 300,000 m
3
of water.
Outcomes
• Permanent security services, local
operating and command centres
for each business unit.
• Partnerships or donations for projects
that address communities’ most
pressing concerns (infrastructure,
health and wellbeing, clean water,
quality education, decent work and
economic growth).
• Reconditioning of municipal
potabilisation plant in Fresnillo,
Zacatecas to supply mine water
to city residents.
Metrics
• Economic value distributed.
• Social investment.
• Local employment.
• Health, Safety and Environment KPIs.
Associated principal risks
• 1 – Potential actions by governments
• 2 – Security
• 15 – Environmental incidents
For more information, please
refer to the Managing our risks
and opportunities section on
pages 116-138
GOVERNMENT
Collaborative and respectful relations for the common
good with policymakers and representatives of local,
state and federal government.
27
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Strategic Report Governance Financial Statements Additional Information
How we engage with
contractors and suppliers
Management
• Constant monitoring to evaluate
performance (safety and
operational).
• Regular engagement and capacity
building through the ‘I Care, We
Care’ initiative.
• Involvement of contract owners in
accident or incident investigations.
• Surveys to better understand the
issues that matter to our workforce
(organisational climate, safety).
• Focus groups with contractors
to better understand our social
performance in local communities.
Executive Committee and Board
• Executive Committee members
meet with key contractors to
review, supervising production
and safety performance.
What issues matter to
contractors and suppliers
• Productivity/development rates.
• Health and safety in the workplace.
• Security in the regions where
we operate.
• Labour and human rights.
• Preventing and addressing
harassment.
• Ethics and integrity.
Outcomes from our engagement
Actions
• Capacity building of contractors
to implement measures to prevent
and address harassment.
• Safety meetings between
management and key business
partners at each mining unit,
addressing safety opportunities
and cross-functional initiatives for
implementation.
• Monitor the security situation
and maintain clear communication
with contractors.
• Enhanced controls to assure
compliance with their tax and
labour obligations.
• Due diligence procedures to verify
the ethical profile of new contractors
and suppliers.
• Require endorsement of our Code
of Conduct for Third Parties.
Decisions
• Implement mechanism to
categorise, monitor, and evaluate
business partners.
• Intensify efforts in planning, risk
analysis, and control to ensure
coverage of all possible risk scenarios.
Outcomes
• Corrective actions implemented
to reinforce engineering control,
personnel competencies and
strengthen the accountability
processes.
• Training of contractor companies
in the implementation of the
mechanism to prevent labour
harassment.
Metrics
• Fatal injuries.
• Total Injury Frequency Rate.
• Lost Time Injury Frequency Rate.
• Gender Diversity.
Associated principal risks
• 5 – Global macroeconomic
developments.
• 8 – Human resources.
• 10 – Safety.
For more information, please
refer to the Managing our risks
and opportunities section on
pages 116-138
CONTRACTORS
AND SUPPLIERS
Collaborative partnerships with contractors and
suppliers to improve productivity and safety.
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Fresnillo plc Annual Report and Accounts 2024
OUR STAKEHOLDERS CONTINUED
How we engage with
minority shareholders
Management
• Organise conference calls
and roadshows.
• Attend investment forums
and conferences.
• Hold private meetings.
Executive Committee and Board
• The Company’s 2024 Annual
General Meeting (AGM) was held
in-person, providing the opportunity
for some Directors to meet with
independent shareholders.
• The Senior Independent Director
engages directly with institutional
investors.
• The Executive Committee members
meet with analysts, hold conference
calls after production reports
and engage with shareholders
during roadshows.
What issues matter to
minority shareholders
• Financial and operational
and performance.
• CAPEX project execution.
• Country risk uncertainty.
• Board diversity composition.
• Executive compensation.
• Climate transition planning.
• Mineral waste management.
Outcomes from our engagement
Actions
• Ensure their interests are considered
in decision making.
• Ensure that transactions with
related parties are transparent
and fully documented.
• Report our Environmental, Social
and Governance performance
and strategy in a transparent and
timely fashion.
Decisions
• Support for a 2025 Business Plan and
Budget that responsibly balances
the operating performance targets.
Outcomes
• Declaration of a final dividend as
well as interim dividend in 2024.
Metrics
• Financial and operational
performance.
• Environmental, Social and
Governance KPIs.
• CEO Annual variable bonus.
Associated principal risks
• 8 – Human resources
• 10 – Safety
• 13 – Climate change
• 14 – Tailings dams
• 15 – Environmental incidents
For more information, please
refer to the Managing Our Risks
and Opportunities section on
pages 116-138
MINORITY
SHAREHOLDERS
Strong and transparent relationships to invest through
the cycles and generate sustained returns.
29
Strategic Report Governance Financial Statements Additional Information
www.fresnilloplc.com
SECTION 172 STATEMENT
In compliance with sections 172
(‘Section 172’) and 414CZA of the UK
Companies Act, the Board of Directors
of the Company (the ‘Board’) makes the
following statement in relation to the
year ended 31 December 2024:
Fresnillo’s purpose of contributing to
the wellbeing of people through the
sustainable mining of silver and gold
reflects the fact that precious metals
are essential to advancing technology
and science, which underpin societal
progress and enhance quality of life.
Fresnillo recognises the inherent
environmental and social impacts of its
mining activities and is committed to
addressing these responsibly, promoting
value creation and supporting the
Company’s long-term success, as
detailed in the Sustainability section
on pages 58-115 of this Annual Report.
The Company upholds high ethical
standards, ensuring that both its
workforce and third parties adhere
to expected corporate values. These
commitments reinforce the Company’s
reputation for accountability and shape
decision-making, guiding all aspects of
its operations. By prioritising operational
excellence, the Company drives
efficiency and reliability, creating a
strong foundation for stakeholder trust.
The Company recognises the critical role
stakeholders play in shaping its resilience
and profitability. It purposefully engages
with a diverse group – employees and
Unions, communities, governments,
contractors and suppliers, and minority
shareholders – to understand their
needs and concerns. This engagement
fosters strong relationships and ensures
inclusive, forward-thinking business
management. Examples of stakeholder
engagement and its impact on business
success are outlined on pages 24-28,
while stakeholder-related risks and
mitigation strategies are detailed on
pages 24-28.
Recognising that the sustainability
matters important to stakeholders are
evolving rapidly, the Company conducts
a periodic materiality assessment of
their significance to stakeholders and to
its operations, as described on page 61.
This assessment supports the Board in
prioritising the issues, with the HSECR
Committee following up on the most
salient, as detailed in its Chairman’s
report on pages 58-59.
Additionally, the Board engages
directly with the workforce through
its designated Non-Executive Director,
facilitating an iterative process to identify
areas for improvement and promote
a working environment centred on
employee wellbeing, which reinforces
the Company’s commitment to its
people, as described on page 30.
The Board integrates stakeholder
considerations into its evaluation of
Principal Decisions, particularly those
with long-term implications, strategic
priorities, and major regulatory changes,
as further detailed in the Board
Activities on pages 154-155.
By upholding its purpose, delivering
long-term value, and maintaining
high standards of governance and
responsibility, the Board ensures careful
consideration of all stakeholders and the
long-term consequences of its decisions.
Approved by the Board of Directors on
3 March, 2024.
30
Fresnillo plc Annual Report and Accounts 2024
WORKFORCE ENGAGEMENT
The Company’s workforce
is the cornerstone of its
long-term success.
Their dedication, expertise, and
innovation are critical to navigating a
rapidly evolving landscape and shaping
the business for the challenges and
opportunities ahead. For this reason,
the Board is committed to fostering
a workplace culture that empowers
employees and contractors, and inspires
them to contribute their best.
Our aim is to understand the
perspectives of employees and
contractors regarding their experiences
working for the Company, and to
integrate these into our decision-
making processes. We achieve this by
maintaining structured channels for
workforce engagement, as depicted
in the diagram below. Our initiatives
include Engagement Surveys (see Our
People on pages 69-79) as well as direct
input from Non-Executive Director
Mr Arturo Fernández, who is the
designated director for engagement
with the workforce.
In 2024, Mr Fernández led two
in-person sessions at the Herradura
mine, bringing together a diverse
group of unionised and non-
unionised personnel from a variety
of demographics and with different
responsibilities. These open discussions
fostered empathy and transparency,
focusing on employees’ concerns and
recommendations to improve overall
workplace satisfaction. Key feedback
from these sessions included:
• Expanding training initiatives to
enhance operational effectiveness.
• Providing greater clarity on the
Company’s performance.
• Offering clear career paths and
upskilling opportunities to support
professional growth.
• Addressing turnover in specific
cohorts and exploring mitigation
strategies.
Concerns also included ensuring
anonymity and protection in the
whistleblowing process, strengthening
the Anti-harassment Prevention
Programme, and improving security
conditions surrounding the Company’s
facilities. Long-standing employees
expressed strong appreciation for the
Company’s commitment to them,
enthusiasm for family members
joining the workforce, and pride
in how Herradura’s leadership
has promoted greater female
participation in the workforce.
Insights gathered from these sessions
have continued to shape ongoing and
subsequent discussions, influencing
decision-making processes, and
ensuring workforce views are integrated
into both strategy and operational
practices. Building on this and previous
feedback, the Company has continued
deploying comprehensive initiatives to
address key concerns, including:
• Addressing security: Development
of region-specific prevention
programmes based on findings from
the latest security perception survey.
• Building trust in the
Whistleblowing Mechanism:
Deploying a perception survey,
launching awareness campaigns,
and providing targeted training to
improve intervention processes.
• Continuous improvements in
industrial safety: Enhancing
leadership practices, implementing
regular performance evaluations and
accountability meetings, making
progress in critical risk management
and controls, and delivering a
comprehensive communication
strategy.
• Improving perception on fair
compensation: Conducting
campaigns to highlight benefits and
compensation schemes through
internal newsletters and workshops.
• Reassessing our approach to
gender diversity: Carrying out
internal assessments and industry
benchmarking to better understand
the challenges and opportunities
of integrating women into our
workforce, informing our strategy.
This iterative process helps identify
areas for improvement whilst fostering
a positive and productive work
environment. By addressing workforce
concerns and aligning initiatives with
shared goals, the Company continues
to cultivate an engaged and motivated
workforce that drives long-term success.
Workforce engagement: communication and feedback
Surveys/
Focus groups
Communication
initiatives
NED/Workforce
engagement sessions
ContractorsEmployees
Executive Committee
(Led by the CEO)
Board of Directors
(Led by the NED responsible for workforce engagement)
Workforce
NED/Workforce
feedback sessions
31
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Strategic Report Governance Financial Statements Additional Information
REVIEW OF OPERATIONS – MINES IN OPERATION
Q&A WITH TOMÁS ITURRIAGA, CHIEF OPERATING OFFICER,
CENTRAL REGION
Disciplined approach
delivers efficiencies and
cost control
Following a significant reorganisation
that underlined our commitment to
maximising the potential of existing
assets while also extending the growth
pipeline, Tomás Iturriaga was appointed
Chief Operating Officer Central in
December 2023. Having already gained
extensive and valuable experience of
our assets during three years as Chief
Operating Officer for our entire portfolio,
Tomás’s responsibilities include our
established mines at Fresnillo, Saucito
and Juanicipio, together with the
advanced exploration projects at
Orisyvo and Guanajuato.
What was your main focus over
the last year?
Throughout the entire Central Region,
we have been very disciplined about
efficiencies and cost control, and this has
delivered excellent results. Three issues
were absolutely central to our activities.
Firstly, it was important to consolidate
operations at Juanicipio following the
mine’s good first year – and you can see
from the results that this was successful.
Secondly, we confirmed the turnaround
in performance at Saucito, continuing
to build on the improvements achieved
in 2023. Finally, we concentrated on
improving Fresnillo’s operational
controls to ensure greater control
of the mining sequence, dilution
and other factors affecting ore grades.
Here, the results were mixed with
lower throughput and silver production
during the year, but higher gold, lead
and zinc production.
Where do the main challenges
and opportunities lie?
Internally, the year started with a sharp
focus on prices and the exchange rate.
This led us to seek efficiencies in both
production and costs, and to find the
most profitable way to operate our
mines within that context. At the same
time, this approach helped us identify
opportunities that offered maximum
impact coupled with minimum effort
and cost. The outcome was that our
operations were able to significantly
outperform expectations. With
our Saucito and Juanicipio mines
performing at, or above plan, and
Fresnillo heavily focused on cost control
initiatives – together with the increase in
metals prices and the devaluation of the
Mexican peso – we were able to capture
increased value that was not foreseen at
the beginning of the year.
What would you highlight at
each of the operations?
At the Fresnillo mine, the MD5000
tunnel boring machine resumed
operations in the second half of the year,
enabling us to continue developing
the main haulage level at the western
end of the mine. Around 1,000 metres
remain to be developed – and although
we are advancing less rapidly than
initially planned, the MD5000 is without
doubt the optimum tool to develop this
project. In addition, the San Carlos shaft
is now operational, reducing haulage
distances and cutting costs. The shaft
is scheduled to operate for the whole
of 2025, and we have also established
processes and controls to ensure
improved performance across the mine.
Increased productivity and greater
availability of equipment have driven
a transformation at Saucito since
the mine’s low point in 2023. This
achievement bears testament to the
hard work carried out by the team
at Saucito. The learning curve has
been steep but the results speak
for themselves.
At Juanicipio, we have been successful in
optimising maintenance programmes
to increase plant availability at the
beneficiation plant, which allowed us
to schedule 11 additional days of milling
during the year. We are continuing the
process to normalise metallurgy to 100%,
before looking for additional efficiencies
that will allow us to increase throughput.
What is the focus for 2025?
The safety of our teams is always at the
forefront of our mines, and while we
have significantly improved the maturity
of our safety programmes and KPIs, we
will not be complacent. Zero fatalities
remains our primary focus for 2025.
Our mines in the Central district are now
performing well, but there is potential
to be even more productive. For the
year ahead, our key objectives include
improving performance at Fresnillo and
maintaining the good results at Saucito
and Juanicipio. We will achieve this by
continuing to focus on costs, synergies
and output right across the district.
In particular, we aim to decrease
dilution at Fresnillo by using new,
smaller equipment, by adhering
more strictly to the mining sequence
and by better controlling blasting
and excavation. We will also focus on
the balance of ore from the different
areas of the mine to maximise output.
Furthermore, we will continue to gather
and analyse data from the reconciliation
process to improve the accuracy and
reliability of the short- and medium-
term mine plans. We will also maintain
the ongoing programme to rationalise
the contractor base, not only at Fresnillo
but also at all the mines in our portfolio.
Our mines in the
Central region are now
performing well – but
there is potential to be
even more productive.”
32
Fresnillo plc Annual Report and Accounts 2024
FRESNILLO
One of the world’s longest continuously operated mines,
Fresnillo produced 18.2% of the Group’s total silver in 2024
and generated 16.2% of total Adjusted revenue.
2025 OBJECTIVES
Decrease dilution.
Improve short and mid-term planning processes.
Continue to focus on key cost reduction initiatives.
Maintain the ongoing programme to rationalise the
contractor base.
Improve our safety performance.
Increase the resource base and convert resources
into reserves.
2025 OUTLOOK
For 2025, the silver ore grade is expected to be in the
range of 160-180 g/t, with the gold ore grade around
0.60-0.70 g/t.
2024 OBJECTIVES COMMENT
Conclude the connection of the two sections and the
commissioning of the San Carlos shaft during Q1.
A See: Mine production and key developments below.
Sustain our development performance at circa 3,250
metres per month.
A See: Mine production and key developments below.
Improve short- and mid-term planning processes. A See: Mine production and key developments below.
Focus on key cost reduction initiatives. PA See: Financial performance below.
Improve our safety performance and continue
strengthening our safety-centred culture.
NA See pages 73-77.
Resume tunnel boring machine’s contribution to
development rates
PA See: Mine production and key developments below.
A: Achieved; PA: Partially achieved; NA: Not achieved.
REVIEW OF OPERATIONS – MINES IN OPERATION CONTINUED
FRESNILLO DISTRICT
Mine production
1
2024 2023 % change
Ore milled (kt) 2,334 2,619 (10.9)
Silver (koz) 10,242 12,772 (19.8)
Gold (oz) 51,473 36,909 39.5
Lead (t) 27,088 21,373 26.7
Zinc (t) 50,702 45,386 11.7
Silver ore grade (g/t) 152 170 (10.6)
Total reserves
2
2024 2023 % change
Silver (moz) 104.5 98.8 5.8
Increased due to changes to the model, a higher silver price and the cut-off grade
strategy, partly offset by depletion.
Gold (moz) 263 272 (3.3)
Decreased due to depletion.
Total resources
3
2024 2023 % change
Silver (moz) 690.7 670.9 3.0
Increased due to the cut-off grade strategy, a higher price and good results from
the exploration programme, adding mineral resources to existing structures, partly
offset by depletion.
Gold (moz) 1.46 1.50 (2.7)
Decreased due to depletion.
1 Fresnillo mine production excludes ore processed and production
from Juanicipio.
2 2024 reserves as of 30 June 2024.
3 2024 resources as of 30 June 2024.
33
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Strategic Report Governance Financial Statements Additional Information
Key developments in the year
Silver production decreased, driven by
two main factors. Firstly, processing
volumes at the beneficiation plant
decreased due to lower availability of
ore, which had to be hauled via ramps
while the two sections of the deepened
San Carlos shaft were connected.
Secondly, ore grade was lower due to
a higher proportion being extracted
from western areas of the mine, which
have a lower silver ore grade with higher
gold and base metal content, as well as
increased dilution in narrower veins. In
some areas, we also mined lower cut-off
grade ore to take advantage of higher
metals prices.
The average development rate in the
year increased to 3,236 metres per
month (2023: 3,105 metres per month),
in line with the development plan.
Productivity, calculated as tonnes of ore
milled per person, decreased vs 2023
driven by the lower volumes processed
as explained above.
Cross-functional teams worked to
improve the short- and mid-term
planning process during the year. In
addition, we made a number of small
investments that will contribute to the
timely preparation of new stopes and
decrease dilution in 2025. Following final
mechanical adjustments, the tunnel
boring machine resumed operations
1 The methodology to calculate this indicator has been changed from a ‘by product’ to ‘per equivalent ounce’ basis as this is more representative. Cash cost per ounce
is now being calculated as the total cash cost (cost of sales plus treatment and refining charges, less depreciation) divided by the silver or gold equivalent ounces sold.
2020-2023 figures have been restated to be comparable to those of 2024.
2 Margin defined as average realised price less cash cost per ounce.
in the second half of 2024 and is
expected to contribute consistently
to development rates going forward.
Additional bolting and in-mine
equipment, suitable for narrower veins,
also arrived on site. These initiatives,
together with improved control of
blasting and excavation, and a stricter
adherence to the mining sequence,
are expected to further decrease
dilution in 2025.
The commissioning of the San Carlos
shaft was concluded in 2H24 and is
expected to support a reduction in
haulage costs in 2025 and beyond.
Financial performance
Cost per tonne increased 11.1% to US$112.2
in 2024, primarily driven by the increase
in haulage and development, which
increased contractor and maintenance
costs, the lower volume of ore processed,
and the underlying cost inflation. This
was partly mitigated by the devaluation
of the Mexican peso vs the US dollar.
Cash cost per silver equivalent ounce
1
decreased to US$15.4 (2023: US$15.7)
mainly due to the higher gold, lead
and zinc ore grades, partly offset by the
increase in cost per tonne. Margin per
ounce increased 69.6% to US$13.4 (2023:
US$7.9). Expressed as a percentage of
the silver price, it increased to 46.4%
(2023: 33.4%).
Fresnillo cost per tonne
(US$/tonne milled)
112.2
69.9
84.7
91.5
101.1
112.2
2024
2023
2022
2021
2020
Fresnillo cash cost
(Silver US$/ounce)
15.4
11.7
13.0
12.9
15.7
15.4
Silver price Cash cost
21.3
45.2%
24.947.6%
21.740.7%
23.633.4%
28.846.4%
2024
2023
2022
2021
2020
% figures represent margin between cash cost and
silver price.
Fresnillo ore milled per person
(Tonnes)
618
655
589
608
633
618
2024
2023
2022
2021
2020
Financial highlights 2024 2023 % change
Adjusted revenue (US$m) 591.2 479.6 23.3
Revenue (US$m) 542.6 423.1 28.2
Adjusted production costs (US$m) 261.9 264.8 -1.1
Depreciation (US$m) 96.3 95.5 0.8
Segment profit (US$m) 277.3 156.8 76.8
Capital expenditure (US$m) 90.3 97.8 -7.7
Exploration (US$m) 18.8 38.1 -50.7
Cost per tonne total (US$) 112.23 101.1 11.0
Cash cost (US$/oz silver) 15.42 15.74 -2.0
Margin (US$/oz)
2
13.36 7.9 69.1
Margin (expressed as % of silver price) 46.42 33.42 –
All-in sustaining cost (US$) 21.97 22.91 -4.1
All-in sustaining cost decreased by 3.9%
to US$22.0 per equivalent silver ounce
explained by the lower cash cost and a
decrease in sustaining capex.
Capital expenditure
Total capital expenditure in 2024
was US$90.3 million, which included
sustaining capex, mine development, the
deepening of the San Carlos shaft and
the tailings management programme.
34
Fresnillo plc Annual Report and Accounts 2024
SAUCITO
Saucito contributed 25.7% to total silver
production in 2024 and generated 20.9%
of total Adjusted revenue.
REVIEW OF OPERATIONS – MINES IN OPERATION CONTINUED
SAUCITO DISTRICT
Mine production
2024 2023
1
% change
Ore milled (kt) 2,364 2,164 9.2
Silver (koz) 14,474 12,102 19.6
Gold (oz) 82,718 72,763 13.7
Lead (t) 22,729 19,535 16.4
Zinc (t) 34,097 32,991 3.4
Silver ore grade (g/t) 214 195 9.7
Gold ore grade (g/t) 1.40 1.34 4.5
Total reserves
2
2024 2023 % change
Silver (moz) 111.6 110.9 0.6
Increased slightly due to the cut-off grade strategy and higher price,
offset by depletion.
Gold (koz) 515 411 25.3
Total resources
3
2024 2023 % change
Silver (moz) 346.3 383.9 (9.8)
Decreased as a result of a more conservative approach to resource estimation at
the Jarillas and Mezquite Veins, depletion and exploration results, partly mitigated
by the cut-off grade strategy and higher price.
Gold (moz) 1.7 1.7 0.0
1 Saucito mine production excludes ore processed and production from
Juanicipio.
2 2024 reserves as of 30 June 2024.
3 2024 resources as of 30 June 2024.
2025 OBJECTIVES
Continue progressing the deepening of the Jarillas shaft.
Continue our focus on cost reduction initiatives and
contractor rationalisation.
Sustain improved safety performance.
Improve equipment availability.
Increase the resource base and convert resources
into reserves.
2025 OUTLOOK
The silver ore grade for 2025 is expected to be in the
range of 200-220 g/t, while the gold grade is estimated
to be between 0.90-1.10 g/t.
2024 OBJECTIVES COMMENT
Increase volume of ore processed to the optimal
run rate of 7,000 tpd.
A See: Mine production and key developments below.
Continue progressing the deepening of the
Jarillas shaft.
A See: Mine production and key developments below.
Focus on key cost reduction initiatives. A See: Financial performance below.
Improve our safety performance and continue
strengthening our safety-centred culture.
A See pages 73-77.
A: Achieved; PA: Partially achieved; NA: Not achieved.
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Strategic Report Governance Financial Statements Additional Information
35
Key developments in the year
Silver and gold production increased
year on year due to a higher ore grade
and an increase in volume of ore
processed, driven by the improved safety
performance, increased productivity
and availability of equipment, enabling
stricter adherence to the mine plan.
Mine development rates decreased
year-on-year to an average of 2,683
metres per month in 2024 (2023: 2,920
metres per month), primarily due to
lower availability of equipment and
additional ventilation and pumping
required in certain areas.
Productivity increased vs 2023,
due to the experience gained by our
personnel and the increased availability
of equipment.
The Pyrites plant at Saucito produced
1.9 moz of silver and 3.2 koz of gold in
2024. This was higher year-on-year due
to the first full year of contribution of
the Pyrites plant at Fresnillo following
connection to the national electricity
grid in 2Q23.
The project to deepen the Jarillas
shaft from 630 metres to 1,000 metres
remains on track to be completed by
2027. Construction of the supporting
infrastructure and activities to place
equipment on site continued during
the year.
Financial performance
In 2024, we continued to focus on cost
reduction initiatives such as optimising
the contractor base and decreasing
maintenance and personnel costs.
Cost per tonne decreased 6.0% to
US$133.0, mainly driven by the reduction
in the use of development and
infrastructure contractors, the higher
volumes of ore processed, and the
favourable effect of the devaluation of
the Mexican peso vs the US dollar. This
was partly offset by the increase in the
volume of by products with high gold
and silver contents purchased from Met-
Mex (smelting and refining company)
and the underlying cost inflation.
Cash cost per silver equivalent ounce
1
decreased to US$13.6 per ounce (2023:
US$15.1 per silver ounce) mainly as
a result of a lower cost per tonne
and higher silver ore grade. Margin
per ounce increased to US$15.1 in
2024 (2023: US$8.6). Expressed as
a percentage of the silver price,
it increased from 36.2% to 52.6%.
All-in sustaining cost decreased 17.7%
to US$18.6 per equivalent silver ounce
due to the lower cash cost, decrease in
sustaining capex and lower capitalised
mine development.
Saucito cost per tonne
(US$/tonne milled)
133.0
72.0
89.8
119.5
141.2
133.0
2024
2023
2022
2021
2020
Saucito cash cost
(Silver US$/ounce)
13.6
9.8
11.5
13.1
15.1
13.6
Silver price Cash cost
21.3
54.1%
24.953.8%
21.739.7%
23.636.2%
28.852.6%
2024
2023
2022
2021
2020
% figures represent margin between cash cost and
silver price.
Saucito ore milled per person
(Tonnes)
688
858
721
558
621
688
2024
2023
2022
2021
2020
1 The methodology to calculate this indicator has been changed from a ‘by product’ to ‘per equivalent ounce’ basis as this is more representative. Cash cost per ounce
is now being calculated as the total cash cost (cost of sales plus treatment and refining charges, less depreciation) divided by the silver or gold equivalent ounces sold.
2020-2023 figures have been restated to be comparable to those of 2024.
2 Margin defined as average realised price less cash cost per ounce.
Financial highlights 2024 2023 % change
Adjusted revenue (US$m) 760.0 527.8 44.0
Revenue (US$m) 720.6 487.3 47.9
Adjusted production costs (US$m) 314.5 305.5 2.9
Depreciation (US$m) 118.8 104.4 13.8
Segment profit (US$m) 405.1 186 117.8
Capital expenditure (US$m) 97.3 125.1 -22.2
Exploration (US$m) 12.9 31.2 -58.7
Cost per tonne total (US$) 133.03 141.2 -5.8
Cash cost (US$/oz silver) 13.64 15.09 -9.6
Margin (US$/oz)
2
15.14 8.55 77.1
Margin (expressed as % of silver price) 52.61 36.17 –
All-in sustaining cost (US$) 18.56 22.64 -18.0
Capital expenditure
Capital expenditure in 2024 totalled
US$97.3 million, mainly allocated to
sustaining capex, in-mine development,
the tailings dam and the project to
deepen the Jarillas shaft.
36
Fresnillo plc Annual Report and Accounts 2024
Juanicipio contributed 18.5% to the Group’s total
attributable silver production in 2024 and generated
18.2% of total Adjusted revenue.
REVIEW OF OPERATIONS – MINES IN OPERATION CONTINUED
JUANICIPIO DISTRICT
JUANICIPIO
2025 OBJECTIVES
Cost reduction initiatives.
Increase development rates to 1,300 metres per month.
Increase the resource base and convert resources
into reserves.
Improve our safety performance.
2025 OUTLOOK
The average silver ore grade is expected to be between
380-430 g/t while the gold grade is estimated to be
between 1.2-1.4 g/t.
Mine production
2024 2023 % change
Ore milled (kt) 744 711 4.6
Silver (koz) 10,400 9,415 10.5
Gold (oz) 21,856 20,570 6.3
Lead (t) 9,957 7,202 38.3
Zinc (t) 16,737 11,368 47.2
Silver ore grade (g/t) 468 472 (0.8)
Gold ore grade (g/t) 1.25 1.27 (1.6)
Total reserves
1
2024 2023 % change
Silver (moz) 73.9 68.4 8.0
Increased due to the changes to the model, the addition of two new veins through
the exploration programme, and a higher price and the cut-off grade strategy,
partly offset by depletion.
Gold (koz) 527 437 20.6
Total resources
2
2024 2023 % change
Silver (koz) 142,498 154,473 (7.8)
Gold (koz) 834 839 (0.6)
Decreased mainly due to depletion.
1 2024 reserves as of 30 June 2024.
2 2024 resources as of 30 June 2024.
2024 OBJECTIVES COMMENT
Increase development rates. NA Development rates remained at 1,222 metres
per month.
Advance exploration programmes to generate
resources and convert resources into reserves.
PA The exploration activities focused on converting
resources into reserves, however resources decreased
year-on-year.
A: Achieved; PA: Partially achieved; NA: Not achieved.
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37
Key developments in the year
Attributable production of all metals
increased significantly year on year
as 2024 was the first full year of
production at Juanicipio, following the
commissioning and ramp up of the
beneficiation plant in 2023.
Silver and gold ore grades remained
high throughout the majority of the
year but trended down in the last
months of the year as we mined deeper,
in line with the mine sequencing plan.
Mine development remained at 1,222
metres per month in 2024 (2023: 1,239
metres per month).
Financial performance
Cost per tonne decreased as efficiencies
were achieved due to the economies
of scale, the reduction in the use
of development and infrastructure
contractors and, to a lesser extent, the
favourable effect of the devaluation of
the Mexican peso vs the US dollar, partly
offset by cost inflation.
Cash cost per silver equivalent ounce
1
decreased to US$8.2 per ounce (2023:
US$10.7 per silver ounce) mainly as a
result of the variation in change in work
in progress, a lower cost per tonne,
higher lead and zinc ore grades and
lower treatment and refining charges.
Margin per ounce increased to US$20.6
in 2024 (2023: US$13.0). Expressed
as a percentage of the silver price,
it increased from 54.9% to 71.6%.
All-in sustaining cost decreased 25.5%
to US$11.7 per equivalent silver ounce
due to the lower cash cost, decrease in
sustaining capex and a lower capitalised
mine development.
Cost per tonne and cash cost in 2023 are
not considered to be representative as
they correspond to the commissioning
and ramp-up period of the flotation
plant.
Capital expenditure
Capital expenditure in 2024 totalled
US$59.3 million and was allocated
primarily to mine development and
purchase of equipment.
37
Juanicipio cost per tonne
(US$/tonne milled)
115.8
50
123.1
115.8
2024
2023
2022
Juanicipio cash cost
(Silver US$/ounce)
8.2
5
5
10.7
8.2
Silver price Cash cost
24.953.8%
21.739.7%
23.654.9%
28.871.6%
2024
2023
% figures represent margin between cash cost and
silver price.
Juanicipio ore milled per person
(Tonnes)
1,020
50
1,022
1,020
2024
2023
2022
1 The methodology to calculate this indicator has been changed from a ‘by product’ to ‘per equivalent ounce’ basis as this is more representative. Cash cost per ounce
is now being calculated as the total cash cost (cost of sales plus treatment and refining charges, less depreciation) divided by the silver or gold equivalent ounces sold.
2020-2023 figures have been restated to be comparable to those of 2024.
2 Margin defined as average realised price less cash cost per ounce.
Financial highlights 2024 2023 % change
Adjusted revenue (US$m) 662.8 492.5 34.6
Revenue (US$m) 627.5 454.7 38.0
Adjusted production costs (US$m) 153.8 156.7 -1.9
Depreciation (US$m) 89.2 68.9 29.5
Segment profit (US$m) 475.1 271.6 74.9
Capital expenditure (US$m) 59.3 82.2 -27.9
Exploration (US$m) 8.2 7.6 7.9
Cost per tonne total (US$) 115.8 123.1 -5.9
Cash cost (US$/oz silver) 8.18 10.65 -23.2
Margin (US$/oz)
2
20.6 12.99 58.6
Margin (expressed as % of silver price) 71.58 54.95 –
All-in sustaining cost (US$) 11.71 15.72 -25.5
38
Fresnillo plc Annual Report and Accounts 2024
REVIEW OF OPERATIONS – MINES IN OPERATION
Q&A WITH DANIEL DIEZ, CHIEF OPERATING OFFICER,
NORTHERN REGION
Outstanding opportunities
across all assets
In December 2023, Daniel Diez was
appointed Chief Operating Officer North,
tasked with strengthening oversight of
our assets and focusing on advancing
the pipeline. Daniel is responsible for
the Herradura, Ciénega and San Julián
mines, together with the projects at
Tajitos, Rodeo and Capricornio. Here, he
explains his key areas of focus during
2024 and his goals for 2025.
What were your first impressions
of Fresnillo?
Over the years, I have gained extensive
experience in mining across the world,
including a number of gold-silver
projects, so I already knew that Fresnillo
was a sound, stable company with
a reputation for delivering value
to shareholders.
My initial goal was to understand
the challenges and opportunities
facing each asset within the Northern
District and begin a value delivery
plan to capture opportunities during
the first year. It rapidly became clear
that while performance has been
satisfactory, there was also potential
for improvement. Our opportunity
to improve is supported by the very
positive drive from our CEO about the
need to maintain a sharp focus on cost
control and efficiency.
Everything I have learnt in my first
year at Fresnillo has underlined the
validity of my early impressions. While
our assets are at different stages of
maturity and face a range of challenges,
the factor that unites them is that they
all offer outstanding opportunities for
future results.
Where do the main challenges
and opportunities lie?
Year one has been primarily about
identifying those opportunities,
prioritising short-term improvement
initiatives, whilst also implementing
plans that will deliver more long-term,
transformational results.
Our mature operations required a
change in how we approach the
future, in terms of urgently bringing
forward new plans for greater efficiency
to extend the life of operations. We
are fortunate to benefit from skilled
and experienced teams at all our
assets. Over the last 12 months these
teams have been able to identify and
implement significant improvements.
As always, seizing our opportunities
for efficiency and productivity count
for nothing unless all our colleagues
go back home safely at the end of
the working day. So everything we
aim to do is in the context of deeply
embedding a safety culture in our
operations and driving continuous
improvement of our safety indices.
Which operations have
been leading the way?
Firstly, Ciénega is the year’s big success
story. Ciénega has a long history of
providing value as well as being a source
of great professionals. The original
outlook for this mine was complex, with
a limited mine life if additional cost
cutting strategies were not identified
and implemented promptly. However,
by changing how the team approached
the future – redoubling efforts to identify
operational efficiencies and delivering
on cost control measures – we have
been able to achieve an excellent
financial and operational performance.
In addition, we will continue our
exploration programme in these areas
with the aim of extending the mine’s life
beyond 2028.
San Julián was another major positive
in 2024. Although we had forecasted
that the Disseminated Ore Body
(DOB) would become depleted during
the year, unexpected geotechnical
complexities accelerated the closure
and reduced the mineable reserves,
making the picture very challenging
at the beginning of the year. A highly
professional team worked hard to
identify opportunities to optimise plant
operation. Whilst good exploration
results together with quick responses
from planning and operational teams
enabled us to adapt the mine plan
and exploit new high-grade areas. The
end result saw us overdelivering on
production, with cash cost and AISC
below budget. Looking ahead, even
though it will be relying only on the
Veins operation, we believe there is
additional potential in the area, which
leveraged by the team’s knowledge and
expertise, might give us the opportunity
to extend the mine life in the future.
Herradura is another example where
our team’s skills have enabled a
significant turnaround. While the first
part of the year was difficult due to staff
shortages and unexpected weather
conditions, the operations team drove
an Operational Excellence programme,
including key efficiencies and a major
cost control programme supported
by renewed focus on planning and
execution. The outcome was clear to
see in Q4, which was one of the most
productive quarters in Herradura’s
life. Challenges remain for 2025, in
particular around ore exposure and
the processing of sulphide ore by heap
leaching, but I am confident that the
many ongoing initiatives will enable us
to keep capturing opportunities here.
The Valles underground project, the
reprocessing of old heaps and a Carbon
in Column process for the dynamic
leaching plants are in the pipeline, and
we expect to provide a positive update
of the strategic plan during 2025.
What is the focus for 2025?
We have made a good start, but this
is only the beginning. The aim for
the year ahead is to maintain and
where possible increase our focus on
consolidating the efficiency mindset
across all operations in the north,
and to start delivering long-term,
high impact structural changes that
will underpin production in the years
ahead. At the same time, we will
work to bring the projects at Tajitos,
Rodeo and Capricornio closer to
becoming development projects –
and then operational mines – in the
Fresnillo portfolio.
We have made a good
start, but this is only the
beginning. The aim for
the year ahead is to maintain
and where possible increase
our focus on consolidating
the efficiency mindset.”
39
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Strategic Report
Governance
Financial Statements
Additional Information
The operations team at Herradura drove an
Operational Excellence programme, including
key efficiencies and a major cost control
programme supported by renewed focus
on planning and execution. The outcome
was clear to see in Q4, which was one of the
most productive quarters in Herradura’s life.
SHAPING OUR BUSINESS
TO OPTIMISE
OUR MINES IN
OPERATIONS
40
Fresnillo plc Annual Report and Accounts 2024
REVIEW OF OPERATIONS – MINES IN OPERATION CONTINUED
SAN JULIÁN DISTRICT
SAN JULIÁN
The San Julián silver-gold mine started operations in 2016. In 2024, it contributed
21.0% to total silver production and generated 12.9% of total Adjusted revenue.
2025 OBJECTIVES
Focus on implementing the second stage of the
optimisation plan at San Julián Veins to improve
the cost base.
Continue consolidating exploration in the region with
the aim of increasing the resource base and extending
mine life beyond 2030.
Increase the resource base and convert resources
into reserves.
Improve our safety performance.
2025 OUTLOOK
For the year ahead, the silver ore grade at the San Julián
Veins is expected to be in the range of 200-220 g/t, with
the gold ore grade expected to average 1.1-1.3 g/t.
Production San Julián Disseminated Ore Body
2024 2023 % change
Ore milled (kt) 1,554 2,074 (25.1)
Silver (koz) 3,393 7,791 (56.4)
Gold (oz) 1,779 3,478 (48.8)
Lead (t) 3,704 6,843 (45.9)
Zinc (t) 11,942 14,410 (17.1)
Silver ore grade (g/t) 81 136 (40.4)
Reserves San Julián Veins
1
2024 2023 % change
Silver (moz) 27.6 45.3 (39.1)
Decreased due to a more conservative approach to reserve estimation and
depletion, partly mitigated by the cut-off grade strategy and a higher metals prices.
Gold (koz) 128 210 (39.0)
Reserves San Julián Disseminated Ore Body
1
2024 2023 % change
Silver (moz) 0.0 11.2 (100.0)
Reserves have been depleted.
Gold (koz) 0.0 8 (100.0)
Reserves have been depleted.
Resources San Julián Veins
2
2024 2023 % change
Silver (moz) 115.4 141.1 (18.2)
Decreased due to a more conservative approach to resource estimation,
exploration results and depletion, partly mitigated by the cut-off grade strategy
and higher price.
Gold (koz) 883 955 (7.5)
Resources San Julián Disseminated Ore Body
2
2024 2023 % change
Silver (moz) 14.3 39.5 (63.8)
Decreased mainly due to depletion.
Gold (koz) 10.3 25.1 (59.0)
Decreased mainly due to depletion.
Total production
2024 2023 % change
Gold (oz) 51,413 44,487 15.6
Silver (koz) 11,836 13,349 (11.3)
Production San Julián Veins
2024 2023 % change
Ore milled (kt) 1,237 1,142 8.3
Silver (koz) 8,443 5,559 51.9
Gold (oz) 49,633 41,009 21.0
Silver ore grade (g/t) 232 166 39.8
Gold ore grade (g/t) 1.31 1.17 12.0
1 2024 reserves as of 30 June 2024.
2 2024 resources as of 30 June 2024.
2024 OBJECTIVES COMMENT
Successfully conclude DOB mining. A See: Mine production below.
Continue exploration in the region with the
aim of increasing the resource base.
PA See: Reserves and resources below.
Convert inferred resources to reserves at
San Julián Veins.
PA See: Reserves and resources below.
Focus on key cost reduction initiatives
at Vein operations.
A See: Financial performance below.
Improve our safety performance and continue
strengthening our safety-centred culture.
A See pages 73-77.
A: Achieved; PA: Partially achieved; NA: Not achieved.
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Key developments in the year
Silver and gold production at San
Julián Veins increased year-on-year
primarily due to the increased volume
of ore processed as a result of the
timely preparation of stopes and the
implementation of an operational
plant optimisation programme, which
increased the processing capacity.
Furthermore, the higher gold and
silver ore grades at the San Antonio,
La Dura, Eliza and Última Tierra areas,
together with improved dilution control
in wider veins, also contributed to the
increase in quarterly and full year gold
and silver production.
Production of all metals decreased at
San Julián Disseminated Ore Body
year-on-year, mainly due to the gradual
decrease in production at this mine and
the unforeseen geotechnical behaviour
of the ore body as it approached the
end of its mine life. Mining activities
concluded in November 2024 and the
closure plan is underway.
Productivity decreased, with the
majority of personnel at San Julián
DOB retained whilst mining activities
concluded and the mine closure plan
began implementation, partly offset
by the optimisation programme at
San Julián Veins.
Financial performance
San Julián Veins
Cost per tonne decreased 2.6% to
US$106.1, primarily due to the decrease
in maintenance costs, the decrease in
electricity costs as a greater portion of
our consumption came from renewable
sources with a lower cost per unit, the
average devaluation of the Mexican
peso vs the US dollar, and the higher
volumes of ore processed. This was
partly offset by the adverse effect
of the underlying cost inflation.
Cash cost per equivalent ounce of silver
decreased 24.2% due to the higher silver
ore grades. Margin per ounce increased
93.5% to US$17.8 (2023: US$9.2), while
margin expressed as a percentage of the
silver price increased from 38.9% in 2023
to 62.0% in 2024.
All-in sustaining cost decreased to
US$16.6 per equivalent silver ounce driven
by a lower cash cost and a decrease in
sustaining capex.
San Julián (DOB)
Cost per tonne decreased 10.2% to
US$44.9, mainly driven by the decrease
in consumption of steel, explosives,
reagents in addition to the lower
maintenance and contractor costs, and
the average devaluation of the Mexican
peso vs the US dollar, partly offset by the
lower volume of ore processed as this
mine approached the end of its life
and the adverse effect of the underlying
cost inflation.
Cash cost increased to US$20.3 per
equivalent silver ounce
1
driven by
the lower silver ore grade, partially
mitigated by a lower cost per tonne.
Margin per ounce decreased 10.5% to
US$8.5 (2023: US$9.5), while margin
expressed as a percentage of the silver
price decreased from 40.2% in 2023 to
29.6% in 2024.
All-in sustaining cost increased to
US$22.3 per ounce driven by the
increase in cash cost.
San Julián Veins and DOB ore milled
per person
(Tonnes)
1,498
1,576
1,602
1,693
1,570
1,498
2023
2022
2021
2020
2024
San Julián Veins cost per tonne
(US$/tonne milled)
106.1
71.8
81.5
91.0
109.0
106.1
2023
2022
2021
2020
2024
San Julián Veins cash cost
(Silver US$/ounce)
10.95
10.00
13.02
13.82
14.44
10.95
Silver price Cash cost
21.3
53.0%
24.947.6%
21.736.4%
23.638.9%
28.862.0%
2024
2023
2022
2021
2020
% figures represent margin between cash cost and
silver price.
San Julián DOB cost per tonne
(US$/tonne milled)
44.9
39.0
39.2
44.8
50.0
44.9
2023
2022
2021
2020
2024
San Julián DOB cash cost
(Silver US$/ounce)
20.26
10.61
8.3
10.46
14.14
20.26
Silver price Cash cost
21.3
50.1%
24.966.6%
21.751.8%
23.640.2%
28.829.6%
2024
2023
2022
2021
2020
% figures represent margin between cash cost and
silver price.
1 The methodology to calculate this indicator has been changed from a ‘by product’ to ‘per equivalent ounce’
basis as this is more representative. Cash cost per ounce is now being calculated as the total cash cost (cost
of sales plus treatment and refining charges, less depreciation) divided by the silver or gold equivalent
ounces sold. 2020-2023 figures have been restated to be comparable to those of 2024.
2 Margin defined as average realised price less cash cost per ounce.
Financial highlights 2024 2023 % change
Adjusted revenue (US$m) 469.6 385.5 21.8
Revenue (US$m) 456.0 406.4 12.2
Adjusted production costs (US$m) 201.0 228.1 -11.9
Depreciation (US$m) 162.7 101.9 59.7
Segment profit (US$m) 253.8 158.7 59.9
Capital expenditure (US$m) 49.4 74.8 -34.0
Exploration (US$m) 16.5 30 -45.0
Veins 2024 2023 % change
Cost per tonne total (US$) 106.1 109.0 -2.6
Cash cost (US$/oz silver) 10.95 14.44 -24.2
Margin (US$/oz)
2
17.83 9.20 93.8
Margin (expressed as % of silver price) 61.95 38.92 –
All-in sustaining cost (US$) 16.60 25.26 -34.3
DOB 2024 2023 % change
Cost per tonne total (US$) 44.9 49.9 -10.0
Cash cost (US$/oz silver) 20.26 14.14 43.3
Margin (US$/oz)
2
8.52 9.50 -10.3
Margin (expressed as % of silver price) 29.60 40.19 –
All-in sustaining cost (US$) 22.28 16.29 36.8
Capital expenditure
Capital expenditure in 2024 was
US$49.4 million, mainly allocated to
mining works and sustaining capex.
42
Fresnillo plc Annual Report and Accounts 2024
REVIEW OF OPERATIONS – MINES IN OPERATION CONTINUED
CIÉNEGA
CIÉNEGA
Ciénega is our most polymetallic mine, contributing 6.2% to total attributable gold
production and 8.6% to total attributable silver production. The mine generated 6.3%
of total Adjusted revenue during 2024.
2025 OBJECTIVES
Continue to focus on maximising productivity with own
resources while enhancing contractor efficiency.
Continue exploration programme in selected high grade
target areas to extend the reserve base and mine life.
Finalise evaluation of satellite deposits to complement
production.
Improve our safety performance.
2025 OUTLOOK
In 2025, the average gold ore grade is expected to be
between 1.1-1.3 g/t, with the silver ore grade expected to
average 120-140 g/t.
Mine production
2024 2023 % change
Ore milled (kt) 1,059 1,065 (0.5)
Silver (koz) 4,834 4,335 11.5
Gold (oz) 39,422 35,934 9.7
Lead (t) 2,922 2,881 1.4
Zinc (t) 3,168 3,550 (10.8)
Silver ore grade (g/t) 166 147 12.9
Gold ore grade (g/t) 1.27 1.14 11.4
Total reserves
1
2024 2023 % change
Silver (moz) 13.8 21.9 (37.0)
Decreased as a result of changes to the model, in particular related to capping and
depletion, partly mitigated by the cut off strategy and a higher price.
Gold (koz) 122 213 (42.7)
Total resources
2
2024 2023 % change
Silver (koz) 113,683 126,441 (10.1)
Decreased as a result of exploration results, changes to the model, in particular
related to capping and depletion, partly mitigated by the cut-off strategy and a
higher price.
Gold (koz) 1,457.8 1,476.3 (1.3)
1 2024 reserves as of 30 June 2024.
2 2024 resources as of 30 June 2024.
2024 OBJECTIVES COMMENT
Focus on key cost reduction initiatives. A See: Financial performance below.
Continue the exploration programme in the region
and re-evaluate mineral hauled from satellite veins.
PA See: Reserves and resources below.
Improve our safety performance and continue
strengthening our safety-centred culture.
NA See pages 73-77.
A: Achieved; PA: Partially achieved; NA: Not achieved.
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Strategic Report Governance Financial Statements Additional Information
4343
Key developments in the year
Gold and silver production increased
year-on-year due to due to the higher
ore grade at the Jessica Transversal and
Taspana Sur areas.
Productivity increased as the
programme to optimise the contractor
base and increase the productivity
of unionised personnel continued to
deliver positive results.
Financial performance
The initiatives put in place in 2023 to
rationalise the contractor base, further
decrease consumption of certain
operating materials and optimise the
maintenance process, together with a
more selective approach to ore extracted
from satellite areas, contributed to
decreased costs in 2024. The team will
continue to focus on profitability by
implementing initiatives to capture
efficiencies and identifying additional
opportunities to decrease costs
including reviewing contractors’ terms.
Cost per tonne decreased 10.5% to
US$121.5 in 2024. This was driven by
lower contractor costs as a result of the
initiatives to reduce costs at this mine,
and the devaluation of the Mexican
peso vs the US dollar, partly offset by
cost inflation.
Cash cost per equivalent gold ounce
decreased by 17.4% primarily due to
the lower cost per tonne and a higher
gold ore grade. Margin per ounce
increased significantly to US$1,013.4
in 2024 (2023: US$214.0). Expressed
as a percentage of the gold price, the
margin increased to 41.3% (2023: 10.9%).
All-in sustaining cost decreased 25.7% to
US$1,823.9 per equivalent gold ounce,
primarily driven by the lower cash
cost and, to a lesser extent, decreased
sustaining capex and lower capitalised
mine development.
Capital expenditure
Capital expenditure in 2024 totalled
US$17.1 million and was allocated
primarily to mine development,
sustaining capex and safety
and environment, including the
construction of the tailings dam.
Ciénega ore milled per person
(Tonnes)
829
900
842
612
647
829
2023
2022
2021
2020
2024
Ciénega cost per tonne
(US$/tonne milled)
121.5
76.7
86.1
116.3
135.8
121.5
2023
2022
2021
2020
2024
Ciénega cash cost
(Gold US$/ounce)
1,440.2
872.2
962.1
1,406.4
1,743.7
1,440.2
Gold price Cash cost
1,792.4
51.3%
1,795.046.4%
1,799.321.8%
1,957.710.9%
2,453.641.3%
2024
2023
2022
2021
2020
% figures represent margin between cash cost and
gold price.
1 The methodology to calculate this indicator has been changed from a ‘by product’ to ‘per equivalent ounce’
basis as this is more representative. Cash cost per ounce is now being calculated as the total cash cost (cost
of sales plus treatment and refining charges, less depreciation) divided by the silver or gold equivalent
ounces sold. 2020-2023 figures have been restated to be comparable to those of 2024.
2 Margin defined as average realised price less cash cost per ounce.
Financial highlights 2024 2023 % change
Adjusted revenue (US$m) 228.4 169.3 34.9
Revenue (US$m) 222.5 162 37.3
Adjusted production costs (US$m) 128.7 144.6 -11.0
Depreciation (US$m) 63.2 48.7 29.8
Segment profit (US$m) 92.9 18.9 391.5
Capital expenditure (US$m) 17.1 43.8 -61.0
Exploration (US$m) 4.9 7.8 -37.2
Cost per tonne total (US$) 121.51 135.8 -10.5
Cash cost (US$/oz gold) 1,440.18 1,743.72 -17.4
Margin (US$/oz)
2
1,013.40 214.00 373.6
Margin (expressed as % of gold price) 41.30 10.93 –
All-in sustaining cost (US$) 1,823.91 2,455.93 -25.7
44
Fresnillo plc Annual Report and Accounts 2024
REVIEW OF OPERATIONS – MINES IN OPERATION CONTINUED
HERRADURA DISTRICT
One of Mexico’s largest open pit gold mines, Herradura
produced 57.1% of the Group’s total gold in 2024 and
generated 24.3% of total adjusted revenue.
HERRADURA
2025 OBJECTIVES
Continue metallurgical analysis for sulphides to
optimise recovery.
Advance phase 2 of the Operational Excellence
programme to capture further efficiencies and cost
reduction initiatives.
Complete engineering of the Carbon In Column project
for dynamic leaching plants and start construction.
Complete engineering and start early works for Valles
underground mine.
Improve our safety performance.
Increase the resource base and convert resources
into reserves.
2025 OUTLOOK
Gold ore grades in 2025 are expected to be in the range
of 0.50–0.70 g/t.
Mine production
2024 2023 % change
Ore deposited (kt) 22,742 20,224 12.5
Total volume hauled (kt) 97,692 99,542 (1.9)
Gold (oz) 360,598 355,485 1.4
Silver (koz) 524 611 (14.2)
Gold ore grade (g/t) 0.71 0.76 (6.6)
Total reserves
1
2024 2023 % change
Gold (moz) 5.7 5.5 3.6
Increased due to a higher price and cut-off strategy, partly offset by changes to the
model and depletion.
Total resources
2
2024 2023 % change
Gold (moz) 6.8 6.7 1.5
Increased due to a higher price, partly offset by depletion, exploration results and
a higher cost.
1 2024 reserves as of 30 June 2024.
2 2024 resources as of 30 June 2024.
2024 OBJECTIVES COMMENT
Conclude the life of mine plan, review and implement
relevant recommendations.
A See: mine production below.
Focus on key cost reduction initiatives. A See: financial performance below.
Improve our safety performance and continue
strengthening our safety-centred culture.
A See pages 73-77.
A: Achieved; PA: Partially achieved; NA: Not achieved.
45
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Strategic Report Governance Financial Statements Additional Information
Strategic Report
Key developments in the year
Annual gold production increased
slightly as a result of a higher volume of
ore processed, driven by the optimisation
of equipment utilisation. This was
partially offset by the lower ore grade as a
result of the change to the mine plan in
1H24, heavy rainfall, which delayed access
to higher grade oxidised ore areas, and
the greater height of the leaching pads,
which increased the residence time of
the solution on the pads and slowed the
overall speed of recovery.
After a complex first half of the year,
productivity and efficiency plans drove
recovery and led to a successful end
to the year. Increased productivity
rates and a targeted, strict cost control
programme delivered the expected
results, both operationally and financially.
The main challenges remain around
heap leach recovery for primary ore
(sulphides), triggering an intensive
metallurgical testwork programme to
determine the best processing path to
be implemented during 2025.
Productivity decreased vs 2023 as
personnel hauled material over longer
distances.
A complete reassessment of the
strategic mine plan was developed,
identifying several optimisation projects
at the mine, plant and maintenance
areas. The implementation of some of
these projects, known as the Operational
Excellence programme, began in 2024,
with a second phase scheduled for 2025.
The programme will include initiatives
to capture further efficiencies and cost
reductions, along with the engineering
for a Carbon in Column process to
increase recovery rates at the dynamic
leaching plants, and for the Valles
underground mine. The expectation is
to advance these initiatives, to continue
consolidating the lower cost base for the
operation, while optimising production
rates for the next five-year period.
Financial performance
While cost reduction initiatives
contributed to significant reductions
in the operating cost base, various
factors impacted cost indicators as
described below.
Cost per tonne of ore hauled decreased
8.3%, primarily due to the lower stripping
and decreased consumption of electricity
partly offset by cost inflation. However,
cost per tonne of material hauled (ore
and waste material) increased 2.0%.
Cash cost increased 4.1% to US$1,441.9
per equivalent ounce of gold
1
, mainly
due to the cost associated to the
reduction of gold inventories to be
processed in the dynamic leaching
plants at Herradura, partly mitigated
by the lower cost per tonne. However,
margin per ounce increased 76.5% from
4545
Herradura ore milled per person
(Tonnes)
32,840
39,531
42,672
40,967
35,959
32,840
2023
2022
2021
2020
2024
Herradura cost per tonne
(US$/tonne milled)
22.2
18.3
21.7
19.7
24.2
22.2
2023
2022
2021
2020
2024
Herradura cash cost
(Gold US$/ounce)
1,441.9
737.1
951.4
1,150.5
1,384.6
1,441.9
Gold price Cash cost
1,792.4
58.9%
1,795.047.0%
1,799.336.1%
1,957.729.3%
2,453.641.2%
2024
2023
2022
2021
2020
% figures represent margin between cash cost and
gold price.
1 The methodology to calculate this indicator has been changed from a ‘by product’ to ‘per equivalent ounce’
basis as this is more representative. Cash cost per ounce is now being calculated as the total cash cost (cost
of sales plus treatment and refining charges, less depreciation) divided by the silver or gold equivalent
ounces sold. 2020-2023 figures have been restated to be comparable to those of 2024.
2 Margin defined as average realised price less cash cost per ounce.
Financial highlights 2024 2023 % change
Adjusted revenue (US$m) 884.7 708.7 24.8
Revenue (US$m) 883.6 708.2 24.8
Adjusted production costs (US$m) 505.5 490.9 3.0
Depreciation (US$m) 91.7 78.4 17.0
Segment profit (US$m) 323.7 157.2 105.9
Capital expenditure (US$m) 55.0 56.9 -3.3
Exploration (US$m) 16.6 18.3 -9.3
Cost per tonne total (US$) 22.23 24.20 -8.1
Cash cost (US$/oz gold) 1,441.87 1,384.64 4.1
Margin (US$/oz)
2
1,011.71 573.08 76.5
Margin (expressed as % of gold price) 41.2 29.27 –
All-in sustaining cost (US$) 1,730.28 1,650.18 4.9
US$573.1 to US$1,011.7, while margin
expressed as a percentage of the gold
price increased from 29.3% in 2023 to
41.2% in 2024.
All-in sustaining cost increased 4.9% to
US$1,730.3 per equivalent gold ounce,
mainly due to the higher cash cost and
increase in sustaining capex.
Capital expenditure
Capital expenditure in 2024 totalled
US$55.0 million, which was focused on
mining works, the construction of the
leaching pads and sustaining capex.
Noche Buena
Full-year gold production totalled
20,941 ounces. As previously announced,
mining activities concluded in May
2023, and the mine closure plan has
continued as expected. For further details
on our mine closure process, see the
Sustainability section on page 100.
46
Fresnillo plc Annual Report and Accounts 2024
Prospecting and drill target generation (37)
(Santiago and La Palma/Peru, Pencahue/Chile,
Escritorio, Buenavista)
Early stage drilling (14)
(Capricornio/Chile, Chicayo-Supaypacha/
Peru, Fresnillo and San Julián districts)
Advanced exploration
(Pilarica/Peru, San Juan,
Candamena, Lucerito)
PEA
(Rodeo, Tajitos,
Guanajuato)
Feasibility
(Orisyvo)
Developments
Projects
Mine
Operations
*Operations at Soledad and Dipolos are currently suspended.
REVIEW OF OPERATIONS CONTINUED
A STRONG GROWTH PIPELINE
PROJECTS AND PROSPECTS PORTFOLIO
Our pipeline of exploration projects is key to our ongoing strategy of organic growth.
The diagram below shows our operations, projects and prospects across all stages.
Systematic project generation
1
Mine in operations
Fresnillo, Saucito, Herradura, Soledad-Dipolos*, San Julián,
Ciénega, Juanicipio
2
Development projects
No projects under development.
3
Prospecting and drill target generation (37)
Santiago and La Palma/Peru, Pencahue/Chile, Escritorio,
Buenavista
Early stage drilling (14)
Capricornio/Chile, Chiclayo-Supaypacha/Peru, Fresnillo
and San Julián districts
Advanced exploration
Pilarica/Peru, San Juan, Candameña, Lucerito
PEA – Feasibility
Orisyvo, Rodeo, Guanajuato, Tajitos
Highlights:
• We are reporting proven and probable reserves at all our underground mines.
• Exploration continues to be a key driver of growth.
• Our focus remains on Latin America, locating and consolidating new districts in Mexico, Peru and Chile.
• Our exploration teams have a highly respected reputation in the Mexican mining industry.
47
Strategic Report Governance Financial Statements Additional Information
www.fresnilloplc.com
EXPECTED DELIVERY OF GROWTH
130 – 150 koz Au
80 – 120 koz Au
140 – 165 koz Au
120 – 160 koz Au
1.0 moz Au
3.2 moz Au
371 moz Ag
Greenfield project development to be complemented with brownfield growth possibilities at Herradura.
1 Total average annual production.
Subject to pre-feasibility and feasibility assessment, final feasibility assessment and Board approval.
Resources
GREENFIELD PROJECTS
BROWNFIELD PROJECTS
Project
Project
2025 2026 2027 2028 2029 2030 2031
Expected avg.
annual production
1
Expected avg.
annual production
1
Guanajuato
Orisyvo
Herradura
underground
Tajitos
Rodeo
Valles
undergound
Infill drilling exploration, feasibility,
development and construction
Infill drilling exploration,
development and construction
Exploration to increase resources. Update
the preliminary economic assessment, start
pre-feasibility assessment level studies
Exploration to increase resources. Update the preliminary economic assessment,
start pre-feasibility assessment level studies. Refine conceptual development scenarios
Final metallurgical testing, feasibility,
development and construction
Exploration to increase resources. Update the preliminary economic
assessment, start pre-feasibility assessment level studies.
Refine conceptual development scenarios
Production
Production
Production
Production
Production
Production
48
Fresnillo plc Annual Report and Accounts 2024
REVIEW OF OPERATIONS – EXPLORATION
Exploration continues to be the key driver of growth for the Group. We believe that
continuous investment across price cycles is the most efficient and sustainable route
to create a portfolio of prospects and projects that extends across multiple stages.
Our firm and unchanging commitment
to exploration sets us apart from many of
our peers and provides a solid platform
for our future success.
Our exploration teams have a proud
and highly respected reputation in
the Mexican mining industry. They
have been responsible for our most
significant breakthroughs, such as
those at San Julián and Saucito, and
are ideally qualified to identify and
develop new opportunities. One of
the most important roles of our teams
is to engage with local communities
and seek their participation at an early
stage of a project. Not only does this
help safeguard our licence to operate,
it also gives us the opportunity to meet
and consult with local people, thereby
ensuring that we are able to tailor
any subsequent community support
programmes to meet their specific
needs (see sustainability section on
pages 101-106).
Our focus remains on Latin America
and, in particular, we look to locate and
consolidate new districts in Mexico,
Chile and Peru where we have identified
favourable gold-silver potential.
In 2024, our drilling programmes
decreased by 20.4% compared to
2023, with a total of 742,945 metres
drilled. 88% of drilling activities were
carried out at, or close to, our existing
operations, in line with our continued
focus on brownfield exploration which
maximises the possibility of good
returns. We drilled 90,632 metres
in greenfield targets where we are
consolidating districts.
Brownfield exploration
The Group’s strategy of focusing
on brownfield (on-lease or near-
mine) exploration to extend mine
life continued during the year. Our
belief that brownfield exploration and
discovery offer the best route to growth
of low-cost, low-risk mineral resources
and mineral reserves in well-understood
environments remains central to our
approach. Brownfield exploration is
configured to deliver a balanced project
pipeline that includes identifying early-
stage targets with project lead times of
typically four to five years, combined with
progressing more advanced projects
that can potentially deliver new mining
opportunities within the next two to
three years.
The objectives of the drilling campaigns
at our mines are threefold: (i) replenish
and augment our mineral reserves,
converting inferred resources into the
indicated category with infill drilling; (ii)
increase the total and inferred resources
by drilling at extensions of known
mineralisation and also by testing new
targets; and (iii) continue to ensure the
quality of the reserves blocks scheduled
to be mined in the short term, with
selected additional drilling carried
out wherever deemed necessary due
to grade variations. We work hard to
ensure the long-term sustainability of
our business and to drive growth by
replenishing depleted reserves and
maintaining a robust growth pipeline.
Greenfield exploration
We carefully define and execute drilling
campaigns aimed at discovering and
increasing resources at our early-stage
prospects in new mineral districts.
Focusing on projects that have shown
good potential for supporting our
growth ambitions. For projects in the
relatively early stages, we may conduct
preliminary economic assessments
(PEAs), which comprise an economic
analysis of the potential viability of
mineral resources.
For more advanced projects, we
undertake extensive de-risking
activities to refine models, explore the
extent of mineralisation and provide
comprehensive support to a project
as it moves into and through the
development stage – a key moment
in the journey towards becoming an
operational mine.
All our exploration projects are
measured against a set of strict criteria
to ensure they meet our operational,
revenue and profitability objectives.
For example, we will only proceed
with a standalone project if it offers
a minimum potential of 150 moz
of silver or 2 moz of gold. We also
consider a range of additional factors
before commencing activities, such as
ore grades, metallurgical recoveries,
extraction costs, environmental impact,
and sustainability and community
investment, as well as the available
infrastructure. Exploration budget is
allocated to selected projects based
on their score in the favourability and
risk analyses performed yearly on
our prospects and projects portfolio,
to be followed by the implementation
of an exploration programme
based on a disciplined milestone-
completion approach.
2024 performance
Mineral resources and ore reserves
Estimations of our mineral resources
and ore reserves are developed by our
corporate technical staff in line with
best practice and are audited every
year by independent consultants prior
to public statement under the JORC
Code reporting standards. The 2024
underground mineral resources and
ore reserve estimates were based on
price assumptions of US$1,750/oz gold
and US$23.0/oz silver, with open pit
ore reserves and mineral resources
estimated at US$1,750 and US$1,950/
oz gold respectively. These price
assumptions were based on an average
of the price outlooks from various
financial institutions, whereas in prior
years the outlook was set at the average
price over the prior three years. The
increased metals prices, along with the
removal of project capex from the cut-
off calculation, resulted in a decrease in
cut-off grades in 2024.
Since 2023, we have been implementing
a major technical development initiative
to upgrade our mineral resource and
ore reserve engineering functions and
reconciliation processes, and we again
made significant progress in 2024.
Following a considerable effort from
our teams, we are reporting proven
and probable reserves at all
our underground mines.
The corporate technical services
team will continue to improve all
disciplines in 2025, with a special focus
on improving our grade control and
reconciliation process.
Exploration and variations in reserves
and resources at our existing mines
are set out as part of our Review of
Operations (see pages 31-45).
The following section provides details
about our advanced exploration
projects, highlighting the progress
made in 2024 as well as outlining our
plans for the year ahead.
49
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Strategic Report Governance Financial Statements Additional Information
Silver in consolidated overall mineral resources (contained metal) increased 1.4% to 2,250. The 30.8 moz increase was the result
of the variations shown below.
2,700,000
Resources
2023
Guanajuato Lucerito
540,000
1,080,000
1,620,000
2,160,000
0
Fresnillo Candameña Others Juanicipio Ciénega San Julián
DOB
San Julián
Veins
Saucito Resources
2024
96,021
23,373
19,784
7,628 2,831
11,975
12,758
25,186
25,715
37,591
2,219,710
2,250,464
Gold in consolidated overall mineral resources (contained metal) increased to 38.5 moz, primarily driven by the contributions
shown below.
45,000
Resources
2023
Guanajuato Lucerito
9,000
18,000
27,000
36,000
0
Candameña Soledad &
Dipolos
Rodeo Noche
Buena
Herradura Others Fresnillo Saucito San Julián
Veins
Centauro
Profundo
Resources
2024
464
335
198
118
83
80
78 (25)
(39)
(71)
(72)
(615)
37,937
38,470
Silver in consolidated overall ore reserves (contained metal) decreased 7.1% to 331.3 moz, with the decrease of 25.2 moz primarily
driven by the contributions shown below.
500,000
Reserves
2023
Fresnillo Juanicipio
100,000
200,000
300,000
400,000
0
Saucito Ciénega San Julián
DOB
San Julián
Veins
Reserves
2024
Koz
5,673
5,446
659 (8,065)
(11,170)
(17,781)
356,568
331,331
Gold in consolidated overall ore reserves (contained metal) increased 2.5% to 7.2 moz, with the 177 koz increase primarily driven
by the contributions shown below.
9,000
Reserves
2023
Herradura Saucito
1,800
3,600
5,400
7,200
0
Juanicipio San Julián
DOB
Fresnillo San Julián
Veins
Ciénega Reserves
2024
Koz
173
104
90 (8)
(9)
(83)
(91)
7,058
7,234
50
Fresnillo plc Annual Report and Accounts 2024
Advanced exploration projects
Orisyvo
Orisyvo is a world-class, high-sulphidation
epithermal, disseminated gold deposit
located in the Sierra Madre mountains
of Chihuahua state, hosting open-
pit constrained total resources of 9.6
million ounces of gold. The project is
in the pre-feasibility stage aiming at
the development of a bulk-mining
underground operation and associated
infrastructure, which includes mineral
processing and tailings storage
facilities. During 2024, several pre-
feasibility level studies were completed,
delivering promising outcomes, and
these are currently under review with
the parties involved. Focus remains
on the optimisation of the expected
capital expenditure, operating costs,
and metallurgical recoveries through
the evaluation of state-of-the-art
technologies, including alternatives for
water and energy supply, and tailings
disposal areas. The land acquisition
strategy, alongside the region-wide
engagement programme with the
community as well as local and state
governments, continues to operate as
scheduled, in preparation for the required
indigenous consultation processes.
Rodeo
Rodeo is an open pit, heap leaching
gold project located in central Durango
state. 1.4 million ounces of gold occur
in a volcanic rock-hosted disseminated
ore body showing thorough oxidation
down to depths exceeding 200 metres.
Good metallurgical recoveries have
been obtained from ore coming from
a projected low strip ratio open pit.
During 2024, agreements with local
communities for long-term land
access were reached and formalised
through contracts. A district-wide
community engagement programme
is ongoing, focusing on several health,
infrastructure and educational initiatives
proposed by the community members.
Camp preparation, construction of
access roads and recruitment of local
personnel are in progress for a 1Q25
drilling start-up. The initial exploration
programme is targeting resource
expansion and securing enough
samples for detailed metallurgical test
work in columns, with the objective of
gathering additional information to
deliver a revised preliminary economic
assessment before year end.
Tajitos
Tajitos is a low strip ratio open-pit,
heap-leach, disseminated gold project
located in the Herradura Corridor of
northwestern Sonora state. In 2024,
41,640 metres of core and reverse
circulation drilling were completed
in the main resource area, including
2,948 metres of PQ diameter holes
designed for the ongoing metallurgical
investigations on columns. A preliminary
economic assessment is in progress,
including the evaluation of capital
expenditures and optimisation of the
gold recoveries; results are expected
in 2H 2025. Exploration in the district
is now focused on drill-testing
numerous remaining targets with good
potential for high-grade gold veins for
underground mining and additional
disseminated mineralisation; promising
results have been obtained so far.
Environmental studies associated
with the potential development of
this project are in progress, along
with a regional community relations
programme which includes the
Caborca municipality.
Guanajuato
Guanajuato is a historic, world-class
gold and silver epithermal vein field
stretching more than 40 kilometres
along the central Mexican state of
Guanajuato. 101,521 metres of core
drilling were completed during
2024, 72% of which was devoted to
the southern portion of the district
where a significant silver-gold vein
system was discovered; high-grade
inferred resources here increased
to circa 3 moz of gold and 371 moz
of silver. A preliminary economic
assessment is ongoing, along with
additional metallurgical investigations,
land acquisition, and a community
engagement programme. Exploration
also continued in the central portion
of the district, where conceptual
alternatives for mine development
and mineral processing scenarios are
currently being evaluated.
Prospects
In Mexico, our focus was on the Lucerito
and Candameña projects which are
advancing as planned. At Lucerito,
located in central Durango, gold and
silver resources increased to 3.2 moz
and 228 moz respectively, whereas at
Candameña resources increased to
1.6 moz of gold and 39.8 moz of silver.
Additional drilling and metallurgical
investigations will continue in 2025.
In Peru, we started drilling at the La
Palma prospect in northern Peru
and developed a comprehensive
medium-term plan for the process
of obtaining social and government
permits, aiming at the generation of
drilling programmes for several of our
good potential prospects in the main
Peruvian gold and silver belts.
In Chile, the exploration team
focused on the Capricornio and
Pencahue projects, where community
engagement is also ongoing.
Early-stage exploration
We routinely carry out activities at our
six exploration offices to accumulate
regional geological, geophysical,
structural and geochemical data
and analyse it in a GIS environment.
Areas identified with good potential
are followed up by gathering remote
sensing hydrothermal alteration data
commissioned from international
high-quality service providers. The
information gained is integrated
into the database to refine our
understanding of the targeted ore
deposit systems. Furthermore, our
regional prospecting teams in Mexico,
Peru and Chile carry out the field work
required to validate the exploration
targets and eventually incorporate
them into our prospect pipeline.
REVIEW OF OPERATIONS – EXPLORATION CONTINUED
51
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Strategic Report Governance Financial Statements Additional Information
FINANCIAL REVIEW
The consolidated financial statements of Fresnillo plc are prepared in accordance
with UK-adopted international accounting standards. This financial review intends to
explain the main factors affecting performance as well as provide a detailed analysis
of the financial results in order to enhance the understanding of the Group’s financial
statements. All comparisons refer to 2024 figures compared to 2023, unless otherwise
noted. The financial information and year-on-year variations are presented in US dollars,
except where otherwise indicated. The full financial statements and their accompanying
notes can be found on pages 212-260.
The following report presents how we have managed our financial resources.
Commentary on financial performance
The Group’s financial performance in 2024 reflects the positive impact of higher precious metals prices coupled with a more
stable operational performance, notwithstanding the challenges faced during the year.
Adjusted revenue
1
increased 26.9% vs 2023 to US$3,639.9 million. This was primarily due to higher gold, silver and zinc prices
and the increase in volumes of all metals sold. Revenue increased 29.3% year-on-year to US$3,496.4 million, primarily due to the
increase in Adjusted revenue.
Adjusted production costs
2
decreased 2.6% vs 2023. This was mainly due to the efficiencies and economies of scale achieved,
principally at Saucito, Juanicipio, Ciénega and San Julián Veins, and the favourable effect of the devaluation of the Mexican
peso vs. US dollar. These factors were partly offset by cost inflation of 2.3%, excluding the exchange rate devaluation, as well as
the longer haulage distances associated with mining deeper in the earth, which increased maintenance, contractors’ costs and
diesel consumption, particularly at Herradura and Fresnillo.
As a result, gross profit and EBITDA
3
more than doubled to US$1,246.3 million and US$1,547.3 million in 2024.
We maintained our strong financial position, with US$1,297.8 million in cash and other liquid funds as of 31 December 2024,
a net increase of US$763.2 million over the period, having paid dividends of US$78.2 million in accordance with our policy
(adjusted for extraordinary, non-cash items, in particular the revaluation of the Silverstream contract and the effect of the
exchange rate on deferred taxes), invested US$370.5 million in capex, and spent US$163.0 million on exploration expenses.
The Group’s financial
performance in 2024
reflects the positive impact
of higher precious metals
prices coupled with a
more stable operational
performance.”
52
Fresnillo plc Annual Report and Accounts 2024
FINANCIAL REVIEW CONTINUED
Income statement highlights
2024
US$ million
2023
US$ million
Amount change
US$million Change %
Adjusted revenue
1
3,639.9 2,869.1 770.8 26.9
Total revenue 3,496.4 2,705.1 791.3 29.3
Cost of sales (2,250.1) (2,201.8) (48.3) 2.2
Gross profit 1,246.3 503.2 743.1 147.7
Exploration expenses 163.0 182.4 (19.4) (10.6)
Operating profit 945.8 142.5 803.3 563.7
EBITDA
3
1,547.3 655.7 891.6 136.0
Special mining rights 127.0 30.8 96.2 312.3
Income tax (Tax income)
4
390.2 (205.0) 595.2 n/a
Profit for the period 226.7 288.3 (61.6) (21.4)
Profit for the period, excluding post-tax Silverstream effects 354.3 282.9 71.4 25.2
Basic and diluted earnings per share (US$/share)
5
0.191 0.317 (0.126) (39.7)
Basic and diluted earnings per share, excluding post-tax
Silverstream effects (US$/share) 0.364 0.310 0.054 17.4
1 Adjusted revenue is revenue as disclosed in the income statement adjusted to exclude treatment and refining charges and metals prices hedging.
2 Adjusted production costs are calculated as cost of sales less depreciation, profit sharing, hedging, change in inventories and unproductive costs. The Company
considers this a useful additional measure to help understand underlying factors driving production costs in terms of the different stages involved in the mining and
plant processes, including efficiencies and inefficiencies, as the case may be, and other factors outside the Company’s control such as cost inflation or changes in
accounting criteria.
3 Earnings before interest, taxes, depreciation and amortisation (EBITDA) is calculated as profit for the year from continuing operations before income tax, less finance
income, plus finance costs, less foreign exchange gain/(loss), less revaluation effects of the Silverstream contract and other operating income plus other operating
expenses and depreciation.
4 Tax income resulted from the favourable impact of the revaluation of the Mexican peso vs the US dollar.
5 The weighted average number of Ordinary Shares was 736,893,589 for 2024 and 2023. See Note 18 to the consolidated financial statements.
The Group’s financial results are largely determined by the performance of our operations. However, other factors beyond our
control, including a number of macroeconomic variables, affect our financial results. These include:
Metals prices
The average realised silver price increased 21.7% from US$23.6 per ounce in 2023 to US$28.8 per ounce in 2024, while the average
realised gold price rose 25.3% to US$2,453.6 per ounce. The average realised zinc by-product price increased 8.7% to US$1.28 per
pound, with the lead by-product price decreasing 2.7% vs 2023 to US$0.92 per pound.
MX$/US$ exchange rate
Spot exchange rate at 31 December 2024 Spot exchange rate at 31 December 2023 Impact
$20.27 per US dollar $16.89 per US dollar The 20.0% spot devaluation had an
adverse effect on deferred taxes and
special mining rights
Average Mexican peso/US dollar exchange rate 2024 Average Mexican peso/US dollar exchange rate 2023 Impact
$18.30 per US dollar $17.77 The 3.0 devaluation had a positive
effect of US$29.8 million on the Group’s
costs denominated in Mexican pesos
(approximately 45% of total costs) when
converted to US dollars.
Cost inflation
The Mexican Consumer Price Index for 2024 was 4.3%. However, to evaluate the Group’s cost inflation for the year, we calculate
the unit price increase for each component of adjusted production costs and take into consideration their weighted average
within the Group’s basket. The resulting cost inflation estimate for 2024 was 0.2%, which included the favourable effect of the
3.0% average devaluation of the Mexican peso against the US dollar. Underlying cost inflation (cost inflation excluding the
devaluation of the Mexican peso vs. US dollar) was 2.3%. We conduct the same exercise for each individual mine operation,
whose basket components may carry different weightings.
The main components driving our cost inflation are listed below:
Labour
Unionised workers received on average a 7% increase in wages in Mexican pesos, while non-unionised employees received
on average a 6% increase in wages in Mexican pesos; when converted to US dollars this resulted in a weighted average labour
inflation of 0.5%.
53
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Strategic Report Governance Financial Statements Additional Information
Energy
Electricity
The weighted average cost of electricity in US dollars decreased 16.2% from US$9.70 cents per kW in 2023 to US$8.13 cents
per kW in 2024.
Diesel
The weighted average cost of diesel increased 4.7% in US dollars to 111.9 US cents per litre in 2024, compared to 106.9 US cents
per litre in 2023.
Contractors
Agreements are signed with each individual contractor company and include specific terms and conditions that cover not only
labour, but also operating materials, equipment and maintenance, among others. Contractor costs are mainly denominated in
Mexican pesos and are an important component of our total production costs. In 2024, increases per unit (i.e. per metre developed/
per tonne hauled) granted to contractors whose agreements were due for review during the period, resulted in a weighted average
increase of approximately 0.1% in US dollars, after considering the devaluation of the Mexican peso vs the US dollar.
The effects of the above external factors, combined with the Group’s internal variables, are further described below through the
main line items of the income statement.
Revenue
Consolidated revenue
2024
US$ million
2023
US$ million
Amount
US$ million Change %
Adjusted revenue
1
3,639.9 2,869.1 770.8 26.9
Treatment and refining charges (143.6) (164.0) 20.4 (12.4)
Total revenue 3,496.4 2,705.1 791.3 29.3
1 Adjusted revenue is revenue as disclosed in the income statement adjusted to exclude treatment and refining charges and metals prices hedging.
Adjusted revenue increased by US$770.8 million primarily driven by the higher gold and silver prices and the increased volumes
of all metals sold. Changes in the contribution by metal were the result of the relative changes in metals prices and volumes
produced. The effect by metal, both in terms of volume and price, is shown in the table below.
Adjusted revenue
1
by metal
2024 2023
US$ million
%
contribution US$ million
%
contribution
Volume
variance
US$ million
Price
variance
US$ million
Total net
change
US$ million Change %
Gold 1,514.7 41.6 1,186.2 41.4 27.7 300.8 328.5 27.7
Silver 1,673.9 46.0 1,310.6 45.7 61.2 302.2 363.3 27.7
Lead 139.8 3.8 121.5 4.2 21.9 (3.6) 18.3 15.1
Zinc 311.5 8.6 250.8 8.7 37.3 23.4 60.7 24.2
Total Adjusted revenue 3,639.9 100.0 2,869.1 100.0 148.2 622.7 770.8 26.9
1 Adjusted revenue is revenue as disclosed in the income statement adjusted to exclude treatment and refining charges and metals prices hedging.
Adjusted revenue by mine
The contribution by mine to Adjusted revenues is outlined in the table below. This is expected to change further in the future,
as new projects are incorporated into the Group’s operations and as precious metals prices fluctuate.
2024 2023
(US$ million) % contribution (US$ million) % contribution Change %
Herradura 884.7 24.3 708.7 24.7 24.8
Saucito 760.0 20.9 527.8 18.4 44.0
Juanicipio 662.8 18.2 492.5 17.2 34.6
Fresnillo 591.2 16.2 479.6 16.7 23.3
San Julián (Veins) 354.5 9.7 205.1 7.1 72.8
San Julián (DOB) 115.1 3.2 201.3 7.0 (42.8)
Ciénega 228.4 6.3 169.3 5.9 34.9
Noche Buena 43.4 1.2 84.8 3.0 (48.8)
Total 3,639.9 100 2,869.1 100 26.9
Treatment and refining charges
Treatment and refining charges
1
are reviewed annually using international benchmarks. Treatment charges per tonne of lead
and zinc concentrate and silver refining charges decreased in dollar terms by 10.0%, 25.7% and 23.0%, respectively. These factors,
combined with the higher volumes of lead and zinc concentrates shipped from our mines to Met-Mex, resulted in a 12.4%
decrease in treatment and refining charges set out in the income statement in absolute terms when compared to 2023.
1 Treatment and refining charges include the cost of treatment and refining as well as the margin charged by the refiner.
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Fresnillo plc Annual Report and Accounts 2024
FINANCIAL REVIEW CONTINUED
Cost of sales
Concept
2024
US$ million
2023
US$ million
Amount
US$ million Change %
Adjusted production costs
2
1,582.2 1,624.1 (41.9) (2.6)
Depreciation 619.8 497.3 122.5 24.6
Profit sharing 12.3 2.2 10.1 459.1
Hedging 0.0 (0.2) 0.2 (100.0)
Change in work in progress 35.8 52.6 (16.8) (31.9)
Unproductive costs including inventory reversal and unabsorbed
production costs
3
0.0 25.9 (25.9) (100.0)
Cost of sales 2,250.1 2,201.8 48.3 2.2
2 Adjusted production costs are calculated as cost of sales less depreciation, profit sharing, hedging, change in inventories and unproductive costs. The Company
considers this a useful additional measure to help understand underlying factors driving production costs in terms of the different stages involved in the mining and
plant processes, including efficiencies and inefficiencies, as the case may be, and other factors outside the Company’s control such as cost inflation or changes in
accounting criteria.
3 Unproductive costs primarily include unabsorbed production costs such as non-productive costs from the temporary suspension of activities at Herradura and non-
productive fixed mine costs incurred at Noche Buena from the finalisation of mining activities.
Cost of sales increased 2.2% to 2,250.1 million in 2024. The main factors driving the US$48.3 million increase are listed below:
Adjusted production costs decreased by US$41.9 million as shown in the graph below:
60
Cost inflation
(+2.3%) excluding
the MXP/USD
devaluation effect
Others Net Effect
of Changer
in Volume of
Ore Processed
(40)
(20)
0
20
(60)
MXP/USD
Devaluation
effect
(+3.0%)
Net Operating
efficiencies
Decrease
in Adjusted
Production
Cost
40
USD MILLION
4.8 (8.5)
31.6
(29.8)
(40.0)
(41.9)
The ongoing efforts to implement cost reduction initiatives generated positive results in 2024, driving US$40.0 million net
worth of operating efficiencies. These included efficiencies and economies of scale (-US$69.8m) at Saucito and Juanicipio due to
decreased contractor costs, and at Ciénega and San Julián as a result of the rationalisation of contractors together with initiatives
to optimise the maintenance process. This achievement was offset by inefficiencies (+US$29.8m) at Herradura due to the longer
haulage distances, and at Fresnillo as a result of increased haulage costs as ore was hauled via ramps while the two sections of
the deepened San Carlos shaft were connected, and increased contractors’ and maintenance costs.
Depreciation (+US$122.5 million) due to increased depreciation of the asset base at San Julián DOB as it approached the end
of its life and, to a lesser extent, the depreciation of the additional asset base at Juanicipio and the increased depletion factor at
Ciénega and Saucito.
Gross profit
Gross profit is a key financial indicator of profitability at each business unit and the Fresnillo Group as a whole.
Total gross profit doubled from US$503.2 million in 2023 to US$1,246.3 million in 2024.
The main factors driving the US$743.0 million increase in gross profit are shown in the graphic below:
1,000
Higher Metal
Prices
(Au +25.0%
Ag+22.6%
and ZN +8.7%)
Net Effect
of Change
in Volume
of Ore
Processed
Net Increase
in ore
grades and
recoveries
166.7
333.3
500.0
666.6
0
Net
Operating
Efficiencies
MXP/USD
Devaluation
effect
(+3.0%)
Lower
Treatment
and refining
charges
Others Cost inflation
(+2.3%)
excluding
the MXP/USD
revaluation
effect
Higher
depreciation
mainly at
San Julián
(DOB) and
Juanicipio
2024
Gross
Profit
833.3
USD MILLION
126.6
51.7
40.0
29.8
20.4
2.2 (31.6)
(122.5)
626.3
743.0
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Strategic Report Governance Financial Statements Additional Information
The contribution by mine to the Group’s consolidated gross profit and the year-on-year variations are outlined in the table below:
Contribution by mine to consolidated gross profit
2024 2023 Change
US$ million
%
contribution US$ million
%
contribution US$ million %
Juanicipio 384.8 31.0 202.8 41.0 182.0 89.7
Saucito 281.7 22.7 80.4 16.2 201.3 250.4
Herradura 274.2 22.0 124.2 25.1 150.0 120.8
Fresnillo 180.0 14.5 61.2 12.4 118.8 194.1
San Julián 89.3 7.2 56.3 11.4 33.0 58.6
Ciénega 29.6 2.4 (29.8) (6.0) 59.4 (199.3)
Noche Buena 3.2 0.2 (0.1) 0.0 3.3 >100
Total for operating mines 1,242.8 100.0 495.0 100.0 747.8 151.1
Metal hedging and other subsidiaries 3.5 8.2 (4.7) (57.3)
Total Fresnillo plc 1,246.3 503.2 743.1 147.7
Administrative and corporate expenses
Administrative and corporate expenses decreased 14.7% from US$128.4 million in 2023 to US$109.5 million in 2024, mainly due
to the lower fees incurred for advisory and consulting services, the favourable effect of the devaluation of the Mexican peso vs
the US dollar on administrative expenses denominated in pesos, including personnel salaries, and the cost reduction initiatives
resulting from services provided in accordance with the Shared Services Agreement with Peñoles.
Exploration expenses
Exploration expenses decreased 10.6% from US$182.4 million in 2023 to US$163.0 million in 2024. In line with our strategy,
exploration continued to focus on the Fresnillo and San Julián districts, with special emphasis on intensifying activities aimed
at increasing the resource base, converting resources into reserves and improving the confidence of the grade distribution in
reserves. An additional US$2.0 million was capitalised, mainly relating to exploration expenses at the Guanajuato project. As
a result, risk capital invested in exploration totalled US$165.0 million in 2024, compared to US$185.9 million in 2023 (of which
US$3.5 million was capitalised). This represents a year-on-year decrease of 11.2%.
EBITDA
EBITDA is a gauge of the Group’s financial performance and a key indicator to measure debt capacity. It is calculated as profit
for the year from continuing operations before income tax, less finance income, plus finance costs, less foreign exchange gain/
(loss), less the net Silverstream effects and other operating income plus other operating expenses and depreciation.
2024
US$ million
2023
US$ million
Amount
US$ million Change %
Profit from continuing operations before income tax 743.9 114.0 629.9 552.5
– Finance income (46.9) (50.6) 3.7 (7.3)
+ Finance costs 73.6 88.8 (15.2) (17.1)
– Revaluation effects of Silverstream contract 182.3 (7.7) 190.0 n/a
– Foreign exchange loss, net (7.0) (2.0) (5.0) 250.0
– Other operating income (39.2) (35.3) (3.9) 11.0
+ Other operating expense 21.0 51.2 (30.0) (58.6)
+ Depreciation 619.8 497.3 122.5 24.6
EBITDA 1,547.3 655.7 891.6 136.0
EBITDA margin 44.3 24.2 – –
In 2024, EBITDA more than doubled to US$1,547.3 million primarily driven by the higher gross profit and lower administrative
and exploration expenses. As a result, EBITDA margin expressed as a percentage of revenue increased, from 24.2% in 2023 to
44.3% in 2024.
Other operating income and expense
In 2024, a net gain of US$18.3 million was recognised in the income statement primarily as a result of assigning the rights
and obligations of the non-core Guazapares mining concessions to Coeur Mining. In contrast, a loss of US$15.8 million was
registered in 2023 mainly as a result of the illegal extraction of ore from the leaching pads at Soledad-Dipolos by third parties,
which has now ceased.
Silverstream effects
The Silverstream contract related to Industrias Peñoles’ Sabinas mine silver production is accounted for as a derivative financial
instrument carried at fair value.
Following a notification from Industrias Peñoles that its Sabinas mine was experiencing operational and financial difficulties,
which increased the risk of Peñoles’ being unable to fully comply with the terms and conditions of the Silverstream, the Company
has decided to incorporate this uncertainty into the model used to estimate the fair value of the financial derivative instrument.
This resulted in a US$231.6 million loss before taxes and the period’s profit amortisation of US$49.3 million, with an overall net
impact of US$182.3 million in the income statement.
56
Fresnillo plc Annual Report and Accounts 2024
FINANCIAL REVIEW CONTINUED
The Group expects that further unrealised gains or losses related to the valuation of the Silverstream contract will be taken to
the income statement in accordance with silver price cyclicality or changes in the variables considered in valuing this contract.
Further information related to the Silverstream contract is provided in the balance sheet section in notes 14 and 30 to the
consolidated financial statements.
Net finance costs
Net finance costs of US$26.6 million compared favourably to the US$38.2 million recorded in 2023. The US$11.6 million decrease
was primarily due to the lower interest paid as in 2024 net finance costs mainly reflected interest paid on the US$850 million
principal amount of 4.250% Senior Notes due 2050. Conversely, in 2023 the Group paid interest on the outstanding US$317.9
million of 5.500% Senior Notes due 2023, in addition to the interests described above. Detailed information is provided in Note
10 to the consolidated financial statements. During the year ended 31 December 2024 there were no capitalised borrowing
costs (2023: US$2.1 million).
Taxation
Income tax expense for the year was US$390.2 million, which compared negatively to the tax income of US$205.0 million in
2023. The effective tax rate, excluding the special mining rights, was 52.5% (2023: -179.8%), compared to the 30% statutory tax
rate. The reason for the variation in the effective tax rate is the difference between the tax and the accounting treatment related
mainly to the effect of the spot exchange rate on the tax value of assets and liabilities. This adverse effect was mitigated by the
effect of the Mexican inflation on the restatement of tax value of fixed assets as described in the table below:
2024 2023
Spot exchange rate devaluation (revaluation) 20.0 (12.8)
Exchange rate effect on tax value of assets and liabilities US$300.2 million (US$214.5 million)
Inflationary uplift of the tax base of assets and liabilities (US$55.2 million) (US$54.8 million)
Mining rights in 2024 were US$127.0 million compared to mining rights of US$30.8 million charged in 2023. The significant
increase is due to higher deferred mining rights driven by the devaluation of the Mexican peso/US dollar spot exchange rate in
2024 and the fact that the special mining right will increase from 7.5% to 8.5% from 2025 onwards.
Profit for the period
Profit for the year decreased year-on-year by 21.0% as a result of the factors described above.
2024
US$ million
2023
US$ million
Amount change
US$ million Change %
Profit for the period 226.7 288.3 (61.6) (21.4)
Profit for the period, excluding post-tax Silverstream effects 354.3 282.9 71.4 25.2
Profit due to non-controlling interests
1
85.8 54.4 31.4 57.7
Profit attributable to equity shareholders of the Group 140.9 233.9 (93.0) (39.8)
Basic and diluted earnings per share (US$/share)
2
0.191 0.317 (0.126) (39.7)
Basic and diluted earnings per share, excluding post-tax
Silverstream effects (US$/share) 0.364 0.310 0.054 17.4
1 The increase reflects the higher profit generated at Juanicipio, where MAG Silver owns 44% of the outstanding shares.
2 The weighted average number of Ordinary Shares was 736,893,589 for 2024 and 2023. See Note 18 to the consolidated financial statements.
Cash flow
A summary of the key items from the cash flow statement:
2024
US$ million
2023
US$ million
Amount US$
million Change %
Cash generated by operations before changes in working capital 1,559.8 649.3 910.5 140.2
Increase/decrease in working capital (162.9) 20.6 (183.5) n/a
Taxes and employee profit sharing paid (97.1) (244.0) 146.9 (60.2)
Net cash from operating activities 1,299.8 425.9 873.9 205.2
Silverstream contract 30.0 40.2 (10.2) (25.4)
Proceeds from the sales of mining concessions
(layback agreement in 2023) (see Note 2 to the consolidated
financial statements) 10.0 22.8 (12.8) (56.1)
Purchase of property, plant and equipment (370.5) (483.4) 112.9 (23.4)
Dividends paid to shareholders of the Company (78.2) (108.4) 30.2 (27.9)
Financial expenses and foreign exchange effects (9.8) (6.4) (3.4) 53.1
Repayment of interest-bearing loans 0.0 (317.9) 317.9 (100.0)
Net (decrease)/increase in cash during the period after foreign
exchange differences 763.2 (434.5) 1,197.7 n/a
Cash and other liquid funds at 31 December
1
1,297.8 534.6 763.2 142.8
1 Cash and other liquid funds are disclosed in Note 17 to the consolidated financial statements.
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Cash generated by operations before changes in working capital more than doubled to US$1,559.8 million, primarily due to
higher precious metals prices and increased production volumes during the year. Working capital increased US$162.9 million,
mainly due to: i) a US$196.2 million increase in trade receivables from related parties principally because of higher precious
metals prices; and ii) a US$28.0 decrease in trade payables. This was partly offset by a decrease in ore inventories of US$50.6
million; and ii) a US$10.7 million decrease in prepayments mainly to contractors.
Taxes and employee profit sharing paid decreased 60.2% vs 2023 to US$97.1 million, mainly due to: i) a decrease in provisional
tax payments paid in 2024; ii) the lower final income tax paid in 2024, net of provisional taxes paid, corresponding to the 2023
tax fiscal year; iii) a decrease in mining rights payments; and iv) lower profit sharing paid.
As a result of the above factors, net cash from operating activities increased 205.2% from US$425.9 million in 2023 to US$1,299.8
million in 2024.
Main uses of funds were:
i) The purchase of property, plant and equipment for a total of US$370.5 million. Capital expenditures for 2024 are described in
the Review of Operations section (see pages 31-45).
ii) Dividends paid to shareholders of the Group in 2024 totalled US$78.2 million, a 27.9% decrease vs 2023, in line with our
dividend policy which includes a consideration of profits generated in the year, adjusted for the extraordinary, non-cash
items, in particular the revaluation of the Silverstream contract and the effect of the exchange rate on deferred taxes. The
2024 payment included the 2023 final ordinary dividend of 4.20 cents per share paid in May 2024, totalling US$31.0 million,
and the 2024 interim ordinary dividend paid in September of US$47.2 million.
iii) Financial expenses and foreign exchange effects of US$9.8 million, an increase of 53.1% vs 2023. Financial expenses in 2024
included interest paid on the 4.250% Senior Notes due 2050. In addition, financial expenses in 2023 included interest paid on
the outstanding US$317.9 million 5.500% Senior Notes due November 2023.
The sources and uses of funds described above resulted in an increase in net cash of US$763.2 million (net increase in cash and
other liquid assets), which combined with the US$534.6 million balance at the beginning of the year resulted in cash and other
liquid assets of US$1,297.8 million at the end of December 2024.
Balance sheet
Fresnillo plc continued to maintain a solid financial position during the period with cash and other liquid funds1 of US$1,297.8
million as of 31 December 2024. Taking this and the US$839.5 million outstanding Senior Notes, Fresnillo plc’s net cash was
US$458.3 million as of 31 December 2024. This compares to the net debt of US$304.4 million as of 31 December 2023. In 2023
the Group had a net debt/EBITDA ratio of 0.46x
1
.
Inventories decreased 9.5% to US$482.2 million, mainly due to: i) the decrease of gold inventories at Noche Buena, ii) a
reduction in the gold content at the leaching pads and to be processed at the dynamic leaching plants at Herradura, iii) the
decreased inventories of zinc concentrate at all our underground mines, and iv) a decrease in inventories of operating materials
and spare parts.
Dividends
Based on the Group’s 2024 performance, the Directors have recommended a final ordinary dividend of 26.1 US cents per
Ordinary Share, which will be paid on 30 May 2025 to shareholders on the register on 22 April 2025. The dividend will be paid in
UK pounds sterling unless shareholders elect to be paid in US dollars. This is in addition to the interim ordinary dividend of 6.40
US cents per share. This final ordinary dividend remains in line with the Group’s dividend policy to pay out 33-50% of the profit
attributable to equity shareholders of the company after making certain customary adjustments to exclude extraordinary non-
cash effects in the income statement.
In addition, the Board has declared a one-off special dividend of 41.8 US cents per share, equivalent to US$308.0 million which
will also be payable on 30 May 2025 to shareholders on the register as at 22 April 2025. This decision was made following a
comprehensive review of the Group’s financial position, its strong balance sheet and taking into consideration the positive cash
flow that the Group is expecting to generate in the coming years.
As disclosed in previous reports, the corporate income tax reform introduced in Mexico in 2014 created a withholding tax
obligation of 10% relating to the payment of dividends, including to foreign nationals. The 2024 final ordinary dividend will be
subject to this withholding obligation.
1 Net debt is calculated as debt at 31 December 2023 less Cash and other liquid funds at 31 December 2023 divided by the EBITDA generated in the last 12 months.
58
Fresnillo plc Annual Report and Accounts 2024
LETTER FROM THE CHAIRMAN OF THE HEALTH, SAFETY,
ENVIRONMENT & COMMUNITY RELATIONS (HSECR) COMMITTEE
Dear Shareholder,
Mining plays a vital role in addressing
global challenges, from modernising
infrastructure and technology to
advancing the energy transition.
As the first link within the commercial
and industrial value chain, it is also
essential to other industries. However,
as a resource-intensive industry,
it demands a disciplined, forward-
looking approach to reducing its
negative impacts. We are committed
to responsible mining practices that
safeguard people, communities and
the environment while contributing
to long-term societal progress.
The HSECR Committee supports
the Board in overseeing how the
Company is doing Business Ethically
and Responsibly, Caring for Our People,
Protecting the Environment, and
Partnering with Our Communities
in pursuit of its strategic objectives.
This includes reviewing strategies
and performance to ensure they
effectively address environmental,
social, and governance (ESG)
considerations and progress against
commitments and objectives.
As Chairman of the Committee, I would
like to express my heartfelt condolences
at the loss of two contractor workers.
These incidents serve as a stark reminder
that there is no margin of error when
it comes to safety, and that we must
remain vigilant of risk scenarios not only
within our production processes but
throughout our entire value chain
In response to these incidents, we have
reinforced competencies in risk analysis,
operational controls and implementation
of further safety measures.
Our commitment has seen a
continuous overall improvements in
our safety performance, including a
year on year 37.1% reduction in Total
Recordable Injury Frequency Rate
(TRIFR) – from 12.08 to 7.59 – and a
35.7% reduction in Lost Time Injury
Frequency Rate (LTIFR) – from 7.40
to 4.75.
Looking ahead, our
2026 vision remains
clear: zero fatalities and
a TRIFR aligned with
International Council
on Mining and Metals
(ICMM) standards.”
We continue to empower workers to
make the right calls regarding safety in
every single activity and environment,
and to have the confidence to stop
operations at any moment – without
any reprisals – should they detect
an unsafe condition. In addition,
we have strengthened engagement
with contractors, implementing new
mechanisms to assess, monitor, and
evaluate their compliance with safety
standards. Furthermore, we remain
resolute in continuing to enhance
leadership practices and verifications,
to ensure coverage of all possible
risk scenarios.
Looking ahead, our 2026 vision remains
clear: zero fatalities and a TRIFR aligned
with International Council on Mining and
Metals (ICMM) standards. To achieve this,
we will enhance leadership oversight,
improve personnel competencies, and
mature our risk management processes.
As part of our long-term strategy, we
are advancing technology-driven safety
initiatives, to further minimise common
industry risks and reinforce preventive
reporting. By continuously evolving our
safety approach, we make safety an
absolute priority in everything we do and
reaffirm our unwavering commitment
to ensuring that every worker returns
home safely – without exception.
Our commitment to safe operations
extends beyond our workforce.
Strengthening governance, monitoring,
and operational controls ensures
environmental and structural integrity
across all facilities. For example, in
2024, we continued strengthening
our Tailings Management System.
This included conducting impact
assessments, identifying potential
failure modes, and standardising
operation, maintenance, and
surveillance procedures to enhance
safety and ensure proactive risk
management. In that respect, we also
invested US$52.9 million in five key
projects, and an additional US$13.6
million was allocated to pre-feasibility
and feasibility-stage projects. The
Independent Tailings Review Panel
(ITRP) also completed its annual review
programme, covering Ciénega, San
Julián and the Orysivo project.
Reliable access to energy and water is
critical to both mining operations and
the wellbeing of local communities.
By investing in renewable energy
and water treatment infrastructure,
we are enhancing sustainability
while contributing to broader
resource security. This year, we
significantly increased renewable
energy consumption, with 80.6% of our
electricity mix sourced from renewables
– up from 53.3% in 2023. This progress
was driven by the strategic substitution
of thermal electricity for wind power in
our energy sourcing agreements.
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As a result, we achieved a 28.0%
reduction in total direct and indirect
Greenhouse Gas (GHG) emissions and
GHG intensity, reaching 0.0182 tons of
carbon dioxide equivalents (CO₂e) per
ton of mineral processed – our lowest
in recent years.
In 2024, we also advanced our water
stewardship efforts, reducing freshwater
consumption and strengthening
collaboration with local and federal
authorities. We achieved 84.2% water
reuse efficiency, with municipal treated
wastewater use rising to 81.2% in the
Fresnillo District and 30.2% company-
wide – up from 76.5% and 26.3% in 2023.
Additionally, a US$ 7 million investment
to expand municipal water treatment
and potabilisation capacity will support
our sustainability ambitions and
address water shortages and sanitation
challenges in Fresnillo city.
We are shaping our business to meet the
challenges and opportunities ahead by
embedding responsible mining practices
that enhance operational resilience,
empower our workforce, support local
communities, and create lasting value
for society. Our long-term strategy
prioritises operational excellence and a
zero-harm approach to people and the
environment, all underpinned by strong
governance and ethical conduct. The
HSECR Committee remains committed
to conducting a comprehensive
assessment of matters under its remit
while driving progress in the Company’s
strategy and overall ESG performance.
Yours faithfully,
Arturo Fernández
Chairman, Health, Safety, Environment
and Community Relations Committee
Role of the Committee
The role and duties of the HSECR
Committee are set out in its terms
of reference, a copy of which can be
found on the Company’s website.
HSECR Committee Membership
Mr Arturo Fernández (Chairman),
Dame Judith Macgregor,
Mr Fernando Ruiz and
Ms Georgina Kessel.
Key contributors: Chief Executive
Officer, Chief Operating Officer
North, Chief Operating Officer
Central, VP Infrastructure (Peñoles),
General Counsel, Assistant VP of
Safety and Environment, Health
Corporate Manager, Community
Relations Manager, and ESG
Compliance Manager.
HSECR Committee Activity
During the year, the Committee
met in accordance with its terms
of reference.
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Fresnillo plc Annual Report and Accounts 2024
Our sustainability strategy challenges
us to push boundaries in mining to
operate responsibly and increase our
contribution to broader society. By
integrating sustainable development
considerations into our business goals,
we want to reduce our environmental
footprint while supporting the wellbeing,
resilience and quality of life of our
workers and communities.
Mining has the potential to drive
economic and social progress when
conducted responsibly. To safeguard
these benefits, we maintain strong
governance and ethical standards,
ensuring transparency and integrity
across our operations. Through
proactive engagement with employees,
contractors, suppliers, Unions, NGOs,
communities and government entities,
we foster positive relationships while
proactively mitigating risks such as
bribery, corruption, money laundering,
fraud, and human rights violations.
Collaboration underpins our
sustainability strategy. Earning the trust
of our diverse stakeholders is integral
to our continued success. Strong
partnerships with different entities
provide us with insights and means to
strengthen our strategy and explore
new avenues. Long-term relationships
with our workforce enable us to build
a robust pipeline of talent to progress
our goals. And positive connections
with communities secure vital support
in pursuit of our ambitions.
It is through collaboration that we
recognise our stakeholders’ interests and
effectively address the matters that are
important to them. By creating positive
change that our stakeholders value, we
will begin to dispel negative perceptions
of mining, helping to cement our role
firmly in the future economy. Forging
reciprocal relationships also widens
our sphere of influence, extending the
positive impact of our work. See our
Stakeholders section on pages 24-28.
To achieve our long-term vision, we are
focusing our efforts on four key areas
that bring together the benefits of
precious metals and sustainable
mining practices:
We believe that precious metals are part of the solution to pressing global challenges.
They are vital for everything from equipment to diagnose and treat life-changing
illnesses to contributing to the energy transition. We strive to mine these resources
in a way that supports lives and livelihoods long into the future
SUSTAINABILITY AT THE CORE OF OUR PURPOSE
OUR APPROACH TO SUSTAINABLE MINING
STRENGTHENING MODERN
MINING PRACTICES
To limit our impact
on the planet, we strive
for zero-harm to people
and the environment.
Robust policies and
responsible management
of infrastructure and
resources, backed by
operational excellence,
hold us to high standards
and drive continuous
improvement in managing
risks and leveraging
new technologies.
EMPOWERING
PEOPLE
Modern mining offers
rewarding careers and
builds lifelong skills. We
nurture a collaborative,
supportive environment to
encourage people to forge
a long, rewarding career
with us, where they feel
involved and engaged in
progressing our strategy
and performance.
ADDRESSING LOCAL AND
REGIONAL PRIORITIES
We want to use our
influence to be a force
for improvement in
areas where we operate.
By engaging with our
neighbouring communities,
we are working to address
their priorities and enhance
their resilience for long-term
wellbeing and prosperity.
GENERATING
SHARED VALUE
As a responsible corporate
citizen, we work to
distribute the benefits of
our operations locally and
nationally through robust
policies and oversight.
Engagement
We also actively engage with
governments, NGOs, business
associations, and industry stakeholders
to drive environmental and social
progress. These partnerships generate
valuable insights, drive innovation,
allocate resources effectively, and
promote best practices across the
industry. However, our commitment
goes beyond mining:
• We participate in the Silver Institute’s
initiative to further study silver’s
lifecycle and its role as a climate-
smart metal.
• We engage in innovation-
driven partnerships, such as the
Colorado Cleantech Challenge,
which connects mining companies
with clean technology providers to
collaboratively address and overcome
the environmental challenges
inherent in our industry, enhancing
environmental performance and
industry sustainability.
• We are members of the IFRS
Sustainability Alliance and, through
management membership, form
part of the IFRS Sustainability
Reference Group with the purpose
of expanding our knowledge and
contributing to technical discussions
on sustainability standard setting.
• We also contribute to the World
Environment Center (WEC), gaining
insights from global industry leaders
on climate strategy and sustainable
development.
• In Mexico, we are part of CESPEDES,
the national chapter of the World
Business Council for Sustainable
Development (WBCSD),
collaborating on best practices
and policy engagement.
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Issue significance for our stakeholder
Issue materiality for the business
5
2
15
12
17
4
14
10
13
16
6
11
1
9
3
7
8
18
1.0
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
1.00.90.80.70.60.50.40.30.20.10
Issue significance for our stakeholder
Issue materiality for the business
5
2
15
12
17
4
14
10
13
16
6
11
1
9
3
7
8
18
1.0
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
1.00.90.80.70.60.50.40.30.20.10
Materiality
assessment
We actively engage with stakeholders
to identify, assess, and prioritise material
issues that impact both our business
and our stakeholders. This process,
known as materiality assessment,
informs our sustainability strategy
and non-financial reporting, ensuring
alignment with evolving societal
expectations and industry trends.
Given the dynamic nature of our
industry, we conduct in-depth
materiality assessments periodically,
ensuring best practices and alignment
with industry standards.
Our latest Materiality assessment
focused on operational mining sites in
Mexico. As in previous years, we assessed
materiality for both the present and the
next 10 years, aligning with the medium-
term scenarios in our Enterprise Risk
Management Framework and the
Company’s Strategic Plan.
The assessment outcomes were
communicated internally and
incorporated into our sustainability
strategy and disclosures, ensuring
transparency and alignment with
business priorities. Issues identified
as high priority for both the business
and external stakeholders are
being actively managed and
strategically communicated.
Our most recent assessment
reinforced the ongoing relevance
of key issues while also identifying
shifts in stakeholder priorities against
our previous assessment:
1. Consistently high-priority topics:
Water management, ethics,
corporate integrity, and safety.
2. Evolving priorities: Community
relations (with focus on long-term
sustainability), health and safety,
and occupational health concerns.
3. Declining prominence: Certain
aspects of waste management
and mine closure.
Materiality 2023 Materiality 2033
1
Biodiversity conservation
2
Climate change
3
Community relations
4
Data privacy and cybersecurity
5
Diversity, equity and inclusion
6
Environmental management
7
Ethics and corporate integrity
8
Governance, risk and crisis management
9
Health, safety and occupational wellbeing
10
Human rights
11
Innovation and technology
12
Mine closure
13
Relationship with government and authorities
14
Relationship with indigenous people
15
Responsible value chain
16
Talent development
17
Waste management
18
Water management
High
Medium
Low
Material issues Relevance of material issues:
• We support Naturalia, an NGO
dedicated to the conservation of
Mexican ecosystems and wildlife.
• Finally, we also actively engage in
market research on sustainability
and climate change, having
contributed in the past to FRC
Lab publications, and the Mexican
Council for Sustainable Finance’s
2024 report Final Report: Establishing
a Baseline on the Integration of TCFD
Recommendations in Financial
Institutions within the Mexican
Financial System.
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Fresnillo plc Annual Report and Accounts 2024
SUSTAINABILITY AT THE CORE OF OUR PURPOSE CONTINUED
OUR APPROACH TO SUSTAINABLE MINING
Pillar & ambitions Key matters
Material issues
Page 61
Intersection with principal risks
Pages 116-138 SDG alignment Our commitments Our objectives Our progress
DOING BUSINESS ETHICALLY
AND RESPONSIBLY
WE AFFIRM OUR ETHICAL
CULTURE THROUGH OUR
BEHAVIOUR AND ACTIONS
See pages 65-68
• Ethics culture
• Responsible business
7
Ethics and corporate
integrity
15
Responsible value chain
4
Data privacy and
cybersecurity
13
Relationship with
government and authorities
1
Potential actions
by the government
8
Human resources
3
Cybersecurity
• Embed a culture of trust and
accountability that strengthens
operational integrity
• Be accountable for our actions
across the value chain
• Strengthen understanding
of and confidence in the
Whistleblowing Mechanism
• Deployed robust communications
campaign in 2024
CARING FOR OUR PEOPLE
WE PRIORITISE OUR WORKFORCE’S
HEALTH, SAFETY AND WELLBEING
See pages 69-79
• Our culture
• Our people
• Safety
• Health
10
Human Rights
16
Talent development
9
Health, safety and
occupational wellbeing
11
Innovation and technology
5
Diversity, equity and
inclusion
8
Human resources
10
Safety
7
Union Relations
• Empower people to make the
right decisions for the safety of
our operations
• Reduce TRIFR and Fatality rate to
the ICMM range
• Reduced TRIFR to 7.59 from
12.08 in 2023
• Continually work towards
achieving zero fatalities
• Achieve zero fatalities • Reduced fatality rate but
unfortunately still experienced
two fatalities in the period
• Provide safe and healthy
working environments
• Achieve safe and healthy work
environments certification (ELSSA)
• Recertification of all our mines
in 2024
• Foster diversity, equity, and inclusion
in our workforce and increase the
overall participation of women
• Increase representation of women
in our workforce to 12% and in
managerial roles to 8% by 2025
• Achieved 12.46% of women in
our workforce and 9.43% in
managerial roles
PROTECTING THE ENVIRONMENT
WE OPTIMISE RESOURCE
CONSUMPTION TO CURB OUR IMPACTS
AND ARE ACCOUNTABLE FOR OUR
ENVIRONMENTAL FOOTPRINT
See pages 80-100
• Energy
• Climate change
• Waste management
• Water stewardship
• Biodiversity
• Mine closure
11
Innovation and technology
2
Climate change
18
Water management
17
Waste management
6
Environmental
management
1
Biodiversity conservation
12
Mine closure
13
Climate change
14
Tailings dams
15
Environmental incidents
• Enhance resource efficiency
and reduce consumption
• Protect ecosystems surrounding
our operations
• Achieve 75% renewables in
electricity mix by 2030
• Increased renewable electricity
consumption to 80.6% from 53.3%
in 2023.
• Use water efficiently and
responsibly, reducing freshwater
consumption
• Increased proportion of treated
municipal wastewater consumption
to 30.2% from 26.3% in 2023
• Manage waste responsibly throughout
the lifecycle of our operations
• Implement the Tailings
Management System
across all mines
• Conducted seven risk evaluation
assessments in 2024
PARTNERING WITH
OUR COMMUNITIES
WE ENGAGE MEANINGFULLY WITH
OUR COMMUNITIES AND SUPPORT
THE ISSUES THAT MATTER TO THEM
See pages 101-106
• Community relations
• Socio-economic
development
• Respecting human rights
3
Community relations
14
Relationship with
Indigenous people
10
Human Rights
2
Security
6
Access to Land
11
Licence to Operate
• Uplift communities through social
investment programmes to improve
local services and infrastructure,
and promote entrepreneurship
• Drive community growth though
initiatives that support community
aspirations
• Social investment totalled US$ 4.78,
increasing 25.2% from 2023
• Contribute to local economy
through responsible tax policies,
employment and procurement
• Promote local employment
and procurement
• Economic value distributed
totalled US$2,152.5, decreasing
by 8.3% from 2023
Our sustainability strategy is structured around four strategic pillars:
Doing Business Ethically and Responsibly, Caring for Our People,
Protecting the Environment, and Partnering with Our Communities.
Our sustainability framework
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Strategic Report Governance Financial Statements Additional Information
Pillar & ambitions Key matters
Material issues
Page 61
Intersection with principal risks
Pages 116-138 SDG alignment Our commitments Our objectives Our progress
DOING BUSINESS ETHICALLY
AND RESPONSIBLY
WE AFFIRM OUR ETHICAL
CULTURE THROUGH OUR
BEHAVIOUR AND ACTIONS
See pages 65-68
• Ethics culture
• Responsible business
7
Ethics and corporate
integrity
15
Responsible value chain
4
Data privacy and
cybersecurity
13
Relationship with
government and authorities
1
Potential actions
by the government
8
Human resources
3
Cybersecurity
• Embed a culture of trust and
accountability that strengthens
operational integrity
• Be accountable for our actions
across the value chain
• Strengthen understanding
of and confidence in the
Whistleblowing Mechanism
• Deployed robust communications
campaign in 2024
CARING FOR OUR PEOPLE
WE PRIORITISE OUR WORKFORCE’S
HEALTH, SAFETY AND WELLBEING
See pages 69-79
• Our culture
• Our people
• Safety
• Health
10
Human Rights
16
Talent development
9
Health, safety and
occupational wellbeing
11
Innovation and technology
5
Diversity, equity and
inclusion
8
Human resources
10
Safety
7
Union Relations
• Empower people to make the
right decisions for the safety of
our operations
• Reduce TRIFR and Fatality rate to
the ICMM range
• Reduced TRIFR to 7.59 from
12.08 in 2023
• Continually work towards
achieving zero fatalities
• Achieve zero fatalities • Reduced fatality rate but
unfortunately still experienced
two fatalities in the period
• Provide safe and healthy
working environments
• Achieve safe and healthy work
environments certification (ELSSA)
• Recertification of all our mines
in 2024
• Foster diversity, equity, and inclusion
in our workforce and increase the
overall participation of women
• Increase representation of women
in our workforce to 12% and in
managerial roles to 8% by 2025
• Achieved 12.46% of women in
our workforce and 9.43% in
managerial roles
PROTECTING THE ENVIRONMENT
WE OPTIMISE RESOURCE
CONSUMPTION TO CURB OUR IMPACTS
AND ARE ACCOUNTABLE FOR OUR
ENVIRONMENTAL FOOTPRINT
See pages 80-100
• Energy
• Climate change
• Waste management
• Water stewardship
• Biodiversity
• Mine closure
11
Innovation and technology
2
Climate change
18
Water management
17
Waste management
6
Environmental
management
1
Biodiversity conservation
12
Mine closure
13
Climate change
14
Tailings dams
15
Environmental incidents
• Enhance resource efficiency
and reduce consumption
• Protect ecosystems surrounding
our operations
• Achieve 75% renewables in
electricity mix by 2030
• Increased renewable electricity
consumption to 80.6% from 53.3%
in 2023.
• Use water efficiently and
responsibly, reducing freshwater
consumption
• Increased proportion of treated
municipal wastewater consumption
to 30.2% from 26.3% in 2023
• Manage waste responsibly throughout
the lifecycle of our operations
• Implement the Tailings
Management System
across all mines
• Conducted seven risk evaluation
assessments in 2024
PARTNERING WITH
OUR COMMUNITIES
WE ENGAGE MEANINGFULLY WITH
OUR COMMUNITIES AND SUPPORT
THE ISSUES THAT MATTER TO THEM
See pages 101-106
• Community relations
• Socio-economic
development
• Respecting human rights
3
Community relations
14
Relationship with
Indigenous people
10
Human Rights
2
Security
6
Access to Land
11
Licence to Operate
• Uplift communities through social
investment programmes to improve
local services and infrastructure,
and promote entrepreneurship
• Drive community growth though
initiatives that support community
aspirations
• Social investment totalled US$ 4.78,
increasing 25.2% from 2023
• Contribute to local economy
through responsible tax policies,
employment and procurement
• Promote local employment
and procurement
• Economic value distributed
totalled US$2,152.5, decreasing
by 8.3% from 2023
These pillars guide our efforts in addressing material issues
that impact our business and stakeholders. By setting clear
commitments and tracking measurable progress, we ensure
accountability, drive continuous improvement, and align
our actions with long-term sustainability commitments.
See our ESG KPIs Tables on pages 107-113.
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Fresnillo plc Annual Report and Accounts 2024
SUSTAINABILITY AT THE CORE OF OUR PURPOSE CONTINUED
OUR APPROACH TO SUSTAINABLE MINING
Our culture
We recognise organisational culture as the cornerstone of our safe and successful
operations. Rooted in our core values of trust, responsibility and respect, integrity,
and loyalty, this culture shapes decisions and actions at every level of the organisation.
These values cultivate an environment of mutual respect, unwavering commitment,
and operational excellence. Safeguarding the wellbeing of our people whilst driving
the achievement of our strategic objectives to deliver the Company’s purpose.
VALUES
1. TRUST: We believe in our collective
capability as a team, leveraging
the talents of individuals and
working hard together to achieve
extraordinary results.
2. RESPONSIBILITY & RESPECT:
We fulfil our commitments and
objectives, taking full accountability
for our actions, decisions, and
outcomes. We recognise the
inherent value of every individual,
ensuring fair and impartial
treatment that preserves personal
dignity and integrity while avoiding
any behaviour that could be
offensive. We value diverse opinions
and beliefs, actively listening
to differing perspectives and
acknowledging their importance.
We are committed to upholding
the law, respecting its intent, and
protecting the environment.
3. INTEGRITY: We act with honesty,
truth, justice, and transparency,
ensuring alignment between
our thoughts, words, and actions.
We take personal responsibility
for carrying out our roles on time
and on task, always striving for
the quality and excellence that
define us.
4. LOYALTY: We honour our
commitments even in
challenging circumstances,
acting in the best interests of
our shareholders, Company,
clients, colleagues, suppliers,
the authorities and society. We
safeguard the Company assets,
uphold confidentiality, and protect
intellectual property and trade
secrets entrusted to us.
DESIRED BEHAVIOURS
Our culture is anchored in key
competencies that define the
expected behaviours across
all processes and levels of the
organisation. These behaviours
ensure the safety of our operations
while fostering the wellbeing and
development of our people:
1. Teamwork: We promote effective
collaboration, recognising that
collective efforts drive our success.
2. Clear and Effective
Communication: We encourage
open and transparent information
flow, essential for informed
decision-making and agile
problem-solving.
3. Agile Adaptability: In our dynamic
environment, we value the ability
to adjust quickly to change and
leverage emerging opportunities.
4. Effective Execution: We
prioritise operational discipline
and a results-driven approach
to maintain excellence in our
daily activities.
5. Growth and Development: We
invest in our people, providing
tools, training, and opportunities
to help them achieve their goals.
5. Emotional Intelligence: We
foster self-regulation and empathy;
essential qualities for respectful and
constructive work environments.
THE BOARD’S OVERSIGHT
• Ensuring the alignment of the
Company’s Purpose, strategy,
values, and culture.
• Monitoring the Company’s
performance through specific
Board Committees and
working sessions.
Board leadership and Company
purpose section on pages 154-157.
EMPLOYEE ENGAGEMENT
• Workforce engagement
through designated NED.
• ‘I Care, We Care’ philosophy.
• Leadership practices in the field.
• Trust-driven Union relations
and collaboration.
• Safety and hygiene committees.
• Living in Balance strategy.
• Ethics and compliance capacity
building.
• Harassment Prevention
programme.
• Onboarding and reinduction
programme.
• Diversity, equity, and inclusion
initiatives.
See Sustainability section
on pages 58-115.
MONITORING OUR CULTURE
• Organisational climate and
engagement surveys:
– Employee and contractor
satisfaction.
– Organisational culture.
– Psychosocial risks.
– Leadership assessment.
• Safety Culture surveys:
– Safety leadership.
– Safety perception (LEAL).
• Ethics Culture surveys:
– Ethics Culture (Ethisphere).
– ‘World’s Most Ethical
Companies’ assessment
(Ethisphere).
• KPIs:
– Whistleblowing and ethical
conduct cases.
– Turnover rate.
– Diversity indicators.
See Sustainability section
on pages 58-115.
OUTCOMES FROM MONITORING OUR CULTURE
• Maintain robust strategies that
support our business objectives and
promote our workforce’s wellbeing.
• Continue our efforts to eliminate all
forms of workplace violence, prevent
workplace and sexual harassment,
and strengthen confidence in
the Whistleblowing Mechanism,
through specific training and
awareness campaigns.
• Enhance the quality of Leadership
Practices through direct mentoring
from leaders and by improving
workforce competencies.
• Leverage recent insights and
findings from initiatives and
frameworks to further evolve
our DEI strategy and effectively
communicate the positive
impacts achieved.
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DOING BUSINESS ETHICALLY
AND RESPONSIBLY
WE AFFIRM OUR ETHICAL CULTURE
THROUGH OUR BEHAVIOUR AND ACTIONS
Ethics culture
We expect our workforce and business
partners to embody our values and
adhere to our Code of Ethics and
Conduct, creating a foundation of trust
and accountability that strengthens
our ethics culture and operational
integrity across all aspects of our
business. Furthermore, by promoting
and applying these standards within
their own value chains, our partners
contribute to a virtuous cycle that
amplifies ethical practices, generating
a positive ripple effect throughout the
broader business ecosystem.
Since 2016 we have actively participated
in Ethisphere’s ‘World’s Most Ethical
Companies’ survey, leveraging its
Ethics Quotient to assess our ethical
culture, identify international best
practices, benchmark our Integrity
and Compliance Programme, and
track our progress over time. In 2024,
we conducted our latest Ethics Culture
survey based on this framework. These
insights have guided the fine-tuning
of our Integrity and Compliance
Programme, with initiatives aimed
at further strengthening our ethics
culture, such as:
• Evaluating the main reasons
why workers choose not to
report concerns, and training
middle management to address
these issues.
• Reinforcing leadership messaging,
emphasising confidentiality and
protection from retaliation to
ensure workers feel safe raising
their concerns.
Following a comprehensive review
of our Third-Party Code of Ethics
and Conduct, we issued an updated
version in 2024 outlining the guidelines
to which our business partners
must adhere.
Training and capacity building
Our Integrity and Compliance
Programme is designed to cultivate a
desired culture within the Company
and among our business partners.
To achieve this, we establish clear
expectations for behaviours through
mandatory training and different
engagement strategies.
For our employees, we conduct an
annual endorsement of our Code of
Conduct, including a declaration of
potential conflict of interests. In 2024,
we also conducted workshops on key
issues such as Conflicts of Interest, Anti-
corruption and Anti-bribery (ABAC),
Harassment Prevention, Regulatory
Compliance and the Whistleblowing
Mechanism. These included:
• Rolling out the ‘we act with integrity’
campaign to 93 team leaders of
mine units through workshops
that addressed key integrity and
compliance issues, complemented
by case studies for real-world context.
• Delivering compulsory courses
on the Code of Conduct, key
compliance policies, fundamental
concepts of workplace and sexual
harassment, and guidance on the
Whistleblowing Mechanism.
We also implement ongoing
campaigns to engage our entire
workforce through different forms
of media and channels as well as a
dedicated internal portal. Our aim
is to ensure that internal policies
and key aspects of the Integrity and
Compliance Programme are effectively
communicated and understood.
Dissemination efforts in 2024 included:
• Guidelines on gifts and hospitalities.
• Semi-annual whistleblowing statistics.
• Identification and acknowledgment
of conflicts of interest.
• Cybersecurity awareness.
Additionally, we continuously engage
our business partners through
corporate communications and media
to reinforce our compliance policies
–publicly available on our corporate
website– and the Code itself.
Harassment Prevention
Programme
We believe a positive work environment
enhances both wellbeing and
productivity. The Harassment
Prevention Programme, supported by
comprehensive training and face-to-
face workshops featuring hands-on
experience and group dynamics, equips
our workforce to identify, prevent, and
report workplace and sexual harassment.
These workshops encourage open
dialogue, helping participants to gain
new perspectives, challenge behaviours
such as chauvinism or gender-based
violence and, most importantly, adopt
constructive strategies to address these
issues, ensuring that every member of
the Company is committed to a safe and
respectful workplace.
In 2024, we updated the workplace and
sexual harassment protocol, integrating
improvements to enhance efficiency,
objectivity, and confidentiality in the
reporting and response process. We
also conducted workshops for 676
employees and contractors across all
our business units and in our advanced
exploration project, Orysivo.
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Fresnillo plc Annual Report and Accounts 2024
SUSTAINABILITY AT THE CORE OF OUR PURPOSE CONTINUED
DOING BUSINESS ETHICALLY AND RESPONSIBLY
Whistleblowing Mechanism
Our Whistleblowing Mechanism (‘Línea
Correcta’) serves as a confidential and
secure channel for raising concerns
regarding the Company’s operations and
any unethical behaviour. It is operated
by Ethics Global, an external third-party
provider, which ensures the anonymity
of whistleblowers when filing a report.
The Whistleblowing Mechanism is
widely available to our employees,
contractors, and other stakeholders
such as suppliers and members of
surrounding communities. The reports
received are reviewed quarterly by the
Honour Commission and monitored
by the Audit Committee. Twice a year,
the Board of Directors also receives
these reports at Board meetings. See
Corporate Governance in page 146.
To ensure effective case management,
all investigations are conducted by
qualified professionals with specialised
training in workplace behaviour,
compliance and fraud prevention.
Thorough investigative procedures are
in place to either substantiate or dismiss
allegations – including, but not limited
to, reviewing tender options to ensure
fairness and transparency, reviewing
third-party quality surveys to assess
performance, or conducting interviews
to identify instances of bribery or
unethical practices. In some cases, there
may not be sufficient evidence to reach
a definitive conclusion, but efforts are
made to monitor the situation and take
preventive measures when necessary.
In 2024, we reinforced our
commitment to a strong speak-up
culture, encouraging employees to
raise concerns while also emphasising
the responsible use of reporting
mechanisms to ensure legitimate
issues are effectively addressed.
To support this, we designed and
deployed a robust communications
campaign which aimed to reduce
the risks associated with information
leakage and retaliation by engaging
with potential whistleblowers and
promoting the full range of reporting
channels available for violations to
our Codes of Ethics and Conduct. The
campaign included infographics and
videos to explain reportable behaviours,
expectations for leaders and personnel,
the importance of confidentiality in
grievance investigations, as well as
demystifying misconceptions that
may discourage reporting.
During the year, we observed a slight
decrease in complaints related to
workplace and sexual harassment
compared to the previous year, which
we attribute to ongoing efforts to
foster an inclusive and respectful
organisational culture. These efforts
include campaigns to strengthen
confidence in the Whistleblowing
Mechanism and the deployment of the
Harassment Prevention Programme. As
part of our continued communication
initiatives, we aim to further build trust
in reporting mechanisms, which may
result in an increase in reported cases
next year. See our ESG KPIs Tables
on pages 107-113.
WHAT’S NEXT
Looking ahead, we remain
committed to fostering a culture
rooted in integrity and respect.
Our priorities include delivering
ongoing training, addressing
workplace misconceptions,
reinforcing organisational values,
addressing grievances effectively,
and promoting the active use of
our reporting channels by:
• Continuing our efforts to
eliminate all forms of workplace
violence, prevent workplace
and sexual harassment, and
strengthen confidence in the
Whistleblowing Mechanism,
through specific training and
awareness campaigns.
• Continuing to strengthen our
internal processes to remain
compliant with regulations.
• Conducting workshops
for middle management,
emphasising their responsibilities
as ethical role models to promote
integrity and ethical behaviour in
the workplace.
• Fostering a humane leadership
aligned with Company values
through targeted seminars for
middle management in the
Fresnillo District, as part of
a pilot initiative to address
region-specific needs.
Type 2024 2023
Labour harassment
72 66
Sexual harassment
13 23
Inappropriate arrangements
with suppliers
20 21
Abuse of authority
21 19
Other
12 11
Non-compliance with internal policy
4 8
Conflict of interest
5 5
Professional negligence
3 5
Unsafe conditions
2 4
Fraud
6 1
Misuse of assets
2 –
Breach of trust
1 –
Inappropriate behaviour at work
0 –
Total 161 163
Cases by classification
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Strategic Report Governance Financial Statements Additional Information
Responsible business
Modern slavery and
commitment to human rights
We are committed to upholding human
rights and do not tolerate any form of
modern slavery, including forced labour
and human trafficking in any aspect of
our business or value chain.
As part of the Company’s risk
assessment process, in 2024 we
implemented a major initiative involving
working sessions, process mapping,
workshops and interviews with risk
owners and representatives of our
most relevant suppliers. We concluded
that the level of risk is acceptable,
within industry parameters, and have
classified it as medium. In addition,
we have identified additional mitigation
actions that will be reviewed and,
where appropriate, implemented.
For more information, please refer
to our website for the latest available
Modern Slavery Statement. See
https://www.fresnilloplc.com/footer/
modern-slavery/
Compliance programme
Our policy mandates:
• Enforcing a zero-tolerance policy
for corruption and bribery.
• Encouraging the reporting
of suspected misconduct
through Línea Correcta, our
Whistleblowing Mechanism.
• Ensuring all reported incidents
of bribery and corruption are
thoroughly investigated.
• Avoiding engagement with
third parties flagged for bribery
or corruption concerns following
due diligence.
• Ensuring all transactions
are recorded accurately
and transparently.
During 2024, we documented
and updated critical processes in
coordination with technical areas
and process owners to guarantee
regulatory compliance and business
continuity. Key updates included
telecommunications infrastructure,
energy use, water management, and
indigenous consultation. Awareness
of the importance of regulatory
compliance is continuously reinforced
through corporate communications
and the year-round Compliance
Matters campaign.
Anti-Bribery and Anti-Corruption
(ABAC)
Compliance with the UK Bribery Act
2010, the Mexican General Law of
Administrative Accountability, and
relevant federal and state regulations,
is a core commitment upheld across
the organisation. Whilst our Internal
and third-party Codes of Ethics and
Conduct establish expected behaviours,
we continuously supervise operations to
mitigate risks and ensure compliance
with legal and ethical standards.
Disciplinary actions for involvement
in violations – whether directly or
indirectly – may include legal measures,
employment termination for our
workforce, or the cessation of business
relationships for third parties.
Our ABAC programme is aligned
with international best practices,
such as the United Nations Global
Compact (UNGC), International Labour
Organization (ILO) convention, and
Organization for Economic Cooperation
and Development (OECD) corporate
responsibility guidelines. In 2024, we
advanced our ABAC programme by
implementing improvements identified
during a 2022 third-party assessment.
These enhancements focused on
strengthening controls in departments
more prone to ABAC risks, such as
community relations, procurement,
contracting, financial operations, and
third-party management.
Money Laundering Prevention (AML)
We also rigorously monitor transactions
and report vulnerable activities in
compliance with local Anti-Money
Laundering (AML) regulations.
In 2024, mandatory reports required
under the Mexican AML regulatory
framework were submitted to the
Mexican Tax Administration Service
in a timely manner.
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Fresnillo plc Annual Report and Accounts 2024
Third Party Due Diligence
Since 2013, we have conducted due
diligence before establishing business
relationships with third parties such as
contractors, customers, and suppliers.
The due diligence is carried out through
a risk-based approach, determining risk
levels, with validity from one to three
years, and termination of business
relationships if risks cannot be mitigated.
Our due diligence process is fully aligned
with our Anti-Bribery, Anti-Corruption
(ABAC) and Anti-Money Laundering
(AML) policies compliance framework
and our broader risk management
approach. This integration enables us to
proactively mitigate risks by reinforcing
monitoring and controls to prevent
unethical practices – including fraud and
human rights violations – whilst ensuring
heightened oversight of high-exposure
areas, processes, and individuals.
Additionally, third parties must pledge
compliance with our standards for
ethical behaviour, integrity, human
and labour rights, occupational health
and safety, and environmental and
community considerations.
Implemented in 2023, the automation
and standardisation of our due
diligence process has provided a clear
oversight of third-party criticality. The
new platform efficiently detects alerts
and ensures an accurate methodology
for making informed decisions about
initiating or continuing business
relationships. Automation ensures
more effective tracking of transactions,
reduces response times, and simplifies
processes for all parties. To support its
implementation, we conducted training
and support sessions throughout 2024.
SUSTAINABILITY AT THE CORE OF OUR PURPOSE CONTINUED
DOING BUSINESS ETHICALLY AND RESPONSIBLY
WHAT’S NEXT
• Continue our efforts to
assess and mitigate Modern
Slavery risks.
• Continue training for all
personnel, emphasising fraud
prevention, specifically tailoring
modules for areas and personnel
with a higher likelihood of
encountering bribery risk.
• Implement a targeted training
plan covering anti-corruption
and anti-bribery for areas more
susceptible to these risks.
• Carry out continuous
monitoring of group-related
operations with vulnerable
activities, along with the
necessary adaptation to
emerging regulatory changes.
4
1
6
3
2
5
10
6
8
9
55
19
68
80
52
221
364
343
415
367
2024
2023
2022
2021
2020
Low Medium High Rejected
Third-party due diligences performed, by risk level
Government payment
transparency
As required by the UK Reports on
Payments to Governments Regulation
2014, its amendment in December 2015
and the Disclosure and Transparency
Rules of the Financial Conduct
Authority (FCA), since 2016 we have
reported an overview of payments to
governments made by our Company
and its subsidiaries during the previous
reporting year.
The payments disclosed are those
arising from activities involving the
exploration, prospecting, discovery,
development, and extraction of
minerals (extractive activities), based
on materiality established by such
regulations (where a payment or
a series or related payments have
exceeded £86,000).
The type of payments that were
disclosed for the 2023 fiscal year are:
• Taxes: there are taxes paid by Fresnillo
on its income, including special
mining rights. In accordance with
the UK Regulations, payments made
in relation to consumption, sales or
employee taxes were excluded.
• Royalties.
• Licence fees, rental fees, entry fees
and other considerations for licences
or concessions: these are fees paid as
consideration for acquiring a licence
for gaining access to an area where
extractive activities are performed.
For more information, please refer
to our website for the latest available
report on payments to governments.
See https://www.fresnilloplc.com/
investors/regulatory-announcements/
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Strategic Report Governance Financial Statements Additional Information
2024
2023
2022
2021
2020
0% 20% 40% 60% 80% 100%
2024
2023
2022
2021
2020
44%
42%
45%
44%
38%
56%
58%
55%
56%
62%
Our people
Our corporate culture is rooted in
ethics and a genuine commitment
to the wellbeing of our people. This
foundation enables us to foster long-
term relationships with our workforce,
built on respect for labour rights,
constructive dialogue with Union
representatives, and initiatives to
address the issues that matter most
to our employees and contractors.
Guided by these principles, we strive
to attract, develop, and retain top talent
to secure a robust pipeline that drives
our organisation’s success.
Our current workforce comprises 18,095
individuals, 8.8% of whom are non-
unionised, 30.9% are unionised and
60.3% are contractors. Additionally, of our
total workforce, 12.5% are women. See
our ESG KPIs Tables on pages 107-113.
Attraction
We collaborate with leading
educational institutions that offer
degrees in fields related to Earth
sciences, such as mining, geology,
metallurgy, and engineering. Our
cohort-based recruitment system
for non-unionised workers includes
short and long-term internships,
residencies, and the Engineers in
Training programme.
The Engineers in Training programme
is tailored for residency graduates,
providing a dedicated coach for
guidance and performance appraisals,
with the potential for permanent roles
in the Company, holding an average
retention rate of 62%.
These initiatives offer undergraduates
meaningful professional experience,
embedding our culture and values
early in their careers, whilst building a
robust talent pipeline aligned with our
growth strategy. They also support our
commitment to increasing women’s
participation in the mining industry.
Over time, we have made significant
progress toward gender-balanced
cohorts. Our latest cohort in 2024
comprised 143 young professionals.
INTERNSHIPS
Includes traditional one-month
continuous internships and
specialised Dual Internships, where
participants alternate between
academic coursework and one
week per month at work centres
to reinforce their knowledge.
Diversity in talent attraction
Men
Women
Note: includes Long-term internships and Engineers
in Training. Junior non-unionised positions.
Workforce composition by affiliation
Contractors
Unionised employees
Non-unionised employees
Note: 297 of the contractor personnel are non-
unionised operational workers internalised from
contracting companies.
RESIDENCIES
These three-month residencies
focus on implementing impactful
projects for the Company.
Participants present their findings
to interdisciplinary teams.
ENGINEERS IN TRAINING
Designed for undergraduates
who have completed residencies,
this six-month programme
develops skills across mining
production processes and
provides technical, administrative,
and safety competencies.
CARING FOR OUR PEOPLE
WE PRIORITISE OUR WORKFORCE’S
HEALTH, SAFETY AND WELLBEING
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Fresnillo plc Annual Report and Accounts 2024
Retention
To unlock our employees’ full potential,
we foster a work culture that champions
inclusion, collaboration, and innovation,
while prioritising physical and emotional
wellbeing through robust safety
policies, career development plans,
and recognition initiatives. Long-
term career growth is a cornerstone
of our retention strategy, reflected in
our ongoing investment in training
programmes and commitment to
offering fair, competitive compensation
packages and benefits that exceed legal
requirements, tailored to responsibilities
and performance-based evaluations.
To celebrate their dedication and
contributions, we honour employees’
milestones annually through our Loyalty
Recognition Programme. In 2024,195
employees were recognised for service
anniversaries ranging from five to
40 years.
Acknowledging the importance of
a modern work environment, we
prioritise initiatives that enhance
workforce wellbeing, promote work-life
balance and address the unique needs
associated with mining units, including:
• Enhanced support for remote
locations: Flexible working
arrangements such as fly-in-fly-out
schedules, role rotation, variable
workdays, and additional measures
to compensate personnel working
in areas with limited family support
infrastructure.
• Quality-of-life facilities: Access
to gyms, pools, sports courts, and
reliable telecommunications.
• Health, Nutrition, and Cultural
Programmes: Organisation-wide
initiatives to promote comprehensive
wellbeing. The Living in Balance
Programme also provides tools for
employees and families to foster
healthy habits that improve their
lifestyle (see Health on pages 78-79).
Periodic engagement exercises provide
valuable insights that inform future
policies and initiatives to enhance
employee satisfaction and drive
organisational success. This includes
biennial organisational climate surveys
and annual discussions with our
Designated Non-Executive Director
(NED) for workforce engagement
(see Workforce Engagement in
page 30).
ENGAGING WITH OUR PEOPLE
We carry out biennial engagement surveys, using the Basher methodology
to monitor organisational climate. This encompasses 60 items across seven
key areas to evaluate employee and contractor satisfaction. The survey
employs a dual evaluation scale, combining responses with the relevance
they hold for each individual. The outcomes are comprehensively analysed
across different cohorts, leading to discussions among leadership teams and
relevant departments. Areas with the lowest scores, as well as specific items,
are highlighted and form the basis for extensions to existing programmes or
integrated as focal points of new improvement plans.
Topics:
• Our working practices.
• Industrial safety.
• Code of conduct and compliance.
• Management and leadership.
• Work environment.
• Trust.
• Teamwork.
Cohorts analysed:
• Process/department.
• Organisational roles.
• Age groups.
• Seniority.
• Sex.
• Key personnel.
SUSTAINABILITY AT THE CORE OF OUR PURPOSE CONTINUED
CARING FOR OUR PEOPLE
Development
Our onboarding procedures integrate
unionised and non-unionised
personnel through immersive in-person
sessions, while contractors complete
a comprehensive programme via
our online Virtual Campus before
accessing industrial facilities, ensuring
safe operations. All personnel undergo
regular reinduction processes
to reinforce safety protocols and
operational excellence. The onboarding
experience highlights the Company’s
safety culture, fostering a collective
commitment to accountability, risk
prevention, and critical risk controls,
ensuring alignment with operational
standards (see Safety on pages 73-77).
Core onboarding topics include:
• Industrial safety and hygiene: Basic
safety, ‘I Care, We Care’ philosophy
and critical risks control protocol.
• Health, safety and environmental
regulation: Special permits and
norms, first aid, CPR, and
compliance regulations.
• Company overview: HSECR
management system, antibribery
practices, labour harassment
prevention and psychosocial
risks management.
Our Performance Appraisal
system identifies training needs,
high-potential individuals, and key
positions for succession planning,
advancing promising candidates into
institutional development programmes.
Aligned with our strategic priorities,
these programmes strengthen
both technical competencies
and leadership capabilities.
The Soft Skills Development
Programmes provide tailored
support across all organisational levels.
Managers and supervisors strengthen
their technical expertise in exploration,
mine planning, accounting, mineral
processing and digital innovation while
also gaining leadership and managerial
skills. Executives focus on strategic
challenges, deepening their knowledge
in finance, human resources, corporate
social responsibility, and leadership.
The Technical Development
Programmes focus on strengthening
and certifying competencies vital
to business process – such as Rock
Mechanics, Ventilation, Safety,
Environment, Planning, and Metallurgy.
And aim to enhance core safety
capabilities such as critical risks
and controls. We also operate three
evaluation centres at our facilities in the
Fresnillo District, registered with the
National Council for Standardization
and Certification of Labour
Competencies (CONOCER).
In 2024, we achieved an average of 67
training hours per worker, including 23
hours specifically dedicated to safety
training. See our ESG KPIs Tables on
pages 107-113.
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Strategic Report Governance Financial Statements Additional Information
www.fresnilloplc.com
-2.64%
-2.28%
-3.59%
-3.12%
-4.46%
2024
2022
2021
2020
2023
Diversity, equity and inclusion
We are committed to fostering inclusion
and promoting gender equality, guided
by the Women’s Empowerment
Principles (WEPs), which we signed
in 2020. To increase the overall
representation of women, we have
established two key objectives:
1. Strengthen the contribution of
women to the Company’s success.
2. Positively impact female employees’
experience and opportunities.
In 2020, we committed to raising the
overall representation of women in
our workforce to 12% by 2025 and
breaking the glass ceiling at the
operating manager and superintendent
levels, with the aim of increasing the
percentage of women in these roles
to 8%. Significant progress has been
made, with the overall representation
of women reaching 12.46% and women
in managerial roles rising to 9.43% by
2024, compared to 9.70% and 2.56% in
2020, respectively. Whilst proud of these
achievements, we recognise that further
efforts are needed to close the gap with
the national average of 17.9%, as reported
by the Mexican Mining Chamber.
Since adhering to the WEPs, we have
participated in multiple initiatives
that have allowed us to measure our
progress, identify areas of opportunity,
and drive organisational improvements.
In 2024, we joined the United Nations
Global Compact (UNGC) Target Gender
Equality (TGE) Accelerator Program
and reassessed our performance
using the WEPs Gender Gap Analysis
Tool, achieving an overall score of
54%. Our strongest results are in the
commitments pillar, with medium
performance in implementation and
greater opportunities for improvement
in metrics and transparency.
Further advancing our gender diversity
efforts, the Herradura mine underwent
evaluation under the Women in Mining
(WIM) Mexico Seal, a methodology that
assesses mining units across nine pillars,
including harassment prevention,
professional development, inclusive
facilities and working conditions. This
marked significant progress in our
journey, providing valuable insights
to recalibrate the Company’s gender
diversity strategy in alignment with
its 2025-2040 Strategic Plan across
our operations.
Since 2022, we have deepened
our inclusion initiatives by hosting
annual rallies in Caborca, Sonora, in
collaboration with the TELETON Sonora
Foundation, the local National System
for Integral Family Development (DIF),
and Sonora University’s (UNISON)
Caborca campus. These events aim to
raise awareness and provide practical
tools for fostering an inclusive society
and workplace. In 2024, the rally brought
together 300 attendees, including
students, teachers, psychologists, and
medical professionals. The programme
featured eight conferences on topics
such as language development,
neurodevelopmental divergences,
occupational therapy, and sensory
integration, alongside five workshops
on crisis intervention and classroom
behavioural management.
Additionally, during 2024 we actively
participated in BAL Group’s annual DEI
Week, which provides conferences and
discussions on disability awareness and
best practices for labour inclusion. These
initiatives underscore our commitment
to cultivating an inclusive workplace
and driving meaningful progress in
diversity, equity, and inclusion.
Gender Pay Gap
We are committed to paying an equal
wage for an equal job. Based on salary
scales, we have policies in place to
close the gender pay gap. In 2024,
the gender pay gap for non-unionised,
non-executive employees was -4.46% in
2024. The gender pay gap is calculated
using the weighted average salary per
hierarchical level. The head count per
hierarchical level and business unit is
used to determine the weights in the
overall average gap calculation.
Overall gender pay gap
9.7
11.01
12.11
11.88
12.46
12%
2024
2023
2020
2022
2021
Percentage of women in the
workforce
8%
2.56%
3.85%
5.42%
8.0%
9.43%
2024
2023
2020
2022
2021
Glass ceiling: women in managerial
positions
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Fresnillo plc Annual Report and Accounts 2024
Labour relations
Unions play a pivotal role in
our commitment to promote
ongoing operation at our mine
sites, enhancing productivity and
developing a robust safety culture.
We believe that maintaining fair and
respectful relationships with Unions is
essential to building trust and mutual
accountability, whilst upholding workers’
rights to freedom of expression, free
association, and collective bargaining.
We actively engage with Unions through
regular dialogue and periodic operational
reviews, leadership development
programmes, and wellbeing initiatives –
including sports and cultural events –
as well as collaborative projects focused
on continuous improvement. Regular
interactions take place between the
CEO, the Head of HR, and Union senior
leadership, whilst at the operational
level, our business units maintain
close ties with local Union committees
and delegates. These engagements
underscore our dedication to open
communication and foster collaboration
for capacity-building initiatives,
particularly for those newly elected
as Union committee members.
SUSTAINABILITY AT THE CORE OF OUR PURPOSE CONTINUED
CARING FOR OUR PEOPLE
WHAT’S NEXT
• Diversify talent development
programmes and initiatives.
• Formalise succession plans.
• Implement a DEI module in
onboarding virtual trainings.
• Leverage recent insights and
findings from initiatives and
frameworks to further evolve
our DEI strategy and effectively
communicate the positive
impacts achieved.
Annual Safety Symposiums,
conducted in partnership with Unions
and authorities, provide a platform
for exchanging best practices and
promoting meaningful discussions on
industry challenges and opportunities.
In partnership with the Union, we also
conduct the ‘LEAL’ survey on workplace
behaviour perceptions and experiences,
using its insights to refine our strategy
and drive continuous improvement
in our safety culture (see Safety section
on pages 73-77).
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RISK
MANAGEMENT
technical and
operational
approach
ACCOUNTABILITY
recognition and
responsibility
BEHAVIOUR
COMPETENCIES
proactive
preventive safety
culture
LEADERSHIP
ethical,
humane and
visible
Safety
We prioritise the wellbeing of
our workers and uphold a deep
commitment to Life though our
‘I Care, We Care’ philosophy, with
the goal of ensuring safe operations:
zero fatalities, zero accidents, zero
injuries, and zero harm.
Strategy
Safety is a fundamental value, reflecting
our moral obligation to protect the
wellbeing of our workers. Our goal is
clear: to operate without fatal accidents,
minimise exposure to risk, prevent
harm to people and damage to assets,
and maintain an ethical, safe work
environment supported by strong
and visible leadership at all levels of
the organisation. Our 2026 vision is to
achieve zero fatalities and decrease
our TRIFR to International Council on
Mining and Metals (ICMM) standards.
We aim to minimise individuals’ risk
exposure, protect assets, and leverage
advanced technology to enhance
preventive reporting and enable
proactive decision-making, whilst
mitigating common industry risks and
ensuring operational continuity. To
this end, we continue analysing and
testing solutions tailored to each site’s
specific needs – including advanced
telemetry for asset integrity monitoring,
The ‘I Care, We Care’ strategic cycle
geolocation, proximity and collision
warning systems to prevent accidents,
and radars and geomechanical cables
for slope and rock stability monitoring.
Additionally, technologies that support
critical control automation, and
software to ensure proper escalation,
among others.
Prevention is at the heart of our
safety culture. Our ‘I Care, We Care’
philosophy addresses inherent
risks though five strategic pillars:
leadership, accountability, behaviours
risk competencies, systems, and
learning environment. These pillars
aim to establish critical controls and
performance standards across all
business process, from explorations to
operations, empowering personnel to
identify and address risks in alignment
with safety protocols, and make sound,
responsible decisions. This approach
fosters continuous improvement,
effectively reducing risks through the
provision of the right tools and training.
The ‘I Care, We Care’ technical
components prioritise critical risks –
those with the potential for fatalities or
serious harm – whilst the operational
framework ensures that all risks
are addressed systematically. This
approach enables a comprehensive
risk management strategy and drives
continuous innovation in safety practices,
risk management, and emergency
preparedness, all within a virtuous
cycle of a Learning Environment: high-
performance standards, continuous
learning and improvement.
Since 2021, we also implement near-
miss reporting to identify missed or
failed critical controls that could lead to
harm. This initiative fosters a proactive
management approach, encourages
worker participation in an early warning
system, and strengthens operational
safety by enabling timely and informed
decision-making.
Management
The Safety Operational Plan focuses
on the consistent and comprehensive
implementation of critical controls. This
includes verifying their effectiveness,
ensuring proper deployment, and
promoting visible leadership both in the
field and through active engagement
and participation with employees
and contractors at all levels of the
organisation. We employ various
mechanisms to identify and assess risks,
all with an operational focus aimed at
minimising risk during field activities.
• Our risk management strategy
adheres to the NOM-023-STPS-2012
standard. Routine tasks are
evaluated using general tools, while
non-routine or high-risk activities
require specific mechanisms such
as the Safe Work Analysis, permits,
and authorisations.
• For critical risks, leadership teams
conduct critical risk identification
and bow-tie analyses to identify,
review, and strengthen controls,
actively supported by risk owners,
critical control owners and experts.
These efforts have enabled us to
develop a comprehensive portfolio of
critical control verification tools that
ensure avoidance or mitigation of
risks, including pre-activity checklists,
performance standards, parameters
and quality criteria.
We have advanced our efforts to
establish our safety culture as a way
of life, building on past initiatives
and reflecting our ideal way of doing
business. Creating value while ensuring
the wellbeing of our people, as outlined
in the following sections.
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Fresnillo plc Annual Report and Accounts 2024
Leadership in the field
We consider safety a Life Value, and
uphold it though values-driven Visible
Leadership, embedding responsibility
and accountability at every level and
among all members of our workforce.
We deliver leadership programmes
to promote leadership by example in
the field. This approach ensures the
oversight and verification of critical
risks and their associated controls,
contributing to the strengthening
of our preventive culture. Leadership
practices aim to empower individuals
to identify missing or failed controls and
make the right decisions. For example
by stopping tasks if necessary to ensure
safe operations until issues are resolved.
In 2024, we:
• Initiated quality verification
for leadership practices
(coaching modality and quality
in management) and piloted
quality verification for the Hazard
Identification and Risk Assessment
Tool (IPER) (coaching modality).
• Reinforced the accountability
process for leadership teams at the
executive and managerial levels. This
was achieved through field support
and integration into all our practices,
including performance evaluation.
• Launched the Safety Leadership
Survey to gather insights from
middle managers – both employees
and contractors – on the field
implementation of the safety strategy.
Safe Operations Culture:
Behaviour, Participation,
Engagement and Awareness
Our workforce is composed of
different roles and responsibilities
that actively participate in hazard
identification, risk assessment, and
the establishment of control processes.
Safety and risk management specialists
provide training, guidance, and
advice across operations and projects.
Collaboration is fostered through
committees, safety commissions, and
emergency response teams, which drive
training, risk management initiatives
and projects that enhance our safety
culture. To identify hazards and unsafe
practices, we also partner with the
Union, Health and Safety Committees
and contractor committees to conduct
facility inspections, recommend
preventive measures, and conduct
accident investigations.
In 2024, we continued advancing
the maturity of the ‘I Care, We Care’
Operational Committee, with a focus
on empowering people and promoting
safe operations. During the committee’s
meetings, safety performance was
assessed, with cross-functional control
and learning initiatives implemented.
A key outcome was the draft of the
2025 Safety Operational Plan, which
is centred on achieving zero fatalities
by prioritising:
• Enhancing the quality of
leadership practices.
• Reviewing, verifying, and updating
cross-cutting and cross-functional
performance standards.
• Implementing a unified standard
for contractors.
The Business Partners Meeting
was also strengthened during 2024,
providing a regular forum for evaluating
safety performance by analysing
common challenges, and establishing
mutual commitments to achieve
safe operations.
In 2024, we continued our collaboration
with the National Miners and
Metallurgists’ Union FRENTE through
safety leadership training workshops,
experience-sharing sessions among
local committees across different
mines, and coordinated efforts to
align communication between the
Company and the Union. Together, we
promoted skills development through
immersive workshops designed for local
committee members, new employees,
and aspiring leaders.
Our flagship Safety Symposium is
key for fostering collaboration and
strengthening safety culture, bringing
together the Company, the Union,
contractors, and authorities. The 12th
edition of the symposium is scheduled
to take place in 2025.
Risk Management
In 2024, top critical risks were expanded
from five to ten, alongside continued
evaluations of performance standards.
We also initiated a programme
to develop technical and safety
management standards with input
from multidisciplinary operational
teams. Additionally, four cross-
functional specialist teams were
formed to address risks related to:
• Explosives and blasting.
• Electrical safety.
• Rock falls.
• Loss of control of equipment
and vehicles.
We also worked to enhance the
analysis of performance and preventive
reporting, moving beyond corporate-
level reporting to adopt a drill-down
focus, enabling deeper insights and
more effective targeting of resources.
The SSMARCSuite software was
updated to version 2.0, incorporating
feedback and proposals. This upgrade
supports continuous improvement
in leadership practices and safety
management tools across all levels
of leadership.
Finally, we made progress in
establishing permanent emergency
brigades as a best practice at
each mining unit, exceeding legal
requirements. The training programme
for these brigades is now underway.
SUSTAINABILITY AT THE CORE OF OUR PURPOSE CONTINUED
CARING FOR OUR PEOPLE
‘I CARE, WE CARE’ OPERATIONAL
COMMITTEE
Purpose
• Ensure uniform and cross-
functional deployment of the
safety strategy across operations.
• Support the Executive
Committee and Management
in risk management.
Members
• General operational
superintendents.
• Service area leaders.
• Technical specialists.
• Safety leaders.
Key Objectives
• Manage workplace safety risks.
• Track and report safety
performance.
• Implement clear and compatible
corporate guidelines.
• Monitor and follow-up on risk
verifications.
• Conduct in-depth verifications.
• Foster cross-functional learning.
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Strategic Report Governance Financial Statements Additional Information
Communication
In 2024, we deployed a communication
strategy to emphasise key messages
around daily operations and strengthen
the ‘I Care, We Care’ philosophy as a
core element of our business identity.
The campaign I Take Control of My
Safety covered topics such as:
• Performance and actions for
controlling critical risks.
• Empowerment to take the right
actions and decisions in the face
of risk.
• Critical controls for hazards such as
equipment control loss, equipment-
vehicle-person interactions, foot and
hand safety.
• Safety measures during the
holiday season.
Safety Training
We prioritise the continuous
development of our workforce to
strengthen safety culture and achieve
operational excellence. Training
programmes equip our employees
and contractors with the skills and
knowledge needed to uphold these
standards (see Our people on
pages 69-70).
SAFETY TRAINING
Comprehensive Training
• Safety induction, regulatory and
normative courses, risk analysis,
and risk control protocols.
• Operational procedures,
high-risk task practices, and
permits and authorisations.
• Safety management, hazardous
material handling, and
preventive safety tools.
Technical Competencies
• Certification standards
accredited by the National
Council for Standardization
and Certification of Labour
Competencies (CONOCER).
Emergency Preparedness
• Training for mine rescue,
firefighting, first aid, hazardous
materials handling, and
evacuation.
Certifications and awards
We hold safety related certifications
relevant to our industry in our mining
units, including ISO 45001, and the
International Cyanide Management
Code (see our ESG KPIs Tables in
pages 107-113).
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Fresnillo plc Annual Report and Accounts 2024
SUSTAINABILITY AT THE CORE OF OUR PURPOSE CONTINUED
CARING FOR OUR PEOPLE
Performance
We have continued to mature our
preventive reporting through near miss
reporting, identifying failed or missing
critical controls. These instances, which
do not represent energy release or
damage, allow operational leaders to
promptly address potential hazards to
individuals or equipment. In addition
to its focus on management, our
cultural objective is to ensure workers’
participation in an early warning system,
enabling them to understand the
safety environment and make
timely decisions.
While our safety performance has shown
a positive trend in recent years, we
deeply regret the loss of two contractors
who were performing non-routine tasks.
These incidents highlight that there is
no room for non-compliance or lack of
controls and underscore the importance
of fostering a robust risk management
culture across all processes, activities and
environments – every day, on every shift.
We remain resolute in our
commitment to foster a disciplined
control implementation, enhance
leadership qualities, and strengthen
accountability at every level to achieve
safe operations in every task and shift.
In response to the fatal accidents of
2023, cross-functional learning actions
were implemented. Although the
root causes of the 2023 fatal accidents
did not repeat in 2024, new potential
risk scenarios emerged, particularly
in activities outside the productive
extraction value chain and non-routine
tasks. Root cause analyses provided
valuable insights, leading to the
following actions:
• Conducting in-depth analyses
using the Incident Cause Analysis
Method (ICAM).
• Reinforcing competencies in risk
analysis and control implementation,
while empowering all workers to
take ownership of safety in every
activity – both within and outside the
production value chain – with greater
rigour and discipline in routine and
non-routine operations.
2026 goals
Goal Decrease TRIFR by 5%: Reduce TRIFR rate to ICMM range
Time horizon Short-term (1 year) Medium and long term (3-5 years)
Actions to achieve it
• Mature risk management.
• Organise consultation forums.
• Mature the ‘I Care, We Care’.
Operational Committee.
• Enhance quality of leadership practices.
• Consolidate risk management.
• Improve risk management across scenarios and stakeholders.
• Improve personnel competencies and training.
• Implement projects to improve safety.
• Strengthening engagement with
all business partners, regardless of
company size, nature or duration
of their operations.
• Implementing a mechanism to
categorise, monitor, and evaluate
business partners, assessing their
compliance with standards and
expected performance to determine
their hiring and retention.
• Intensifying efforts in the planning,
risk analysis, and control of non-
routine activities or those outside
the productive chain.
• Enhancing verification and
follow-up through leadership
practices for activities outside
the productive chain.
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Strategic Report Governance Financial Statements Additional Information
1
1
1
4
2
2024
2021
2020
2023
2022
0.020
0.044
0.081
0.024
0.022
10.26
7.40
12.08
4.75
7.59
6.18
13.88
5.76
10.42
5.44
2024
2022
2021
2020
2023
Fatal Injuries and Fatal Injury
Frequency Rate
Injury Frequency Rate for every
1,000,000 hours
Fatal injuries: Number of fatal injuries to employees
and contractors. Fatality injury frequency rate:
Number of fatal injuries to employees and contractors
for every 1,000,000 hours of exposition time.
Total Recordable Injury Frequency Rate (TRIFR):
Lost-Time Cases + Restricted Work Cases +
Medical Treatment per 1,000,000 Hours Worked.
Lost Time Injury Frequency Rate (LTIFR): Number
of Lost-Time Injuries per 1,000,000 Hours Worked.
WHAT’S NEXT
• Continue progress on our
pledges to decrease our
fatality rates and TRIFR.
• Enhance the quality of
Leadership Practices through
direct mentoring from leaders
and by improving workforce
competencies.
• Transform the ‘I Care, We Care’
Operational Committee into an
effective learning environment
by elevating commitments to
mandatory status.
• Consolidate the health and
safety management system
through the ‘I Care, We Care’
strategy by minimising
risks, improving safety and
increasing productivity.
• Conduct a comprehensive
audit on the implementation
of technical standards and
safety management to identify
and address any gaps.
• Implement formal multi-
disciplinary audits and
verifications to close
gaps on performance
and enhance steering.
• Draft conceptual design of
technology and innovation
projects to improve the
workforce’s overall safety.
• Mature processes in risk
management, analysis,
communication of results
and transversal learning of
incidents (ongoing).
• Advance the risk management
strategy in the face of different
scenarios and stakeholders.
Performance on a site-by-site basis can be found in the ESG KPIs Tables on pages 107-113.
PROMOTING SAFETY ACROSS THE MINING INDUSTRY
During the year, we were proud to
collaborate with the Mexican Mining
Chamber (CAMIMEX) in hosting the
XVII National Underground Mine
Rescue, First Aid, and Hazardous
Materials Emergency Response
Competition.
A total of 35 teams from leading
mining companies across Mexico
came together at Fresnillo’s tourist
mine – an underground exhibition
of our oldest mine open to the
public – to test and refine their
critical response skills in a series of
challenging scenarios. This year’s
event marked a milestone for
inclusion and diversity in the mining
sector, with the historic participation
of two all-women rescue teams.
The competition featured simulations
of underground incidents including
fire control, hazardous materials
emergencies, and extreme rescue
operations. The opening ceremony,
held at the José González Echeverría
Agora, brought together industry
leaders and local authorities, who
reaffirmed the sector’s commitment
to safety and the wellbeing of workers
and communities.
The winners stood out for their
physical fitness, technical expertise,
and teamwork, demonstrating
their ability to respond effectively
to complex challenges. Beyond
individual achievements, the
event showcased the mining
industry’s collective commitment
to strengthening emergency
management processes.
Our Achievements:
• First Place in Men’s Mine Rescue
(Fresnillo).
• First Place in BENCHMAN BG4
Test (Fresnillo).
• First Place in Trainer (Fresnillo).
• Third Place in GASMAN Test
(Fresnillo).
• Third Place in Women’s Mine
Rescue (Fresnillo).
• First Place in Hazardous Materials
Emergency Response (Penmont).
• Second Place in First Aid in Open
Pit Rescue (Penmont).
This event highlights our unwavering
dedication to safety, prevention, and
strong emergency response systems.
It also reinforces our partnerships
with key stakeholders, including
CAMIMEX, government authorities,
and industry peers. Together, we
drive progress in risk management,
ensuring safety and safeguarding live.
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Fresnillo plc Annual Report and Accounts 2024
1
19
34
39
46
2024*
2023
2022
2021
2020
SUSTAINABILITY AT THE CORE OF OUR PURPOSE CONTINUED
CARING FOR OUR PEOPLE
Health
We prioritise the wellbeing of our
workforce by fostering a safe and
healthy work environment.
Our foremost commitment is to
safeguard the wellbeing of our
people by ensuring a safe and healthy
work environment. Supported by
a multidisciplinary focus through
specialists in the health sector
and organisational development,
we take a comprehensive approach
to workplace health.
We focus on the early detection and
management of health risks to prevent
both occupational and chronic diseases,
prioritise emergency preparedness, and
promote healthy habits. This is achieved
through clear operating procedures,
robust controls, and targeted training
programmes. In recent years, our
health strategy has evolved to embrace
a holistic perspective, going beyond
traditional occupational health
programs to address both physical
and mental health.
Comprehensive Health Strategy
• Health Care: check-ups, medical
consultations, and health campaigns.
• Comprehensive wellbeing:
nutritional support, sports promotion
and psychological support.
• Industrial Care: ergonomics and
industrial hygiene.
• Innovation and development:
health technologies and software.
• Emergencies: emergency
preparedness and training.
Occupational Health
Our approach focuses on proactively
identifying, mitigating, and managing
the health risks to which our workforce
is exposed to safeguard their wellbeing.
By ensuring regulatory compliance,
we establish working conditions
that prevent fatalities, accidents, and
occupational illnesses. Additionally,
we foster a culture of health through
preventive care, aiming to reduce
chronic diseases and enhance overall
wellbeing and fitness for work.
• Our Health Care strategy identifies,
evaluates, analyses, and interprets
employees’ medical information
to develop a health diagnosis for
each business unit. This includes
entry, periodic, exit, and specialised
medical examinations, along
with guidance on preventive
care measures. It also includes
gynaecological checkups.
• Our Industrial Care strategy
prioritises hygiene and ergonomics,
actively monitoring exposure
to physical and chemical risks:
Industrial Hygiene identifies
workplace risk – such as noise,
dust, vibration, heavy metal
contamination, extreme
temperatures – and implements
targeted interventions to
mitigate health risks and prevent
occupational diseases. Ergonomics
systematically analyses the
interaction between individuals
and their activities, equipment, and
physical environment to improve
tasks, working conditions, and overall
wellbeing, enhancing workplace
quality, productivity, safety, and health.
• While prevention remains a priority,
emergency response is a core
competence of all health teams.
Training in Basic Life Support (BLS),
Prehospital Trauma Life Support
(PHTLS), Advanced Cardiovascular
Life Support (ACLS) and Defensive
Ambulance Driving is integral to the
medical staff’s curriculum.
In 2024, we continued to carry out our
periodic medical examinations across
our workforce. Our industrial hygiene
programme achieved significant
progress across all business units,
through field inspections, hygiene
studies, meetings with area leaders,
and workforce training.
The 46 occupational illnesses recorded
during the period were attributed to
hearing loss, pneumoconiosis, and
ergonomic risk – an increase from
previous periods.
New cases of Occupational Illnesses
Note: Figures include employees and contractors.
* Figures are preliminary on the date of issuing this
Annual Report.
Comprehensive Wellbeing
Our Comprehensive Wellbeing
strategy aims to create safe and healthy
workplaces whilst supporting worker
health through preventive actions,
emphasising a holistic approach that
balances health, productivity, and quality
of life. In 2024, we conducted the second
edition of the Living in Balance survey,
to better understand workers’ current
habits and promote healthier lifestyles.
Our core activities include vaccination
campaigns, supplementary campaigns,
nutritional guidance, sports and cultural
activities, as well as community health
initiatives in collaboration with local
and federal authorities, health agencies
and the UNAM Foundation (see Socio-
Economic Development on pages
102-105).
Furthermore, in recognition of the
growing percentage of women in
our workforce, particularly those in
childbearing stages, we have developed
a dedicated programme focused on
prenatal care, cancer screening, and
education and training in cancer
prevention. We support nursing
mothers through flexible schedules
to uphold breastfeeding rights. We
also continued our traditional Breast
Cancer awareness campaigns, featuring
impactful talks, breast examinations,
cytology screenings, and physical
activity sessions.
Mental health is a key pillar of our
commitment to wellbeing. The
Mexican standard NOM-035-STPS
guides companies in identifying,
analysing, and preventing psychosocial
risk factors while fostering a positive
workplace environment. To align
with this standard, we designed
our psychology service to positively
influence how workers think, feel, act,
and respond, fostering a healthier and
more resilient workforce. We have
implemented robust campaigns to
raise awareness of psychological risk
factors and their prevention, as well as
the channels that are available to report
workplace harassment, such as the
Whistleblowing Mechanism and the
Labour Behaviour Commissions (see
Ethics Culture on pages 65-66).
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www.fresnilloplc.com
We asses psychosocial risk factors
by administering non-mandatory
Reference Guide questionnaires across
our mines. Employees identified as
exposed to traumatic events or risks
undergo psychological evaluation and
receive targeted treatment sessions.
Their progress and reintegration are
closely monitored, with temporary role
adjustments made if appropriate to
ensure their wellbeing and prevent
further health risks.
Certifications and awards
We hold health-related certifications
relevant to our industry in our mining
units, such as the Mexican Social
Security Institute’s (IMSS) ‘Safe and
Healthy working Environment’ (ELSSA);
‘Cardio-protected spaces’, endorsed
by the Mexican National Association
of Cardiologists (ANCAM) and other
prestigious organisations; and the ‘100%
Smoke-and Emissions-free space’ by
the Mexican Health Ministry (see ESG
KPIs Tables on pages 107-113).
WHAT’S NEXT
• Establish a mental health
strategic plan.
• Follow-up on recommendations
from the Living in Balance survey.
• Implement industrial hygiene
project to improve mining
operations.
• Follow-up on the fatigue
management systems at
Juanicipio and Herradura.
• Continue with the plan to
certify all mines as cardio-
protected spaces.
• Recertification of personnel in
Advanced Cardiovascular Life
Support (ACLS) and Prehospital
Trauma Life Support (PHTLS).
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Fresnillo plc Annual Report and Accounts 2024
48.38%
49.73%
35.60%
53.27%
80.63%
2024
2023
2022
2021
2020
0.077
0.081
0.080
0.088
0.092
2024
2023
2022
2021
2020
0.0231
0.0231
0.0246
0.0248
0.0182
2024
2023
2022
2021
2020
While recognising the critical
role of mining and precious
metals processing as essential
industries, we also acknowledge
the environmental impacts of our
operations. This includes water
consumption, land disturbance,
waste generation, and Greenhouse
Gas (GHG) emissions. To sustain our
social licence to operate, we prioritise
resource optimisation, mitigate
adverse impacts, and transparently
communicate our environmental
footprint to stakeholders.
A systematic approach to environmental
management enables us to:
• Prevent or mitigate adverse
environmental impacts.
• Comply with legal and regulatory
requirements.
• Improve environmental performance
across the life cycle of products
and services.
• Achieve financial and operational
benefits through sustainable
practices.
• Communicate environmental
progress to stakeholders
transparently.
Environmental Impact Assessments
(EIAs) are a top priority before launching
any mining project; identifying potential
impacts on critical factors such as
water resources, air quality, land use,
biodiversity, and socioeconomic
conditions. These assessments
inform the development of robust
environmental management plans
and ensure compliance with ISO 14001
standards, reinforcing our commitment
to sustainable development.
SUSTAINABILITY AT THE CORE OF OUR PURPOSE CONTINUED
Energy
Mining is inherently energy-intensive,
relying heavily on fuel and electricity
to extract, process, and transport
minerals. Vigilantly monitoring energy
consumption and GHG emissions is
central to our sustainability efforts,
enabling us to mitigate risks, improve
resource efficiency, and enhance
both business continuity and
cost management.
We have been steadily increasing our
use of renewable energy in recent years,
aiming to achieve 75% renewables in
our electricity mix by 2030. In 2024,
we sourced a total 80.6% of renewable
electricity from the different regulatory
frameworks under which we operate.
• 34.3% of total electricity was secured
under the Electricity Industry Law
(LIE) regulatory framework, with
Fuentes de Energía Peñoles (FEP)
acting as our Qualified Services
Supplier. A total of 92.9% of this
consumption was sourced by
the wind farm Eólica Mesa La
Paz (MLP), while the remainder
was procured from the wholesale
electricity market (WEM).
• 65.7% remaining electricity was
secured under the legacy Self-Supply
regime, under which some of our
load centres continue to operate. Of
this, 74.2% was sourced by the wind
farm Eólica de Coahuila (EDC), with
the remaining energy sourced from
the Mexican power utility, Federal
Electricity Commission (CFE) Basic
Supply and a thermoelectric power
plant, Termoeléctrica Peñoles (TEP).
Summary of electricity sourcing by regulatory framework in 2024
Regulatory framework % Renewable % Non-renewable Total
LIE (Wholesale Electricity Market) 31.9%
a
2.4%
b
34.3%
Self-supply (Legacy contracts) 48.8%
c
17.0%
d
65.7%
Total 80.6% 19.4% 100%
Notes: Sourcing for each figure corresponds to: a) MLP, b) WEM, c) EDC, d) CFE and TEP.
Another key milestone in 2024 was
the migration of TEP to the Wholesale
Electricity Market (MEM) in April by our
parent company, Industrias Peñoles.
During the first months of the year, two
of our mines were primarily supplied
by this plant; however, following the
migration, they began supplementing
their supply with energy from EDC.
This transition marked a strategic step
in reducing indirect GHG emissions
associated to our operations.
As a result of the actions implemented,
annual renewable energy consumption
increased significantly, rising from 53.3%
in 2023 to 80.6% in 2024. In absolute
terms, renewable energy consumption
grew from 626.3 GWh/year in 2023 to
987.7 GWh/year in 2024 despite overall
electricity consumption increasing by
4.2%. These results demonstrate the
efforts made in previous years, aligned
with the goal of ensuring a reliable,
competitive supply based on clean
energy sources. See ESG KPIs Tables
on pages 107-113.
Renewable electricity consumption
Energy intensity
(MWhe per tonne of mineral processed)
GHG intensity
(tonnes of CO
2
e per tonne of mineral
processed)
PROTECTING OUR ENVIRONMENT
WE OPTIMISE RESOURCE CONSUMPTION TO
CURB OUR IMPACT, AND ARE ACCOUNTABLE
FOR OUR ENVIRONMENTAL FOOTPRINT
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Global GHG emissions for the period 1 January 2023 to 31 December 2023
GHG emissions (tonnes of CO
2
e) Energy (MWhe)
Reporting
year
Previous
year
%
change
Comparison
year
Reporting
year
Previous
year
%
change
Comparison
year
2024 2023 2024-2023 2012 2024 2023 2024-2023 2012
Scope 1 + Scope 2 597,422* 825,325 (27.6) 704,366 3,003,588* 2,941,925 2.1 1,806,063
Scope 1 (direct): Combustion of fuel
(mobile and stationary sources)
469,122* 469,146 (0.0) 375,121 1,778,652* 1,766,162 0.7 1,385,448
Diesel Total 415,283 428,015 (3.0) 366,784 1,533,177 1,580,181 (3.0) 1,729,591
Diesel (Company-owned) 283,431 288,762 (1.8) 228,085 1,046,401 1,066,088 (1.8) 841,216
Diesel (contractors) 131,852 139,254 (5.3) 138,700 486,776 514,094 (5.3) 511,550
Gasoline Total 5,935 5,995 (1.0) 3,686 22,859 23,092 (1.0) 12,234
Gasoline (Company-owned) 3,214 3,487 (7.8) 3,686 12,381 13,432 (7.8) 12,234
Gasoline (contractors) 2,721 2,508 8.5 0 10,479 9,661 8.5 0
Natural gas Total 43,728 30,657 42.6 0 204,245 143,192 42.6 0
Natural gas (Company-owned) 43,728 30,657 42.6 0 204,245 143,192 42.6 0
Natural gas (contractors) 0 0 n/a 0 0 0 n/a 0
LPG Total 4,177 4,478 (6.7) 4,650 18,371 19,696 (6.7) 20,448
LPG (Company-owned) 3,977 4,243 (6.3) 4,650 17,492 18,663 (6.3) 20,448
LPG (contractors) 200 235 (14.9) 0 879 1,033 (14.9) 0
Scope 2 (indirect): Electricity
purchased from the grid and PPAs
128,299* 356,179 (64.0) 329,245 1,224,936* 1,175,763 4.2 420,615
Mexican National Grid (CFE and
WEM)
84,671 136,914 (38.2) 69,966 193,314 312,590 (38.2) 135,461
Thermal – Thermoelectric Peñoles
(TEP)
43,628 219,265 (80.1) 259,279 43,949 236,889 (81.4) 285,164
Wind – Coahuila Wind Force (EDC)
& Mesa la Paz (MLP)
0 0 n/a 0 987,674 626,284 57.7 0
Intensity measurement: Emissions
and energy reported above per
tonne of processed ore.
0.0182* 0.0248 (26.6) 0.013 0.092* 0.088 3.6 0.034
i. Figures marked with an asterisk (*) have been assured by EY. Please refer to the Assurance Statement on pages 114-115.
ii. Methodology: We have reported on all the emission sources required under the Streamlined Energy & Carbon Reporting. These sources fall within our operational
control. We do not have responsibility for any emission sources that are not included in our Consolidated Statement. The emissions and energy consumed in the
United Kingdom and offshore as well as those pertaining to our exploration projects and corporate offices are negligible. We have used the Greenhouse Gas Protocol:
A Corporate Accounting and Reporting Standard (Revised Edition), and a 100-year time horizon Global Warming Potential (GWP) for Methane (CH4) and Nitrous
oxide (N2O) equivalences. Updates to Scope 1 and 2 data versus previous periods are twofold: the former due to rectifications of fuel inventories derived from the
external audits – but not material as they amount to an increase of less than 1.5% of GHG emissions – and the latter due to the Mexican National Grid emission factor
for the period – usually published on a later date than this Annual Report. For the same reason, the emission factor of electricity consumed from the electricity grid
(CFE and WEM) during 2024, corresponds to 2023.
iii. Scope 1 corresponds to direct GHG emissions/direct energy consumed.
iv. Scope 2 corresponds to indirect GHG emissions from purchased electricity/total purchased electricity consumption.
v. Processed ore corresponds to the ore processed in the beneficiation and leaching plants, the mineral deposited in the leaching pads as well as iron concentrate
treated in the pyrites plant.
SUPPORTING AND STABILISING MEXICO’S POWER GRID
For many years, Fresnillo and Saucito
mines have maintained strict
operational discipline to control energy
consumption during the hours when
energy demand in Mexico reaches
its peak. Strategies such as reducing
water levels in the mines and halting
equipment, including ventilation and
exploration machinery, have been
implemented to avoid overcharges
related to power fees.
In May 2024, the national grid
operator, CENACE, declared an
operational emergency due to high
electricity demand in the country,
resulting in a load shedding event
that affected several units within
the Company, including Fresnillo
and Saucito. To prevent future
disconnections, the Company
coordinated with CENACE and CFE
to implement voluntary controlled
energy contributions during peak
demand periods. Both mining units
increased their contribution from
4.0 MW, which had been managed
prior to the emergency in the
National Electric System (SEN),
to up to 6.5 MW during peak hours.
This measure helped stabilise the
national grid and reduced the
likelihood of further load shedding.
Our high degree of operational
discipline has been essential in
controlling demand. In 2024,
the energy allocation strategy
was reviewed to ensure efficient,
sustainable, and cost-effective
coverage, as the generating plants
under the self-supply scheme could
not fully meet the needs of the
mining units.
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Climate change
Task Force on Climate-related
Financial Disclosures (TCFD)
Compliance Statement
FCA Listing Rules
We have provided climate-related
financial disclosures for the year
ended 31 December 2024 according
to the UK’s Listing Rule 6.6.6R(8) of
information to be included in Annual
Report and Accounts, having taken
into consideration the UK Listing Rule
Guidance (UKLR) 6.6.8G and UKLR
6.6.9G for all sectors and non-financial
sectors. This includes all four of the
TCFD pillars and the 11 recommended
disclosures set out in Figure 4 of
Section C of the report entitled
Recommendations of the Task Force on
Climate-related Financial Disclosures
published in 2021 by the TCFD. In
completing this work, we made use of
TCFD guidance material, including the
TCFD technical supplement on the use
of scenario analysis, TCFD Guidance on
Metrics, Targets and Transition Plans,
and the TCFD Guidance for All Sectors.
Our report is partially consistent
with the TCFD recommendations as
outlined in the table below. Further
development still required on Strategy
recommended disclosures B and C,
and Metrics and Targets recommended
disclosure C. These gaps stem from
ongoing efforts quantify Climate Risks
and Opportunities (CROs), integrate
them into business strategy, and define
additional climate-related targets. In
2025, we plan to continue our progress
in reporting across all four TCFD pillars,
with particular focus on quantifying risk
materialisation scenarios, and refining
the energy forecasting process to
strengthen financial planning. Additional
details on our planned improvements
are provided in the table below.
SUSTAINABILITY AT THE CORE OF OUR PURPOSE CONTINUED
PROTECTING OUR ENVIRONMENT
Task Force on Climate-related Financial Disclosures Statement. Summary of Fresnillo’s TCFD response
TCFD Pillar
TCFD
recommendation
Cross-
reference Summary of progress to date What’s next
Governance a) Board oversight Page 83 Consistent: The HSECR committee assists the Board
and collaborates with management to provide oversight
on the effectiveness of the Company’s ESG strategies –
including climate change – which is discussed at quarterly
meetings; the Chairman of the HSECR reports insights
from these meetings to the Board.
Assess progress on TCFD disclosure and oversight
of Company’s approach to physical risks and
transition risks. Develop synergy between the
Audit and the HSECR Committees.
b) Management’s role Pages 83-84 Consistent: Within the senior and middle management
tiers, the responsibility for climate change encompasses
identifying strategic risks, evaluating their impact on
achieving strategic objectives, and supervising the
implementation of controls in both strategic and
operational plans.
Integrate climate-related opportunities into the
Company’s growth strategy and cost control
initiatives. Define criteria and coordinate efforts
to mature climate financial analysis.
Strategy a) Climate-related
risks and opportunities
Pages 84-89 Consistent: Time horizons for CROs are defined based on
the ERM framework and the Company’s strategic planning.
The shortlist of CROs includes detailed descriptions of
impacts to our business.
Continue to improve and refine financial
materiality assessments of the most relevant CROs.
b) Impact on
the Company’s
business, strategy
and financial planning
Page 90 Partially consistent: Engaged with industry experts to
understand decarbonisation value levers and initiated
an energy forecast process. Still more work is needed
to integrate climate-related considerations into overall
strategic decision-making.
Continue to develop and mature inputs to
integrate climate-analysis into financial planning,
informing the Company’s strategy, and how the
implementation of this strategy will align with
Mexico’s updated NDC.
c) Resilience of the
Company’s strategy
Pages 90-91 Partially consistent: Strengthened climate-scenario
analysis including a 2°C scenario for transition risks
and a 4°C for physical risks. Gathered key insights on risk
exposure, both qualitative and quantitative, informing
climate resilience. More work is needed on financial
quantification and strategies responsive to specific CROs.
Quantify risk materialisation scenarios of most
prevalent CROs and develop a framework that
allows for connectivity between CROs and capital
expenditures. Incorporate ongoing cost control
initiatives and climate-opportunities to climate
mitigation and adaptation strategies.
Risk
Management
a) Risk identification
and assessment
process.
Pages 91-92 Consistent: Achieved comprehensive CRO register that
has been subject to several iterations and improvements,
providing insights into the most exposed CROs.
Quantify risk materialisation scenarios of our most
prevalent CROs.
b) Risk management
process
Page 92 Consistent: Design of climate-risk management
framework, and first climate-risk assessment.
Develop action plans for the eight CROs
identified in the 2024 assessment, to strengthen
and standardise existing controls and mitigation
measures.
c) Integration
into overall risk
management
Pages 92-93 Consistent: Streamlined climate into the ERM framework. Continue maturing the climate-risk management
framework, connectivity with emerging risks and
review insurance opportunities.
Metrics and
Targets
a) Climate-related
metrics to assess
climate risks and
opportunities
Pages 92-93 Consistent: Industry specific metrics disclosed. Fully comply with cross-industry indicators.
b) Scope 1, Scope 2,
and, if appropriate,
Scope 3 GHG metrics
and the related risks
Page 94 Consistent: GHG emissions aligned to GHG Protocol
methodology. Third-party verification of Scope 1 and
Scope 2 GHG emissions.
Refine scope 3 GHG inventory while concurrently
carrying out third-party verification of climate-
related KPIs.
c) Climate-related
targets and
performance
against targets
Page 94 Partially consistent: Aim to source 75% of the Company’s
electricity from renewable energy by 2030. Introduced
the first remuneration indicator. More work is needed to
commit to other targets.
Analyse different approaches to setting GHG
emission reductions and timeframes for resulting
viable options. Mature connections between
climate change and other ESG risks, incorporating
them more explicitly into KPIs and targets.
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Strategic Report Governance Financial Statements Additional Information
Governance
The Board and its Committees’ role
The Company’s governance framework is
detailed on page 146. Board Committees
focus on specific topics on behalf of the
Board, drawing on the Directors’ diverse
range of skillsets and experiences.
During these sessions, Directors actively
engage in discussions, raise inquiries
and provide recommendations to
guide Management.
Two Committees play a particularly
active role in overseeing climate-
change and broader ESG matters:
• The Audit Committee reviews and
challenges the Company’s climate-
related financial disclosures and
oversees progress on reporting. It
also conducts a quarterly review of
principal and emerging risks – many
of which intersect with climate-
related risks – and monitors the
effectiveness of risk management
and internal controls.
• The HSECR Committee engages
closely with Management to oversee
the Company’s strategies, ensuring
they effectively address ESG
considerations, including climate
change. On a quarterly basis, it
monitors key performance indicators
and benchmarks progress against
industry peers. Discussions include
TCFD requirements, progress against
the Company’s renewables target,
and intensity metrics on water,
energy and GHG emissions.
The Board receives updates from
its Committees, including reports
from the Chairmen of the Audit and
HSECR Committees, as well as regular
sustainability performance updates
from the CEO. Additionally, Board
working meetings incorporate strategic
discussions on climate change and
broader ESG priorities, reinforcing their
role as an ongoing area of focus. During
2024, key climate-related activities by
the Board and its Committees included:
• A review of the Company’s
sustainability strategy, climate
change initiatives to date, and
ESG priorities during a Board
working session.
• Audit Committee approval of third-
party external assurance for KPIs
related to direct and indirect energy
consumption and GHG emissions
for the reporting year.
• HSECR Committee updates on the
Company’s progress in its Annual
TCFD compliance programme.
To ensure Directors possess the
necessary expertise to oversee
Fresnillo’s climate-related regulatory
compliance and overall strategy,
Board working sessions in recent years
have included briefings on regulatory
updates, reporting frameworks, and
sustainability trends with an industry
perspective from both management
and sustainability experts.
Relevant competencies of Board
members for addressing climate
change, particularly within the HSECR
Committee, are detailed in the Board
biographies in the governance section
on pages 148-151. Notably:
• Mr Arturo Fernández brings
extensive expertise in Mexican
public policy and a strong academic
background in macroeconomics.
• Ms Georgina Kessel contributes
significant experience in energy
and climate change.
• Dame Judith Macgregor provides
valuable international perspectives
on climate change, leveraging her
extensive diplomatic background.
• Mr Fernando Ruiz offers considerable
experience in Mexican taxation and
insights into evolving carbon pricing
legislation.
Further details on the Audit and
HSECR Committees’ Terms of
Reference are available on the
Company’s corporate website.
Management’s role
Guided by the Board and Executive
Committee, and in alignment with our
risk appetite, we systematically assess,
prioritise, and manage climate-related
risks through our Enterprise Risk
Management (ERM) framework.
Climate oversight is embedded within
senior management, ensuring that
decision-makers at the highest level
integrate climate-related risks and
opportunities into the Company’s long-
term strategy. The following roles have
direct responsibility for assessing and
managing these risks:
Management Role Responsibilities
Chief Executive Officer (CEO) Oversees the integration of climate-related risks and opportunities into
business strategy, ensuring alignment with corporate objectives and
regulatory requirements. Leads communication on climate goals and
holds the organisation accountable for implementation.
Chief Financial Officer (CFO) Ensures financial resilience by overseeing compliance with climate-related
regulations and integrating climate risks into financial planning and reporting.
Collaborates with operations to evaluate cost-effective decarbonisation
opportunities.
Chief Operations Officers
(COOs – North and Centre Districts)
Lead operational initiatives to enhance energy and resource efficiency,
reduce GHG emissions, and address environmental risks, ensuring alignment
with the Company’s sustainability strategy.
Corporate Risk Manager Oversees corporate risk management, ensuring climate-related risks
are identified, assessed, and integrated into the broader Enterprise Risk
Management (ERM) framework. In addition, prepares scenarios of possible
risks that could materialise.
ESG Compliance Manager Ensures compliance with climate-related regulations and disclosure
requirements, aligning the Company’s reporting with investor and
stakeholder expectations.
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SUSTAINABILITY AT THE CORE OF OUR PURPOSE CONTINUED
PROTECTING OUR ENVIRONMENT
Additional functional areas such as
Finance, Safety and Environment,
Energy, Infrastructure and Community
Relations contribute expertise and
provide operational support, ensuring
alignment with climate ambitions.
In recent years, we have strengthened
our approach to climate risk assessment
by forming cross-functional steering
teams to refine climate-risk frameworks
and develop climate financial analysis.
Following the harmonisation of climate
risk management with the ERM
framework, in 2024 a team from Risk,
Financial Control, and ESG Compliance
continued collaboration with the mining
units to assess site-specific climate-
related risks. Although still in its early
stages, a process to estimate long-term
energy demand for the Strategic Plan
was also initiated.
During 2024, workshops were held for
Senior and Middle Management on
upcoming sustainability regulations,
the financial impacts of climate change,
and other ESG topics, to strengthen
expertise in key leadership positions.
Governance Priorities for 2025
In 2025, we will further refine how
climate priorities translate into
measurable business objectives,
ensuring alignment across strategy,
operations, and investment decisions.
Under the Executive Committee’s
guidance, management will focus
on integrating climate-related
opportunities into the Company’s
growth strategy and cost control
initiatives, tracking progress while
Scenario name
Warming
trajectory
by 2100 Description Physical Scenario Source
Transition
Scenario source
Rapid 1.5°C A rapid transition to a global low-carbon economy that
achieves Net Zero by 2050.
Not considered IEA NZE
Steady <2°C A steady transition in line with the Paris Agreement,
limiting peak warming below 2°C. World economies
adopt more sustainable growth, with lower material
intensity and respect for environmental boundaries.
IPCC SSP 1-2.6 IEA APS
Delayed 2-3°C A slow transition with notable physical and transition
impacts. Emissions decline after 2045, but environmental
degradation, moderate growth, and persistent inequality
increase vulnerability.
IPCC SSP 2-4.5 Not considered
Business
as usual
>4°C A worst-case scenario with unconstrained emissions,
leading to extreme warming and intensified physical risks.
Rapid technological progress is coupled with high fossil fuel
use and resource-intensive lifestyles.
IPCC SSP 5-8.5 Not considered
Climate scenarios
maintaining flexibility in the context
of evolving regulations and market
conditions, continuing to take steps
towards reaching full compliance with
TCFD recommendations.
Additionally, we will continue using
targeted training and capacity-building
initiatives to strengthen our internal
capabilities, ensuring that both
management and operations teams
can effectively incorporate climate
considerations into their decision-
making and daily practices.
Strategy
Climate change represents a principal
risk for the Company, with strategic
implications for the business. Mining
plays a key role in enabling the global
transition to a low-carbon future
by providing essential minerals for
renewable energy technologies,
but at the same time is expected to
decarbonise its own operations and
adapt to evolving regulations to reduce
its impact.
Although Mexico does not currently
have a net-zero target, the country’s
recently announced plans to
increase reductions in its Nationally
Determined Contributions (NDCs)
of economy-wide emissions from
30% to 35% by 2030 will require the
participation of heavy industries such
as mining. This regulatory shift, along
with increasing pressure for carbon
pricing mechanisms, underscores the
importance of preparing for transition
risks while also leveraging opportunities
to enhance efficiency and incorporate
renewables to reduce costs.
Scenario analysis
We use scenario analysis to evaluate
how different climate futures could
impact our business. Our approach
follows internationally recognised
methodologies:
• Physical Risk Scenarios: Based
on the Intergovernmental Panel
on Climate Change (IPCC) and
Shared Socioeconomic Pathways
(SSPs), these scenarios encompass
a spectrum of potential futures
shaped by various combinations of
possible socioeconomic, regulatory
and climate factors offering insights
into possible social, economic,
political, and technological changes
between the present and 2100. These
were used to assess impacts such as
extreme weather events.
• Transition Risk Scenarios: Based
on the International Energy Agency
(IEA) – which relies on the Global
Energy and Climate (GEC) Model
– these scenarios examine future
energy trends to model potential
regulatory and market changes,
including carbon pricing. The Net
Zero Emissions (NZE) scenario shows
a narrow but achievable pathway for
the global energy sector to achieve
Net Zero by 2050, whereas the
Announced Pledges Scenarios (APS)
considers all climate commitments
made by Governments around
the world, including NDCs and
Net Zero targets.
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Strategic Report Governance Financial Statements Additional Information
63
19
66
20
75
22
73
22
64
19
63
19
58
17
48
14
35
10
22
6
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
65
42
69
44
78
50
75
48
67
43
65
42
60
38
50
32
36
23
23
14
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
We anticipate that transition risks
will materialise more rapidly than
physical risks, as proactive climate
action seeks to mitigate the most
severe consequences of climate
change. Whilst reducing emissions can
help limit long-term physical risks, it
also introduces regulatory, financial, and
market-driven challenges. Conversely,
in the absence of emissions constraints,
physical risks will intensify, becoming
more frequent and severe.
Scenario analysis provides a structured
approach to understanding potential
climate-related impacts on our business.
Although not a forecast, it enables us
to evaluate a range of possible futures
and integrate climate considerations
into operational and financial planning.
In past years, management has been
assessing the resilience of the Company
taking into consideration different
climate-related scenarios. This ongoing
work has taken into consideration how
climate-related risks and opportunities
may evolve and their potential business
implications under different conditions.
Physical risks
There are significant potential physical
risks to our operations due to extreme
weather events caused by climate
change. These risks vary depending
on factors such as whether a mine
is underground or open-pit and its
geographic location within Mexico.
In 2023, we conducted a scenario
analysis based on IPCC scenarios for
eight physical risk hazards: wildfire,
heat, flood, precipitation, drought,
hail/thunderstorms, cold, and wind.
The focus of this analysis was impact,
understood as potential financial loss
due to asset and infrastructure damage,
as well as disruption to revenue-
generating activities. The analysis
was performed at five-year intervals
from 2020 to 2100. By evaluating the
severity and frequency of these risks
in the short term and projecting their
evolution through 2050, we identified
sites currently exposed to physical risks
as well as those that may become more
vulnerable over time.
Hazard
Current risk
(2020)
Description
(2020-2050)
Wildfire High Lowest increase
Wind Low Lowest increase
Heat Low Medium increase
Drought Low Reduction in risk
Precipitation (rainfall) Low Low increase
Cold Low Reduction in risk
Hail and thunderstorms Low Reduction in risk
Flood* Lowest
Lowest increase
* There are three common flood types: 1) Fluvial floods (or river floods), caused by an overflow of a river,
lake or stream into neighboring land. 2) Pluvial floods (flash floods and surface water), caused by extreme
precipitation. Surface water floods occur when the urban drainage system is overwhelmed, whereas flash
floods are caused by torrential precipitation falling within a short amount of time, as well as due to the sudden
release of water from a levee or dam. 3) Coastal floods (or storm surge) are the inundation of land along the
coast by seawater caused by tsunamis, high tides and windstorms.
Average risk classification for all mining sites assessed by hazard
Risk classifications ranged from lowest
to highest, based on hazard severity in
2020 under a >4°C scenario (Business as
usual) – as per the base year default of
the modelling tool used to model these
hazards. The risk change categories
indicate how risk levels are expected to
shift by 2050 under the same scenario.
These range from Lowest increase in
risk to Highest increase in risk, with an
additional Reduction in risk category
where applicable. The risk classification
for each hazard reflects the average
across all sites included in our scenario
analysis – incorporating all our operating
mines and advanced exploration
projects. We have highlighted in the
table below those that resulted most
relevant for this preliminary analysis.
Transition risks
Our operations face a range of potential
transition risks, including market shifts,
policy and legal changes, technological
advancements, and reputational factors.
Many of these risks fall outside our
direct operational control, necessitating
a proactive and preventive approach.
When incorporating scenario analysis,
the warming trajectory expected
by 2100 for transition risks remains
consistent across the NZE and APS
scenarios, as both assume progress
toward decarbonisation – albeit at
different speeds.
Projected impact of carbon pricing,
Net Zero scenario (US$ million)
Projected impact of carbon pricing,
Announced Pledges scenario
(US$ million)
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SUSTAINABILITY AT THE CORE OF OUR PURPOSE CONTINUED
PROTECTING OUR ENVIRONMENT
We conducted scenario analysis using
a Net Zero Emissions (NZE) pathway
and an Announced Pledges (APS)
scenario. In the absence of a current
carbon pricing mechanism in Mexico,
we used carbon price projections from
the International Energy Agency (IEA)
for both developed and developing
economies. This dual approach accounts
for potential future pricing policies in
Mexico and reflects costs associated
with the EU, and other potential Carbon
Border Adjustment Mechanisms
(CBAM). Our analysis considered Scope
1 and 2 emissions by mine site, based
on calculations from the 2024 update of
our 2024-2039 Strategic Plan, including
only the Life of Mine (LOM) of existing
assets and most material energy sources
(electricity and diesel).
The findings indicate that, depending
on the pricing scenario, our Company
faces significant potential exposure
to rising costs from carbon pricing if
additional emission reduction measures
are not implemented. Additionally,
we anticipate cost pressures from our
upstream value chain, as suppliers pass
on expenses related to new equipment
investments and direct carbon costs.
Given that commodity prices are
market-driven, we have limited ability
to influence downstream pricing.
Moreover, further granularity in carbon
emissions data across the value chain
is needed to fully assess the financial
impact of carbon pricing.
Despite continuous monitoring of
carbon pricing mechanisms, we
currently assess its risk rating as low
due to the limited applicability of such
instruments in Mexico – as detailed in
the Climate Resilience section on pages
90-91. However, given the potential
financial implications as well as the
evolving regulatory landscape and
growing public policy commitments
nationally and internationally, together
with its relevance for internal shadow
pricing or carbon budgeting, we
recognise the need to ensure both
Company Senior Management and
stakeholders remain informed of its
potential impact.
Climate Risk Identification and
Assessment
Our climate risk assessment is an
evolving process that integrates periodic
reviews to refine our strategic response.
After running some calibration exercises
for our scenario analysis, in 2023, we
reassessed our Climate-Related Risks
and Opportunities (CROs) through
an updated analysis aligned with our
Enterprise Risk Management (ERM)
framework. This review incorporated
insights from risk owners across key
areas – Industrial Safety, Water, Tailings
Storage Facilities (TSFs), Mine Planning,
and Maintenance – enabling a more
focused approach to prioritising climate
resilience and adaptation measures.
We have identified and evaluated 25
material CROs based on their likelihood
and impact, ensuring alignment with
the operational frontiers of our Strategic
Planning framework. These risks span
short-term (2024-2028), medium-term
(2029-2034), and long-term (beyond
2035) horizons, providing a structured
approach to managing exposure
across the mining lifecycle. While some
locations will cease operations before
2040, we aim to develop an overall and
consistent long-term assessment for
the business, as the risk at these sites
continues throughout the closure
and post-closure stages of the mining
life cycle.
In 2024, we updated the risk rating for
each CRO on our list, shown next, with
Red-Amber-Green (RAG) ratings based
on the ERM framework scoring – which
additionally to impact, incorporates
likelihood of occurrence. The following
table includes a summary of the short-
term gross risks or opportunities for our
complete registry. The strategic review
of our CROs continues to inform our risk
management approach and provides
valuable insights to mature our climate
strategy in the coming years.
For more information on the ERM
framework, please refer to the Managing
our risks and opportunities section on
pages 116-138.
ID Risk Category
Climate
risk type
-subcategory Summary risk title
Operational risk description
(cause, event & consequence(s))
Financial risk
description
(cause, event &
consequence(s))
Value chain
impact
Time
horizon Risk Rating
P1 Operational Physical –
Acute
Extreme weather
events (rainfall,
storms, flooding)
impact operations
and cause business
disruption
Increased rainfall causes flooding,
restricting access roads to the site
and preventing accessibility for
employees. More extreme and
frequent storms cause overflow
or collapse of tailings deposits.
Decrease in revenue
due to reduced
operating time.
Increased operating,
extraction and
maintenance costs.
Extraction and
beneficiation
Medium
Term
High
P2 Operational Physical –
Acute
Extreme weather
events (cold,
freezing conditions,
snowfall) impact
operations and
cause business
disruption
Reduction of electricity generation
due to the reduced availability
of fuel (e.g. natural gas) - leads
to reduced output capacity in
extraction and beneficiation.
Reduced revenue. Extraction and
beneficiation
Medium
Term
Medium
P3 Financial Physical –
Acute
Extreme weather
events (heatwaves
and wildfires)
impact operations
and cause business
disruption
Wildfire limits land area eligible
for licencing. Workers’ productivity,
health and wellbeing are negatively
impacted by the effects of excess
heat. Damage to equipment or
spare parts.
Reduction in
revenue (heat) and
loss of potential
future revenue due
to limitations of new
sites that can be
explored (wildfire).
Extraction and
beneficiation
Medium
Term
Medium
List of Climate Risks and Opportunities
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Strategic Report Governance Financial Statements Additional Information
ID Risk Category
Climate
risk type
-subcategory Summary risk title
Operational risk description
(cause, event & consequence(s))
Financial risk
description
(cause, event &
consequence(s))
Value chain
impact
Time
horizon Risk Rating
P4 Operational Physical –
Chronic
Chronic changes
to climate affecting
operations and
mine closure
Chronic changes in temperature
lead to modifications to current
monitoring and remediation
processes of closed mines. Water
stress negatively impacts operations
and extraction processes. Higher
temperatures increase dust
emissions associated with mine
operations – suppressing dust
and managing tailings storage
facilities/disposal activities
becomes more challenging.
Increased costs
due to necessary
modifications to
mines, operations
and mine closure
processes. Potential
for extra costs
associated with
non-compliance/
fines for exceeding
permitted dust
limits.
Extraction and
beneficiation/
Closure and
post-closure
Long Term Low
P5 Financial Physical –
Chronic
Droughts
stress water
management
systems
Reduced precipitation and
increased water stress during the
dry season and/or periods of high
temperatures impact long-term
changes in water availability and/or
water quality to supply operations
and watershed users. Modifications
to existing water managements
systems are required.
Increased costs due
to modifications
to existing water
managements
systems, or the
construction of
water reservoirs.
Extraction and
beneficiation
Long Term High
P6 Operational Physical –
Chronic
More frequent
extreme weather
events increase
insurance costs
Insurance companies change
commercial conditions and increase
premiums in response to damage
from more extreme weather events,
such as overflow of tailings deposits
due to extreme rainfall.
Increase in total
extraction and
beneficiation
operating costs.
Extraction and
beneficiation
Long Term Medium
T1 Compliance Transition –
Markets
Lower ESG
score decreases
credit rating
Access to finance for mine
construction in Mexico is restricted.
Mines are typically scored lower for
ESG ratings, which are considered
by credit rating agencies.
Low ESG ratings
increase the
cost of loans for
constructing new
mines in Mexico.
Development
and construction
Short
Term
Low
T2 Operational Transition –
Reputation
Intensive water
use affecting social
licence to operate
Increasing water scarcity in
Fresnillo’s areas of operation lead
to increased competition for water.
This reduces water availability for
extractive operations, despite proper
water permits being in place.
Increased
operating costs
due to increased
competition
for water.
Extraction and
beneficiation
Short
Term
Medium
T3 Financial Transition –
Reputation
Community
engagement
required to
avoid negative
perceptions
relating to changes
in local ecosystem
During mine construction,
changes in land use affect forest
land, with increased road building
and vehicular activity. This increases
noise and dust levels and also
creates negative perceptions
of Fresnillo in neighbouring
communities and potentially
from other stakeholders. To combat
this, engagement activities with
local communities are required.
Additional costs
incurred for
community
engagement
activities to
avoid construction
delays and other
future impacts.
Development
and construction
Short
Term
High
T4 Operational Transition –
Reputation
Capital re-allocation
to implement a
decarbonisation
strategy
Fresnillo has failed to develop a
clear sustainability roadmap for
the future, leading to considerable
impacts on the whole company’s
operational approach and costs.
Increased
operating costs.
Extraction and
beneficiation
Short
Term
Low
T5 Compliance Transition –
Policy and
Legal
Introduction of
carbon taxes
Sub-national carbon pricing
instruments become more
stringent, impacting the costs
of extraction and operations as
these are emissions intensive
activities. Some transfer of Carbon
Boarder Adjustment Mechanisms
(CBAM) costs to final buyers occurs,
due to levies on exports of specific
products. Mines in particular
states are affected by local
government decisions to issue
‘environmental taxes’.
An increased
carbon tax
impacts energy
costs, increasing
production costs for
mineral extraction
and beneficiation.
Revenue decreases
due to the
absorption of some
of the increased
costs incurred by
CBAMs. Extraction
and operation costs
increase due to the
emissions intensive
natures of these
processes
Extraction and
beneficiation/
Other
Medium
Term
Low
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ID Risk Category
Climate
risk type
-subcategory Summary risk title
Operational risk description
(cause, event & consequence(s))
Financial risk
description
(cause, event &
consequence(s))
Value chain
impact
Time
horizon Risk Rating
T6 Operational Transition –
Policy and
Legal
Impacts of
purchasing
offsets
In order to meet increased
regulatory standards and improve
market reputation in relation to
decarbonisation, costs are incurred
in the offsetting of GHG emissions
of operations in Mexico.
Gross margin is
impacted due
to increase in
operating costs as a
result of offsetting.
Extraction and
beneficiation
Medium
Term
Medium
T7 Compliance Transition –
Policy and
Legal
More stringent
land and water
usage regulations
are enforced
Fresnillo must ensure compliance
with more stringent regulations
in Mexico relating to surface and
groundwater use. Regulations
relating to land-use change
and land-use licences impact
construction and equipment costs.
Increased operating
expenses due to
higher costs for
water and land-use
licenses. This also
increases total
construction and
equipment costs.
Extraction and
beneficiation
Medium
Term
High
T8 Compliance Transition –
Reputation
Increased
emissions due to
fossil fuel subsidies
Higher fossil fuel subsidies
increase the emissions associated
with energy consumption. This
negatively affects Fresnillo’s
reputation among stakeholders
looking for an improved
sustainability performance.
Extraction and
beneficiation
Medium
Term
Low
T9 Operational Transition –
Markets
Diesel prices
affect costs
associated with
energy during
extraction
Diesel prices rise due to the
move away from fossil fuels
to renewable energy sources.
Operations (specifically the current
fleet) are heavily reliant on diesel
usage, hindering a transition to
renewable fuel sources.
Operating
costs increase
as anticipated
increases in fossil
fuel costs (due to
market changes
and regulatory
pressures) come
into effect.
Extraction and
beneficiation
Long Term High
T10 Compliance Transition –
Policy and
Legal
Changing political
environment
National policies to increase
Mexico’s production of fossil
fuel result in an increase in the
electricity tariff paid by corporations.
The electricity tariff
paid by corporations
increases due to
the slow increase of
renewable energy
in the fuel mix – this
increases Fresnillo’s
energy costs for
mineral extraction
and beneficiation.
Extraction and
beneficiation
Long Term Medium
T11 Compliance Transition –
Policy and
Legal
More stringent
emissions
standards to
comply with
Mexico’s NDC
More stringent emissions
standards are enforced to comply
with Mexico’s NDC, which delays
construction of new mines
because of more challenging
requirements to obtain licences.
Decrease in
revenue
growth rate.
Extraction and
beneficiation
Long
Term
Low
T12 Operational Transition –
Policy and
Legal
Implementation
of optimisation
software
Implementing software to
optimise processes and seize
efficiencies (for example through
greater use of the Internet of
Things) makes processes more
efficient by improving monitoring.
This requires intensive software
development and rollout.
Increased
operating costs
to introduce new
software across
the organisation.
Extraction and
beneficiation
Long
Term
Low
O1 Operational Transition –
Energy Source
Switching to
renewable
sources
of energy
The implementation of a
decarbonisation strategy for
Fresnillo’s vehicle fleet (resulting
in a move to electric or hydrogen-
fuel vehicles), coupled with
the increased consumption of
renewable electricity, allows the
business to reduce its reliance on
fossil fuels. Fresnillo engages with
the move to renewable energy
to ensure climate resilience and
support the energy transition.
Operating costs
are reduced due
to minimised
exposure to
carbon taxation
policies. Business
emissions are
reduced, enabling
cost savings
associated with
renewable energy
supply in the
mining extraction
processes.
Extraction and
beneficiation
Short
Term
High
SUSTAINABILITY AT THE CORE OF OUR PURPOSE CONTINUED
PROTECTING OUR ENVIRONMENT
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www.fresnilloplc.com
ID Risk Category
Climate
risk type
-subcategory Summary risk title
Operational risk description
(cause, event & consequence(s))
Financial risk
description
(cause, event &
consequence(s))
Value chain
impact
Time
horizon Risk Rating
O2
Strategic Transition –
Markets
Increased demand
for silver for PV
panels
The increased global demand for
solar panels and other low-carbon
technologies (many of which are
reliant on silver in their construction),
will increase silver demand globally.
Extraction revenue
will increase.
Extraction and
beneficiation
Short
Term
Medium
O3
Operational Transition –
Resilience
Reduction in
the material
footprint of
Fresnillo as
a whole
Fresnillo introduces policies to
reduce the total material footprint of
operations, including offices, waste
management and other areas.
By reducing the
total material
footprint of the
organisation, and
implementing
process and
material efficiencies,
Fresnillo reduces its
operating costs.
Extraction and
beneficiation
Medium
Term
Low
O4
Strategic Transition –
Resilience
Climate modelling
exercises are
used to build
organisational
resilience
Climate modelling is used to
engage stakeholders across the
business on risks and opportunities
that have not previously been
considered. This process enables
greater understanding of risks and
adaptation measures and improves
the definition of safe parameters for
mine infrastructure.
Potential for
reduced exposure
to financial impact
resulting from
climate changes
in the future due
to the introduction
of adaptation
and mitigation
measures.
Extraction and
beneficiation
Long Term Medium
O5
Operational Transition
– Resource
Efficiency
Implementing
efficient closed
water circuits
The stress imposed on water
sources during extraction processes
is eased, providing greater water
resilience to operations.
Reduced
operational
costs during the
extraction phase.
Extraction and
beneficiation
Long Term Medium
O6
Operational Transition
– Resource
Efficiency
Introduction
of adaptive
technologies to
reduce carbon
intensity of assets
and operations
Fresnillo implements its
decarbonisation strategy for the
current vehicle fleet at existing
mines. This may include the
operation of dual (diesel-LNG)
systems to replace diesel-based
vehicles. The migration to electric
technologies for extraction in
existing mines will also help
to reduce the carbon intensity
of operations.
Decreased exposure
to carbon taxation
and reduced
operational costs
(due to process
efficiencies) result
in overall cost
reductions for
operations and
extraction.
Extraction and
beneficiation
Long Term Medium
O7
Operational Transition
– Resource
Efficiency
Introduction
of adaptive
technologies to
reduce water
intensity of assets
and operations
Low water intensity technologies (for
example, dry tailings deposits) allow
Fresnillo to reduce dependence on
freshwater to operate, avoiding the
risk of water scarcity.
Reduced operating
costs.
Extraction and
beneficiation
Long Term Medium
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Impact on the business, strategy
and financial planning
Climate change affects various stages
of the mining life cycle, including
exploration, development, operation,
closure, and post-closure. Most of our
CROs have been identified as relevant
to the operational stage. Our thorough
analysis of our CROs is intended to
serve as the foundation for informed
strategic decision-making for current
operations and development projects.
The Company has already made certain
climate-related strategic decisions,
such as to increase renewable energy
consumption, and investments in
energy and operational efficiency.
Where decisions have been approved by
the Board, the effects were considered
in the preparation of the financial
statements (see the judgements
section of the Consolidated Financial
Statements note on pages 218-220).
Our climate strategy follows a proactive
approach, aiming to both mitigate our
impact on climate change and adapt to
its physical consequences at the same
time. To achieve this, we have embarked
on two projects that will help us make
informed decisions regarding our
climate change initiatives:
• The regional climate modelling
project was successfully concluded
during 2023, providing industry-
valuable insights of climate
parameters on a per-mine site
basis. Nevertheless, we recognise
that more training is needed for
operational teams to be able to
leverage this information and
incorporate it into decision making.
• The decarbonisation roadmap – an
in-depth analysis of our largest assets
and those of our parent company,
Industrias Peñoles – has provided
valuable insights into available low-
carbon technologies in our industry.
The most relevant decarbonisation
levers remain renewable electricity,
which we have already capitalised
extensively (see energy section on
pages 80-81), and fleet electrification.
While fleet electrification requires
specific infrastructure at mine sites,
its potential benefits may be more
applicable to future operations rather
than existing ones. Further analysis
is needed to assess feasibility and
implementation requirements,
as well as other value levers
specific to the extraction and
beneficiation process.
SUSTAINABILITY AT THE CORE OF OUR PURPOSE CONTINUED
PROTECTING OUR ENVIRONMENT
In anticipation of potential impacts,
we recognise further work needs to be
carried out to account for stand-alone
effects, particularly concerning energy
and operational efficiency measures.
In 2024, we worked on incorporating
energy consumption by source into
the Strategic Plan’s long-term models.
A comprehensive understanding and
strategic planning regarding climate-
related risks will enable us to implement
measures that effectively mitigate the
impact of, and reduce our exposure to,
transition risks. Our strategic priorities
include leveraging ongoing operational
and cost efficiency initiatives in water
and energy, integrating transition
planning into day-to-day operations,
and ensuring operational discipline in
the analytical accounting of impact
and GHG reductions. This approach
ensures that all contributing factors
– beyond large-scale technology
investments – are systematically
incorporated, reinforcing our ability
to drive meaningful progress.
Additionally, we seek to capitalise on
opportunities such as the growing
demand for silver in the solar PV
industry. Adapting to climate change
will also safeguard the wellbeing of
our workforce, strengthen mining
infrastructure, secure water supplies,
and enhance collaboration with
surrounding communities, ultimately
minimising the potential impact on
our business.
These ongoing efforts are part of our
broader commitment to developing
a transition plan that aligns with the
framework outlined by the Transition
Pathway Taskforce (TPT) in the years
ahead. While more information is still
required to help us engage with our
value chain for Scope 3 reductions,
we believe that continuing to make
steady progress will enhance our
ability to anticipate and integrate
associated costs and revenue streams
more accurately, ensuring long-term
profitability and resilience.
Climate resilience
In 2024, we deepened our analysis of
key physical risks, focusing on wildfire
exposure and water stress in the Fresnillo
District and extreme heat conditions at
Herradura – the mine with the highest
number of days exceeding 38°C across
all scenarios. This involved working
sessions with operational teams to assess
exposure and resilience. A summary of
our findings is presented below. More
information on how the Company
manages our CROs is available in the
next section, on pages 92-93.
Additionally, we continue to monitor
transition risks, such as regulatory
developments related to emissions
reduction, carbon pricing mechanisms
and land and water usage regulations,
as well as evolving ESG considerations
in credit ratings methodologies:
• The Special Tax on Products and
Services (IEPS) applied to fossil fuels
has been in place since 2014. Current
environmental taxes in states where
we operate are not applicable to
emission factors from non-source
point emissions. The carbon market
remains voluntary, while the
Mexican Trading Emissions System
to date only considers source point
emissions, remaining unapplicable
to our Company.
• The ESG profile scores of our credit
ratings are in line with the metals
and mining sector.
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Strategic Report Governance Financial Statements Additional Information
Hazard Assumptions What we did Conclusion
Wildfire Potentially disrupts
operations, damages
infrastructure and
equipment, and
poses safety hazards
due to flames, excess
heat, and smoke.
Conducted a detailed
review of reinsurance
risk surveys, business
continuity audits for
each mine, and current
insurance coverage.
The risk of wildfire impacting business
continuity was dismissed, as mine
sites have robust firefighting systems
and brigades. Additionally, fire-related
damage to assets and operations is
covered by insurance.
Heat stress
-equipment and
infrastructure
Extreme heat may
reduce machinery
performance or
damage equipment.
Held interviews with
mine leadership,
operations, and mine
planning teams to
identify equipment
vulnerabilities.
The risk of heat damage to
equipment and infrastructure was
assessed as non-material, as only a
few spare parts, such as tyres, may
be vulnerable during certain seasons,
with no historical data indicating
significant impact. A more detailed
analysis is required.
Heat stress
– worker
productivity
High temperatures
may impact worker
productivity.
Engaged with medical
and human resources
teams to evaluate
personnel exposure,
existing site condition
monitoring processes,
and compliance with
labour regulations on
heat exposure.
The risk of heat stress on worker
productivity is difficult to quantify,
as job roles already factor in heat
exposure regulations, and mitigation
measures such as air conditioning
improve overall site conditions despite
average or peak temperatures.
Water stress Increased water
scarcity and reduced
precipitation drives
competition for
water resources.
Engaged with
environmental,
operations and
accounting teams to
identify operational
strategies to
reduce mine water
consumption and
enhance community
engagement.
The impact of water stress is complex,
context-dependent, and sometimes
indirect, influencing our social licence
more than operational performance.
The Company will continue to
substitute freshwater for treated
wastewater, improving operational
efficiency and strengthening
community relations.
Based on our thorough and evolving
analysis of CROs, our management is
confident in the Company’s resilience
and ability to thrive amidst the
challenges of climate change. We are
dedicated to sustainable operations
and remain optimistic about our
profit-generation capacity. With strong
processes to manage and adapt to
climate-related risks, we are well-
equipped to successfully navigate the
changing climate landscape, securing
the long-term sustainability and
success of our business.
Strategy Priorities for 2025
In 2024, we incorporated a long-term
energy planning forecast into our
Strategic Plan. Capitalising on lessons
learnt, we expect to further improve,
standardise and document this process
in 2025. We believe this information
is crucial to advancing our financial
analysis by incorporating more detailed
data on key inputs – such as water or
energy – to enhance forward looking
planning. Additionally, we aim to
develop a framework that allows for
connectivity between CROs and capital
expenditures. Finally, we will pursue
refining quantitative analysis of the
most salient climate-opportunities in
the future.
Risk Management
The Board has overall responsibility for
our approach to Risk Management
and delegates this responsibility to
the Audit Committee. Climate change
is considered a principal risk to the
business, and we adopt a Group-wide
approach to risk management based
on risk identification, assessment,
prioritisation, mitigation and monitoring
processes, which are continually
evaluated, improved and enhanced
in line with best practice. The principal
risk Climate Change connects with
our emerging risks, notably Water
stress and drought, Transition to a
low-carbon future and Increasing
societal and investor expectations
(see Managing our Risks and
Opportunities on pages 116-138).
Identifying and assessing climate
risks and opportunities
The intricate and rapidly evolving nature
of climate change amplifies risks related
to environmental incidents, water
access, workforce health and safety,
regulatory changes, and social licence
to operate. A robust climate strategy
depends on a deep understanding of
our business model’s CROs, considering
the mining lifecycle and our value chain.
Our risk management system follows
a structured approach – identification,
assessment, prioritisation, mitigation,
and monitoring – continuously refined
in line with best practices.
Climate change considerations
were first incorporated into our
annual risk appraisal in 2021. The
process began with a risk catalogue
informed by industry benchmarks,
peer insights, and climate guidance,
followed by workshops and interviews
across all business areas to build a
comprehensive CRO register. In 2023,
we refined this register, consolidating
risks into a more focused list of material
CROs. This involved fully integrating
climate change into our Enterprise
Risk Management (ERM) framework,
aligning climate risk scoring with
corporate risk criteria and ensuring risk
definitions were broad enough to be
relevant across the business.
In 2024, we conducted our first
dedicated climate risk assessment,
applying a balanced and representative
approach to evaluate what
management deemed as the most
material physical and transition CROs
to the organisation. We believe that
an insight into this comprehensive
subset of CROs offers an opportunity
to enhance controls and mitigation
actions for risks that have either
materialised or remain latent.
This process was informed by past
experiences of business continuity
interruptions. For example, Hurricane
Rosa in Herradura where extreme
precipitation disrupted transport routes
and access roads, caused landslides,
and flooded the pit and other critical
infrastructure. Further examples
include the polar vortex in San Julián,
which caused blockages to access
roads, interrupting critical supplies,
and power shortages. The process
was also informed by past events that
did not affect business continuity,
such as wildfires close to our facilities
at Ciénega and San Julián, as well as
current operational challenges and local
conditions including water sourcing
availability, community perception of
water stress and disruptions to local
ecosystems. Finally, regulatory factors
such as environmental state taxes were
also considered, given their increasing
salience in Mexican government policy.
The assessment involved interviews
with risk owners, mapping critical
processes, surveying mining units
and key corporate departments,
and benchmarking findings against
reports from insurance institutions and
consultancy firms. As a result, we gained
clearer insights into our risk appetite
for material climate risks, identifying
opportunities to strengthen mitigation
actions and allowing us to plan more
effectively for the future.
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Risk ID Risk name Likelihood Impact Risk rating Velocity Appetite Business interruption
P1 Extreme weather events (rainfall,
storms, flooding) impact operations
and cause business disruption
High Significant High < 1 year Medium Total shutdown
P2 Extreme weather events (cold, freezing
conditions, snowfall) impact operations
and cause business disruption
Likely Moderate Medium < 1 year Low Impact on one or more processes
P3 Extreme weather events (heatwaves
and wildfires) impact operations and
cause business disruption
Likely Moderate Medium < 1 year Low Impact on one or more processes
P5 Droughts stress water management
systems
High Severe High < 3 years Low Partial shutdown
P6 More frequent extreme weather
events increase insurance costs
Likely Moderate Medium < 3 years Low n/a
T2 Intensive water use affects our
social licence to operate
High Significant Medium < 1 year Low Impact on one or more processes
T3 Community engagement required
to avoid negative perceptions relating
to changes in local ecosystem
High Significant High < 1 year Low Impact on one or more processes
T5 Introduction of carbon taxes Unlikely Low Low < 3 years Medium No impact
SUSTAINABILITY AT THE CORE OF OUR PURPOSE CONTINUED
PROTECTING OUR ENVIRONMENT
2024 climate risk assessment matrix
This thorough analysis enabled us to
identify the two CROs the Company is
most exposed to, which are:
• P1 – Extreme weather events (rainfall,
storms, flooding) impact operations
and cause business disruption, and
• P5 – Droughts stress water
management systems.
Managing climate risks
The business-wide impacts of climate
change originally led us to include
climate change as an emerging risk,
as part of provision 28 of the 2018
UK Corporate Governance Code.
Today, however, we now consider it
to be a principal risk. Updates on the
regulatory landscape are considered
in line with business-wide regulatory
monitoring processes. In this regard,
climate change related risks have been
included in the financial viability study,
primarily focused on hypothetical
scenarios of winter storms and extreme
rainfall. For a more detailed overview
of these scenarios, please see Viability
Statement on pages 139-140.
Our updated climate change risk
management system is a collaborative
effort involving operational and
corporate departments including
Mine Operations, Plant Operations,
Maintenance, Mine Closure,
Environment, Industrial Safety, Tailings
Storage Facilities (TSFs), Community
Relations, Energy, Financial Planning,
Operational Comptrollership, Financial
Comptrollership, Explorations
Comptrollership, Legal, ESG and
Risk. Ongoing work focuses on the
definition of risk owners, identifying
current controls and mitigation actions,
and collaboratively enhancing these
through monitoring and management,
across all operating units. Our purpose
is to run this exercise periodically with
risk owners to ensure the accuracy of
impact assessments and the adequacy
of future mitigation actions.
In recent years, our focus has been on
fully integrating our assessment of
climate-related risks and opportunities
with our ERM framework. As a result,
we have updated our climate risk
framework to reflect the same scoring
system and timeframes as our central
ERM framework, enabling climate
to be ranked alongside other risks to
our business. Additionally, following
the 2024 assessment detailed in the
previous section, we have updated our
controls and mitigation actions for each
CRO in that subset.
Risk ID Risk name Controls and mitigation actions Metrics
P1 Extreme weather
events (rainfall,
storms, flooding)
impact operations
and cause business
disruption
1. Continuous monitoring by qualified personnel using weather stations to predict and anticipate
extreme weather events.
2. Communication protocols and coordination with municipal, state, and federal authorities.
3. Emergency Preparedness Response Plans (EPRPs) for extreme weather events, with continuous
training for emergency response teams.
4. TSFs Potential Failure Model Assessments (PFMAs).
5. Deep drainage systems with regular maintenance to withstand extreme rainfall, diversion channels
around industrial areas, contingency ponds surrounding leaching pads, freeboard capacity in TSFs
to contain 100-year storms, pumping systems, lightning rods, and slope stability monitoring in
leaching pads and waste rock heaps.
References in other sections:
• Safety: pages 73-77
• Tailings and mineral waste: pages 95-96
Under development
P2 Extreme weather
events (cold, freezing
conditions, snowfall)
impact operations
and cause business
disruption
Controls 1, 2 and 3.
6. HVAC systems for offices, housing, and support areas as well as flu prevention campaigns.
7. Road maintenance, tree pruning to prevent damage to power lines, and construction
of alternative routes.
8. Maintenance and signage of roads, and instrumentation in ventilation circuits.
References in other sections:
• Safety: pages 73-77
Under development
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Strategic Report Governance Financial Statements Additional Information
Risk ID Risk name Controls and mitigation actions Metrics
P3 Extreme weather
events (heatwaves
and wildfires) impact
operations and cause
business disruption
Controls1, 2, 3 and 6.
9. Firefighting systems and brigades, wildfire response equipment and non-damaging testing of
pipelines and infrastructure near forested areas.
10. Cleaning and reforestation campaigns near facilities.
11. Occupational health site monitoring of job conditions (including temperature) and mitigation
measures (such as breaks, hydration or air conditioning) in compliance with labour regulations on
heat exposure.
References in other sections:
• Safety: pages 73-77
• Environment: pages 80-100
Under development
P5 Droughts stress
water management
systems
12. Tracking water usage in processes and continuous monitoring of groundwater levels across all
business units.
13. Long-term water consumption planning per business unit, including monitoring water concession
titles and usage licences.
14. Implementation of wastewater treatment, water recirculation, and reuse efficiency to minimise
freshwater consumption.
15. Infrastructure in place to redirect water supply within the mine and plant, with daily monitoring.
16. Strict control over groundwater extraction for operational use.
17. Specific site initiatives:
– Municipal wastewater treatment and potabilisation of groundwater in Fresnillo District.
– Rainwater harvesting project in Ciénega.
– Early warning system for drought conditions at Herradura.
References in other sections:
• Water stewardship: pages 98-99
• Socioeconomic development: pages 102-105
Percentage of
freshwater withdrawn
in regions with high
or extremely high-
water stress
Percentage of water
consumed in regions
with high or extremely
high-water stress
Percentage of water
reuse efficiency*
Wastewater intensity
Percentage of
Third-party wastewater
inputs
P6 More frequent
extreme weather
events increase
insurance costs
18. Ongoing global monitoring of insurance coverage, pricing, and policy types available for extreme
weather events and climate change-related risks.
n/a
T2 Intensive water
use affecting social
licence to operate
19. Implementation of wastewater treatment, water recirculation, and reuse efficiency to minimise
freshwater consumption to prevent conflicts with local communities.
20. Community engagement framework, including:
– Meetings with community leaders to discuss water usage concerns.
– Monitoring community grievances over water shortages and prioritising the addressing of
water-related complaints.
– Specific engagement programmes related to biodiversity and water management.
References in other sections:
• Water: pages 98-99
• Community relations: pages 101-102
• Socio-economic development: pages 102-105
Wastewater intensity
Percentage of
Third-party wastewater
inputs
Community
grievances*
T3 Community
engagement
required to avoid
negative perceptions
relating to changes
in local ecosystem
Control 20.
References in other sections:
• Community relations: pages 101-102
• Socio-economic development: pages 102-105
Community
grievances*
T5 Introduction of
carbon taxes
21. Engagement with regulators and law makers on energy and climate change regulations through
industry associations
22. Strategy of increasing renewable electricity consumption through legacy self-supply and current
regulatory frameworks.
23. Energy and operational efficiency measures including demand control to reduce electricity
demand in peak hours, haulage route optimisation, mine shafts, harmonic filters, and on demand
ventilation systems
24. Use of hydraulic electric drills in underground mines is already established.
25. Deployment of fuel switching projects from diesel to electricity.
References in other sections:
• Energy: pages 80-81
• Our approach to sustainable mining: page 60
Absolute Scope 1 and 2
GHG emissions
Percentage of grid
electricity
Percentage renewable
electricity
O1 Switching to
renewable sources
of energy
Control 21, 22, 23 and 24.
References in other sections:
• Energy: pages 80-81
Percentage renewable
electricity
O2 Increased demand for
silver for PV panels
26. Monitor commodity insights through the Silver Institute and specialised reports.
27. Advanced exploration projects such as Guanajuato focus on silver reserves, whereas exploration
projects in Latin America focus on product diversification
References in other sections:
• Exploration: pages 48-50
• Our markets: pages 20-21
Silver price**
Annual global
industrial silver
demand***
Note: Metrics with (*) are found in the ESG KPIs Tables on pages 107-113, (**) in other sections of this Annual Report, (***) not presented in this Annual Report.
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SUSTAINABILITY AT THE CORE OF OUR PURPOSE CONTINUED
PROTECTING OUR ENVIRONMENT
Risk Management priorities for 2025
Following the completion of our
2024 climate risk assessment, we
have identified an emerging priority:
developing risk materialisation
scenarios for the two most exposed
risks. For extreme weather events
(rain, storms, flooding), we will focus
on La Herradura and Ciénega, whilst
for water scarcity, we will analyse the
Saucito and Juanicipio units.
Additionally, we will develop action plans
for the eight CROs identified in the 2024
assessment, working with risk owners
to strengthen and standardise existing
controls and mitigation measures. We
will also review the scope and coverage
of insurance policies for weather-related
and reputational impacts.
Looking ahead, we aim to further
develop Key Risk Indicators and
leverage scenario analysis to quantify
key opportunities, such as the growing
demand for metals and minerals in the
global transition to net zero.
Metrics and Targets
Our target is to source 75% of electricity
from renewable sources by 2030. We
have steadily increased our consumption
of renewables in recent years, despite
regulatory uncertainties which have
caused delays to new renewable supply
sources coming online.
TCFD category Metric
Unit of
measurement
% change
YoY FY24 FY23 FY22 FY21
SASB Climate-related Disclosure Topics and Metrics, Metals and Mining
GHG emissions Absolute Scope 1 and 2 tCO
2
e -27.6% 597,422 825,325 968,249 894,149
Scope 1 tCO
2
e 0.0% 469,122 469,146 545,970 544,107
Percentage of Scope 1 emissions
under emissions limiting
regulations
% n/a 0 0 0 0
Scope 2 tCO
2
e -64.0% 128,299 356,179 422,279 350,042
Absolute Scope 3
a
tCO
2
e n/a * 700,480 713,043 729,158
GHG emissions intensity
measurement
tCO
2
e/ton of mineral
processed
-26.6% 0.0182 0.0248 0.0246 0.0231
Energy management Total energy consumed GJ 2.1% 10,812,917 10,590,930 11,350,894 11,327,936
Percentage of grid electricity
of total energy consumed
% n/a 6.4% 10.6% 14.8% 10.0%
Percentage renewable energy
of total energy consumed
% n/a 32.9% 21.3% 12.4% 17.4%
Percentage renewable electricity
of total electricity consumed
% n/a 80.6% 53.3% 35.6% 49.7%
Energy intensity measurement MWh/ton of mineral
processed
3.6% 0.0916 0.0885 0.0801 0.0814
Water management Total freshwater withdrawn thousand m
3
29.8% 31,215 24,057 30,023 28,488
Total freshwater consumed thousand m
3
4.4% 9,944 9,521 12,817 14,534
Percentage of freshwater
consumed in regions with
High or Extremely High Baseline
Water Stress
% n/a 100% 100% 100% 100%
Percentage of third-party
wastewater inputs
% n/a 30.2% 26.3% 14.0% 12.9%
Wastewater intensity m
3
/ton of mineral
processed
28.0% 0.1329 0.1028 0.0532 0.0556
Tailings Storage
Facilities Management
Number of TSFs
b
Number 0.0% 17 17 14 n/a
SASB Climate-related Disclosure Topics and Metrics, Metals and Mining
Remuneration – CEO
Annual Bonus
Weighting points
c
Number 0.0% 5 5 n/a n/a
a. Scope 3 GHG emissions categories that have been deemed most material include Purchased goods and services, Processing of sold products, Downstream
transportation and distribution, and Investments. See our ESG KPIs Tables on pages 107-113.
b. During 2024, the Tailings Review Executive Committee authorised changing the scope of the Tailings Management System to focus only on TSFs, resulting in an
update of the TSF inventory, leaving a record of 6 operational TSFs, three under care and maintenance in operational units, and eight under care and maintenance in
legacy units. See Tailings and mineral waste on pages 95-96.
c. Two new indicators were included in the CEO Annual bonus under the ESG objective category in 2023, related to water and GHG emission intensities. See Director’s
Remuneration Report on page 184.
* Processing of sold products was not available at the time of publication; it will be updated retroactively.
Our primary climate-related metrics
and targets are linked to our priority
CROs, detailed in the previous section.
Additionally the mining industry is
energy and water intensive, and the
rigorous monitoring of our usage of
both resources is therefore key to our
operations. Our metrics are outlined
in table below. Further work is still
needed to comply with the cross-
industry metrics.
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Strategic Report Governance Financial Statements Additional Information
TAILINGS AND MINERAL WASTE
Tailings are a by-product of mineral
processing, the leftover slurry of
milled rock after valuable minerals
are extracted. They are stored
in engineered Tailings Storage
Facilities (TSFs) or reused as paste
backfill in underground works.
Waste Rock is removed to
access ore, and primarily stored
in waste piles, with some reused
in underground cut-and-fill
operations. Most waste rock is
generated by open-pit operations.
Heap leaching is used for
disseminated ore deposits of
open pit operations. After ore
extraction is complete, heaps
are rinsed and drained to ensure
environmental protection.
Governance framework of TSFs
(Roles and responsibilities)
Waste management
We safeguard local communities and
the environment through responsible
waste management.
Our mining operations produce two
primary categories of waste:
• Mineral waste, such as tailings and
waste rock, and
• Non-mineral waste, including
hazardous materials like spent oils
and non-hazardous recyclables such
as wood and plastics.
Each waste type is managed through
dedicated processes to ensure
proper disposal, recycling, or reuse,
prioritising environmental stewardship
and compliance. For example, our
management systems prioritise the
prevention of soil contamination
through measures such as handling
engine oils, fuels, and chemicals
responsibly, and mitigating risks from
tailings and dust. See our ESG KPIs
Tables on pages 107-113.
The following diagram outlines the
specific pathways for handling and
managing these waste streams across
our operations, and the following
sections explain each of them
Tailings and mineral waste
Safe tailings management is a critical
aspect of our mining operations,
covering every phase from design
to post-closure. Committed to
achieving zero harm to people and
the environment, we have adopted
some of the industry-leading principles
and practices for the governance
and operation of our Tailings Storage
Facilities (TSFs). As a result, we reported
no tailings-related failures in 2024.
During 2024, the Tailings Review
Executive Committee authorised
changing the scope of the Tailings
Management System to focus only
on TSFs. Other facilities, such as leach
pads and water dams, will continue to
be managed safely and responsibly,
complying with their specific norms
and standards. As result of the change
of scope, the TSF inventory was
updated, with leach pads and water
dams excluded, leaving a record of six
operational TSFs, three under care and
maintenance in operational units, and
eight under care and maintenance in
legacy units. See our ESG KPIs Tables on
pages 107-113.
Governance
Our governance framework defines
the roles, responsibilities, and
accountability of those involved in
the design, construction, operation,
maintenance, and monitoring of TSFs.
The Board’s Health, Safety, Environment,
and Community Relations (HSECR)
Committee is regularly updated on
compliance, key issues, risks, and
recommended actions.
The Independent Tailings Review
Panel (ITRP) meets with the Company
every two months, conducts annual
field visits, and presents findings to
senior management for follow-up. The
Tailings Review Executive Committee –
comprising Board members, advisors,
and general managers – continues
to meet every two months, fostering
coordination across management
and enabling timely, informed
decision-making.
In 2024, addressing organisational
needs and reflecting the evolution
and maturity of the TSFs system, the
Responsible Tailings Facility Engineers
(RTFEs) were transferred from the
Corporate Tailings Management
Office to individual mining units to
strengthen governance and enhance
operational performance.
SITE MANAGEMENT
Mine Manger
Risk owner and responsible
for operating facilities following
the Tailings Management
System guidelines.
Responsible Tailings Facility
Engineer (RTFE)
Ensure safe operation and
implementation of the Tailings
Management System.
Engineer of Record (EoR)
Provide technical expertise to
ensure the TSF is managed
safely and complies with
appropriate governance
and best practices.
TSFS STEWARDSHIP
Corporate Tailings Manager
Develop, update and manage
Corporate Governance and
Tailings Management System.
Administer external reviews
and verifications.
EXTERNAL REVIEWS
Independent Tailings
Review Panel (ITRP)
Annual review programme
to confirm compliance
with Governance and best
practice requirements.
Inspectors, reviewers,
and auditors
Implement Dam Safety
Inspections (DSI).
Implement Dam Safety
Reviews (DSR).
GROUP-LEVEL OVERSIGHT
Accountable Executive
Officer (AEO)
Accountable for tailings
management and
implementing the systems
needed for responsible tailings
management.
Tailings Review Executive
Committee
Provide governance and
overall oversight.
Continuous oversight of
operation, governance,
inspection, review, and
audit reports.
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Fresnillo plc Annual Report and Accounts 2024
In 2024, we strengthened our efforts to
disseminate the Tailings Management
System guidelines and the Board of
Directors’ Policy and commitments
to responsible tailings management,
which were issued in 2023. The annual
review programme by the ITRP was
also completed:
• Review programme covered
Ciénega, San Julián, and the
Orisyvo project.
• Overall recommendations from
the ITRP decreased from to 43 in
2024, down 50% from 2023.
• Priority 1 (highest priority)
recommendations fell from 12
in 2023 to none.
• We also achieved 70% progress on
recommendations accumulated
since 2019, with no highest priority
recommendations outstanding.
Strategy and Risk Management
Guided by our Tailings Management
System, we uphold safety and
environmental standards throughout
the lifecycle of TSFs. Our system is
based on the ICMM tailings governance
principles and primarily aligned with
the Mining Association of Canada (MAC)
and the Canadian Dam Association
(CDA), which we believe to be industry
best practice. Our design, construction,
surveillance, and maintenance practices
are supported by qualified engineering
firms. Compliance efforts are supported
by advanced instrumentation and
monitoring systems, enabling near
real-time management of critical
controls, detailed condition reporting,
and prompt response capabilities.
While we are currently not
implementing the Global Industry
Standard on Tailings Management
(GISTM), we continue to monitor updates
and industry developments related to its
implementation. We believe advancing
our Tailings Management System
will position us to meet many
GISTM requirements.
Our approach to new technologies
evaluates safety, efficiency, and
environmental benefits, as well as
their maturity and economic feasibility.
Our focus includes:
i. Improving safety: Advanced
surveillance, monitoring, and alerting
technologies (e.g., InSAR, drones, and
data analytics).
ii. Enhancing operational efficiency:
Downstream processing technologies
(e.g. paste and filtered tailings).
iii. Reducing environmental risks:
Upstream processing technologies
(e.g. selective processing, water and
energy efficiency).
In 2024, we implemented projects
including expansions to TSFs at Fresnillo
(San Carlos), Saucito, and Juanicipio,
as well as the design of a new TSF for
Herradura. Additionally, three projects
were in pre-feasibility or feasibility stages.
All projects adhered to the principles of
our Tailings Management and Capital
Project Management Systems, ensuring
site and tailings characterisation-based
designs, quality assurance, design intent
validation by the designer or EoR, and
effective project documentation.
We closely monitor tailings volumes to
assess remaining capacity and lifespan,
adopt innovative practices that reduce
surface storage needs, enhance resource
recovery, and promote sustainable
tailings management. These efforts
add value to mining waste and align
with our environmental stewardship
goals by minimising in situ storage and
maximising resource efficiency across
operations, achieving a low cost per ton
of stored tailings.
Efforts to implement the Tailings
Management System across mining
units continued in 2024, emphasising
the incorporation of Dam Safety
Inspections, and risk evaluation and
management for TSFs. Significant
progress was made in:
• Conducting Dam Break Analyses
at San Julián and Herradura.
• Potential Failure Modes Analyses
at Juanicipio, Saucito, and Fresnillo
(San Carlos) and San Julián.
• Development of Operation,
Maintenance, and Surveillance
manuals at Ciénega.
Performance
In 2024, we generated 15.74 million
tons of tailings, used 649,144 tons as
underground mine backfill, reprocessed
1.39 million tons of old tailings, and used
64,294 tons as construction material
for TSF expansions. These initiatives
contributed to a net increase of 15.03
million tons in stored tailings, despite
16.49 million tons being deposited
during the year. Key contributions
from our operations include:
• Fresnillo (Proaño Complex):
Tailings from legacy facilities were
reprocessed at the Pyrites Plant
to recover economically valuable
metals, with residual materials
transferred to facilities designed
and operated according to our
Tailings Management System.
• San Julián: One-third of generated
tailings were converted into paste
backfill for underground mine works.
• Saucito: Tailings were repurposed
for construction applications, such
as embankments and buttresses,
in the expansion of its TSF.
SUSTAINABILITY AT THE CORE OF OUR PURPOSE CONTINUED
PROTECTING OUR ENVIRONMENT
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Strategic Report Governance Financial Statements Additional Information
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Non-mineral waste
Our goal is to optimise resource use
by minimising physical waste and
maximising process efficiency.
Non-hazardous waste
Most non-hazardous waste from our
mining operations consists of recyclable
materials such as cardboard, tyres,
wood, steel, plastics, and urban solids.
To ensure proper handling, we adhere
to rigorous materials management
protocols and have dedicated storage
sites within our business units.
We manage special handling and
organic waste by segregating, recycling,
and repurposing materials in compliance
with regulatory standards. Recyclables
are sent to accredited facilities, urban
solid waste is compacted and disposed
of safely, and organic waste is composted
or repurposed for community use.
Hazardous waste
We are committed to responsible
hazardous waste management and
provide comprehensive training to all
personnel covering the entire waste
lifecycle. We securely store, identify,
and organise hazardous waste before
sending it to authorised facilities for
final disposal. Preventive maintenance
is also carried out to ensure equipment
efficiency and minimise the risk of
oil spills, while spent lubricating oil is
reprocessed for reuse.
We also prioritise safe and responsible
cyanide management in compliance
with the International Cyanide
Management Code (ICMC) best
practices and Mexican standard NOM-
155 SEMARNAT-2007, which establish
environmental requirements for gold
and silver leaching systems (production,
transportation, storage, usage, and
facilities decommissioning). Operations
at Herradura and Noche Buena are
certified under the International Cyanide
Management Code, which accounts for
each of their Merrill-Crowe processes
and the dynamic leaching plants.
Although not all mines are certified
under the ICMC, their operations
are based on its principles. Key
measures include:
• Procuring sodium cyanide from
certified manufacturers.
• Protecting communities and the
environment during transportation,
handling, and storage.
• Optimising processes to minimise
residual cyanide in tailings.
• Monitoring seepage to prevent
groundwater contamination.
• Decommissioning facilities
responsibly to avoid legacy issues.
• Following working practices
that prevent impacts on health
or ecosystems.
We train personnel, conduct scenario
simulations and emergency drills
regularly, in accordance with NOM-023-
STPS-2012, ISO 45001, ISO 14001 and
the ICMC itself. Detailed procedures for
cyanide solution preparation, destruction,
and contingency plans are also reviewed
frequently. In addition, we engage local
authorities and communities to enhance
transparency. In addition, we build trust
by engaging with local authorities and
communities – ensuring full transparency
around our processes, potential hazards
and controls. No incidents related to
cyanide management were reported
in 2024.
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Fresnillo plc Annual Report and Accounts 2024
STEWARDSHIP
WATERSHED AND COMMUNITY ENGAGEMENT
Secure water rights from authorities before
operational usage.
Collaborate with authorities and stakeholders to
improve water access for neighbouring communities.
See Social Investment on pages 103-105.
Exchange best practices with other industries
and civil society organisations.
TRANSPARENCY AND ACCOUNTABILITY
Comply with water quotas and quality regulations.
Monitor and improve withdrawals and discharges
(deviations).
Enhance water accounting practices through
disclosure and ongoing evaluation.
POLLUTION PREVENTION
Direct unused water from dewatering into
settlement ponds to remove suspended solids
before safe downstream discharges (deviations).
Ensure responsible cyanide management.
Ensure the responsible operation of TSFs. See
Tailings and Mineral Waste on pages 95-96.
EFFICIENCY AND REUSE
Implement closed-loop water circuits to prevent
discharge into natural waterways.
Reuse wastewater from municipal sources
and internal operations to reduce freshwater
consumption.
Assess and adopt mineral processing technologies
to enhance safety and reducing carbon and
water footprints.
SUSTAINABILITY AT THE CORE OF OUR PURPOSE CONTINUED
PROTECTING OUR ENVIRONMENT
Water stewardship
We strive to minimise our water
footprint and collaborate with
our stakeholders to promote
responsible water management.
Mining and ore processing require
considerable water resources. A
challenge heightened in arid regions
where local communities also face water
scarcity. Recognising that sustainable
water management is essential to both
operational success and community
wellbeing, we prioritise minimising
our water footprint.
We conduct Environmental Impact
Assessments (EIAs) to evaluate the
state of local and regional water
resources and their vulnerability
before embarking on any project and
have developed a water stewardship
strategy built on four key pillars:
Water stewardship strategy
We operate in river basins already facing water stress, a challenge that climate change is set to intensify across all scenarios.
This reality drives our commitment to responsible water management and active collaboration with stakeholders to safeguard
this vital resource.
Current Conditions Water stress considering climate change scenarios (by 2030)
Business unit
Overall Water Risk Water stress Optimistic Business as usual Pessimistic
Herradura
Noche Buena
Fresnillo
Saucito
Juanicipio
Ciénega
San Julián
Key
Overall Water Risk Water stress
Extremely High (4-5) Extremely High (>80%)
High (3-4) High (40-80%)
Medium – High (2-3) Medium – High (20-40%)
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Strategic Report Governance Financial Statements Additional Information
99
0.33
0.38
0.33
0.29
0.30
2024
2023
2022
2021
2020
0.37
0.43
0.38
0.39
0.44
2024
2023
2022
2021
2020
Committed to environmental
stewardship across all our mines, we
implement operational controls to
reduce total suspended and dissolved
solids. Additionally, we have water
quality monitoring programs in place,
complying with national standards. Our
mining operations use closed-circuit
water systems and have a high rate of
water reuse, achieving an 84.2% reuse
efficiency in 2024.
Since 2009, the Fresnillo District has
implemented an ambitious strategy
to replace freshwater consumption in
our processes with municipal treated
wastewater. This initiative benefits local
government by reducing wastewater
treatment costs whilst contributing to a
cleaner environment for the community.
We are currently optimising the
operations of the Proaño and West
plants, which supply most of the
water needs for Fresnillo, Saucito,
and Juanicipio.
In 2024, we saw an increase in
freshwater withdrawals: in the
Fresnillo District, mainly due to the
2023 agreement with the municipal
Potable Water, Sewage, and Sanitation
System announced last year. As per
the agreement we will supply potable
mine water to city residents, while
repurposing rejected water for our
industrial processes – avoiding any
discharge to superficial water bodies
or the city’s sewer system.
Freshwater intensity
(m
3
per ton of processed ore)
Water Intensity
(m
3
per ton of processed ore)
In 2024, we strengthened our
collaboration with the Federal
Government by committing an annual
return of 300,000 m³ of water as part of
the 2024-2030 National Water Plan. This
included investing US$2 million during
the year – out of a total US$7 million
– to rehabilitate Fresnillo city’s water
potabilisation plant, now renamed the
Proaño Potable Water Plant.
The year also saw the launch of a
project in Ciénega to replace mine
water with treated wastewater for
mine auxiliary services. Additionally,
a portion of treated water will be used
for irrigating green areas, and alfalfa
and oat crops grown for deer at the
Wildlife Conservation Management
Unit (UMA). This will avoid residual
treated wastewater discharges.
Looking ahead, we will continue
refining our water management
standards and procedures to
ensure our practices not only meet
but exceed industry benchmarks.
Furthermore, we will continue to
enhance water accounting to improve
tracking, efficiency, and transparency
– reinforcing our commitment to
sustainable and responsible water use.
In Herradura, due to the construction of
the new leaching pad and TSF. Finally,
in Ciénega, due to improvements in
our accounting methodology, as we
continue to incorporate more accurately
our total water deviations. For more
detail on water performance, refer
to our statement of water input and
outputs in our ESG KPIs Tables on
pages 107-113.
Also in 2024, the proportion of
municipal treated wastewater in our
total water consumption increased
to 81.2% in the Fresnillo District and
30.2% on a consolidated basis – up from
76.5% and 26.3% in 2023, respectively.
This progress has further reduced our
reliance on freshwater. Notably, despite
an increase in overall water intensity to
0.44 in 2024, freshwater intensity has
somewhat continued its downward
trend of recent years. See ESG KPIs
Tables on pages 107-113.
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SUSTAINABILITY AT THE CORE OF OUR PURPOSE CONTINUED
PROTECTING OUR ENVIRONMENT
Biodiversity
We are committed to preserving
biodiversity through responsible
practices that mitigate the impact
of our operations on ecosystems
and natural habitats.
Aligned with the Mexican biodiversity
norm NOM-059-SEMARNAT-2010, our
Environmental Impact Assessments
(EIAs) and management plans provide
a robust framework to managing
biodiversity responsibly by identifying
and implementing measures to
avoid, mitigate, and compensate
our environmental impacts.
Before initiating any project, or
making significant changes such as
expanding permits or operations, we
conduct comprehensive assessments
to evaluate potential impacts on
biodiversity. To address these impacts
throughout a project’s lifecycle, we
implement permanent environmental
management programmes that
monitor air, soil, water, vegetation,
and wildlife, as well as closure plans.
We actively avoid operating in Mexican
Natural Protected Areas, UNESCO
Natural World Heritage sites, UNESCO
Man and the Biosphere Reserves,
Ramsar Wetlands of International
Importance as well as International
Union for Conservation of Nature
(IUCN) Protected Areas.
We identify species of special concern
and execute comprehensive Wildlife
Rescue and Relocation Programmes.
Measures include wildlife exclusion
barriers, such as fencing and wildlife
corridors, species counts, relocation
of flora and fauna, and monitoring
survival rates, aligning with IUCN and
Mexican biodiversity norm listings
and species under protection status.
Key measures include:
• Inspections to assess plant and
wildlife conditions, applying
preventive measures to ensure
survival rate.
• Prohibiting the introduction of
non-native species and limiting
vegetation impacts to designated
construction areas.
• Training new employees on
ecological protection.
• Prohibiting hunting on company-
owned lands.
Rehabilitation efforts focus on restoring
affected areas to their natural state post-
operation, using endemic vegetation.
Soil conservation initiatives, including
erosion control through plant material
cordons, enhance natural habitat
recovery by increasing humidity levels.
Forestry nurseries at all operations play
a vital role in restoring sites to their
pre-operation state and conserving
endemic species. Staff receive training
in planting, irrigation, and pest control
to ensure the nurseries’ success. In
some cases, these facilities also support
environmental education and research
in partnership with local authorities.
Our Wildlife Conservation Management
Units (UMAs), approved by the
Mexican Federal Environmental
Agency (SEMARNAT), are dedicated to
conserving natural habitats and wildlife
populations. At Fresnillo and Ciénega,
these facilities host educational tours to
raise awareness among employees and
local communities, particularly children.
Mine closure
Our mine closure vision is an integral
part of our project planning, shaping
both design and cost considerations
throughout the lifecycle of our
operations. It also incorporates social
impact assessments and stakeholder
engagement to support long-term
community transitions. See Community
Relations on pages 101-102.
Our mining units benefit from
conceptual closure plans which
are updated every three years on a
mine-site basis with the support of
a third-party expert, and an internal
multidisciplinary team. Mine closure
provisions are updated annually for
cost adjustments. See Significant
accounting policies on page 225.
Noche Buena is the first mine in our
portfolio scheduled for closure. While
pit operations have ceased, inventory
recovery continues as long as it remains
economically viable. The progressive
closure plan focuses on restoring land
for livestock and wildlife use, with a
20-year post-closure commitment to
rehabilitation and maintenance. This
includes the removal of most access
roads, power corridors, and water
infrastructure, while ensuring waste
facilities and processing areas are safely
decommissioned. Certain structures,
such as leaching pads, may require
extended care.
In 2024, we carried out a variety
of rehabilitation efforts, including
repurposing deadwood for soil
conservation structures, filter dams and
the planting of native saplings. We also
continued advancing slope grading
to enhance stability and prevent soil
erosion at the western Tepetatera.
WHAT’S NEXT
• Continue maturing our climate
change strategy.
• Continue developing standards
and procedures for water
management within our
operations.
• Progressively implement
critical environmental risk
management methodology
guided by the International
Council on Mining and Metals
(ICMM) in our mining units.
• Continue to deploy Noche
Buena’s progressive closure plan.
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Stakeholder identification, evaluation and mapping
Informal and formal meetings
Social studies: Baseline, impact assessment and reputation
Register of commitments
Social management plans
Community committees
Indigenous peoples consultation
Strategic social investment
Grievance mechanism
Community requests of contribution
Social incident investigations
Community small and medium enterprises
Land acquisitions and resettlements
Social closure plans
EXPLORATION
PROJECT
DEVELOPMENT OPERATION CLOSURE
KNOW
ENGAGE
DEVELOP
Community relations
We build and maintain communities’
trust by engaging effectively
and taking responsibility for our
impacts. This approach is essential
to securing our social licence to
operate. Our community strategy,
spanning all phases of the mining
lifecycle, focuses on fostering mutual
understanding and collaboration
between our operations and local
communities, ensuring shared
development and growth.
Engaging communities
effectively in the lifecycle
of mining
Stakeholders in the global mining
industry increasingly expect companies
to manage social and environmental
impacts responsibly whilst contributing
to community development. Managing
these expectations responsibly,
transparently, and in a timely manner
helps us reduce opposition to projects
and aims to mitigate potential impacts
on local communities.
Projects are carefully designed to
avoid adverse impacts, and when
challenges arise, mitigation measures
are implemented proactively. Key
elements of our approach include:
• Monitoring public opinion to identify
challenges through partnerships
with peers, business associations,
governments and NGOs.
• Conducting social studies to align
engagement strategies with
community perceptions.
• Engaging communities through
formal and informal settings and
ongoing social programmes.
• Operating a grievance mechanism
to resolve concerns efficiently and
prevent escalation.
• Aligning mitigation strategies with
global best practices in social and
environmental responsibility.
Our community engagement strategy
evolves with the mining lifecycle,
from building relationships during
exploration to trust-building and risk
assessments in the development phase,
ongoing dialogue during operations,
and impact mitigation in closure.
Local employment, procurement, and
social investment also evolve over time,
transitioning from early-stage support
to capacity-building initiatives that align
with community needs at each phase.
See Socio-economic Development on
pages 102-105.
Social Risk management
Our evaluation procedures help us to
identify potential risks and potentially
impacted stakeholder groups,
prioritising risks based on their impact
and location. Preventive and mitigation
actions are implemented through
collaborative strategic planning and
overseen by dedicated committees.
Clear responsibilities are assigned
within an accountability framework
to ensure that the issues underlying
risks are effectively addressed and
resolved, while remaining vigilant to
any potential re-emergence.
Framework for community engagement in the life cycle of mining
PARTNERING WITH OUR COMMUNITIES
WE ENGAGE MEANINGFULLY WITH OUR COMMUNITIES
AND SUPPORT THE ISSUES THAT MATTER TO THEM
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Fresnillo plc Annual Report and Accounts 2024
CDMX
23.6%
SON
22.9%
Other
2.7%
DUR
7.2%
ZAC
21.6%
CHIH
9.5%
GTO
5.8%
COAH
6.7%
Potential risks include negative
perceptions of company performance,
unmet community expectations
and commitments, ineffective
communication, competition for natural
resources, and anti-mining activism, as
well as reduced government spending.
Strategic Programmes
In 2024, we successfully standardised
strategic programmes across all our
business units, aligning them with our
social management and investment
frameworks. These programmes aim
to strengthen community relations by
raising awareness of social realities in
our internal workforce, and include:
• Operational Engagement
Programme: Aims to enhance
collaboration between community
relations and operational teams,
fostering trust and teamwork to
address social challenges effectively.
• Social Engagement Programme:
Aims to develop social ambassadors
within our operations who engage
with communities to communicate
the Company’s commitment to
modern and socially responsible
mining practices.
• Contractor Awareness
Programme: Targets foreign
contractors to prevent and mitigate
social risks in local communities,
with an emphasis on ethics and
human rights.
Community Grievances
Our grievance mechanism ensures
fair and efficient resolution processes,
supported by dedicated Community
Relations teams at each operating unit
and advanced project. These teams
document and manage grievances
through a specialised system, acting as
mediators between communities and
the relevant operational departments to
promptly investigate and resolve issues.
The effectiveness of our grievance
mechanism is measured by its ability
to build trust, address community
needs, and prevent recurring issues. By
fostering open communication and a fair
resolution process, we ensure concerns
are handled transparently and effectively
across our operations. In 2024 we had
25 community grievances, with more
details on our performance available in
the ESG KPIs Tables on pages 107-113.
In addition to effective stakeholder
engagement, the equitable
distribution of mining benefits
significantly contributes to the
overall wellbeing of communities.
Our commitment to creating
value in the regions where we
operate is demonstrated by our
actions, which include providing job
opportunities, local procurement,
skills development, targeted
community investments, and
fulfilling our financial responsibilities
by paying our fair share of taxes.
Economic impact
Our activities yield a positive economic
impact in the regions where we operate.
In particular, employment, contracting
opportunities and contributions
to governments demonstrate our
commitment to sharing the benefits
of mining. In 2024, our Economic value
distributed amounted to US$2,152.5
million, down 8% versus 2023.
Economic value distributed by state
SUSTAINABILITY AT THE CORE OF OUR PURPOSE CONTINUED
PARTNERING WITH OUR COMMUNITIES
Concept US$ million Percentage
Payments
to suppliers
(contractors)
1,773.5 82.4%
Payments to federal
government
221.2 10.3%
Wages and benefits
of workers
149.7 7.0%
Payments to local
governments
8.0 0.4%
Total 2,152.5 100%
Economic Value Distributed is considered to
be a social performance measure. We consider
our community investment to be an indirect
economic impact of our activities and therefore
present it separately from the Economic Value
Distributed measure.
Economic value distributed
by concept
Socio-economic development
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Fresnillo
District
31.1%
Corporate
20.9%
Ciénega
2.9%
San
Julián
6.4%
Herradura
and
Noche Buena
18.9%
Projects
and
advanced
exploration*
16.1%
Explo-
rations
3.8%
Mining fund
Introduced in 2014, Mexico’s special
tax on mining activities was designed to
create a fund to support the sustainable
development of mining regions,
benefiting communities near mining
operations. However, this fund has
since been reallocated to national
public spending. In response, we
continue to work closely with the
communities where we operate to
engage authorities and advocate for
infrastructure projects that directly
benefit mining communities.
In 2024, we contributed US$31.8 million
to the Fund for Sustainable Development
of Mining States and Municipalities.
Local employment and procurement
Local employment is a key driver of
social acceptability and community
development. From the early days
of exploration, we prioritised hiring
locally and continue this commitment
throughout the development and
operational phases. Employment
opportunities are offered directly or
through our mining contractors, and
in 2024, regional labour accounted for
74.95% of our total workforce.
We actively participate in the
mining clusters of Zacatecas, Sonora,
Chihuahua, and the recently established
Durango cluster. These clusters serve
as key platforms for fostering regional
supplier development, enhancing
their integration into the mining
industry’s value chain. Additionally,
they provide an effective mechanism
for maintaining close relationships
with key stakeholders, including
state governments, while supporting
local procurement capabilities and
skills development.
Furthermore, Peñoles’ Centre for
Technical Studies in Laguna del Rey
(CETLAR) provides training for mining,
instrumentation and maintenance
technicians, tailored to our specific
needs. Candidates are selected from
communities near our operations,
fostering local talent and promoting
long-term community engagement.
Social investment by business unit, 2024
Social investment
We are committed to maintaining
and strengthening our social
licence to operate by addressing
the most pressing needs of
our communities and building
trust through accountable and
collaborative partnerships.
Our social investment priorities
align with the UN Sustainable
Development Goals (SDGs) – Education,
Water, Decent Work and Economic
Growth, and Health – through initiatives
that support community aspirations
while ensuring the responsible use
of resources. Embracing the concept
of shared value, we drive community
growth while generating long-term
benefits for the Company, fostering
a more inclusive and sustainable
economy that helps reduce poverty,
inequality, and social fragmentation.
In 2024, we invested US$ 4.78 million
in local communities, a 25.2% increase
over 2023. Investment distribution
by strategic lever and by region are
shown below.
We believe that meaningful and
lasting impact can only be achieved
through collaborative efforts. Through
our Alliance for the Common Good
strategy, we proactively engage all
levels of government in transparent
and participatory dialogue. Our primary
objective is to build long-term capacity
in our neighbouring communities
and to foster lasting relationships with
them, civil society organisations, and
government entities.
By providing accurate and verifiable
information, we advocate to influence
decision-making that prioritises the
needs of communities. This involves
promoting projects that address
pressing concerns and securing
funding from various government
sources. These partnerships are vital
in mitigating the impact of negative
external influences and ensuring
operational continuity, from both a
regulatory and public investment
perspective. Our work helps highlight
our contributions to society, strengthens
the State’s presence in these regions
and, most importantly, improves
community wellbeing.
%
Education
27.3
Health
39.9
Decent work
6.4
Water
5.0
Other
21.4
Social Investment by strategic lever,
2024
* Includes the Orisyvo, Rodeo and Guanajuato advanced exploration projects.
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SOCIAL INVESTMENT PORTFOLIO
SDG alignment
Objective
We are committed to enhancing
the health and wellbeing of our
neighbouring communities through
a preventive approach. Our efforts
focus on promoting initiatives
that improve access to healthcare,
encourage healthy lifestyles, and
strengthen community wellbeing.
We are also committed to advancing
inclusive and quality education,
recognising its critical role in
reducing poverty and inequality.
By fostering education, we aim to
expand development opportunities
for children and young people in
our communities.
We aim to reduce our freshwater
footprint through operational
efficiency. We also strive to
secure access to safe water and
infrastructure for our neighbouring
communities, aiming to avoid
reliance on water supplied by the
Company. Through community
committees, we support tripartite
water supply projects in partnership
with government entities and NGOs,
delivering solutions that meet
local needs.
We are committed to fostering
entrepreneurship in our
neighbouring communities through
collaborative strategies that promote
self-sustaining local economies
and support regional supplier
diversification within our value
chain. By working with strategic
partners, we focus on developing
entrepreneurial skills, empowering
small and medium-sized enterprises
(SMEs) for long-term success and
facilitating economic resilience
beyond mine closure.
Strategic partners
Key initiatives in 2024
Community Health Weeks in
partnership with the UNAM
Foundation, local and federal
authorities and health agencies
to bring quality health to our
neighbouring communities,
providing:
• 2,496 optometry appointments
and 2,421 items of corrective
eyewear.
• 2,714 odontology appointments
and 15,505 dental procedures.
• 821 physical therapy
appointments.
• 1,071 general medical
appointments.
Preventive Health in communities,
providing almost 12,000
appointments.
Leaders in the Horizon, a sports
training programme for young
people and adults to develop
sport leaders in communities
close to Herradura and the
Guanajuato project.
Sports and recreational activities
to promote health and wellbeing
among children, young people and
adults. Examples include the Santos
Fresnillo plc Soccer Academy, the
Baseball Academy, the Basketball
Academy, the BMX Minera Fresnillo
Club, and the Tennis Club.
Fresnillo Recreational Park is a
high-quality sports facility designed
to encourage physical activity and
provide relaxation spaces for families.
PREST-MATH is designed to enhance
critical thinking, problem-solving, and
mathematical reasoning through
interactive learning. Introduced in 45
primary schools in the communities
of San Julián, Herradura, and the
Fresnillo District, it operates in
partnership with INNOVEC and
the education ministries of Sonora,
Zacatecas, and Chihuahua.
Picando Letras has been redesigned
with an inclusive approach that
promotes equity, cultural diversity
and a culture of harmony, along with
reading comprehension. Delivered
in partnership with Ensamble
Alejandría, it is currently active in
64 schools across communities
neighbouring our mines.
FIRST Robotics competition engages
students in Science, Technology,
Engineering and Maths (STEM)
subjects while fostering teamwork
and leadership skills. We currently
support over 150 high school
students and sponsor five teams
from communities near the Orisyvo
and Guanajuato projects, Herradura,
Ciénega, and Fresnillo.
Excellence Scholarships covering
academic, living, and other expenses,
to support top-performing applicants
from the FIRST robotics competition
to access higher education. Currently,
we sponsor 18 students at La Salle
University’s Laguna and Noroeste
Campuses, as well as technological
and state universities in regions
where we sponsor robotics teams.
Water Infrastructure Strategy
addresses water infrastructure in
different areas of influence:
• Working with the San Julián
community committee and
our partner FORMAC, we are
continuing to build a collective
water system for the community.
• We supported La Lagunita by
providing 2 km of piping to supply
water to 15 families in San Julián.
• We contributed labour for
maintenance work on the water
well in La Almita in Herradura.
• We maintain an ongoing
collaboration with the Centre for
the Study of Deserts and Oceans
(CEDO) and the Municipal Water,
Sewage, and Sanitation Operating
Agency (OOMPAS) to address
water-related challenges in the
15 de Septiembre community,
in Herradura.
See Case Study
on page 105
See Water Stewardship
on pages 98-99
Productive Projects is our flagship
programme to support the creation
and consolidation of small businesses.
Through our partnership with
ProEmpleo, they receive tailored
advisory services in marketing,
finance, and business administration,
aimed at enhancing their autonomy,
generating employment, and
expanding their market reach
beyond the regional level.
We assessed 14 local businesses
in the Fresnillo and Sierra Districts,
and also continue to operate the
‘Women of the Desert and Sea’
training programme in Herradura.
See Case Study
on page 105
SUSTAINABILITY AT THE CORE OF OUR PURPOSE CONTINUED
PARTNERING WITH OUR COMMUNITIES
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GIVING MORE STUDENTS ACCESS TO HIGHER EDUCATION
We have expanded our Excellence Scholarships Programme to include public
universities in states near our operations, optimising resources and making
higher education more accessible to local students. By partnering with
universities closer to their hometowns, we help students pursue their degrees
while staying near their families, reducing financial and logistical barriers.
Through these partnerships, we have awarded 10 new scholarships to
students at:
• Guanajuato University (UGTO).
• Sonora University (UNISON).
• Zacatecas Autonomous University (UAZ).
• Tecnológicos Nacionales de México (TecNM) – Ciudad Cuauhtémoc,
Hermosillo, and Fresnillo campuses.
The programme provides long-term academic support, covering tuition,
school materials, housing, meals, personal expenses, and transportation.
We remain committed to strengthening communities through strategic
partnerships with educational institutions and civil society. By working together,
we continue to create meaningful opportunities for the next generation.
STRENGTHENING WATER
SUSTAINABILITY
As part of our commitment to
water conservation and community
engagement, we are enhancing
rainwater harvesting efforts in
Ciénega to further strengthen
the region’s water sustainability.
This initiative is part of a
comprehensive smart water
management project that
integrates rainwater, surface water,
and groundwater resources.
Implemented in collaboration
with local schools and the
community, the project
fosters active participation and
shared responsibility for water
conservation. In 2025, efforts will
focus on continuing to develop and
install infrastructure designed to
enhance water recharge, such as
key lines, infiltration trenches, water
collection dams, infiltration furrows,
and fog collectors.
Socio-economic development continued
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Respecting human rights
Our due diligence approach
focuses on social assessments
in the communities where we
operate. These assessments
identify risks and impacts related to
social, environmental, labour, and
human rights – driving continuous
improvements in our stakeholder
engagement strategy and social
management plans. We also benefit
from processes to identify the
presence of indigenous peoples
early in our projects, guiding our
engagement approach.
We do not tolerate threats or
intimidation for corporate gain and
uphold an ethical culture that rejects
any form of violence, including against
those who may oppose our activities.
Interactions with private security
We expect strict ethical conduct
from private security contractors,
ensuring honest, respectful, and
lawful interactions that align with
environmental protection, anti-
corruption, labour, and human rights
standards. All private security suppliers
undergo background screenings using
national criminal databases.
Our private security serves a deterrent
role, supported by technology and
collaboration with municipal, state,
and federal security authorities. To
mitigate risks, our security forces remain
unarmed, preventing:
• Clashes with criminal groups that
could endanger our workforce
and communities.
• Violent confrontations with
artisanal miners attempting to
access our facilities.
Interactions with public security
Mexico’s Federal Protection Agency
established the Mining Police in 2020,
a specialised force providing security
for mining operations in collaboration
with the Economy Ministry and the
Mexican Mining Chamber. Herradura
was the first mine in Mexico to
implement this initiative.
Mining Police officers complete a 15-
hour Human Rights Training Module,
focusing on protecting both mining
facilities and human rights. Training
covers core human rights principles
and police action, and how to protect,
respect, promote and guarantee human
rights in their work activities and in their
daily lives. Criminal background checks
are conducted for all employees during
hiring, with enhanced screening for
security personnel
Indigenous peoples
We recognise that Free, Prior, and
Informed Consent (FPIC) consultation
is a fundamental right of Indigenous
communities and a key mechanism
for building trust. We are committed
to fostering meaningful engagement,
ensuring that every interaction respects
their values, culture, and traditions
while adhering to national regulations
and international best practices. Our
consultative approach is guided by good
faith, transparency, and accountability.
Consultation allows us to understand
the perspectives of Indigenous
peoples on our projects and to
address their concerns.
Our approach begins with the
proactive identification of Indigenous
communities and due diligence
in exploration concessions. Before
consultation, we assess the potential
impacts and benefits of projects and
support community capacity-building
to enable their full participation.
During consultation, we consider their
preferred engagement methods,
present information in a culturally
appropriate manner, and establish
agreements on shared benefits.
In 2018, we obtained the Rarámuri
people’s consent to build a water
reservoir for San Julián. In 2021, we
collaborated with their community on
road infrastructure and collective water
monitoring. In 2024, we continued
strengthening relationships with
indigenous communities at Orisyvo and
San Julián. There were no indigenous
consultations in 2024.
Land acquisitions
and resettlements
Developing a mining project involves
land acquisition and, in some cases,
the resettlement of households. We
recognise that these are complex and
life-changing issues for communities
and that poorly managed resettlements
can disrupt livelihoods and social
structures, damage community
relations, and cause conflict.
We recognise that the right to an
adequate standard of living after land
acquisition and resettlement projects
is a basic human right. For this reason,
we manage land acquisition and
resettlement responsibly, adhering
to local laws and international best
practices, while also:
• Avoiding resettlements whenever
possible, and exploring alternative
solutions.
• Minimising adverse impacts by
working with affected households,
communities, and governments to
restore or improve living conditions
if resettlement is unavoidable.
• Implementing structured processes,
including social baseline studies,
asset surveys, compensation
frameworks, negotiation, livelihood
restoration programmes, and
ongoing monitoring.
No community resettlements occurred
at our operations or development
projects during 2024.
SUSTAINABILITY AT THE CORE OF OUR PURPOSE CONTINUED
PARTNERING WITH OUR COMMUNITIES
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Indicator Metric
% var
2024-2023 2024 2023 2022 2021 2020 Notes
DOING BUSINESS ETHICALLY AND RESPONSIBLY
Compliance
Ethical conduct
Whistleblowing: number of reports Number -5.2% 202 213 143 186 154
Whistleblowing: number of cases Number -1.2% 161 163 113 157 110
Tone from the top: number of reports
related to managers Number -26.3% 14 19 8 8 12
Discipline: Number of disciplinary actions Number 3.0% 69 67 41 50 29
Discipline: Number of control
reinforcement Number -27.3% 8 11 13 9 5
CARING FOR OUR PEOPLE
Workforce
Total personnel
Employees and contractors Number -8.5% 18,095 19,776 21,709 20,116 19,364 EM-MM-000.B
Workforce composition, by affiliation
Non-unionised Number 0.7% 1,591 1,580 1,710 1,533 1,431
Percentage non-unionised Percentage 8.8% 8.7% 9.4% 8.5% 7.9%
Unionised Number -1.6% 5,588 5,680 6,360 5,826 4,327
Percentage unionised Percentage 30.9% 31.4% 35.1% 32.2% 23.9% EM-MM-310a.1
Contractors Number -12.8% 10,916 12,516 13,639 12,757 13,606
Percentage contractors Percentage 60.3% 69.1% 75.3% 70.4% 75.1% EM-MM-000.B
Workforce composition, by gender
Men Number -9.1% 15,841 17,427 19,081 17,901 17,490
Women Number -4.0% 2,254 2,349 2,628 2,215 1,874
Percentage women Percentage 12.46% 11.88% 12.11% 11.01% 9.68%
Labour turnover
Total turnover Rate 13.30% 22.07% 13.56% 10.00% 9.55%
Voluntary turnover Rate 7.87% 9.19% 9.19% 6.44% 3.97%
Training per person
Average training hours per person Hours 3.6% 67 65 83 71 64
Average HSECR-training per person Hours -1.0% 28 28 23 27 42 EM-MM-320a.1
Average non-HSECR training per person Hours 7.1% 40 37 60 44 22
Average safety training per person Hours -1.4% 23 23 19 20 31 EM-MM-320a.1
Diversity, equity and inclusion
Workforce composition, by seniority
Senior executives Number 66.7% 25 15 16 14 18
Men Number 69.2% 22 13 11 11 13
Women Number 50.0% 3 2 5 3 5
Percentage women Percentage 12.00% 13.33% 31.25% 21.43% 27.78%
Managers Number 6.0% 159 150 166 156 156
Men Percentage 4.3% 144 138 157 150 152
Women Percentage 25.0% 15 12 9 6 4
Percentage women Percentage 9.43% 8.00% 5.42% 3.85% 2.56%
Women in leadership positions Number 28.6% 18 14 14 9 9
Percentage women Percentage 9.78% 8.48% 7.69% 5.29% 5.17%
ESG KPIS TABLE
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SUSTAINABILITY AT THE CORE OF OUR PURPOSE CONTINUED
Indicator Metric
% var
2024-2023 2024 2023 2022 2021 2020 Notes
CARING FOR OUR PEOPLE (CONTINUED)
Diversity, equity and inclusion (continued)
Workforce composition, by affiliation
Non-unionised Number 0.7% 1,591 1,580 1,710 1,533 1,431
Men Percentage -0.9% 1,264 1,276 1,372 1,256 1,219
Women Percentage 7.6% 327 304 338 277 212
Percentage women Percentage 20.6% 19.2% 19.8% 18.1% 14.8%
Unionised Number -1.6% 5,588 5,680 6,360 5,826 4,327
Men Number -2.2% 4,869 4,978 5,566 5,171 3,894
Women Number 2.4% 719 702 794 655 433
Percentage women Percentage 12.9% 12.4% 12.5% 11.2% 10.0%
Contractors Number -12.8% 10,916 12,516 13,639 12,757 13,606
Men Number -13.1% 9,708 11,173 12,143 11,474 12,377
Women Number -10.1% 1,208 1,343 1,496 1,283 1,229
Percentage women Percentage 11.1% 10.7% 11.0% 10.1% 9.0%
Health and Safety
Occupational Health
New cases of occupational illnesses Number 17.9% 46* 39 34 19 1
Occupational Safety
Fatal injuries Number -50.0% 2 4 1 1 1 EM-MM-320a.1
Fatal frequency rate Rate -45.7% 0.044 0.081 0.020 0.220 0.045 EM-MM-320a.1
Total recordable injury frequency rate
(TRIFR) Rate -37.1% 7.59 12.08 10.26 10.42 13.88 EM-MM-320a.1
Lost time injury frequency rate (LTIFR) Rate -35.7% 4.75 7.40 5.44 5.76 6.18 EM-MM-320a.1
* Preliminary figures as final data not available at the moment of issuing this Annual Report.
PROTECTING THE ENVIRONMENT
Greenhouse Gas (GHG) emissions
GHG emissions, by source
Diesel GHG emissions ton CO
2
e -3.0% 415,283 428,015 500,747 499,449 457,955
Gasoline GHG emissions ton CO
2
e -1.0% 5,935 5,995 7,512 6,925 4,840
Liquified Natural Gas (LNG) GHG
emissions
ton CO
2
e 42.6% 43,728 30,657 33,330 34,188 7,379
Petroleum Liquified Gas (LPG) GHG
emissions
ton CO
2
e -6.7% 4,177 4,478 4,380 3,545 3,544
Electricity from the grid GHG emissions,
market based
ton CO
2
e -38.2% 84,671 136,914 203,486 132,865 158,505
Electricity from thermal GHG emissions,
market based
ton CO
2
e -80.1% 43,628 219,265 218,793 217,177 211,375
Electricity from wind GHG emissions,
market based
ton CO
2
e – 0 0 0 0 0
Total GHG emissions
Direct GHG emissions (Scope 1) ton CO
2
e 0.0% 469,122 469,146 545,970 544,107 473,719 EM-MM-110a.1
Indirect GHG emissions (Scope 2),
market based
ton CO
2
e -64.0% 128,299 356,179 422,279 350,042 369,880
Direct and indirect GHG emissions
(Scope 1 and Scope 2), market based
ton CO
2
e -27.6% 597,422 825,325 968,249 894,149 843,599
Indirect GHG emissions (Scope 2),
location based
ton CO
2
e 4.2% 536,522 514,984 478,671 465,596 528,826
Direct and indirect GHG emissions
(Scope 1 and Scope 2), location based
ton CO
2
e 2.2% 1,005,645 984,130 1,024,640 1,009,703 1,002,545
Other GHG emission metrics
Direct GHG emissions covered under
emissions-limiting regulations
Percentage – 0% 0% 0% 0% 0% EM-MM-110a.1
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Indicator Metric
% var
2024-2023 2024 2023 2022 2021 2020 Notes
PROTECTING THE ENVIRONMENT (CONTINUED)
Greenhouse Gas (GHG) emissions (continued)
GHG emissions from purchased
goods and services
ton CO
2
e -8.0% 144,541 157,073 168,947 176,193 196,000 Blasting
agents
(explosives),
steel balls for
milling and
lube oil.
GHG emissions from downstream
transportation and distribution
ton CO
2
e 22.2% 20,009 16,371 16,595 15,178 17,000 Intermediate
products
transportation
to processing
facilities.
GHG emissions from processing
of sold products
ton CO
2
e n/a * 456,390 460,478 473,604 490,000 Smelting and
refining.
GHG emissions from Investments ton CO
2
e -38.6% 43,360 70,645 67,022 64,183 64,000 Silverstream
contract.
Total GHG emissions from the
value chain (Scope 3)
ton CO
2
e n/a * 700,479 713,042 729,158 767,000
Greenhouse Gas emissions intensity ton CO
2
e/ton
of mineral
processed
-26.9% 0.0182 0.0248 0.0246 0.0231 0.0231
* Processing of sold products was not available at the time of publication; it will be updated retroactively.
Energy
Energy Consumption by source
Diesel MWh -3.0% 1,533,177 1,580,181 1,848,756 1,843,999 1,691,068
Gasoline MWh -1.0% 22,859 23,092 28,934 26,672 18,640
Liquified Natural Gas (LNG) MWh 42.6% 204,245 143,192 155,680 159,685 36,460
Petroleum Liquified Gas (LPG) MWh -6.7% 18,371 19,696 19,264 15,593 15,590
Electricity from the grid MWh -38.2% 193,314 312,590 467,784 314,103 320,861
Electricity from thermal MWh -81.4% 43,949 236,889 240,875 239,198 231,753
Electricity from wind MWh 57.7% 987,674 626,284 391,733 547,399 517,884
Total Direct Energy Consumption MWh 0.7% 1,778,652 1,766,162 2,052,634 2,045,950 1,761,759
Total Indirect Energy Consumption MWh 4.2% 1,224,936 1,175,763 1,100,392 1,100,699 1,070,498
Total Direct and Indirect Energy
Consumption
MWh 2.1% 3,003,588 2,941,925 3,153,026 3,146,649 2,832,257
Total Energy Consumption GJ 2.1% 10,812,917 10,590,930 11,350,894 11,327,936 10,196,125 EM-MM-130a.1
Grid Electricity Consumption Percentage 6.4% 10.6% 14.8% 10.0% 11.3% EM-MM-130a.1
Renewable Energy Consumption Percentage 32.9% 21.3% 12.4% 17.4% 18.3% EM-MM-130a.1
Renewable Electricity Consumption
as percentage of total electricity
consumption
Percentage 80.6% 53.3% 35.6% 49.7% 48.4% EM-MM-130a.1
Energy intensity MWh/ton
of mineral
processed
3.6% 0.0916 0.0885 0.0801 0.0814 0.0775
Water
Statement of water inputs and outputs
Surface water – Rivers and creeks megalitres -69.2% 166 540 617 669 201
Ground water – Mine Water megalitres 0.3% 2,277 2,270 5,154 6,166 5,573
Ground water – Bore fields megalitres 14.5% 7,101 6,205 6,721 7,370 5,822
Ground water – Ore entrainment megalitres -21.3% 427 542 353 362 383
Third party – Wastewater megalitres 26.2% 4,313 3,417 2,094 2,150 1,599
Total water inputs megalitres 10.1% 14,284 12,973 14,938 16,718 13,578
Surface water – Discharges megalitres -25.6% 27 36 28 33 27
Other – Water entrained
in concentrates megalitres 10.5% 44 40 35 35 38
Total water outputs megalitres -6.6% 70 75 63 68 65
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SUSTAINABILITY AT THE CORE OF OUR PURPOSE CONTINUED
Indicator Metric
% var
2024-2023 2024 2023 2022 2021 2020 Notes
PROTECTING THE ENVIRONMENT (CONTINUED)
Water (continued)
Water deviations
Surface water – Rivers and creeks megalitres – 0 0 0 0 0
Ground water – Aquifer Interception
(dewatering)
megalitres 46.5% 21,244 14,501 17,179 13,921 7,495
Total water inputs megalitres 46.5% 21,244 14,501 17,179 13,921 7,495
Surface water – Discharges megalitres 44.4% 20,652 14,299 17,051 13,807 7,467
Surface water – Supply to third party
(donation)
megalitres 194.0% 592 202 128 115 28
Surface water – Loss (evaporation,
infiltration, etc.)
megalitres – 0 0 0 0 0
Total water outputs megalitres 46.5% 21,244 14,501 17,179 13,921 7,495
Statement of operational efficiency
Total volume to task megalitres 1.6% 72,832 71,653 77,135 76,010 73,510
Total volume of reused water megalitres 0.8% 61,314 60,803 63,025 60,031 60,027
Efficiency of reuse Percentage 84.19% 84.86% 81.71% 78.98% 81.66%
Total volume of recycled water megalitres 21.6% 4,629 3,806 2,401 1,955 1,716
Water management
Total water withdrawn megalitres 29.2% 35,599 27,549 32,180 30,707 21,138 EM-MM-140a.1
Total water deviations megalitres 46.3% 21,271 14,537 17,207 13,954 7,522
Total water consumed megalitres 10.1% 14,328 13,013 14,973 16,753 13,616 EM-MM-140a.1
Total freshwater withdrawn megalitres 29.8% 31,215 24,057 30,023 28,488 19,474 EM-MM-140a.1
In regions with high or extremely
high baseline water stress
Percentage 100% 100% 100% 100% 100% EM-MM-140a.1
Total freshwater consumed megalitres 4.4% 9,944 9,521 12,817 14,534 11,952 EM-MM-140a.1
In regions with high or extremely
high baseline water stress
Percentage 100% 100% 100% 100% 100% EM-MM-140a.1
Other water metrics
Total water intensity m
3
/ton of
mineral
processed
11.7% 0.44 0.39 0.38 0.43 0.37
Freshwater intensity m
3
/ton of
mineral
processed
5.8% 0.30 0.29 0.33 0.38 0.33
Wastewater intensity m
3
/ton of
mineral
processed
29.3% 0.13 0.10 0.05 0.06 0.04
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Strategic Report Governance Financial Statements Additional Information
Indicator Metric
% var
2024-2023 2024 2023 2022 2021 2020 Notes
PROTECTING THE ENVIRONMENT (CONTINUED)
Waste
Tailing Storage Facilities
Total operational facilities Number 6 6 6 n/a n/a EM-MM-540a.1
Total facilities under care and maintenance Number 3 3 3 n/a n/a EM-MM-540a.1
Total facilities in legacy units Number 8 8 5 EM-MM-540a.1
Total facilities Number 17 17 14 n/a n/a EM-MM-540a.1
Mineral waste
Mine waste – waste rock kton -13.2% 76,608 88,241 119,424 131,603 119,234 EM-MM-150a.6
Processing waste – tailings kton -1.6% 8,841 8,980 8,167 7,986 8,969 EM-MM-150a.5
Metallurgical waste – tailings kton 23.8% 6,246 5,045 5,993 6,225 5,909 EM-MM-150a.5
Metallurgical waste – heaps kton 3.7% 21,989 21,209 29,345 28,642 20,571 EM-MM-150a.5
Non-mineral waste
Hazardous waste ton 10.5% 3,544 3,206 1,870 n/a n/a EM-MM-150a.7
Non-hazardous waste ton 12.8% 11,274 9,994 11,279 n/a n/a
Municipal solid waste ton 7.4% 2,992 2,786 2,337 n/a n/a
Special handling waste ton 14.9% 8,282 7,209 8,941 n/a n/a
Total non-mineral waste ton 12.2% 14,817 13,201 13,148 n/a n/a EM-MM-150a.4
Sodium cyanide
Sodium cyanide (NaCN) consumption ton 9.4% 12,721 11,632 13,503 13,400 13,549
PARTNERING WITH OUR COMMUNITIES
Community Relations
Grievance statistics
Outstanding grievances from
previous periods Number 6 10 11 14 n/a
New grievances received in the period Number 19 21 11 22 n/a
Total grievances Number 25 31 22 36 n/a
Closed grievances in the period Number 18 25 12 25 n/a
Outstanding grievances at the
end of the period Number 7 6 10 11 n/a
Local employment and procurement
Local employment Percentage 74.91% 73.74% 67.25% 70.98% 72.29%
Economic value distributed
Wages and benefits to workers US$ million -1.3% 149.7 151.7 146.6 127.5 93.1
Payments to suppliers (contractors) US$ million -10.6% 1,773.5 1,983.2 1,817.3 1,617.4 1,333.9
Payments to local governments US$ million -36.5% 8.0 12.6 6.2 4.6 3.8
Payments to Federal Government US$ million 10.5% 221.2 200.2 258.6 370.4 289.8
Total economic impact US$ million -8.3% 2,152.5 2,347.8 2,228.7 2,120.0 1,720.7
Fund for Sustainable Development of Mining States and Municipalities
Company contribution US$ million -4.1% 31.8 33.2 48.7 64.1 33.6
Social Investment
Education US$ million 65.7% 1.91 1.15 0.82 0.89 0.87
Health US$ million -2.8% 1.30 1.34 1.10 0.63 1.17
Water US$ million 11.8% 0.24 0.21 0.14 0.36 0.28
Decent work and economic growth US$ million 68.7% 0.31 0.18 0.17 0.12 0.14
Other US$ million 10.0% 1.02 0.93 1.08 1.13 0.66
Total social investment US$ million 25.2% 4.78 3.82 3.31 3.14 3.12
112
Fresnillo plc Annual Report and Accounts 2024
SUSTAINABILITY AT THE CORE OF OUR PURPOSE CONTINUED
Metric Herradura
Noche
Buena Fresnillo Saucito Juanicipio Ciénega San Julián
SITE DATA
Health and Safety
Occupational Safety
Total recordable injury frequency rate
(TRIFR) – 2024 Rate 1.79 2.53 7.43 14.17 9.84 7.44 6.56
Total recordable injury frequency rate
(TRIFR) – 2023 Rate 2.73 1.07 11.45 22.89 16.09 10.41 13.23
Lost time injury frequency rate (LTIFR)
– 2024 Rate 1.67 2.53 5.57 7.70 5.69 3.98 4.04
Lost time injury frequency rate (LTIFR)
– 2023 Rate 2.73 1.07 6.91 11.64 10.59 6.24 10.12
Greenhouse Gas (GHG) emissions and Energy
GHG emissions
Direct and indirect GHG emissions
(Scope 1 and Scope 2), market based ton CO
2
e 345,319 2,343 91,710 64,902 23,209 27,744 42,195
Percentage of total Percentage 57.8% 0.4% 15.4% 10.9% 3.9% 4.6% 7.1%
Direct and indirect GHG emissions
(Scope 1 and Scope 2), location based ton CO
2
e 438,132 10,703 165,886 157,495 78,652 51,923 102,853
Energy
Percentage of renewable electricity
consumption Percentage 91.9% 90.9% 72.1% 75.6% 95.5% 80.5% 75.7%
Water
Water management
Total water withdrawn megalitres 5,830 1,468 9,934 9,172 2,298 5,768 1,128
Total water deviations megalitres 0 0 7,136 7,563 1,355 5,217 0
Total water consumed megalitres 5,830 1,468 2,797 1,609 943 551 1,128
Name Status
Coordinates
(lat./long.)
Construction
year
Embarkment
height
Construction
method
Last external
review
Waste
Tailings Storage Facilities inventory
Fresnillo Fresnillo TSF
(Proaño)
Care and
maintenance
23°09'11.99"N
102°51'45.35"W
1953 38m Upstream DSI, Jan 2025 EM-MM-
540a.1
Fresnillo San Carlos
TSF
Operating 23°08'52.26"N
102°53'10"W
2020 32m Centreline DSI, Jul 2024 EM-MM-
540a.1
Saucito Saucito TSF Operating 23°07’30”N
102°55’37.2W
2011 50m Centreline DSI, Jul 2024 EM-MM-
540a.1
Ciénega Ciénega TSF1 Care and
maintenance
25°02'23.59"N
106°20'20.31"W
1991 80m Downstream ITRP, Feb 2024 EM-MM-
540a.1
Ciénega Ciénega TSF2 Care and
maintenance
25°03'06''N
106°20'46.60W
1998 84m Upstream ITRP, Feb 2024 EM-MM-
540a.1
Ciénega Ciénega TSF3 Operating 25°02'01.65''N
106°19'45.33W
2020 75m Downstream ITRP, Feb 2024 EM-MM-
540a.1
San Julián San Julián
TSF
Operating 26°02'34.02"N
106°30'05.26"W
2015 152m Downstream ITRP, Sep 2024 EM-MM-
540a.1
Juanicipio Depósito de
Jales
Operating 23°09'57"N
102°58'19"W
2020 29m Downstream DSI, Oct 2023 EM-MM-
540a.1
Herradura Herradura
TSF
Operating 31°07'43.35"N
112°51'34.47"W
2014 47m Downstream ITRP, Jan 2025 EM-MM-
540a.1
Note: DSI – Dam Safety Inspection. ITRP – Independent Tailings Review Panel.
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Metric Herradura
Noche
Buena Fresnillo Saucito Juanicipio Ciénega San Julián
SITE DATA (CONTINUED)
Certification and awards
Health
Safe and healthy work environments (ELSSA) Certified Certified Certified Certified Certified Certified Certified
100% smoke- and emissions-free space Certified Certified – – – – Certified
Cardio-protected space – – – Certified – – –
Occupational Safety
ISO 45001 Certified Certified Certified Certified – – –
Environmental Management
ISO 14001 Certified Certified Certified Certified – – –
International Cyanide Management
Code (ICMC) Certified Certified – – – – –
114
Fresnillo plc Annual Report and Accounts 2024
INDEPENDENT PRACTITIONER’S ASSURANCE REPORT
To the Management
of Fresnillo plc
Scope
We have been engaged by Fresnillo
plc to perform a limited assurance
engagement, as defined by
International Standards on Assurance
Engagements, here after referred to as
the engagement, to report on Frensillo
plc’s Key Performance Indicators: Scope 1
GHG Emissions, Scope 2 GHG Emissions,
GHG Intensity (Scope 1 and 2) per tonne
of mineral processed, Energy Use (MWh),
and Energy Intensity (MWh) per tonne
of mineral processed (collectively ‘the
Subject Matter’) contained in Fresnillo
plc’s (the Company’s) Annual Report
2024 (the ‘Report’).
Other than as described in the
preceding paragraph, which sets out
the scope of our engagement, we did
not perform assurance procedures on
the remaining information included in
the Report, and accordingly, we do not
express a conclusion on this information.
Criteria applied by Fresnillo plc
In preparing the Subject Matter,
Fresnillo plc applied the WRI/WBCSD
The Greenhouse Gas Protocol
Corporate Accounting and Reporting
Standards (Revised edition) and the
UK Streamlined Energy and Carbon
Reporting (SECR) requirements as
stipulated by the Companies Act 2006
(Strategic Report and Director’s Report)
Regulations 2013 and the Companies
(Director’s Report) and Limited Liability
Partnership (Energy and Carbon
Report) Regulations 2018 (‘the Criteria’).
Fresnillo plc’s responsibilities
Fresnillo plc’s management is
responsible for selecting the Criteria,
and for presenting the Subject Matter
in accordance with that criteria, in all
material respects. This responsibility
includes establishing and maintaining
internal controls, maintaining adequate
records and making estimates that
are relevant to the preparation of the
Subject Matter, such that it is free from
material misstatement, whether due to
fraud or error.
EY’s responsibilities
Our responsibility is to express a
conclusion on the presentation of the
Subject Matter based on the evidence
we have obtained.
We conducted our engagement in
accordance with the International
Standard for Assurance Engagements
Other Than Audits or Reviews of
Historical Financial Information (‘ISAE
3000 (Revised)’) and the International
Standard for Assurance Engagements
on Greenhouse Gas Statements (‘ISAE
3410’), and the terms of reference
for this engagement as agreed with
Fresnillo plc on 26 September 2024.
Those standards require that we plan
and perform our engagement to
express a conclusion on whether we
are aware of any material modifications
that need to be made to the Subject
Matter in order for it to be in accordance
with the Criteria, and to issue a report.
The nature, timing, and extent of the
procedures selected depend on our
judgment, including an assessment
of the risk of material misstatement,
whether due to fraud or error.
We believe that the evidence obtained
is sufficient and appropriate to provide
a basis for our limited assurance
conclusions.
Our independence and quality
management
We have maintained our independence
and confirm that we have met the
requirements of the Code of Ethics for
Professional Accountants issued by the
International Ethics Standards Board
for Accountants, and have the required
competencies and experience to
conduct this assurance engagement.
EY also applies International Standard
on Quality Management 1, Quality
Management for Firms that Perform
Audits or Reviews of Financial
Statements, or Other Assurance or
Related Services Engagements, which
requires that we design, implement
and operate a system of quality
management including policies or
procedures regarding compliance
with ethical requirements, professional
standards and applicable legal and
regulatory requirements.
Description of procedures performed
Procedures performed in a limited
assurance engagement vary in nature
and timing from, and are less in extent
than for a reasonable assurance
engagement. Consequently, the level
of assurance obtained in a limited
assurance engagement is substantially
lower than the assurance that would
have been obtained had a reasonable
assurance engagement been performed.
Our procedures were designed to obtain
a limited level of assurance on which to
base our conclusion and do not provide
all the evidence that would be required
to provide a reasonable level of assurance.
Although we considered the
effectiveness of management’s
internal controls when determining the
nature and extent of our procedures,
our assurance engagement was not
designed to provide assurance on
internal controls. Our procedures
did not include testing controls or
performing procedures relating to
checking aggregation or calculation
of data within IT systems. The GHG
quantification process is subject to
scientific uncertainty, which arises
because of incomplete scientific
knowledge about the measurement
of greenhouse gases. Additionally, GHG
procedures are subject to estimation
(or measurement) uncertainty resulting
from the measurement and calculation
processes used to quantify emissions
within the bounds of existing scientific
knowledge.
A limited assurance engagement
consists of making enquiries, primarily
of persons responsible for preparing the
Subject Matter and related information,
and applying analytical and other
appropriate procedures.
115
Strategic Report Governance Financial Statements Additional Information
www.fresnilloplc.com
Our procedures included:
• Inquiries with Fresnillo plc
representatives responsible for
greenhouse gas emissions and
energy management, collection of
the underlying data and reporting
on the Subject Matter;
• Obtaining understanding of the
process used to prepare the Subject
Matter data;
• Performing data walk-throughs with
representatives on a sample of sites
to test the process of data collection
and consolidation;
• Performing analytical procedures
to support reasonableness of the
Subject Matter data;
• Selecting a sample of data points
across Fresnillo plc locations,
obtaining and analysing
documentary evidence on a sample
basis regarding key GHG emissions,
energy use and production indicators
data to assess whether these data
have been collected, prepared,
collated and reported appropriately;
• Reading the Report to assess
whether the Subject Matter has
reported appropriately.
We also performed such other
procedures as we considered necessary
in the circumstances.
Conclusion
Based on our procedures and the
evidence obtained, we are not aware
of any material modifications that
should be made to the Subject Matter
for the year ended 31 December 2024
in order for it to be in accordance with
the Criteria.
Use of our Assurance Statement
We disclaim any assumption of
responsibility for any reliance on this
assurance report or its conclusions to any
other persons, or for any purpose other
than that for which it was prepared.
Accordingly, we accept no liability
whatsoever, whether in contract, tort
or otherwise, to any third party for any
consequences of the use or misuse of
this assurance report or its conclusions.
Ernst & Young LLP
03 March 2025
London, United Kingdom
116
Fresnillo plc Annual Report and Accounts 2024
MANAGING OUR RISKS AND OPPORTUNITIES
Our approach to risk
The effective management of risk is
integral to good management practice
and fundamental to living up to our
purpose and delivering our strategy.
By understanding, prioritising and
managing risk, Fresnillo plc safeguards
our people, our assets, our values and
reputation, and the environment,
and identifies opportunities to best
serve the long-term interest of all
our stakeholders. We are focused on
conducting our business responsibly,
safely, and legally, while making risk-
informed decisions when responding
to opportunities or threats that present
themselves. Risk management is a
key accountability and performance
criterion for our leaders.
Our risk management process helps us
to manage risks that have the potential
to impact our business objectives
and timely risk monitoring is at the
core of our management practices.
All employees have responsibility for
identifying and managing risks. Our risk
management framework reflects the
importance of risk awareness across
Fresnillo plc. It enables us to identify,
assess, prioritise and manage risks to
deliver the value creation objectives
defined in our business model.
Risk appetite
Defining risk appetite is key in
embedding the risk management
system into our organisational culture.
The Company’s risk appetite statement
helps to align our strategy with the
objectives of each business unit,
clarifying which risk levels are, or are
not, acceptable. It promotes consistent
decision-making on risk, allied to the
strategic focus and risk/reward balance
approved by the Board.
We define risk appetite as ‘the nature
and extent of risk Fresnillo plc is
willing to accept in relation to the
pursuit of its objectives’. We look at risk
appetite from the context of severity
of the consequences should the risk
materialise, any relevant internal or
external factors influencing the risk,
and the status of management actions
to mitigate or control the risk. A scale
is used to help determine the limit of
appetite for each risk, recognising that
risk appetite will change over time.
The risk appetite statement for each
principal risk is the level of risk that the
Board is willing to accept to achieve
our strategic objectives. It articulates
what is an acceptable level of exposure,
relative to the amount of reward we are
seeking, and helps to determine how
much control or mitigating actions may
be required.
Risks that are approaching the limit
of the Company’s risk appetite may
require management actions to be
accelerated or enhanced to ensure the
risks remain within appetite levels. If a
risk exceeds appetite, it will threaten
the achievement of objectives and may
require a change to strategy.
Risk management framework
Our strategy, values and risk
appetite inform and shape our risk
management framework. We embed
risk management at every level of the
organisation to effectively manage
threats and opportunities to our
business and host communities,
and our environmental impact.
Fresnillo plc has an enterprise-wide
risk management information system
which includes a set of integrated tools
and applications to capture, manage
and communicate material risks to the
business. This system considers the
three lines of defence we have in place
at Fresnillo plc:
• First – Unit leaders including mine,
exploration and project personnel,
as well as leaders of corporate and
support areas;
• Second – Corporate level oversight
functions involve the risk
management team, the Health,
Safety, Security, Environment and
Community Relations (HSECR) team,
the project oversight function and
the Executive Committee; and
• Third – Group Internal Audit.
117
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Strategic Report Governance Financial Statements Additional Information
Board and Committees
Executive management
1
Operational management
Strategic risks
People, operational, safety
and communities’ risks
Financial risks
Governance structure
This governance structure supports our risk management framework and enables effective management of material risks.
Board
Overall responsibility for assessing the
nature and extent of principal and
emerging risks and the risk appetite
of the Company and for facilitating
effective, entrepreneurial and prudent
management of the business.
Audit Committee/HSECR Committee
Responsible for reviewing the
effectiveness of the Company’s
risk management systems and
processes. Review assurance over
mitigating controls.
Internal Audit
Provides independent and objective
assurance that risk management,
governance and internal control
processes are working effectively,
thus ensuring that the Company
can achieve its objectives.
Operations &
projects
Exploration &
ore reserves
Finance
Legal, ethics &
compliance
Security
Management steering regional departments providing oversight of risk management in their areas of responsibility.
Responsible for identifying, assessing and mitigating both key and operational risks within their functions/business areas.
Risks should be discussed as part of country management meetings.
• Resources to reserves risks
• Potential actions by governments*
• Exploration risks*
• Project risks*
• Technology risks
• Low-carbon transition risks
• Climate change and natural
disaster risks*
• Security risks*
• People and culture risks*
• Union risks*
• Operation, maintenance
and planning risks
• Health, safety and environment risks*
• Communities and social risks*
• Ethics and compliance risks
• Cyber risks*
• Tailings Dams*
• Liquidity risks
• Market risks
• Credit risks
• Tax risks
• Disclosure risks
• Global macroeconomic developments*
• Impact of metals prices and
exchange rates*
Human resources
and Union
Communities
relations
Safety &
health
TI-TO
Cybersecurity
Insurance policies
and coverage
Executive Committee
Responsible for the review and assessment of the principal
risks and recommending risk appetite and tolerance to the
Board. Develops Company strategy in line with Board appetite.
Risk management
Responsible for monitoring principal and key risks
and ensuring effectiveness of regional and function
risk management.
Top down
Bottom up
Third line of defence Second line of defence First line of defence
* Principal risk.
1 Main areas of executive management.
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Fresnillo plc Annual Report and Accounts 2024
MANAGING OUR RISKS AND OPPORTUNITIES CONTINUED
Risk management process
Set strategy,
objectives and
risk appetite
1. Risk analysis
Identify,
prioritisation
and evaluate risks
to our strategy
and objectives
2. Controls and
risk responses
Implement controls
and actions to
manage risks
within risk appetite
3. Audit &
assurance
Check and verify
that controls and
actions are effective
in managing
the risks
4. Communication
& monitoring
Communicate
principal and
emerging risk
and escalate as
appropriate
5. Improvement
& embed
Build risk capability
and culture so
active management
is embedded in
how we run
our business
6. Resilience
Development of the
Company’s culture
and capacity to
adapt, resist, absorb
and recover from
the impact of a risk
First line
• Risk
assessment and
identification of
new risks in the
business units.
• Continuous
improvement
of processes
and controls.
• Implementation
of corrective
and preventive
actions based
on the results of
leadership team
monitoring.
• Control self-
certifications.
• Preparation of
risk dashboards
and risk matrices
presenting the
status of individual
risks in the
business units.
• Compliance
with the highest
international
industry
standards
such as TSFs.
Second line
• Review of Key
Risk Indicators
(KRIs) and
mitigation
actions.
• Implementation
of controls and
mitigations in
response to risk
scenarios.
• Monitoring
compliance with
international risk
standards.
• On-going reviews
of risks and threats.
• Preparation of
quarterly, half-
yearly and Annual
Reports and
briefings to the
Audit and HSECR
Committee.
• Promoting the
risk culture across
the Company
through
workshops
and training.
• Creating risk
scenarios to
anticipate
impacts and
prepare risk
responses.
Third line
• Execution of
the annual
internal audit
programme.
• Advice and
recommendations
regarding the
most exposed
or new risks.
• Implement
appropriate
policies and
guidelines to
build resilience
to risks.
Culture & leadership
1. Risk analysis
A complete view of our risk universe starts with the analysis of our business, the external environment in which we operate,
the regulatory landscape and our internal operations. This includes the impacts on and of our strategy, initiatives, governance,
and processes.
The Board, the Audit Committee, the HSECR Committee, the Executive Committee and Internal Audit, periodically use working
sessions and interviews to review the evolution of principal and emerging risks, as well as the appetite for each risk. At these
working sessions, the views and suggestions of Board members are heard, and adjustments are made according to the factors
influencing each risk.
We mainly use the following methods in risk assessment:
• Scenario planning.
• Horizon scanning.
• Real time risk management monitoring.
• Social media monitoring.
• Collaboration with other organisations such as third-party suppliers.
Aspects we review when assessing our principal and key risks:
• Risk ownership: each risk has an owner. In addition, each key risk is sponsored by a member of the Executive Committee
who drives the monitoring and progress of mitigation measures.
• Probability and impact: five-by-five scoring matrix applied globally.
• Gross risk: before preventive controls.
• Net risk: after preventive controls have been applied.
• Risk appetite: defined at the principal and emerging risk level and approved by the Board.
• Risk tolerance: in data format, shows the amount of deviation from risk appetite.
• Key risk indicators: quantitative and qualitative measures that provide early signals of a change in the degree of risk.
• Actions: key controls in place and activities required to mitigate them if necessary.
• Impact on the Company’s strategic pillars and interdependencies between key risks.
• Any relevant risks where the principal risk is affected or may affect the emerging risk.
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All principal risks are detailed in a standardised statement. This ensures effective review, understanding and monitoring
across the Company, together with consistency, both in terminology and in the underlying assessment itself. Following
the establishment of climate change as a separate principal risk in 2020/21, reviews have been carried out at various levels,
including the Executive Committee and the Board. These include the identification and documentation of climate-related
risks and the review and consideration of appropriate risk responses. This consolidated view is an input to our review of the
Company’s risk profile.
As part of the top-down process, an updated assessment was completed for each principal risk by the relevant risk owner,
working with the Executive Committee risk sponsor and the risk function.
The framework is based on ISO 31000 (International standard that provides guidelines and principles for managing risk),
ISO 22301 (International standard for Business Continuity Management Systems) and COSO ERM.
1
1 The Committee of Sponsoring Organizations (COSO) of the Treadway Commission Enterprise Risk Management (ERM) framework.
Emerging risk considerations.
Emerging risks are very uncertain by nature. Given the diversity of our operations and projects as well as our geographic
footprint, we are exposed to many highly uncertain, complex, and often interrelated risks. The Company continues to focus
on horizon scanning activity to inform and support identification of the most pertinent internal and external trends and
developments.
We monitor key indicators of emerging risks and their potential impact on our business, markets and host communities.
Many emerging risk topics are reviewed on a recurring basis, alongside ongoing activity addressing their impacts. However,
it is acknowledged that the nature of the emerging risks will evolve and could drive future trends in the long term which the
Company will need to prepare for.
2. Controls and risk responses
We use five key processes to better address our risks: (i) a monthly procedure for evaluating and mitigating principal risks; (ii)
a process to identify and analyse the impact of the geopolitical instability in all the Company’s risks, including projects, with a
main focus on the safety and identification of new risks; (iii) dashboards for each business unit to monitor mitigation actions
and risk level; (iv) impact and probability scenarios which were conducted for risks related to security, supply chain of critical
inputs for operations, cost increases and projects, and (v) collaboration with government, the mining sector and communities
to ensure that we followed best practice.
Fresnillo plc has an internal control framework in place to mitigate the impact of principal and emerging risks. Our executives
(including operations, exploration and project managers, the controllership group, HSECR team), regularly engage in
strengthening the effectiveness of our current controls.
During 2024, with the support of a specialist team and external advice, the comprehensive internal control framework was
enhanced to document material financial and non-financial controls, responsibilities and accountabilities and align them with
the Company’s processes. This improves risk management, reduces potential negative impacts, and ensures compliance with
regulatory requirements for internal controls.
The new mining laws in Mexico, the security near our business units, the increase in the cost of operation, the geopolitical instability,
the license to operate and climate disruption posed new challenges for the Risk Department and the Executive Committee. Due
to the uncertainty around these topics, this year, in addition to our established risk management activities, all strategic decisions by
the Company were analysed using risk scenarios modelling their potential impacts.
3. Audit and assurance
The Board, in pursuing the Company’s business objectives, cannot give absolute assurance that the implementation of a risk
management process will overcome, eliminate, or mitigate all material risks. However, by developing and implementing an
annual and ongoing risk management process to identify, report and manage significant risks, the Board intends to provide
reasonable assurance against material misstatement or loss.
We monitor how well we manage material risks to our objectives by checking and verifying the implementation of our response
plans (actions and controls) and our actual performance against objectives. We enhance the ‘check and verify’ step by applying
the three lines of defence approach:
The internal audit team consists of highly experienced professionals from various specialties, who frequently review operational,
financial, exploration and project processes in the field, using international standard tests and methodologies.
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MANAGING OUR RISKS AND OPPORTUNITIES CONTINUED
First line
• Annual self-assessments of controls and the bi-annual compliance assurance statements.
Second line
• As part of our ERM approach, we the Risk Team conduct specialised reviews to assess risks and controls to ensure compliance,
focused on validating and testing key controls to augment the first line attestations.
• The risk team annually reviews key controls for our principal risks, significant local risks and response plans to identify and respond
to any significant changes in the control environment. Whilst many controls are tailored to business unit requirements, there are
consistent themes across our control environment, such as clear oversight and reporting by business unit management teams,
governance processes for operations, maintenance and tenders, attention to health and safety, the wellbeing of our people and
the priority of maintaining integrity and a strong ethical culture.
Third line
• We are supported by external partners in certain specialised areas, we are also subject to significant assurance activities and third-
line audits conducted through our Internal Audit team, external third parties, certification standards and customer requirements
in our various business lines.
• The work plan of the internal audit area considers all the company’s operational and financial processes, permanently following
up on the recommendations made in each audit, with a particular focus on the most exposed risks or risks that have an impact
on regulatory non-compliance or business disruption.
• External reviews include those that support the range of ISO certifications we manage across the business as well as independent
performance and regulatory reports on Fresnillo plc operations. Examples include:
– business continuity risk inspections of all business units by Hawcroft Consulting in 2024.
– ISO 45001 and ISO 14001 audits of Fresnillo and Saucito mines by BSI Group auditors.
– certification that the Herradura mine leaching operations comply with the Cyanide Code issued by the International Cyanide
Code Institute.
4. Communication and monitoring
Risk can be of any nature and manifest itself and escalate from any part of the business as a threat or even an opportunity.
When risks are material to the Company, they are escalated to the Executive Committee and, where appropriate, to the Board
or its Committees. This requires a strong risk culture, which we continue to develop and encourage.
Although we deploy controls to reduce the likelihood and consequences of risks, some risks inherent in our business remain.
These include natural catastrophes, for which there is limited capacity in international insurance markets. We monitor these
threats closely and develop business resilience plans.
The previous steps of the risk assessment process allow for analyses, reports and briefings that communicate the results and
main findings; this information is mainly presented and discussed at the Audit Committee and the Board.
5 & 6. Improvement, embedding and resilience
To ensure that we can prioritise our efforts and resources, we regularly assess the potential consequences and likelihood of
impact of our principal risks, creating impact scenarios to implement prevention-mitigation measures and response plans.
These assessments, and the effectiveness of our associated controls, reflect management’s current expectations, forecasts
and assumptions. They involve subjective judgements and depend on changes in our internal and external environment.
The Board confirms that:
• A robust assessment of principal and emerging risks has been carried out.
• With support from the Audit and the HSECR Committees, it has monitored the risk management framework
throughout the year.
• It has reviewed the planning, progress and preliminary results of the enhancement of the comprehensive internal
control framework.
Principal risks and uncertainties
The principal risks and uncertainties outlined in this section reflect the risks that could materially affect (negatively or
positively) our ability to meet our strategic objectives.
We define principal risk as ‘risk, or a combination of risks, which may seriously affect the business model, performance, future or
reputation of the Company’.
The Company’s risk profile has been developed based on the most significant risks in our business profiles. All of our principal
risks were reviewed at least twice during the year, including through KRIs, which were developed to help embed the risk
appetite framework in the business and enhance the monitoring and mitigation of risks.
Due to the effects caused by geopolitical instability – the Russia-Ukraine and Hamas-Israel wars, attacks on commercial
shipping in the Red Sea by Iran-backed Houthi rebels, the effects of global inflation affecting the cost of operation, security and
violence near business units, cyberattacks, climatic disturbances, environmental situations close to our operations and changes
to the laws and regulations in the mining industry in Mexico – it was necessary to reassess the principal risks and reorder their
materiality, likelihood and impact, as well as reassess related mitigation actions.
These risks are summarised in the following table in order of maximum reasonable consequence, probability and change
since 2023.
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CURRENT ASSESSMENT OF PRINCIPAL RISKS
AS OF FEBRUARY 2025
2024 Risk Risk appetite* Risk level Change in risk level vs 2023
1
Potential actions by governments
(political, legal, regulatory, tax & concessions)
Low Very high Stable V
2
Security Low Very high Stable V
3
Cybersecurity Low High Increasing
4
Impact of metals prices and exchange rates High High With attention V
5
Global macroeconomic developments (energy
and supply chain disruptions, inflation and cost)
Medium High With attention
6
Access to land (full access to the lands) Low High Increasing
7
Union relations (labour relations) Low High Increasing V
8
Human resources (attract and retain
requisite skilled people/talent crisis)
Medium High Stable
9
Projects (performance risk) Medium High With attention
10
Safety (incidents due to unsafe acts or
conditions could lead to injuries or fatalities)
Low High Stable V
11
Licence to operate (community relations) Medium Medium Stable
12
Exploration (new ore resources) High Medium Stable
13
Climate change
(comply with international standards and regulations)
Medium Medium Stable V
14
Tailings dams
(overflow or collapse of tailings deposits)
Low Medium Stable V
15
Environmental Incidents
(cyanide spills and chemical contamination)
Low Medium Stable V
* Appetite determined by the Board in January 2025.
With attention. Potential for increase in the short term
(V) Risks that were considered for the viability assessment
Very high High Medium
Increasing likelihood
Increasing financial and non-financial consequences-impact
12
13
14
15
1
2
8
6
9
11
35
4
7
10
Heat map
Very low Low Moderate High Very high
Rare Unlikely Possible Likely Almost certain
6 7 3
2024
2023
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MANAGING OUR RISKS AND OPPORTUNITIES CONTINUED
Emerging risks
Mining is a long-term business, and so
our strategy aims to create sustained
value over the life of our mining
operations and beyond. This involves
careful allocation of key resource inputs
– the natural, human, intellectual,
financial, manufactured, and social
and relationship capitals – which are
essential to achieving this aim.
In the longer term, as the world
transitions to a low-carbon future and
consumer demand for sustainable
goods flows through the value chain,
the supply-demand dynamics of
commodities are expected to shift.
This will lead to increasing demand
for sources and solutions with low
CO
2
emissions, and a lower social and
environmental footprint, in addition
to a growing demand for transparent,
sustainable and circular value chains.
Fresnillo plc defines an emerging risk as
‘new manifestation of risk that cannot
yet be fully assessed, a risk that is
known to some degree but is not likely
to materialise or have an impact for
several years, or a risk that the company
is not fully aware of but that could, due
to emerging macro trends in the mid
or long-term future, have significant
implications for the achievement of
our strategic plan’. Furthermore, we
consider emerging risks in the context
of longer-term impact and shorter-term
risk velocity. We have therefore defined
emerging risks as those risks captured
on a risk register that: (i) are likely to be
of significant scale beyond a five-year
timeframe; or (ii) have the velocity to
significantly increase in severity within
the five-year period.
Emerging risks constantly change, can
materialise quickly, and can significantly
affect the company and its operations.
Procedures must be in place for
continuous monitoring of these risks
to allow the company to adapt or
develop appropriate actions.
To strengthen our emerging risks
management framework, during 2024
we carried out activities to: (i) identify new
emerging risks in light of geopolitical
instability, technological disruption
and climate change; (ii) re-assess the
emerging risks identified in 2023; (iii)
deploy effective monitoring mechanisms
recognising the potential for emerging
risks to evolve or materialise quickly; (iv)
carry out horizon scanning to consider
disruptive scenarios, and (v) implement
mitigating control actions and enhance
our risk awareness culture.
This process involved workshops,
surveys and meetings with the
Executive Committee, business
unit leaders, support and corporate
areas, as well as suppliers, contractors
and customers. We also consulted
third-party information from
global risk reports, academic
publications, risk consulting
experts and industry benchmarks.
Emerging risks can impact our principal
risks directly or can become elevated to
a standalone principal risk. The way we
manage emerging risks is dynamic – it
reflects the outcomes of our monitoring
and the evolution of the risk as well
as findings from our scenario analysis.
Managing emerging risks involves
staying on top of technological advances
in the mining industry and beyond;
seeking value-capturing innovations a
focussing on efficiencies; drawing on
new sources of information and working
closely with universities specialising in
mining and geology; as well as training
and upskilling our people.
Emerging risks are currently managed
through the Group’s risk management
framework, regularly enhancing
controls and mitigating actions for
each of them. Emerging risk topics
have been discussed in executive
level committees throughout 2024,
with key actions assigned to closely
monitor their manifestation and
potential opportunities and, in some
cases, also form part of the business
planning process.
For 2025, it is also planned to deepen
certain emerging risk topics such as
Technological disruption & the rapid
proliferation of Artificial Intelligence
and Water stress and drought, by
conducting scenarios of operational
and financial impacts to implement
risk reduction measures and risk
mitigation actions.
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Emerging Risk Description Timescale
Geopolitical instability The potential political, economic, military, and social risks that can emerge from
a nation’s involvement in international affairs. These risks can have far-reaching
implications for both the country itself and the global community at large. There are
many factors that can contribute to geopolitical risks, such as a nation’s economic
stability, its political relations with other countries, and its military strength.
< 5
Years
Water stress and drought Increased depletion of water resources to meet the demand for water
consumption in a region, coupled with extreme heat waves in desert regions.
< 5
Years
Transition to a
low-carbon future
The transition to a low-carbon future is a ‘transition risk’ according to the TCFD
and presents challenges and opportunities for our portfolio in the short and long
term. It is considered within the climate change principal risk mitigation strategy.
However, we consider this risk to be an emerging risk due to the speed of potential
new climate change regulations and the obstacles that government may place in
the way of investment support for clean energy.
> 5
Years
Technological disruption
& the rapid proliferation
of Artificial Intelligence
Failure to identify, invest in, or adopt technological and operational productivity
innovations that significantly replace or optimise a process through new systems
with recognisably superior attributes. We have the threat that artificial intelligence
could replace skilled labour.
< 5
Years
Future of the workforce Create a culture of talent under an inclusive, empowered, and confident culture,
together with the appropriate career paths, to generate a future-ready workforce.
< 5
Years
Increasing societal and
investor expectations
There is increasing expectation and focus on social equality, fairness and
sustainability. Financial institutions are also placing greater emphasis on
Environmental, Social and Governance (ESG) considerations when making
investment decisions.
< 5
Years
Replacement on
depletion of ore reserves
The inability to replace depleted ore reserves in key business units through
exploration, projects or acquisitions.
> 5
Years
Unexpected mine-closure
liabilities that have the
potential to increase costs
This is important to consider because it is possible that government authorities
will change the environmental provisions and obligations of the mine closure
process in a more strict and costly manner.
> 5
Years
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MANAGING OUR RISKS – RESPONSE/MITIGATION TO OUR RISKS
1
Potential actions by governments
(political, legal, regulatory, tax and concessions)
Factors contributing to risk
A considerable level of uncertainty
is likely to dominate the Mexican
legal landscape for the foreseeable
future, with potential impacts on
the timing, consistency and nature
of legal decisions:
• Reorganisation of the Mexican
Supreme Court and election of
Justices and Federal Judges by
popular vote.
• New judicial administration body
and new judicial discipline tribunal.
• Legal reforms to the following laws:
‘Mining Law’, ‘Law on National
Waters’, ‘Law on Ecological Balance
and Environmental Protection’ and
‘General Law for the prevention and
integrated management of waste
in the field of mining and water
concessions’, impacting on the
granting of new concessions and
their duration, exploration activities
and consultation with communities
and indigenous peoples as well
as payments of 5% of profits to
the communities.
Controls, mitigating
actions and outlook
1. As a result of the new mining law, risk
scenarios were developed for each
change and impact, considering
the legal and operational criteria to
implement the necessary mitigation
and prevention measures. These
scenarios are constantly updated.
2. Commitment to constant
communication with all levels
of government.
3. Increased monitoring of the processes
being implemented at the Ministry
of Energy, Environment, Labour
and Economy and daily monitoring,
follow-up and attention to issues
before the Congress of the Union
that may affect the mining industry.
4. Collaboration with other members
of the mining community through
the Mexican Mining Chamber to
lobby against any new harmful taxes,
royalties or regulations. Support for
industry lobbying efforts to improve
the general public’s understanding
of the mining industry.
For more details see Protecting our
Environment on pages 80-100
Link to strategy
41 2 3
Risk appetite
Low
Risk owner
• Government Relations Department
• Legal Department
• Taxes and royalties Department
• Mining and water concessions
Department
Risk oversight
• The Board
• Audit Committee
Behaviour
Stable
Risk rating (relative position)
2024: Very high (1)
2023: Very high (1)
Risk description
Regulatory initiatives or policies issued
by the Mexican government, at all three
levels: federal, state and municipal,
may have an adverse impact on the
operation of the Company. This could
include new laws, regulations, rules or
guidelines with a negative impact on
the mining industry in Mexico. Although
the law in Mexico does currently allow
for the possibility of open pit mining
for strategic reasons, the previous
administration’s prohibition of new open
pit concessions remained in place under
the new administration during 2024,
and no new concessions were granted.
With the recent change in Mexico’s
judiciary, current lawsuits, ‘amparos’
and other legal processes are at risk.
Under the previous administration,
which was in office from 2018-2024,
it had been very challenging to obtain
permits and licences for construction
and environmental matters from the
Ministry of Economy and the Ministry of
Environment. However, the change of
approach from the new administration
is easing the process and we are
now starting to see the granting
of permit applications that fully
comply with regulations.
Failure or delay in obtaining permits and
licences to operate, could adversely affect
our operations and develop projects.
• Prohibition of new concessions for
open-pit mining.
• Permits for building/expanding
tailings dams and projects.
• Inability to obtain necessary water
concessions due to government
control or private interests.
• Discrepancies in the criteria used in
audits carried out by the tax authority.
• Possible new taxes or royalties on the
mining industry.
• Possible profit sharing with
indigenous communities.
• Potential trade disputes under United
States-Mexico-Canada agreement.
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2
Security
3. We interact and meet regularly with
people of the National Guard; Army
and the Navy in some cases. There
are military installations located near
most of our operations.
4. We continue to implement greater
technological and physical security
at our operations:
• The use of a remote monitoring
process at the Herradura, Noche
Buena, San Julián, Juanicipio,
Saucito and Fresnillo mines.
• Local operating and command
centres for each business unit
in the Saucito and Fresnillo
mines and the Juanicipio
development project
• Security services during the
mine construction process at the
Juanicipio development project
5. Increase in logistical controls to
reduce the potential for theft of
mineral concentrate such as:
• Real-time tracking technology;
• Surveillance cameras to identify
alterations in the transported
material;
• Protection and support services
on distribution routes;
• Reduction in the number of
authorised stops to optimise
delivery times and minimise
exposure of trucks transporting
ore concentrates or doré.
6. We continue to invest in
community programmes,
infrastructure improvements and
government initiatives to support
the development of legal local
communities and discourage
criminal acts.
7. To combat drug consumptions
we have:
• Increased the number of anti-
doping tests conducted at the
start of the day in the mining units.
• Frequent inspections out inside
the mines to verify that drugs are
not consumed and sold.
• Drug consumption prevention
campaigns, focused on employees.
Link to strategy
41 2 3
Risk appetite
Low
Risk owner
• Security Department
• Legal Department
Risk oversight
• Audit Committee
• Executive Committee
Behaviour
Stable
Risk rating (relative position)
2024: Very high (2)
2023: Very high (2)
Risk description
In all our business units, we face the
risk of theft, which can occur within
the mines or during transportation. Our
employees, contractors and suppliers are
also at risk of violence due to insecurity in
some of the regions in which we operate.
According to information from the
Ministry of Security and Citizen
Protection and the National Guard,
the presence of organised crime
and high impact crimes (homicide,
kidnapping and extortion) increased
in 2024, especially in the states where
our business units are located such as
Zacatecas, Sonora and Guanajuato.
The main risks we face are:
• High-impact thefts in ore
transportation, most notably of
gold doré and silver concentrates.
• Theft of assets such as vehicles,
equipment, spare parts and fuel.
• Homicide.
• Kidnappings.
• Extortions.
• Vandalism.
• Consumption and sale of toxic
substances in our mining units.
Factors contributing to risk
Influence and territorial disputes by
drug cartels, organised crime and
anarchy in some regions of Mexico
where we have operations, projects
and exploration camps. Especially
close to our operations in Fresnillo,
Zacatecas and Caborca, Sonora.
The remote nature of many of our
locations and projects.
Controls, mitigating
actions and outlook
1. Our property security teams
closely monitor the security
situation, maintaining clear internal
communications and coordinating
work in areas of greater insecurity.
2. We maintain close relationships
with authorities at federal, state
and local levels.
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Risk description
Information is an asset that must
always be protected; it requires
maintaining confidentiality, integrity,
and availability throughout all business
processes. Breaches in, or failures of, our
information security management could
adversely impact our business activities.
Malicious interventions (hacking) of our
information or operations’ networks
could affect our reputation and/or
operational continuity.
Loss or harm to our technical
infrastructure and the use of technology
within the organisation from malicious
or unintentional sources.
The following top eight cybersecurity
and privacy risks comprise Fresnillo plc
overall cybersecurity and privacy
risk profile:
1. Corruption of data – Critical data
where any unauthorised modification
can have adverse impacts.
2. Unauthorised access – Cybersecurity
and privacy incidents due to incorrect
access permissions or system abuse,
exploitation, or misuse.
3. Breach and data theft – Disclosure of
critical and sensitive company data
by an internal or external source.
4. Business disruption – Disrupting key
applications or systems for a period.
5. Lack of cybersecurity ownership
– Failure to assign responsibility
for implementing and adopting
cybersecurity practices daily.
6. Non-compliance – Cybersecurity
and privacy incidents resulting in
non-compliance with applicable
regulations, including privacy.
7. Health and safety incidents –
Breach of availability, integrity
or confidentiality of data which
impacts health and safety.
8. Halt or loss of operations –
Cybersecurity and privacy incidents
which result in loss of operating
licence or closure of operations.
Factors contributing to risk
Globally, cyberattacks have increased
in frequency and impact across all
industries; we suffered a cybersecurity
incident (partial disruption of services)
in July 2024, which had negative
consequences for the Group
(Peñoles and Fresnillo plc).
Rising geopolitical tensions.
Heavy reliance on technology and
automated systems to support
operations within the mining industry.
The industrial and mining sectors are
seen as having a considerably weak
level of whilst the damage that can be
caused is very high.
The level of global and national maturity
of cybersecurity and cybercrime
regulations that could deter criminals is
not yet adequate and is still developing.
Controls, mitigating
actions and outlook
Our cybersecurity programme, aligned
with business strategies, is based on
a governance model with three lines
of defence, involving all operational,
tactical, and strategic business levels
to prevent and mitigate the effects
of computer risks. Our approach is
also based on the NIST Cybersecurity
Framework which is used to assess and
improve our ability to prevent, detect,
and respond to cyberattacks.
1. We maintain continuous awareness
of cybersecurity at all levels of the
organisation, through workshops,
communications, campaigns, and
exercises that allow us to understand
and increase our cybersecurity
culture. Cybersecurity is a risk that
requires more active involvement
of Executive teams, which is why
this year awareness and training
exercises focused on this level have
been carried out.
2. The Security Operations Centre
(SOC) provides analytics that
correlate information from multiple
business unit sources, helping us
to easily identify the impact of a
threat and address the incident
in a timely manner.
3. Cybersecurity incident response plans
are in place and regularly assessed to
ensure we can respond quickly and
effectively to cybersecurity incidents.
4. We conduct ongoing assessments of
the technology controls implemented
in operations and services.
5. We have constant threat intelligence
monitoring that allows us to analyse
trends in the environment that
enable adjustments in our operation
to anticipate and apply necessary
controls.
6. In addition, our systems, networks,
and assets are continuously
monitored through cybersecurity
tools that use Artificial Intelligence
and Machine Learning technology
to analyse behaviours in the
organisation’s networks, identifying
and mitigating advanced threats.
7. Controls are in place to comply with
the Ley Federal de Protección de
Datos Personales en Posesión de
Particulares (LFPDPPP).
8. We carried out the second phase
of auditing our Personal Data
Management System with the NYCE
office, with the objective of achieving
certification in our business units.
Our plan for 2025 is to focus our efforts
on mitigating cyber risks, implementing,
and maturing controls in line with the
threat landscape and emphasising the
importance of individual employee
responsibility to remain vigilant and
alert to cyber threats.
Risk Assessment, Disaster Recovery
Plans, Data Loss Prevention, Pen testing,
IT/OT Network Behavioural Analysis,
and targeted security enhancements
for Operational Technology (OT)
environments are some of the
initiatives that will increase our
Level of Cybersecurity Maturity
(based on NIST CSF).
Link to strategy
2 3
Risk appetite
Low
Risk owner
• IT & TO Department
• Cybersecurity Office
Risk oversight
• The Cybersecurity Committee
• Audit Committee
Behaviour
Increasing
Risk rating (relative position)
2024: High (3)
2023: High (6)
MANAGING OUR RISKS – RESPONSE/MITIGATION TO OUR RISKS
3
Cybersecurity
127
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Strategic Report Governance Financial Statements Additional Information
Risk description
Our results are heavily dependent on
commodity prices – principally gold and
silver. There is an inherent risk when
investing or planning for the future
price of these precious metals.
The volatility of these prices is high
and unpredictable. The prices of these
commodities are strongly influenced
by a variety of external factors, including
wars, geopolitics disruptions, world
economic growth, inventory balances,
industry demand and supply, possible
substitution, etc.
Our sales are mainly denominated in US
dollars, although some of our operating
costs are in Mexican pesos. Thus, any
strengthening of the Mexican peso may
negatively affect our financial results.
Factors contributing to risk
Macro-economic and geopolitical
factors that directly affect the price
of commodities, both positively and
negatively, such as the wars between
Ukraine-Russia and Israel-Hamas, the
recent US elections and trade tension
in the US-China relationship.
Increased attraction of investing in
instruments such as cryptocurrencies
could lead to investors reducing their
investment activities in precious metals.
Controls, mitigating
actions and outlook
1. We consider exposure to commodity
price fluctuations an integral part
of our business and our usual policy
is to sell our products at prevailing
market prices although we do have
a hedging policy for precious metals.
2. We monitor the commodity
markets closely to determine
the effect of price fluctuations on
earnings, capital expenditure and
cash flows. Very occasionally, when
we feel it is appropriate, we use
derivative instruments to manage
our exposure to commodity price
fluctuations. We run our business
plans through various commodity
price scenarios and develop
contingency plans as required.
For more details see Our markets
on pages 20-21
3. We have hedging policies for
exchange rate risk, including those
associated with project-related capex.
4. We focus on cost efficiencies
and capital discipline to deliver
competitive all-in sustaining cost.
Link to strategy
1 2 3
Risk appetite
High
Risk owner
• Financial Planning
• Treasury
Risk oversight
• The Investment Committee
• Audit Committee
Behaviour
With attention
Risk rating (relative position)
2024: High (4)
2023: High (4)
4
Impact of metals prices and exchange rates
128
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Risk description
Geopolitics has the potential to increase
trade tensions, affecting rules-based
trading systems. Trade actions can
affect our key markets, operations
or projects, limiting the benefits of
being a multinational company with
a global presence.
Disruptions or restrictions in the
supply of critical operating inputs
such as steel, cyanide, copper, diesel,
transport equipment, oxygen and truck
tyres, electricity, diesel and gas, steel,
sulphuric acid or mining equipment
spare parts (supplied mainly by land
transport from the US and by sea from
China and Europe) could negatively
affect production or increase its cost.
Factors contributing to risk
• The recent US elections.
• US imposes tariffs rate on Mexico.
• China-US tensions.
• Indirect impacts of the war in Ukraine
and conflict in the Middle East.
• Lack of electricity infrastructure of
the state-owned company (Comisión
Federal de Electricidad CFE), which
supplies energy in Mexico.
• Possible inflation growth in Mexico.
Controls, mitigating
actions and outlook
1. We execute operational excellence
initiatives to counter inflation and
improve margins, and also enhance
cost competitiveness by improving
the quality of the portfolio.
2. We maintain a rigorous, risk-based
supplier management framework
to ensure that we engage solely
with reputable product and service
providers and keep in place the
necessary controls to ensure the
traceability of all supplies (including
avoiding any conduct related to
modern slavery).
3. To achieve cost competitiveness,
we endeavour to buy the highest
possible proportion of our key inputs,
such as fuel and tyres, on as variable
a price basis as possible and to link
costs to underlying commodity
indices where this option exists.
4. We are committed to incorporating
sustainable technological and
innovative solutions, such as using
sea water and renewable power
when economically viable, to
mitigate exposure to potentially
scarce resources.
For more detail see Sustainability
at the Core of Our Purpose on
pages 58-115
Link to strategy
1 2 3
Risk appetite
Medium
Risk owner
• Procurement and contracts
• Operational Comptrollers
• Financial Planning
Risk oversight
• Audit Committee
Behaviour
With attention
Risk rating (relative position)
2024: High (5)
2023: High (3)
MANAGING OUR RISKS – RESPONSE/MITIGATION TO OUR RISKS
5
Global macroeconomic developments
(energy and supply chain disruptions, inflation and cost)
129
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Strategic Report Governance Financial Statements Additional Information
Risk description
Significant failure or delay in accessing
surface land above our mining
concessions and other lands of interest
is a permanent risk to our strategy
and has a potentially high impact
on our objectives.
The biggest risk is failing to gain full
control of the lands where we explore
or operate.
Possible barriers to access to land include:
• Increasing landowner expectations.
• Refusal to comply with the terms
of previous land acquisitions
and conditions regarding local
communities.
• Influence of multiple special interests
in land negotiations.
• Conflicts regarding land boundaries,
and the subsequent resolution
process.
• Succession problems among
landowners resulting in a lack of
clarity about the legal right to own
and sell land.
• Risk of litigation, such as increased
activism by agrarian communities
and/or judicial authorities.
• Presence of indigenous communities
in proximity to lands of interest, where
prior and informed consultation and
consent of such communities are
required.
Factors contributing to risk
The new mining law complicates efforts
to regularise access to land and the
procedures for obtaining new permits.
It is becoming increasingly difficult to
negotiate land prices, with landowners
demanding more money and benefits
for access to land.
Social insecurity prevailing in the
regions where our mining interests are
located may not allow the necessary
work to be carried out to demonstrate
the minimum investments required by
law, leading to the possible cancellation
of the concession.
The Federal Government continues
its policy of not granting new mining
concessions.
Controls, mitigating
actions and outlook
1. We undertake meticulous analysis
of exploration objectives and
construction project designs to
minimise land requirements.
2. Initiatives undertaken to secure
access to land in areas of strategic
interest or value include:
• Judicious use of lease or occupation
contracts with purchase options,
in compliance with legal and
regulatory requirements.
• Early participation of our
community relations teams during
the negotiation and acquisition of
socially challenging objectives.
• Strategic use of our social
investment projects to build trust.
• Close collaboration with our
land negotiation teams, which
include specialists hired directly by
Fresnillo and provided by Peñoles
as part of the service agreement.
3. We perform ongoing reviews of the
legal status of our land rights, we
identify certain areas of opportunity
and continue to implement measures
to manage this risk on a case-by-
case basis. Such measures include,
wherever possible, negotiations with
agricultural communities for the
direct purchase of land.
4. We use mechanisms provided for
in agricultural law and use other
legal mechanisms under mining
legislation that provide greater
protection for land occupation.
5. Negotiate carefully with the
government on concessions with
geological mining interest that have
already been granted.
Link to strategy
1 2 3
Risk appetite
Low
Risk owner
• Legal
• Community Relations
Risk oversight
• Audit Committee
Behaviour
Increasing
Risk rating (relative position)
2024: High (6)
2023: Medium (10)
6
Access to land
(full access to plots of land)
130
Fresnillo plc Annual Report and Accounts 2024
Risk description
Our highly skilled unionised workforce
and experienced management team
are critical to sustaining our current
operations, executing development
projects and achieving long-term
growth without major disruption.
We are committed to safety, non-
discrimination, diversity and inclusion,
and compliance with Mexico’s strict
labour regulations.
The Labour Reform allows the existence
of several Unions within a company
and gives freedom of choice to the
employee. This has led to a complex,
rarefied work environment at the
Fresnillo mine, with violent clashes
between the Union and a group of
workers seeking to register a new
independent Union. The risk is that the
fighting will continue and worsen and
eventually the mine’s workforce will be
reduced. There is also a risk that this
conflict could spread to other mines.
There is a risk of strikes or illegal work
stoppages at some of our mining units
by workers who do not agree with profit
sharing or some of the benefits, mainly
at the La Herradura mine.
Factors contributing to risk
Adverse coalitions that could disrupt
operations illegally, mainly at the
Herradura mine. We had a minor
disruption in May 2023.
We run the risk of an outside Union
seeking to destabilise the current Union.
We could also be adversely affected by
National Union politics.
Controls, mitigating
actions and outlook
1. We remain attentive to any
developments in labour or Trade
Union issues. Our executive
leadership and the Executive
Committee recognise the
importance of Trade Union relations
and follow any developments with
interest. Our strategy is to integrate
unionised personnel into each team
in the business unit. We achieve this
by clearly assigning responsibilities
and through programmes aimed
at maintaining close relations with
Trade Unions in mines and at the
national level.
2. There are long-term labour
agreements (usually three years)
in place with all the Unions at
our operations, helping to ensure
labour stability.
3. We seek to identify and address
labour issues that may arise
throughout the period covered
by the labour agreements and to
anticipate any potential issues in
good time. When appropriate, we
hire experienced legal advisors to
support us on labour issues.
4. We have increased communication
with Trade Union leaders in mining
units to monitor the working
environment and conducted a
review of the contractual benefits
for Union members in our mines.
5. We maintain constructive
relationships with our employees
and their Unions through regular
communication and consultation.
We are proactive in our interactions
with unions and their representatives
at various levels of the organisation
are regularly involved in discussions
about:
• The future of the workforce;
• The economic situation facing
the industry;
• Our production results.
6. We encourage Union participation
in our security initiatives and other
operational improvements. These
initiatives include the Security
Guardians programmes, certification
partnerships, integration of high
productivity equipment, and
family activities.
For more details see Caring for
our People on pages 69-79
Link to strategy
2 3
Risk appetite
Low
Risk owner
• Human Resources
• Legal
Risk oversight
• Audit Committee
• People & Remuneration Committee
Behaviour
Increasing
Risk rating (relative position)
2024: High (7)
2023: Medium (9)
MANAGING OUR RISKS – RESPONSE/MITIGATION TO OUR RISKS
7
Union relations
(labour relations)
131
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Strategic Report Governance Financial Statements Additional Information
Risk description
Our ability to achieve our operating
strategy depends on attracting,
developing and retaining a wide range
of skilled and experienced internal and
external people.
Managing talent and maintaining
a high-quality workforce in a rapidly
changing technological and cultural
environment is a key priority for us. Any
failure in this regard could negatively
impact current operating performance
and future growth prospects.
We face multiple risks in the processes
of recruiting, hiring, training and
retaining talented, skilled and
experienced people:
• Sourcing skilled labour in the mining
sector has become a major risk,
and our industry requires more and
more people who are trained and
experienced in mining processes.
• Digital and technological innovation
has the potential to generate
substantial improvements in the
Company’s productivity, safety and
environmental management. There
is a risk that our workforce will be
unable to transform to the extent
necessary or will be resistant to
change and unwilling to accept the
impact of automation or to acquire
new technological skills.
• The lack of reliable contractors with
sufficient infrastructure, machinery,
performance history and trained
personnel is also a risk that could
affect our ability to develop and build
mine sites.
In addition, contractual terms prohibit
us from hiring specialised personnel
from business partners or contractors.
Factors contributing to risk
The shortage of skilled and experienced
technical labour in the mining industry
is leading to increased competition in
the regions where we operate. In certain
regions where we operate, there are not
enough candidates with the necessary
skills to operate mining equipment.
We have business units far from cities
and with limited and complicated
access, making it difficult to find skilled
labour in those regions.
Changing societal expectations are
putting pressure on our corporate and
employer brand: who we are and what
we stand for.
Controls, mitigating
actions and outlook
1. We enhance the talent of our
employees through training and
career development, invest in
initiatives to broaden the talent pool
and are committed to our diversity
and inclusion policy. Through these
actions we aim to increase employee
retention, as well as the number
of women, people with disabilities
and employees with international
experience in the workplace.
2. Our employee performance
management system is designed
to attract and retain key employees
by creating appropriate reward
and remuneration structures and
providing personal development
opportunities. We have a talent
management system in place
to identify and develop internal
candidates for key management
positions, as well as to identify
suitable external candidates
where appropriate.
3. We aim for continuous improvement,
driven by opportunities for training,
development and personal growth;
in short, we focus on fair recruitment,
fair pay and benefits and gender
equality.
4. Our goal for retaining talent is to
be an employer of choice, and we
recognise that, to be a profitable and
sustainable business, we need to
create value for our employees and
their families. We do this by providing
a healthy, safe, productive and team-
oriented work environment that not
only encourages our people to reach
their potential, but also supports
process improvement.
5. A renewed approach to talent
management was implemented
in the human resources areas
of the business units, ensuring
that all our employees have a
meaningful conversation about
their performance, motivations
and experience, as well as a quality
development plan that enables
them to acquire the skills and
experience they need for the future.
6. Employees who live far away from
the business units are permanently
supported with transportation,
medical care for them and their
families, health and nutrition
programmes with access to high
quality food and support with
clothing and accessories to protect
them from weather changes.
7. A global graduate programme and
strategic partnerships are in place
to establish mutually beneficial
relationships with universities
and schools specialising in mining
and geology.
8. Local internship training programmes
and other future skills development
partnerships are in place.
9. We have continued our performance
appraisal process, reinforcing
formal feedback. We promote
certification of key technical
competencies for operational staff
and have implemented a leadership
and management competency
development programme for
required positions. We develop
our high-potential middle
managers through the Leaders
with Vision programme.
10. Ongoing training workshops are
held for staff by business partners
and contractors, especially in new
technologies and best practices in
the mining industry, for example
with Caterpillar, Matco, Epiroc,
Robbins, Sanvik, etc.
For more details see Caring for
our People on pages 69-79
Link to strategy
41 2 3
Risk appetite
Medium
Risk owner
• Human Resources
Risk oversight
• Audit Committee
• People & Remuneration Committee
Behaviour
Stable
Risk rating (relative position)
2024: High (8)
2023: High (5)
8
Human resources
(attract and retain requisite skilled people/talent crisis)
132
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Risk description
The pursuit of advanced exploration
and project development opportunities
is essential to achieving our strategic
goals. However, this carries certain risks:
• Current or new government
regulations that obstruct, limit
or restrict the granting of mining
concessions; delay or failure to obtain
permits, licences, authorisations, etc.
• Economic viability: the impact
of the cost of capital to develop
and maintain the mine; future
metals prices; and operating costs
throughout the mine’s life cycle.
• Access to land: a significant failure or
delay in land acquisition has a very
high impact on our projects.
• Delivery risk: Projects can exceed the
budget in terms of cost and time;
they cannot be built according to
the required specifications or there
may be a delay during construction;
and major mining teams cannot be
delivered on time.
• Other uncertainties such as:
fluctuations in the degree of ore and
recovery; unforeseen complexities
in the mining process; poor quality
of the ore; unexpected presence
of groundwater or lack of water;
lack of community support; and
inability or difficulty in obtaining and
maintaining the required building
and operating permits.
The following risks relate specifically to
prospective projects in Chile and Peru:
• Government instability, especially
in Peru.
• Potential actions by governments
(political, legal, regulatory and tax).
• Security.
• Licence to operate (community
relations).
• Access to water (national regulation
and geographic complications).
• Environmental compliance.
• Competition for land (threat from
green power generation companies,
for example thermosolar).
• Informal mining.
• Industrial safety compliance
(National Geological and Mining
Service SERNAGEOMIN).
• Increased mining taxes and fees.
Factors contributing to risk
Prohibition of new open-pit mining
concessions.
Uncontrolled increases in the costs
of critical inputs directly affect the
progress of projects and affect the
planning of each project.
In some regions there are no specialised
contractors or contractors with the
technology to develop the projects.
Contractor productivity may be lower
than anticipated, causing delays in
the programme.
Increase in the number of high
impact crimes (homicide, kidnapping,
extortion) in the regions of the projects.
We have identified the following threats
to project development:
• Insufficient resources for project
execution.
• Changes in operational priorities
that can affect projects.
• Inadequate management structure
for project supervision.
• Delays in obtaining necessary permits
for construction and operation.
• Lengthy procedures for land
acquisition, electricity supply
and water.
Controls, mitigating
actions and outlook
1. Our investment assessment process
determines how best to manage
available capital using the following
criteria:
• Technical: we evaluate and
confirm the resource estimate;
conduct metallurgical research
of mineral bodies to optimise the
recovery of economic elements;
calculate and determine the
investment required for the overall
infrastructure (including roads,
energy, water, general services,
housing) and the infrastructure
required for the mine and plant.
• Financial: we analyse the risk
in relation to the return on the
proposed capital investments;
set the expected Internal Rates
of Return (IRR) per project as
thresholds for approving the
allocation of capital based on
the current value of expected
cash flows of invested capital;
and perform stochastic and
probabilistic analyses.
• Qualitative: we consider the
alignment of investment with our
Strategic Plan and business model;
identify synergies with other
investments and operating assets;
and consider the implications for
safety and the environment, the
safety of facilities, people, resources
and community relations.
2. The management of our projects is
based on the Project Management
Body of Knowledge (PMBOK)
standard of the Institute of Project
Management (PMI). It allows us to
closely monitor project controls to
ensure the delivery of approved
projects on time, within budget
and in accordance with defined
specifications. The executive
management team and the
Board of Directors are regularly
updated on progress.
3. Each advanced exploration project
and major capital development
project has a risk record containing
the project-specific identified and
assessed risks.
See Review of operations on
pages 46-50
Link to strategy
2
Risk appetite
Medium
Risk owner
• Projects
• Legal
• Community Relations
• Access to Land Department
Risk oversight
• Audit Committee
• The Investment Committee
Behaviour
With attention
Risk rating (relative position)
2024: High (9)
2023: High (7)
MANAGING OUR RISKS – RESPONSE/MITIGATION TO OUR RISKS
9
Projects
(performance risk)
133
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Strategic Report Governance Financial Statements Additional Information
Risk description
The mining industry is inherently
dangerous. Major hazards across our
operations and projects include process
safety, underground mining, surface
mining and tailings and water storage.
Our workforce faces risks such as
fire, explosion, electrocution and
carbon monoxide poisoning, as well
as risks specific to each mine site and
development project. These include
rockfalls caused by geological conditions,
cyanide contamination, explosion,
becoming trapped, electrocution, insect
bites, falls, heavy or light equipment
collisions involving machinery or
personnel and accidents occurring
while personnel are being transported.
These risks have the potential to cause
death, illness or injury, damage to
the environment, and disruption to
communities. A poor safety record or
serious accidents could have a long-
term impact on morale and on our
reputation and productivity.
We are saddened to report that two
fatalities were recorded during 2024,
and that we experienced increases in
accidents related to:
• Rockfall/terrain failure.
• Loss of vehicle/equipment control.
• Team-vehicle-person interaction.
• Accident in transport of staff.
• Contact with electric power.
• Becoming trapped.
• Contact with hazardous substances.
Factors contributing to risk
Frequent transportation of our people
to remote business units is an ongoing
feature of our operations. In many cases,
these units have poor accessibility
by road.
Failure to comply with safety
programmes, measures and audits
or with the findings of inspections.
High turnover of workforce, including
contractors.
Controls, mitigating
actions and outlook
1. Nothing is more important than
the safety and wellbeing of our
employees, contractors and
communities. Our objective is first
and foremost to have zero fatalities.
We believe all incidents and injuries
are preventable, so our focus is
on identifying, managing and,
where possible, eliminating risks.
We constantly seek to improve our
safety and health risk management
procedures, with focus on the
early identification of risks and the
prevention of fatalities.
2. We are raising awareness of the
risks generated by our operational
activities. This includes quarterly
meetings on the main safety risks
at each mining unit, projects and
exploration sites, overseen by the
Executive Committee.
For more details see Caring for
our People on pages 69-79
3. Continuing the implementation of
the ‘I Care, We Care’ programme
in all our operations, including
strengthening the programme’s five
lines of action.
4. We are reinforcing the four pillars
of our Safety and Occupational
Health strategy:
a. Safety and Health Risk
Management: workers at all
levels are able to identify hazards
and controls, so that all jobs are
carried out safely.
b. Leadership: all employees and
contractors are health and safety
leaders and we demonstrate
our commitment through each
individual’s responsible behaviour.
c. Contractor management: our
contractors are an integral part
of our safety team and culture,
and we work together to improve.
d. Reporting, research and learning
from our accidents: we share
good practices and learn from
our mistakes.
5. We have implemented technical
and safety standards and procedures
for slope geotechnical, tailings
management, underground mining
and process safety.
6. We are advancing the automation
of hazardous processes.
7. The critical controls that reduce risk
in the business units are periodically
updated and improved through
inspections and performance
evaluations, which are carried out
by the safety team, external auditors
such as ‘Real Safety’ and even by
government authorities such as the
Ministry of Labour and PROFEPA.
For more details see Caring for
our people on pages 69-79
Link to strategy
43
Risk appetite
Low
Risk owner
• Safety
• Human Resources
Risk oversight
• HSECR Committee
Behaviour
Stable
Risk rating (relative position)
2024: High (10)
2023: High (8)
10
Safety
(incidents due to unsafe acts or conditions could lead to injuries
or fatalities)
134
Fresnillo plc Annual Report and Accounts 2024
Risk description
At both a local and global level,
the mining industry’s stakeholders
have high expectations relating to
social and environmental performance.
These expectations go beyond the
responsible management of negative
impacts to include continuous
engagement and contribution
to stakeholder development.
Failure to adequately address these
expectations increases the risk of
opposition to mining projects and
operations. Negative sentiment
towards mining or specifically towards
Fresnillo plc could have an impact on
our reputation and acceptability in the
regions where we have a presence.
We monitor the following risks:
• Negative perception of the
Company’s social and environmental
performance.
• Failure to identify and address
legitimate concerns and expectations
of the community and of society
at large.
• Insufficient or ineffective
engagement and communication.
• Failure to contribute purposefully to
community development.
Factors contributing to risk
Higher expectations and scrutiny of
social and environmental performance.
Rising expectations on shared benefits
regarding land agreements.
Perceived competition on access to
natural resources, notably water.
Significant reduction in government
spending on community infrastructure,
development programmes and services.
Anti-mining activism fuelling opposition
to mining.
Community concerns about insecurity,
access to water and the environmental
impact of the operations of the business
units.
Controls, mitigating
actions and outlook
1. We hold regular meetings with
key community stakeholders to
communicate about the Company,
and its social and environmental
practices.
2. An internet listening module was
implemented, making it possible
to capture concerns from the
community which can remain
anonymous. The module has
expanded our reach into areas
where technology makes it easier
for people to raise matters about
the Company. It also enables us to
provide the same care as we do with
cases presented in-person.
3. We closely monitor threat and social
opportunities associated with our
operations through constant and
direct contact with the leaders of
each business unit, social studies,
and media monitoring complaints
and claims process.
4. Governance over the complaints
process is improving every year.
Complaints are received, assessed
and managed, involving line
managers, while dissatisfied
stakeholders are kept informed
of the status of each case, until
satisfactory closure agreements
are reached.
5. We deploy social programmes
in the communities near the
business units, such as support for
schools, clinics and health, supply
of medicines, nutrition and food,
maintenance of roads and bridges,
water supply, etc.
For more details see Partnering with
our communities on pages 101-106
Link to strategy
41 2 3
Risk appetite
Medium
Risk owner
• Community Relations
• Human Resources
Risk oversight
• HSECR Committee
Behaviour
Stable
Risk rating (relative position)
2024: Medium (11)
2023: Medium (11)
MANAGING OUR RISKS – RESPONSE/MITIGATION TO OUR RISKS
11
Licence to operate
(community relations)
135
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Strategic Report Governance Financial Statements Additional Information
Risk description
We are highly dependent on the
success of the exploration programme
to meet our strategic value-creation
targets and our long-term production
and reserves goals.
Maintaining a reasonable investment
in exploration, even when metals prices
are low, has been our policy through
the years. While continuous investment
has always been a hallmark of our
exploration strategy, replenishing
exploited reserves and increasing our
total amount of resources could be a
challenge in the future.
The growing level of insecurity, a more
challenging land access scenario,
and delays in obtaining government
permits detailed previously, translates
into a longer timeframe to deliver new
discoveries and improve the category
of resources. In addition, difficulties in
obtaining new mineral concessions
could hamper the exploration in new
target areas.
Factors contributing to risk
In Mexico, the new mining law
establishes that exploration activities
in new concessions will be carried out
only by the Mexican Geological Services
assigned to the Ministry of Economy.
New concessions would be granted
through a bidding process following
exploration orders submitted to
the Service. However, pre-existing
concessions may continue to be
explored by their holders and may be
commercialised upon authorisation
by the federal Ministry of Economy.
Fresnillo plc’s concessions will allow the
company to continue its brownfield and
greenfield exploration programmes,
at least in the medium term. Access to
new concessions will be difficult.
This year, we have seen that the
exploration programme has been
complicated and delayed mainly
for the following reasons:
• Restrictions on new mining
concessions.
• Delays in procedures regarding
access to land.
• Presence of organised crime
(insecurity) in the regions where we
have projects and exploration camps.
• Delays and failures to obtain permits
and licenses from government
authorities.
• Increased exploration costs.
• In Chile, risk factors include lack of
water in the Atacama Desert in the
north and possibility of conflict with
forestry or agricultural interests in the
south, overall higher costs compared
to those in Mexico, seasonal restrictions
to exploration in the High Andes,
scarcity of open grounds for staking,
poor infrastructure in remote zones,
presence of anti-mining communities
or NGOs, and strong competition for
mining claims and staff.
• In Peru, the main risk factors include
the long lead time required to obtain
social permits (emphasising the
need for strong community relations
teams and programs), delays in
obtaining government permits,
poor infrastructure in mountainous
regions, the presence of anti-mining
communities or NGO’s and the
possibility of invasion of illegal miners.
Controls, mitigating
actions and outlook
1. Increasing regional exploration
drilling programmes to intensify
efforts in the districts with
high potential.
2. For local exploration, aggressive
drilling programmes to upgrade
the resources category and convert
inferred resources into reserves.
3. A team of highly trained and
motivated geologists, including
both employees and long-term
contractors.
4. Advisory technical reviews by
international third-party experts
and routine use of up-to-date and
integrated GIS databases, cutting-
edge geophysical and geochemical
techniques, large to small scale
hyperspectral methods, remote
sensing imagery and analytical
software for identifying favourable
regions to be field checked by
the team.
5. Maintain a pipeline of drill-ready
high priority projects.
For more details see Our Strategy
on pages 14-19
Link to strategy
1
Risk appetite
High
Risk owner
• Exploration
• Projects
• Legal
Risk oversight
• The Board
• The Investment Committee
Behaviour
Stable
Risk rating (relative position)
2024: Medium (12)
2023: Medium (12)
12
Exploration
(new ore resources)
136
Fresnillo plc Annual Report and Accounts 2024
Risk description
The mining industry is highly exposed
and sensitive to climate change:
• Societal responses to the transition
to a low-carbon economy include
stricter regulations to reduce
emissions, a transformation of the
global energy system, changes
in behavioural and consumption
choices, and emerging technologies.
• Our operations and projects are
expected to face severe physical
risks from extreme weather events,
such as high temperatures, drought
and extreme rainfall from more
frequent and intense hurricanes in
the Pacific Ocean. These potential
natural disasters can affect the health
and safety of our people, damage
access roads and mine infrastructure,
disrupt operations and affect our
neighbouring communities.
The most significant risk we currently
face relates to compliance with all
provisions and requirements of
international agreements to reduce
pollution and greenhouse gas
emissions and regulatory disclosure
standards in both Mexico and the UK.
In addition, the mining industry is also
expected to face chronic risks in a few
years, such as rising temperatures,
which may increase our demand for
water, or a decrease in annual rainfall,
which is certain to exacerbate water
stress in the regions where we operate.
The former risks may also intensify
competition for access to water
resources, increasing the risks to
the social licence to operate.
Factors contributing to risk
Burning fossil fuels: Adds greenhouse
gases to the atmosphere, which
increases the greenhouse effect
and global warming.
Deforestation in areas where we have
operations and projects: Intentional
logging, which adds greenhouse gases
to the atmosphere.
Increased temperatures in desert areas
where we operate: Can worsen air
quality and have effects on respiratory
and cardiovascular health.
Changes in weather patterns: Can
worsen air quality and cause respiratory
and cardiovascular effects.
Forest fires near units where we
have operations or projects: Generate
smoke and other air pollutants harmful
to health.
Oil and gas extraction: Main source
of CO
2
pollution.
Increasing livestock farming: Cows
and sheep produce large amounts of
methane when they digest their food.
Controls, mitigating
actions and outlook
1. Understanding our exposure on
each asset through assessment
programmes, such as our critical
risk assessment and asset integrity
assurance programme, and climate
change resilience assessments with
support from external consultants
such as PWC, Marsh, Zurich.
2. Having business resilience plans and
emergency response plans, training
and annual exercises to prepare
for a natural disaster, including
established communication plans
and coordination with local, regional
and state agencies.
3. Using the latest generation of
climate analysis (weather forecasts,
climate outlooks, modelling and
disaster projections) to obtain
quantitative information on
short-, medium- and long-term
physical climate risks.
4. Applying protection principles
rather than a compliance-based
approach across our operations.
Foster proactive relationships
with international civil society
organisations, governments and
environmental departments to
support protective legislation.
5. Actively supporting and reporting
on our practices in relation to the
commitments in the International
Council on Mining and Metals
statement on water management.
Link to strategy
41 2 3
Risk appetite
Medium
Risk owner
• ESG Department
• Legal Department
Risk oversight
• HSECR Committee
Behaviour
Stable
Risk rating (relative position)
2024: Medium (13)
2023: Medium (13)
MANAGING OUR RISKS – RESPONSE/MITIGATION TO OUR RISKS
13
Climate change
137
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Strategic Report Governance Financial Statements Additional Information
Risk description
Ensuring the stability of our tailings
storage facilities (TSFs) during their
entire lifecycles is central to our
operations. A failure, collapse or
overtopping of any of our TSFs could
result in fatalities, damage to the
environment, regulatory violations,
reputational damage and disruption
to the quality of life of neighbouring
communities as well as our operations.
Before constructing a dam, we
conduct a series of studies to
confirm the suitability of the area.
These studies include geotechnical,
geological, geophysical, hydrological,
hydrogeological, and seismic analyses.
Before construction begins, the
Ministry of Environment and Natural
Resources (SEMARNAT), through
the Federal Office for Environmental
Protection (PROFEPA), conducts
several assessments.
Most of our operative facilities were
designed and constructed under local
and national controls and standards;
following investigation, re-design, and
construction process over the last 4
years they also comply with Fresnillo’s
new tailings policy and guidelines.
Our understanding of historic facilities’
conditions is not as mature as that
of the operative facilities but is a work
in progress. As such, those facilities
remain on care and maintenance
status (non-operative).
Having permits, licences and
certifications from the government to
be able to operate TSFs is a risk due to
the time involved in these procedures
and the legal complications. Planning
new TSFs with the necessary time and
to international standards is also a
risk, due to the limitations of the land
around our mines and the costs and
time involved in constructing them.
If we don’t manage these in a timely
manner, we run the risk of disrupting
the operation.
Factors contributing to risk
• The climate in recent years has
become harsher in the regions where
we operate, i.e. more severe and
prolonged rainfall, more intense air
that takes away the geomembrane
liners, snowfall, and frost that
complicates the operation, etc.
Controls, mitigating
actions and outlook
1. The Global Industry Standard on
Tailings Management (GISTM) was
published in 2020 and is considered
to be best practice. We understand
the value and importance it brings
to our industry, and we continually
review and assess the impact of
compliance. Taking GISTM into
account, we have updated our risk
assessment methods with a focus
on more detailed risk identification,
failure modes, and controls to avoid
catastrophic failures.
2. We launched a new tailings policy
in 2023, based on the industry’s
best practices, reinforcing our
commitment to the safety
and health of our workforce,
communities, and the environment.
Each year, internal audit and external
auditors specialised in tailings dams
such as Hawcroft Consulting and
‘Knight Piésold Consulting’ check our
compliance with the policy.
3. Catastrophic failures of TSFs are
unacceptable and their potential for
failure is evaluated and addressed
throughout the life of each facility.
We manage our TSFs in a manner
that allows the effectiveness of their
design, operation, and closure to be
monitored at the highest levels of
the Company:
• Our TSFs are constantly
monitored, and all relevant
information is provided to the
authorities, regulating bodies,
and the communities that could
be affected.
• We manage our TSFs using data,
modelling, and construction and
operating methods validated
and recorded by qualified
technical teams and reviewed
by independent international
experts, whose recommendations
we implement to strengthen the
control environment.
• Risk management includes
timely risk identification, control
definition, and verification. Controls
are based on the consequences
of the potential failure of the
tailing’s facilities.
4. In 2024 we continued several
initiatives to align our governance
practices with current best practices:
• Updating the inventory of the
TSFs and validating the data log.
• Reviewing findings of the
Independent Tailings Review
Panel (ITRP) and prioritising
recommendations arising
from inspections.
For more details see Tailings and
Mineral Waste Management
on pages 95-97
External sources of confidence
• Complying with Independent Tailings
Review Panel (ITRP) annual review
program. This panel is comprised
by renowned international experts.
• Periodically we are inspected by the
Independent Tailings Review Panel,
who issue corrective and preventive
recommendations to keep the
tailings dams in good condition.
In 2024, the Independent Tailings
Review Panel visits were made to
all Fresnillo plc tailings dams.
Link to strategy
4
Risk appetite
Low
Risk owner
• TSF’s Department
• Safety & Environmental Department
Risk oversight
• HSECR Committee
• Executive Committee
Behaviour
Stable
Risk rating (relative position)
2024: Medium (14)
2023: Medium (14)
14
Tailings dams
(overflow or collapse of tailings deposits)
138
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Risk description
Environmental incidents are an
inherent risk in our industry. These
incidents include the possible cyanide
spills and dust emissions, any of which
could have a high impact on our people,
communities and businesses. We
seek to achieve operational excellence
to ensure that our employees and
contractors go home safe and
healthy, and that there are no adverse
impacts on the communities and the
environment where we operate.
An operating incident that damages
the environment could affect both our
relationship with local stakeholders and
our reputation, reducing the social value
we generate.
We continue to be alert to the following
risks:
• Cyanide management risk.
• Impact on the environment through
erosion/deforestation/forest loss or
disturbance of biodiversity because
of the operations of the business unit
or project activities.
• An event involving a leak or spill of
cyanide or SO2, which due to its
chemical properties could generate
an event of major consequence on
the premises of the business unit
and/or in the nearby area. Tailings
pipelines leading from the plant to
the storage deposits are where there
is the highest risk of spills, especially
at the Fresnillo and Saucito mines.
Environmental issues directly related to
climate change and tailings storage are
considered in our specific principal risks
Climate Change and Tailings dams.
Factors contributing to risk
Climate change in the regions where
we operate is beginning to increase
the risk of incidents impacting the
environment, mainly due to more
extreme rainfall.
We operate in challenging
environments, including forests and
agricultural areas in Chihuahua and
Durango, and Sonora Desert, where
water scarcity is a key problem.
Disruptions and lack of supply of
critical inputs for the operation.
Failure to address the recommendations
of external audits, especially those
related to the environment.
Controls, mitigating
actions and outlook
1. We work to raise awareness among
employees and contractors,
providing training to promote
operational excellence.
2. The potential environmental impact
of a project is a key consideration
when assessing its viability, and
we encourage the integration of
innovative technology in the project
design to mitigate such impacts.
3. We have an environmental
management system in place. We
have strengthened the regulatory
risk pillar of the environmental
management system, incorporating
monthly updates of environmental
regulations. Furthermore, we now
regularly monitor the Environmental
Authority inspection processes
to assure compliance with our
environmental commitments
and action plans.
4. Each site maintains updated
environmental emergency
preparedness and detailed closure
plans with appropriate financial
provisions to ensure physical and
chemical stability once operations
have ceased.
For more details see Protecting
our Environment on pages 80-100
5. We comply with international
best practices as promoted by the
International Cyanide Management
Institute (ICMI) and the Mexican
standard NOM-155SEMARNAT-2007,
which establishes environmental
requirements for gold and silver
leaching systems.
For more details see Cyanide
Management on page 97
External sources of confidence
Fresnillo and Saucito are ISO 9001
certified; Fresnillo, Saucito, Herradura
and Noche Buena are ISO 14001 and
ISO 45011 certified.
Our Herradura and Noche Buena
leaching operations comply with
the Cyanide Code issued by the
International Cyanide Code Institute
with the respective certification.
Link to strategy
4
Risk appetite
Low
Risk owner
• Safety & Environmental Department
Risk oversight
• HSECR Committee
Behaviour
Stable
Risk rating (relative position)
2023: Medium (15)
2022: Medium (15)
MANAGING OUR RISKS – RESPONSE/MITIGATION TO OUR RISKS
15
Environmental incidents
(cyanide spills and chemical contamination)
139
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Strategic Report Governance Financial Statements Additional Information
2024 LONG-TERM VIABILITY STATEMENT
Based on their assessment of prospects and viability, the Directors confirm that
they have the expectation that the Company will be able to continue in operation
and meet its liabilities as they fall due over the next five years.
In accordance with provision 31 section
4 of the UK Corporate Governance Code
and considering the Group’s current
position and its principal risks for a period
longer than the 12 months required
by the going concern statement,
management prepared a viability
analysis which was assessed by the
Board for approval.
We closely monitor and assess the
impact of key principal and emerging
risks on our long-term prospects
and, where possible, proactively build
response plans into our investment
decisions.
To ensure our long-term resilience, we
continuously stress-test our business
model against the main uncertainties
associated with the principal and
emerging risks with the highest
probability and impact. Measures are
then recommended to prevent the risks
and, where appropriate, mitigate them
in a timely manner.
The Directors reviewed the viability
period and confirmed the suitability
of a five-year period to December 2029.
This period aligns with the mining
industry’s typical planning cycle and
with the Company’s five-year forecast
period normally used to evaluate
liquidity and contingency plans. It allows
us to model capital expenditure and
development programmes planned
during the timeframe and reflects
cash flows generated by the projects
currently under development. Due
to the long business cycles in our
industry, the Directors considered that
a shorter time would be insufficient.
Reporting on the Company’s viability
requires the Directors to consider
those principal risks that could impair
the solvency and liquidity of the
Company. In order to determine those
risks, the Directors robustly assessed
the Group-wide principal risks and
operation-specific risks by undertaking
consultations with executive
management, mine managers and
other personnel across our operations.
These consultations also enabled the
Directors to identify low probability, high
loss scenarios – singular events – with the
potential magnitude to severely impact
the solvency and/or liquidity of Fresnillo.
In assessing the Group’s viability,
the Directors identified that of our
principal risks, the following are the
most important:
• Potential actions by governments,
which could include the withdrawal
of concessions, permits and licences,
particularly the withdrawal of
permits for the storage and handling
of explosives at mining units.
• Security, particularly the theft of
explosives at one of our business
units with high rates of high impact
crime and theft.
• Impact of metals prices, especially
the volatility of gold and silver prices
over a period.
• Union, the possibility of an illegal
work stoppage or disruption of
operations by unionised workers
especially at the La Herradura mine.
• Safety, risk scenarios involving fires,
explosions, severe flooding and
fatalities.
• Climate change, the effects of
winter storms and torrential rains.
• Tailings dams, in particular the
failure, collapse or overtopping
of a tailings dam.
• Environmental incidents, the
possibility of spills of toxic substances
into the environment and as a
risk associated with others that
would have a severe impact, e.g.
tailings dams.
Having determined that none of
the individual risks would in isolation
compromise the Group’s viability, the
Directors went on to group principal
risks into the following severe but
plausible scenarios, in each case
determining the risk proximity (how
soon the risk could occur) and velocity
(the speed with which the impact
of a risk could be felt):
Scenario 1: Impact of metals prices
Our model assumes that prices for
gold and silver in 2025 fall to US$2,500
per oz and US$29 per oz respectively.
We further assume that precious
metals prices remain at a low level for
the following four years of the viability
period, varying between US$2,500
– US$1,995 per gold oz. and US$29
– US$25.3 per silver oz. So, if the risk
materialises that gold and silver prices
fall to the level we stress, we could see an
impact on the Company’s operations.
To create an impartial projection for a
future low metals prices environment,
the Directors used an average of the
three lowest forecasts for each year of
the assessment, based on consensus
estimates published by institutional
financial analysts. This environment
was deemed to be the most significant
risk, and pervasive across the Company.
(Principal risk)
Scenario 2: Bench collapse
at an open pit mine
A landslide occurs covering the lower
pit of La Herradura mine. Due to
the unexpected nature of the event,
fatalities occur. Production is gradually
ramped back up and re-established to
full capacity. (Singular event)
Scenario 3: Tailings deposit
breach at a mine
A tailings deposit collapses and tailings
are released into the surrounding area,
causing environmental damage. A fund
is created by the Company to be used
to remediate and compensate for any
damage caused. The investigation into
the causes of the event is drawn out
and further time is required before all
environmental permits are reinstated.
As a result, the mine remains closed
throughout the viability assessment
period. (Principal risk.)
Scenario 4: Flooding at a mine
A failure occurs in the rock mass
of the Saucito mine that contains
excess water, which causes a strong
entry of water into the mine above
the pumping capacity, thus stopping
production in one of the main areas.
This situation causes the loss of permits,
additional costs and expenses, and
reputational damage. Recovery to pre-
event production levels begins once
management determines it is safe to
do so. (Singular event.)
Scenario 5: Action by the
Government at a mine
Explosives are stolen in Fresnillo mine,
causing the authorities to suspend the
mine’s explosives permit. Production is
halted while an investigation into the
matter is completed. Once permits have
been restored, production ramps back
up to pre-event levels. (Principal risk.)
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Fresnillo plc Annual Report and Accounts 2024
2024 LONG-TERM VIABILITY STATEMENT CONTINUED
Scenario 6: Fire in a process plant
A major fire breaks out at a main plant
at the San Julián mine, causing multiple
damage to operating equipment,
significant business interruption and
loss of licences and permits, as well
as reputational and environmental
damage. (Singular event.)
Scenario 7: Total power failure
at a mine
Power is totally lost at San Julián
mine due to a severe winter storm in
the Chihuahua and Durango region,
resulting in business interruption,
additional costs, and failure to meet
established objectives and targets.
(Singular event.)
Scenario 8: Strike breaks out
over Union disagreements
Due to differences in profit sharing
and other demands of unionised
employees, a long-lasting strike breaks
out in La Herradura mine, causing
business disruption, additional costs
and expenses, reputational damage
and complications with communities
near the mine. (Principal risk.)
The hypothetical scenarios above are
‘extremely severe’ to create outcomes
that could threaten the viability of
the Group. However, multiple control
measures are in place to prevent
and mitigate any such occurrences
and the likelihood of these scenarios
materialising is very low. In the event
that they did, various options are
available to the Company to maintain
sufficient liquidity to continue in
operation, including the deferral of
capital and/or exploration expenditure. In
addition, in January 2024 the Company
contracted a USD 350 million revolving
credit line for a period of five years.
When quantifying the expected financial
impact and remediation time required
for each of these scenarios, management
performed benchmarking against the
Group’s own experience and against
publicly available information on relevant,
comparable incidents in the mining
industry.
All scenarios were first evaluated using
metals prices based on average analyst
consensus. As no mitigations were
necessary, it was decided that there
was no threat to the viability of the
Company. To create a more stringent
test and further challenge the resilience
of the Group, all scenarios were then
overlaid with scenario one, (low metals
prices) and then re-evaluated.
Even with prices stressed by the impact
of precious metals prices, none of the
scenarios in the viability assessment
turned out to be negative. Of the entire
analysis, the lowest level of cash balance
was identified in scenario three (USD
1,088.9 million), with a positive balance.
This is explained by the fact that in
2024, the Company closed the financial
year with a cash balance of USD 1,297
million, which goes a long way towards
addressing the impacts of these types
of risks should they materialise.
Risk management and internal control
systems are in place throughout the
Group. The internal control systems
enable the Directors to monitor key
variables that could impact the liquidity
and solvency of the Group. We are
confident that management can
sufficiently mitigate any situations
as they might occur.
Our risk mitigation and control
measures include a Crisis Committee,
while the Board would also be briefed
and convened as necessary, in order
to respond to events as they develop.
At each level of our organisation, we
have appointed dedicated personnel
responsible for media management
and engaging with authorities and
other stakeholders, depending on
the magnitude of the crisis.
Based on the results of this robust
analysis and having considered the
established controls for the risks and
the available mitigating actions, the
Directors have a reasonable expectation
that the Group will be able to continue
in operation and meet its liabilities as
they fall due over the five-year period of
their detailed assessment. This longer-
term assessment process supports the
Directors’ statements on both viability,
as set out above, and going concern.
141
Strategic Report Governance Financial Statements Additional Information
www.fresnilloplc.com
GOING CONCERN STATEMENT
The Group’s business activities, together
with the factors likely to affect its
future development, performance
and position are set out above in the
Strategic Report on pages 1-143. The
financial position of the Group, its
cash flows and liquidity position are
described in the Financial Review
on pages 51-57. In addition, Note 31
to the financial statements includes
the Group’s objectives, policies and
processes for managing its capital; its
financial risk management objectives;
details of its financial instruments and
hedging activities; and its exposures to
credit risk and liquidity risk.
In making their assessment of the
Group’s ability to manage its future
cash requirements, the Directors
have considered the Company
and Group budgets and the cash
flow forecasts for the period to
31 December 2026. In addition, they
reviewed a more conservative cash
flow scenario with reduced silver and
gold prices of US$24.9 and US$1,938
respectively throughout this period,
whilst maintaining current budgeted
expenditure while only considering
projects approved by the Executive
Committee. This resulted in our current
cash balances reducing over time
but maintaining sufficient liquidity
throughout the period.
The Directors have further calculated
prices (US$12.8 and US$1,057 for silver
and gold respectively), which should
they prevail to the end of 2026 would
result in cash balances decreasing
to minimal levels by the end of 2026,
without applying mitigations.
Should metals prices remain below
the stressed prices above for an
extended period, Management
have identified specific elements of
capital and exploration expenditures
which could be deferred without
adversely affecting production profiles
throughout the period. On the other
hand, Management could amend
the mining plans to concentrate on
production with a higher margin in
order to accelerate cash generation
without affecting the integrity of the
mine plans. Finally, to maintain a strong
liquidity, in January 2024 Management
acquired a committed revolving credit
facility of US$350M, which could be
used if needed.
After reviewing all of the above
considerations, the Directors have
a reasonable expectation that
Management have sufficient flexibility
in adverse circumstances to maintain
adequate resources to continue in
operational existence for the foreseeable
future The Directors, therefore, continue
to adopt the going concern basis of
accounting in preparing the annual
financial statements.
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Fresnillo plc Annual Report and Accounts 2024
NON-FINANCIAL INFORMATION STATEMENT
This section of the Strategic Report constitutes Fresnillo plc’s Non-Financial Information
Statement, produced to comply with sections 414CA and 414CB of the Companies Act.
The information listed is incorporated by cross-reference.
Non-Financial information Policies and guidelines Outcomes Principal risk KPIs
Environmental
matters
• Sustainability
1
.
• Code of Conduct
2
.
• Recruitment, selection
• and training of
personnel
3
.
• Protecting our
environment section.
See pages 80-100.
• Tailings and
Environmental
incidents.
• Climate change.
• GHG emissions.
• GHG intensity.
• Energy intensity.
• Mining &
metallurgical waste.
• Water withdrawal.
• Water intensity.
Company’s
employees
• Our People section.
See pages 69-72.
• Safety section.
See pages 73-77.
• Our culture section.
See page 64.
• Occupational Health
section. See pages 78-79.
• Security.
• Safety.
• Union relations.
• Labour turnover.
• Training hours.
• Injury frequency rates.
• Cases of Occupational
diseases.
• Details of number of
cases in HR matters.
See page 66.
• Number of disciplinary
actions. See page 107.
Social
matters
• How we report
sustainability,
materiality assessment
section. See page 61.
• Communities section
of the ARA. See pages
101-106.
• Access to land.
• Licence to Operate.
• Economic value
distributed.
• Local employment.
• Community investment.
• Number of community
grievances. See page 102.
Respect for
human rights
• Sustainability
1
.
• Diversity and inclusion
1
.
• Code of Conduct
2
.
• Harassment Prevention
Protocol
3
.
• Diversity & Inclusion.
See page 71.
• Operating labour
Commissions in
each business unit.
See pages 65-66.
• Awareness training
sessions in harassment
prevention. See page 65.
• Human resources. • Percentage of women.
• Diversity in talent
attraction.
• Gender pay gap.
143
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Strategic Report Governance Financial Statements Additional Information
Non-Financial information Policies and guidelines Outcomes Principal risk KPIs
Anti-corruption
and anti-bribery
(ABAC) matters
• Anti-bribery and
corruption
1
.
• Code of Conduct
2
.
• Donations and Political
Contributions
3
.
• Promotional expenses
(including gifts policy)
3
.
• Third party Due
Diligence
3
.
• Government relations
3
.
• Governance activities
during 2024 included
reviews of elements of
the ABAC programme,
which were presented
periodically to the
Board and to the Audit
Committee. See pages
156, 166 and 174.
• During 2024 we continue
performing our third
party due diligence
process (285 analysis,
obtaining 5 high risk,
55 medium risk, 221 low
risk and 4 third parties
non-recommended thus
rejected).
• Corporate Integrity
500 & World’s Most
Ethical Companies by
Ethisphere rankings
See page 65.
• Ethics Culture section
on page 65.
• Potential actions
by the Government
(e.g. taxes, more
stringent regulations).
• Completion rate on
training programme
for employees.
• ABAC policy certification
by third parties.
• Details of number
of cases of alleged
inappropriate
arrangement with
suppliers (some of them
related with alleged
bribes). See page 66.
• Ethical conduct.
See page 65.
1 https://www.fresnilloplc.com/responsibility/our-approach/bribery-and-corruption/
2 https://www.fresnilloplc.com/responsibility/our-approach/code-of-conduct/
3 Public commitment as part of our Code of Conduct, detail on our stance and procedures available in our intranet policy site.
The Strategic Report which is set out on pages 1-143 has been approved by the Board of Directors of Fresnillo plc
Signed on behalf of the Board
Alberto Tiburcio
Director
3 March 2025
144
Fresnillo plc Annual Report and Accounts 2024
THE CHAIRMAN’S LETTER ON GOVERNANCE 2024
ALEJANDRO BAILLÈRES
Reflecting on the past year, I believe that
the Board has made substantial and
meaningful progress in its governance
arrangements in 2024.”
Key governance developments during the year
Appointment of two female
independent Non-Executive
Directors bringing the
percentage of female
directors up to 41%
Appointment of the
Board’s first female Senior
Independent Director
Three-day Working
Meeting and Board mine
visit held in July 2024
Expansion of the Executive
Committee to include
the new role of VP
of Business Development
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Strategic Report Governance Financial Statements Additional Information
Dear shareholder,
It is again my pleasure to introduce the Governance section of
our Annual Report. Despite 2024 being a year of uncertainty
both globally and within Mexico, I believe that we, as a Board,
have nevertheless taken some significant actions to continue
improving the effectiveness of our governance arrangements.
This is best illustrated by reference to the themes that the
Board discussed following our externally-facilitated Board
review in 2023: Rebalancing Focus; Managing Succession;
and Reconnecting.
Rebalancing Focus
Over the past few years, a consistent theme from the Board’s
annual effectiveness reviews has been a desire amongst
Directors that we should spend more time engaging with
Fresnillo’s business environment and understanding the
strategic drivers needed to respond to it. Three years ago, we
initiated a Working Meeting to be held each July (in addition
and separate to our usual July Board meeting) to provide
an opportunity to explore key strategic issues. In 2024, in
response to Directors’ further feedback in 2023, the Working
Meeting was extended to take place over a three-day period,
including a full Board visit to our Juanicipio and Saucito
mines, meetings with management and members of the
workforce, and a series of strategy-related presentations and
discussions. Extending the length of the Working Meeting in
this way enabled us to discuss a much broader range of issues
than our usual Board meetings allow.
Further information about the Working Meeting this year
is set out on page 157; however, it is clear from the feedback
received during the 2024 Board effectiveness review that the
new format for the Working Meeting was much appreciated
by Board colleagues. We propose to hold another similar
session in July 2025.
Managing Succession
In 2024, the Nominations Committee concluded a Board
succession process that had been under way for some time.
Bárbara Garza Lagüera, who had served on the Board as an
Independent Non-Executive Director (NED) for more than
nine years, and Juan Bordes, who had served as a Non-
Independent NED since 2008, both retired from the Board at
the 2024 Annual General Meeting (AGM). At the same time,
Charlie Jacobs, who had also served as an Independent NED
for nine years, was re-designated as a Non-Independent NED.
His responsibilities as Senior Independent Director (SID) were
assumed by Dame Judith Macgregor who has served on
the Board for more than seven years and is also a valuable
member of the HSECR Committee. We are delighted that
Judith has agreed to take on this role. I am hugely grateful to
Bárbara and Juan for their contributions to the Board – we will
miss their wisdom and insight. At the same time, I am very
pleased that Charlie has agreed to continue to serve on the
Board. We will benefit immensely from his knowledge and
experience in the UK capital markets.
We were delighted to announce the appointment of two
new Independent NEDs, Luz Adriana Ramírez and Rosa
Vázquez, at the 2024 AGM. Both were selected following an
externally-supported recruitment process. This is the first
time that an external agency has assisted the recruitment
process for NEDs which has introduced an additional level
of independence and transparency to the appointments
process. Luz Adriana and Rosa bring significant senior
executive experience and technical knowledge to the Board
and we are already benefitting from their respective inputs.
Of particular significance is that we now have a female SID
and the majority of our Independent NEDs are now female.
Alberto Tiburcio, who chairs our Audit Committee and
Remuneration Committee, will reach the ninth anniversary
of his appointment to the Board in May 2025. The Board
and Nominations Committee have therefore already begun
planning for the next stage of our Board succession process. We
recognise the need for orderly and prudent Board succession
at a time when both the Audit and Remuneration Committees
respectively need to plan for an external audit tender process
and to renew the Directors Remuneration Policy in 2026.
As a consequence, to facilitate this, we have decided to ask
shareholders to approve the extension of Alberto’s appointment
for just a further year at the 2025 AGM, notwithstanding
that this will take Alberto’s tenure as a Director beyond nine
years. In addition, we have begun to engage with our larger
independent shareholders about the rationale for this proposal.
Reconnecting
As I have mentioned already, the Working Meeting in July
provided a significant opportunity for the Board members
to not only meet with each other, and particularly with our
two new Board members, but also to engage with the wider
management team and representatives from across the
workforce and some of the communities in which we are
located. The Working Meeting has therefore enabled the
development of better inter-personal relationships which
will benefit the Board when it holds its meetings online.
In May, the 2024 Annual General Meeting was again held in
person in London. The AGM provides a useful opportunity
to engage with shareholders on a range of issues, both
beforehand and during the meeting itself. One question
raised during the AGM process was the extent to which the
independent members of the Fresnillo Board are applying
independent judgement and challenge in its discussions
with management. This is an important question and I am
pleased that Judith Macgregor, our SID, has provided her
perspectives on it on page 159 of this Governance Report.
Looking forward
Reflecting on the past year, I believe that the Board has
made substantial and meaningful progress in its governance
arrangements in 2024. We will seek to build on that in 2025.
I have every respect for my Board colleagues and therefore
would like to conclude this letter by thanking them for their
continuing support both to me and to the Executive Team,
as well as for their valuable contributions to the work of the
Board and its Committees during the year.
I also wish to express my sincere thanks to our shareholders
for their continued support as well as to all Fresnillo plc’s
personnel for their hard work and contributions to our
collective efforts.
Yours faithfully,
Mr Alejandro Baillères
Chairman of the Board
3 March 2025
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GOVERNANCE AT A GLANCE
Governance framework
BOARD COMMITTEES
The Board relies on the advice and recommendations provided by the Board Committees. Committee members
have the requisite skills and experience to enable their committee to focus on specific topics on behalf of the Board.
Each committee operates within clearly defined terms of references and reports regularly to the Board.
HONOUR COMMISSION
The Honour Commission consists of the Chief Executive Officer, the Chief Financial Officer, the Chief Operating Officer North,
the Chief Operating Officer Central, the Compliance Officer, the Vice President of Exploration and the General Counsel.
The Honour Commission is responsible for ensuring that ethical business standards within the Group are maintained,
principally through its role in reviewing and determining the actions to be taken in response to all matters raised through
the Whistleblowing Hotline.
THE BOARD
The main role of the Board is to set the corporate values which underpin the culture by which the Group continues
to operate. The Board is responsible for the supervision of the management of the Group’s activities including the
implementation of the Group’s long-term plans and commercial strategy.
The composition of the Board is structured to ensure that no one individual can dominate the decision-making process
of the Board.
The Board is led by the Chairman. The Company Secretary, working alongside the Chairman and Management, ensures
that the Board receives timely and accurate information. The advice and services of the Company Secretary (whose
appointment and removal are matters reserved for the Board) are also available to the Directors. The Board also regularly
receives advice on UK corporate governance and legal developments from its UK legal and corporate governance advisors.
The Non-Independent Non-Executive Directors of the Board maintain regular contact with the Executive Committee to
support and/or challenge as appropriate. Further oversight then comes from the Board as a whole, including the Independent
Non-Executive Directors.
The respective responsibilities of the Chairman, Chief Executive Officer and the Senior Independent Director are set down
in a written statement (which may be found in the Terms of Reference section of the Company’s website).
For further information on the activities of the Board during the year please see pages 154-155
NOMINATIONS
COMMITTEE
Chair: Alejandro Baillères
The Nominations
Committee makes
recommendations
on the structure, size
and composition of
the Board and its
Committees. This
includes succession
planning for Directors
and other senior
executives.
AUDIT COMMITTEE
Chair: Alberto Tiburcio
The Audit Committee
is responsible for
overseeing all financial
reporting, external
and internal audits,
whistleblowing, related-
party transactions, as
well as risk and internal
control matters.
HEALTH, SAFETY,
ENVIRONMENT
AND COMMUNITY
RELATIONS (HSECR)
COMMITTEE
Chair: Arturo Fernández
The focus of the HSECR
Committee is to monitor
the systems that are
in place to oversee the
Group’s health, safety,
environment and
community relations
activities.
REMUNERATION
COMMITTEE
Chair: Alberto Tiburcio
The Remuneration
Committee is
responsible for
oversight of the
Group’s approach
to remuneration
and setting the key
performance indicators
for the Executive
Committee.
For the Nominations
Committee Report
see pages 161-164
For the Audit
Committee Report
see pages 165-177
For the HSECR
Committee Letter
see pages 58-59
For the Directors’
Remuneration Report
see pages 178-193
THE EXECUTIVE COMMITTEE
Octavio Alvídrez
Chief Executive
Officer
Mario Arreguín
Chief Financial
Officer
Tomás Iturriaga
Chief Operating
Officer Central
Daniel Diez
Chief Operating
Officer North
Marcelo Ramos
Vice President
of Business
Development
Guillermo Gastélum
Vice President
of Exploration
The Executive Committee is responsible for the operational leadership and management of the Group and is headed by
the Chief Executive Officer.
147
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Strategic Report
Governance
Financial Statements
Additional Information
SHAPING OUR BUSINESS
BY IMPLEMENTING
BOTH THE GROUP’S LONG-TERM PLANS AND
STRATEGY
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B N
A
H
R B N
A
H
R
BOARD OF DIRECTORS
NON-INDEPENDENT NON-EXECUTIVE DIRECTORS
ALEJANDRO BAILLÈRES
Chairman
Appointed: 16 April 2012 as Director
and 28 April 2021 as Chairman
CHARLES JACOBS
Non-Executive Director
Appointed: 16 May 2014
ARTURO FERNÁNDEZ
Non-Executive Director
Appointed: 15 April 2008
Current external listed
company directorships
Other key current appointments
Key strengths and experience
All four of the BAL Listed Entities (as defined
below), and Fomento Económico Mexicano
S.A.B. de C.V.
None. All four of the BAL Listed Entities. and Fomento
Económico Mexicano S.A.B. de C.V. (Alternate
Director).
Mr Baillères is President of Grupo BAL and a
member of the board of trustees of Instituto
Tecnológico Autónomo de México. He is
Chairman of the board of directors of Centro
Cultural Manuel Gómez Morin, A.C.
Mr Jacobs is co-head of UK Investment Banking
at JP Morgan.
Mr Fernández is rector and a member of the
board of trustees of Instituto Tecnológico
Autónomo de México and a member of the board
of Grupo Financiero BBVA México S.A. de C.V.
• Insurance and related financial services
in Mexico.
• Broad board-level commercial experience
in Mexico.
As President of Grupo BAL and former Chief
Executive Officer of Grupo Nacional Provincial
(a leading insurance company in Mexico),
Mr Baillères brings knowledge and experience
of Mexican and international business to his role.
• Board and governance experience.
• Rare combination of legal and investment
banking experience with a focus on capital
markets, mining and metals.
Mr Jacobs’ background as the former
Chairman of global law firm Linklaters and head
of their mining sector, along with his previous
Non-Executive Directorships at Investec and
the Shanghai International Financial Advisory
Council, means he brings his 30 years of global
experience in governance, mining, corporate
finance, and legal and regulatory matters to
the boardroom.
• International economics and public policy.
• Directorships of several Mexican companies.
Mr Fernández’ career brings together a solid
academic economics background, many
years’ experience within the Mexican public
policy arena and broad commercial experience
(through board directorships of leading
businesses in a number of sectors in Mexico).
1 Alejandro Baillères and Charles Jacobs were unable to attend a meeting which was convened at short notice to deal with a transactional matter.
6/7
1
2/2 – – 4/4 6/7
1
1/1 – – –
B
N
A
H
R
7/7 – – 4/4 –
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Strategic Report Governance Financial Statements Additional Information
B
N
A
H
R
B
N
A
H
R
FERNANDO RUIZ
Non-Executive Director
Appointed: 15 April 2008
EDUARDO CEPEDA
Non-Executive Director
Appointed: 24 June 2021
Current external listed
company directorships
Other key current appointments
Key strengths and experience
Kimberly Clark de México S.A.B. de C.V. (Alternate
Director), Grupo Mexico S.A.B. de C.V. and two
BAL Listed Entities (Grupo Nacional Provincial
S.A.B., and Grupo Palacio de Hierro S.A.B. de C.V.).
All four of the BAL Listed Entities, Bolsa Mexicana
de Valores, S.A.B. de C.V. and RLH Properties,
S.A.B. de C.V.
Mr Ruiz is a Non-Executive Director of Rassini
S.A.P.I de C.V. ArcelorMittal Mexico S.A. de C.V.
and Cuatro B Materiales de Construcción, S.A.P.I.
de C.V.
Mr Cepeda is a Director of Profuturo Pensiones,
S.A. de C.V., Profuturo Afore, S.A. de C.V., Valores
Mexicanos Casa de Bolsa, S.A. de C.V. and EnerAB,
S. de R.L. de C.V.
• Mexican tax and accounting experience.
• International board and audit committee
experience.
Mr Ruiz was, until 2006, managing partner of
Chevez, Ruiz, Zamarripa y Cia., S.C., tax advisers
and consultants in Mexico and now serves on
the board and audit committees of several
Mexican and international companies. He
has extensive knowledge of Mexican tax and
accounting issues.
• Finance, international markets and banking in
the public and private sectors.
Mr Cepeda was President and Senior Country
Officer for Mexico at JP Morgan from 1993 to
2019 and Chief Executive Officer of JP Morgan
Wealth Management Latin America, also based
in Mexico City from 2009 to 2012. Mr Cepeda has
served as Vice President of the Mexican Bank
Association and has also been a board member
of the Woodrow Wilson International Center for
Scholars and a counsellor in several organisations
related to culture, education and health.
7/7 – – 4/4 – 7/7 – – – –
NOTE Some Directors hold directorships
of some, or all of the following, listed
companies. These are all part of the
consortium known as Grupo BAL (along
with Fresnillo plc, see also page 182:
Industrias Peñoles S.A.B. de C.V., Grupo
Palacio de Hierro S.A.B. de C.V., Grupo
Nacional Provincial S.A.B. and Grupo
Profuturo S.A.B. de C.V. In this section,
these companies are jointly or individually
referred to as the BAL Listed Entities.
Committee
membership key
B
Board
N
Nominations
Committee
A
Audit
Committee
H
Health, Safety, Environment and
Community Relations (HSECR)
Committee
R
Remuneration
Committee
Chairman
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N
A
H
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BOARD OF DIRECTORS
INDEPENDENT NON-EXECUTIVE DIRECTORS
DAME JUDITH MACGREGOR
Senior Independent
Non-Executive Director
Appointed: 23 May 2017
ALBERTO TIBURCIO
Independent
Non-Executive Director
Appointed: 4 May 2016
GEORGINA KESSEL
Independent
Non-Executive Director
Appointed: 30 May 2018
GUADALUPE DE LA VEGA
Independent
Non-Executive Director
Appointed: 29 May 2020
B
N
A
H
R
7/7 – – 4/4 –
B N A H
R
7/7 1/1 5/5 4/4 –7/7 – 5/5 – 4/4
B N
A
H
R
7/7 0/1
2
– – 4/4
Current external listed
company directorships
None. Mr Tiburcio is an Independent
Non-Executive Director of Fomento
Económico Mexicano, S.A.B. de C.V.,
Coca-Cola FEMSA, S.A.B. de C.V.
and two BAL Listed Entities (Grupo
Nacional Provincial S.A.B. and Grupo
Palacio de Hierro S.A.B. de C.V.).
None. Ms de la Vega is a director of Sitios
Latinoamérica, S.A.B. de C.V.
Other key current appointments
Dame Judith is Vice Chair of the
University of Southampton’s
Governing Council, Chair of the
International Strategic Advisory
Group to UK Research and
Innovation, and Member of
the UK Arts and Humanities
Research Council. She continues
being a Board member, and was
previous Chair of the British Tourist
Authority, and Member of the
Board of Trustees of the University
of Cape Town Foundation, and the
Caradon Lecture Trusts.
Mr Tiburcio is an Independent
Non-Executive Director of Grupo
Financiero Scotiabank Inverlat, S.A.
de C.V. (a Mexican subsidiary of The
Bank of Nova Scotia), Profuturo
Afore S.A. de C.V., Transparencia
Mexicana, and a member of the
Board of Trustees of Instituto
Tecnológico Autónomo de México
and a non-independent Board
Member of Tankroom S.A.P.I. de C.V.
Ms Kessel is a Non-Executive
Director of Grupo Financiero
Scotiabank Inverlat, S.A. de C.V.
serving as Chair of the Board
and member of the Risk, Audit,
Human Resources and Corporate
governance Committees. Ms Kessel
is also a member of the Board of
Trustees of Instituto Tecnológico
Autónomo de México.
Ms de la Vega is a Director of a
number of non-listed companies
including Almacenes Distribuidores
de la Frontera, S.A. de C.V., Maximus
Inmobiliaria, S. de R.L. de C.V.,
Citibanamex, Coparmex, and
Altec Purificación, S.A. de C.V.
She is also a Director of ITESM
(Tec de Monterrey) and EISAC.
Key strengths and experience
• International diplomatic
experience.
• Government relations in
resource-rich countries.
• International research
collaboration.
• Wide-ranging managerial and
equity, diversity and inclusion
(EDI) experience.
Dame Judith’s distinguished career
as a British diplomat brings a range
of international experience to her
role. She has worked closely with,
and promoted the interests and
profiles of, UK companies across
a wide range of sectors, including
the mining sector, in a number of
countries including Mexico.
As Senior Independent Director,
Judith is available to shareholders
if they have concerns that have
not been resolved through the
normal channels of Chairman,
Chief Executive Officer, Chief
Financial Officer or Head of
Investor Relations.
• International and Mexican audit
and accountancy and Mexican
tax experience.
• Mexican and international board
and audit committee experience.
Mr Tiburcio was the Chairman and
CEO of Mancera S.C. (the Mexican
firm of Ernst & Young LLP) from
January 2001 until his retirement in
June 2013, having been a partner
for more than 30 years. He has
served as auditor and advisor
to many prestigious Mexican
companies and now sits on the
boards and audit committees of
important Mexican companies and
institutions, thus bringing Mexican
tax and corporate governance
knowledge as well as Mexican and
international audit and accounting
experience to the Board.
• Ministerial experience within
Mexican government.
• Knowledge of Mexican energy
sector.
Ms Kessel has broadened the
Board’s energy and climate
change expertise having served
as Minister of Energy from 2006
to 2011 and chaired the board of
trustees of the Federal Electricity
Commission. She also chaired the
Board of Directors of Petróleos
Mexicanos. She has previously held
senior board positions at Iberdrola,
S.A., Nacional Financiera and the
National Bank of Foreign Trade.
Ms Kessel also served as CEO of
the National Bank of Works and
Public Services. She was previously
adviser to the Chairman of the
Federal Competition Commission
and Head of the Investment Unit at
the Ministry of Finance and Public
Credit of Mexico.
• Broad business leadership
experience within Mexico and
internationally.
• Community and economic
development programme
leadership within Mexico.
Ms de la Vega has held senior
executive roles in a variety of
Mexican businesses spanning a
range of sectors and she has also
been an investor in a number of
those companies. She also serves
on the boards of educational and
cultural institutions and has a strong
commitment to small enterprises
working in health, economic and
community development.
2 Guadalupe de la Vega was unable to attend a meeting of the Nomination Committee meeting that had been scheduled prior to her appointment to
the Committee.
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Strategic Report Governance Financial Statements Additional Information
HÉCTOR RANGEL
Independent
Non-Executive Director
Appointed: 24 June 2021
LUZ ADRIANA RAMÍREZ
Independent
Non-Executive Director
Appointed: 21 May 2024
ROSA VÁZQUEZ
Independent
Non-Executive Director
Appointed: 21 May 2024
B
N
A
H
R
7/7 – 5/5 – –
B
N
A
H
R
2/2 – – – –
B
N
A
H
R
2/2 – – – –
Mr Rangel is an Independent Non-
Executive Director of a BAL Listed
Entity (Grupo Nacional Provincial,
S.A.B.).
Ms Ramírez has served as an
Independent Director on the board
of Directors of Fibra Mty S.A.P.I. de
C.V. (FMTY14) since 2020 and is a
member of its Audit and Corporate
Practices committees.
None.
Current external listed
company directorships
Mr Rangel is the President of BCP
Securities Mexico, a joint venture
with BCP Securities LLC, and
presently serves on the board
of Canadian Utilities Limited
(an ATCO company), Polyforum
Cultural Siqueiros, as well as the
Board of Trustees of the Museum
Franz Mayer. He is an Independent
Non-Executive Director of
Profuturo Afore, S.A. de C.V.
Ms Ramírez is a Non-Executive
Director of Scotiabank Inverlat, S.A.
de C.V. (a subsidiary of The Bank
of Nova Scotia), and is a member
of its Audit and Human Resources
committees.
She is also Vice President for the
Mexican Association of Executive
Women (AMME).
Ms Vázquez is an active member
of the Risk & Audit Committee and
chairs the Sustainability Committee
at Bocar Group. Additionally,
she serves as an independent
Director of Insignia Life, S.A. de C.V.,
where she chairs the Investment
Committee and serves on the
Audit Committee.
Other key current appointments
• Finance, international markets
and banking.
Mr Rangel was the Chief Executive
Officer of Nacional Financiera
S.N.C. and Banco Nacional de
Comercio Exterior and a member
of Mexico’s cabinet under President
Felipe Calderon. Mr Rangel held
various executive positions with
the Grupo Financiero Bancomer
from 1991 until 2008, including
Chairman of the Board. Mr Rangel
has also been President of
the Mexico Bank Association
and President of the Mexican
Business Council. Mr Rangel
served on the Company’s Board
as an Independent Non-Executive
Director from April 2008 to
January 2009.
• Commercial, consumer and
industrial finance and business.
Ms Ramírez served as Managing
Director/Country Manager of VISA
in Mexico for almost 11 years.
Ms Ramírez has served as Vice
President in the Committee
of the Executive Council of
Global Companies (CEEG) for six
consecutive years. She worked
for 18 years at General Electric,
within various businesses in the
industrial, corporate and financial
areas. Ms Ramírez is a dynamic
senior executive who will bring a
successful career across multiple
industries. She is a strong leader,
motivating teams to deliver on
strategy and objectives.
• Environmental, Social,
Governance and Regulatory.
• Sustainability.
• Risk and Audit.
Ms Vázquez 30-year professional
career began with in DuPont.
She also served as President and
Country Manager of The Chemours
Company between 2015 and 2023.
Ms Vázquez was a board
member of the ICC International
Chamber of Commerce, ANIQ
and DuPont-Duwest. She is
a strong people leader with a
track record of developing talent,
motivating teams, and driving
engagement. Ms Vázquez will
bring the experience and technical
knowledge to add value to the
Board, particularly an orientation to
best practices and governance. She
holds a degree in Public Accounting
from Tec de Monterrey (ITESM), a
diploma in Finance from ITAM, as
well as a Board Member Diploma
from IPADE.
Key strengths and experience
Committee
membership key
B
Board
N
Nominations
Committee
A
Audit
Committee
H
Health, Safety,
Environment and
Community Relations
(HSECR) Committee
R
Remuneration
Committee
Chairman
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BOARD OF DIRECTORS
EXECUTIVE COMMITTEE
OCTAVIO ALVÍDREZ
Chief Executive Officer
Appointed: 15 August 2012
MARIO ARREGUÍN
Chief Financial Officer
Appointed: 15 April 2008
GUILLERMO GASTÉLUM
Vice President of Exploration
Appointed: 1 January 2021
Committee membership
Key strengths and experience
Mr Alvídrez is invited to attend Board, Audit
Committee, HSECR Committee and Remuneration
Committee meetings.
Mr Arreguín is invited to attend Board and Audit
Committee meetings.
Mr Gastélum is invited to attend Board meetings.
• Mine management within Mexico.
• UK investor relations.
Mr Alvídrez has extensive experience within the
mining industry having previously held the position
of General Manager of the Madero mine operated
by Peñoles, which is one of Mexico’s largest mines.
Mr Alvídrez joined the Peñoles Group in August 1988,
since then he has held a number of senior operational
and financial positions across Peñoles and Fresnillo.
Mr Alvídrez is a former Director of the Lowell Institute
for Mineral Resources of the University of Arizona.
Mr Alvídrez continues being a Board member, and
was previous President of The Silver Institute. He is
a member of the Mexican Mining Chamber and a
Vice-president of the Advisory Board of the School
of Mines of the University of Guanajuato, Mexico.
• Accountancy and treasury.
• Investment banking.
Mr Arreguín was previously employed by Peñoles
where he held the position of Chief Financial Officer
for 11 years and Group Treasurer for six years prior to
this. Mr Arreguín has a background in investment
banking and project management.
• Senior mining exploration experience in Mexico.
• Geological engineering background.
Mr Gastélum has extensive experience in the
Mexican mining sector, most recently as Deputy
Director of Northern Exploration at Fresnillo. Prior
to this, Mr Gastélum was Regional Manager of
Exploration at Peñoles. He started his career
with Peñoles 34 years ago. He was appointed
as Vice President of Exploration of Peñoles in
2007, having previously served as Subdirector of
Exploration for northern Mexico and Chile and
Regional Exploration Manager.
TOMÁS ITURRIAGA
Chief Operating Officer Central
Appointed: 19 November 2020
DANIEL DIEZ
Chief Operating Officer North
Appointed: 1 December 2023
MARCELO RAMOS
Vice President of Business Development
Appointed: 30 July 2024
Committee membership
Mr Iturriaga is invited to attend Board meetings
and on occasions the Audit Committee and
HSECR Committee.
Mr Diez is invited to attend Board meetings
and on occasions the Audit Committee
and HSECR Committee.
Mr Ramos is invited to attend Board meetings
and on occasions the Audit Committee and
HSECR Committee.
Key strengths and experience
• Senior operational experience in Mexico
and North America.
• Strong mining background.
Mr Iturriaga brings more than 20 years of
professional experience and a significant
track record in the mining sector. In May 2018,
Mr Iturriaga became Director of Health, Safety,
Environment and Community Relations at Peñoles.
Prior to joining Peñoles, Mr Iturriaga held several
positions at Goldcorp, such as General Manager
of Los Filos mine, Chief Operating Officer Mexico
and Regional Vice-President and General Manager
Mexico. He also held the position of Vice President
North American Operations at Capstone Mining
Corp in Canada and Vice President of Operations
and Country Manager for Mexico of Endeavour
Silver Corp.
• Senior operational experience in South America,
Australia and Pakistan.
• Strong mining background.
Mr Diez brings more than 25 years of sector
experience and a broad understanding of the
mining industry, acquired through significant
corporate, operational and project development
roles in Chile, Australia, Pakistan and Brazil. He joined
from Gold Fields where he led its Chile operations
overseeing the development of the Salares Norte
project, a high-grade, gold-silver, open pit deposit
situated in the High Andes of northern Chile.
Previously he held several senior leadership positions
at Yamana Gold. He has also served as Mining Expert
(LATAM) at McKinsey & Company and development
roles at both Xstrata and Antofagasta. He was a
Board member of Minera Alumbrera Ltd. and has
also been Chairman of the Board of Directors of
MARA a (joint venture between Yamana, Glencore
and Newmont) and Minera Alumbrera Limited.
• Senior business development experience in
North and South America, Australia and Asia.
• Strong mining background.
Mr Ramos was appointed in 2024 having previously
held the role of Vice President of Business
Development at Baluarte Minero (part of Peñoles),
to Fresnillo plc in 2024. Mr Ramos has more than
20 years of international metals and mining sector
experience across different commodities such
as gold and base metals, primarily leading M&A
across different regions including North America,
South America, Australia and Asia. Prior to working
in Peñoles, he was Vice President of Business
Development of Oceana Gold Corporation in
Colorado US. Mr Ramos has a Bachelor degree
of Industrial Engineering from the Universidade
Federal do Rio de Janeiro, and an MBA from the
Alliance Manchester Business School.
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Strategic Report Governance Financial Statements Additional Information
UK CORPORATE GOVERNANCE CODE COMPLIANCE STATEMENT
As a commercial company listed on the London Stock
Exchange, Fresnillo is required under the FCA UK Listing
Rules to comply with the Provisions of the Financial Reporting
Council’s UK Corporate Governance Code (the Code – a copy of
which can be found on the website of the Financial Reporting
Council www.frc.org.uk) or otherwise explain its reasons for
non-compliance. The following statement is therefore made
in respect of the year ended 31 December 2024.
For the financial year ended 31 December 2024 the Company
has complied with the provisions of the Code other than as
set out below:
• Code Provision 9 provides that ‘the chair should be
independent on appointment’. Mr Alejandro Baillères,
who was appointed as Chairman on 29 April 2021, was
appointed to the Board by Peñoles pursuant to the
Relationship Agreement (see page 158); thus, at the time
of his appointment, he was not independent. Mr Alejandro
Baillères is beneficially interested in more than 50% of
the share capital of the Company through his interest in
Industrias Peñoles S.A.B. de C.V., the Company’s controlling
shareholder. Having served as Deputy Chairman for more
than three years – and having received guidance for many
years from Mr Alberto Baillères, the previous Chairman –
the Board considers that Mr Alejandro Baillères possesses
significant knowledge and experience of the Company to
carry out the role of the Chairman. The Board considers
that the continued oversight of the Company’s strategic
and operational integrity through its membership of
the Peñoles Group enhances the quality of its corporate
governance rather than detracts from it. Especially as
related-party transactions are reviewed and approved
by Independent Directors and the Audit Committee.
The Board therefore believes that Mr Alejandro Baillères’
involvement is a governance strength since it assures
the Chairman’s alignment with all shareholders’
interests. Given Mr Alejandro Baillères’ experience and
understanding of Mexican business and its regulatory
context, this assessment gains further validity in the
continuing political and social environment in Mexico.
Notwithstanding the expectations of the Code, the Board
values and endorses Mr Alejandro Baillères’ chairmanship
of the Company. The size, composition and balance of skills
on the Board, including its independence and diversity as
well as the existence of a Senior Independent Director and
the adequacy of the succession plans, were assessed as
part of the Board performance evaluation exercise during
the year, and were considered to be highly satisfactory.
• Code Provision 32, which provides that the Board should
establish a Remuneration Committee of Independent
Non-Executive Directors with a minimum membership
of three. In addition, the Chair of the Board can only be
a member if they were independent on appointment.
The Chairman of the Company, Alejandro Baillères, who
was not independent at the time of his appointment, is
a member of the Remuneration Committee. The Board
believes that Mr Alejandro Baillères’ experience and
knowledge of both the Group and the Mexican market –
and his considerable contribution to the Remuneration
Committee’s deliberations – justifies his membership of
the Remuneration Committee. Mr Alejandro Baillères is
not involved in matters concerning his own remuneration.
The other members of the Remuneration Committee are
Alberto Tiburcio and Guadalupe de la Vega, who are both
Independent Non-Executive Directors.
• Code Provision 36, which provides that remuneration
schemes should promote long-term shareholdings by
Executive Directors that support alignment with long-
term shareholder interests. The Company’s approach
to executive remuneration is explained in the Directors’
Remuneration Report on pages 178-188. The Company
does not use share-based forms of remuneration because
it has not been a common form of remuneration in
Mexico. The annual bonus scheme sets targets which are
aligned to the long-term strategic objectives so that these
priorities are embedded within the day-to-day activities of
the Company’s business.
Information about how the Principles of the Code were applied
and compliance, or otherwise, with the Code’s Provisions may
be found in the following sections of this report, which also
provide cross-references to other sections of the report and/
or the Company’s website (www.fresnilloplc.com) where more
detailed descriptions are available.
Board Leadership and Company purpose Page
A
Board effectiveness
160
B
Purpose, values, strategy and culture
156
C
Board decision-making
154-155
D
Engagement with stakeholders
22-28,
156 and
159
E
Oversight of workplace policies and practices
30, 65-
79 and
155-156
Division of responsibilities
F
Role of the Chair
146 and
158
G
Independence
158
H
External commitments and conflicts of interest
158
I
Board resources
146
Composition, succession and evaluation
J
Succession planning and recruitment
163
K
Board composition and skills
148-152,
164
L
Board evaluation
160
Audit, risk and internal control
M
Financial reporting and significant accounting matters
External audit and internal audit – independence and
effectiveness
168-173
N
Fair, balanced and understandable assessment
177
O
Risk management and internal controls
156, 174-
177
Remuneration
P
Remuneration objectives and key responsibilities
178
Q
Remuneration policy
189-193
R
2024 remuneration outcomes:Annual Report on
Remuneration
181-188
The following documents are available on the Company’s
website:
• Schedule of Matters reserved for the Board.
• Statement of Responsibilities of the Chairman, Chief
Executive Officer and Senior Independent Director.
• Terms of Reference: Audit Committee, HSECR Committee,
Nominations Committee and Remuneration Committee.
• Directors’ Remuneration Policy.
Strategic
direction
Purpose, values
and culture
Approval of
business plan
and budget
Monitoring
performance
Risks and
controls
Overseeing
stakeholder
relationships
Key Board
activities
during
2024
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BOARD LEADERSHIP AND COMPANY PURPOSE
Effective board
The Board consists entirely of Non-Executive Directors and
its role is therefore essentially supervisory. The leadership and
management of the Company’s day-to-day operations is the
responsibility of the Executive Committee (comprising the
Chief Executive Officer, Chief Financial Officer, Vice President of
Exploration, the Vice President of Business Development, the
Chief Operating Officer Central and the Chief Operating Officer
North). The Non-Independent Non-executive members of the
Board maintain regular contact with the Executive Committee
to challenge and/or support as appropriate.
This structure creates two levels of oversight for the Executive
Management, initially from the Non-Independent Non-
Executive Directors, and then from the Board as a whole,
including the Independent Non-Executive Directors.
The independent members of the Board engage with
Management through their participation in the Board
Committees, particularly the Audit Committee and the
HSECR Committee. Committee meetings provide most of
the NEDs with an opportunity to discuss operational and
financial matters in detail with management before they are
presented to the Board as a whole. During 2024, examples of
such detailed engagement through the Committees have
included the oversight of financial reporting, risks and internal
controls, reviews of plans to improve the safety culture across
the Group and diversity and inclusion initiatives.
BOARD ACTIVITIES DURING 2024
Strategic direction
The Board supervises the implementation of both the
Group’s long-term plans and commercial strategy. The
strategy itself – to explore, develop, operate and sustain –
has been largely unchanged for many years. Further
information on the strategy is set out in the Strategic
Report on pages 14-19. Regular management reports
to the Board focus on these four strategic priorities.
The challenge for the Board has been less about the
strategy itself and more about the context within which
the Company seeks to pursue its strategy. This was an
important driver for the Working Meeting in July which
enabled Board members to take time to consider in detail
some of the key political, legislative (particularly new mining
laws), technological and competitive factors which impinge
on the Company’s ability to deliver the strategy. For more
information on the Working Meeting see page 157.
The primary focus of the Board in respect of exploration has
been on progress with the Rodeo and Orisyvo developments
and potential acquisition opportunities both within Mexico
and further afield.
On behalf of the Board, the HSECR Committee reviews
many of the factors which enable the Company’s activities
to be sustainable. However, the Board itself monitored
the Company’s sustainability performance in relation to
energy efficiency, tailings dams, water consumption and
climate change.
Approval of business plan and budget
– principal decision
Each year the Board reviews the Business Plan and Budget
for the following year. This is usually at the October Board
meeting with follow-up reviews early in the following year. This
is an important annual decision for the Board which aligns
with the longer-term Strategic Plan and Company Purpose;
it considers site-specific priorities and challenges, sets the
annual production targets and the resources necessary to
achieve them, whilst responsibly managing the impacts of the
Group’s activities. Even though approving the business plan
and budget is a recurring decision year-on-year, the relevant
context and circumstances may change annually; the Board
therefore considers strategies and actions that might affect
stakeholders differently each year. In October 2024, the Board
approved the 2025 Business Plan and Budget.
The Executive Committee presents the Business Plan and
Budget for the Board’s discussion and approval. The discussion
and decision-making of the Board is complemented by a
pro forma template, distributed within the Board papers,
that identifies relevant stakeholder considerations that are
required to be taken into account, with a focus on:
• Generating long-term value for all stakeholders in a
challenging and changing environment characterised
by increasing demands and expectations.
• Prioritising social and environmental performance to
maintain the trust of stakeholders, providing essential
support for our business model.
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The biographies of the Board members and the Executive
Committee, detailed on pages 148-152, outline the wide range
of experience and skills available to the Company. The Board
members continue to ensure that the business model and
strategy, described on pages 12-19 and agreed by the Board,
is delivered for the benefit of the Company’s stakeholders.
The section 172 Statement on page 29 examines how those
different categories of stakeholders are considered.
The factors, as set out in section 172 of the Companies Act 2006, that the Board considered in approving the 2025 Business
Plan and Budget were as follows:
Employees
and Unions
• Enhance critical risk control protocols and safety culture.
• Embed zero-tolerance for fatal accidents and evolution of the ‘I Care, We Care’
programme.
• Continue deploying the Group’s health and safety strategies, including industrial
hygiene and ergonomics, the prevention of psychosocial risks, as well as wellbeing
and mental health programmes.
• Pursue joint strategy with the Union in order to increase safety & labour productivity.
• Promote wellness programmes.
Local communities
• Strengthen community relations and licence to operate.
• Continue community programs aligned to the United Nations Sustainable Development
Goals (SDGs): health and wellbeing, quality education, decent work and economic
growth, water and sanitation, and life of terrestrial ecosystems.
• Promote engagement on the challenges and benefits of the mining industry.
Government
and regulators
• Continue to maintain high standards of corporate governance and adherence
to regulations.
Contractors
and suppliers
• Improve contractor management.
• Align health and safety practices of contractors; reinforce safety protocols.
• Strive and continue to be the first choice for Fresnillo’s contractors and suppliers.
• Ensure the involvement of contractor representatives in accident or incident
investigations.
Minority
shareholders
• Ensure that the dividend payment policy is applied in line with the financial and
operational performance of the Company.
Environmental
considerations
• Maintain continuous implementation of best practices regarding environmental,
hazardous waste and mineral waste management (including tailings storage facilities).
• Continue to explore and implement clean and renewable energy alternatives, as well as
less carbon-intensive fuels, including natural gas.
• Continue making progress on the TCFD (Task Force for Climate Related Financial
Disclosures) objectives.
Customers
• Ensure greater certainty in specifications of concentrate supply to improve accuracy of
assay sampling. Deliver the best product quality for efficient treatment processes.
Monitoring performance
At each Board meeting in 2024, the members of the Executive Committee reported on the quarterly performance of the
business, focusing specifically on operations, exploration, HSECR and culture and ethics. The CEO and Chief Operating
Officers presented updates on mining activities while the VP of Exploration provided updates on exploration initiatives.
The CFO also presented a summary of the quarterly financial performance with particular emphasis on the performance
of the business compared to the previous years and to the approved budget.
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BOARD LEADERSHIP AND COMPANY PURPOSE CONTINUED
The performance of members of the Executive Committee
was assessed by the Remuneration Committee by reference
to previously agreed performance metrics when determining
the bonus awards for the year. Further details of these
outcomes for 2024 are set out in the Directors’ Remuneration
Report on pages 178 to 193.
Purpose, values and culture
The Board sets the corporate values and standards by
which the Group will continue to operate. During the year,
the Board received and reviewed reports on the culture and
ethics initiatives as well as reports on the operation of the
Company’s anti-bribery and corruption, and whistleblowing
procedures. Prior to review by the Board, many of these
reports are considered by the relevant Board Committees,
providing the Independent NEDs who are members of
those Committees with the opportunity to engage with
the executives on specific aspects of the programmes and
outcomes being presented. Particular aspects of culture
discussed with management during the year included
the following:
• Discussion at the HSECR Committee about the role
of safety leadership in setting the right safety culture
for the organisation.
• Reviews at the Audit Committee of the whistleblowing
reports and the Honour Commission’s responses and
actions to ensure that the whistleblowing policy is
operating equitably.
• Reviews at the HSECR Committee of management’s
responses to community grievances and wider
engagement.
In addition, the Working Meeting in July enabled Board
members to see for themselves some of these programmes
and initiatives in operation.
Overseeing stakeholder relationships
The Executive Committee is responsible for the day-to-day
stewardship of all stakeholder relationships and its members
report to the Board on the key metrics and initiatives. The
Board, either directly or through its Committees, primarily
the HSECR Committee, engages or oversees engagement
with the Company’s stakeholders through a number of
governance activities. These are described in more detail,
along with further information about the Company’s
engagement with key stakeholders, in the Stakeholder
section on pages 22-28).
During the year, the Board received reports on community
and employee initiatives. The Working Meeting in July 2024
provided the Directors with an opportunity to see some of
these initiatives for themselves (see below).
Specific stakeholder activity considered by the Board during
the year included updates on:
• The safety performance and ‘I Care, We Care’ programme
(particularly the specific actions taken in response to the
fatalities that occurred during the year).
• Community relations initiatives.
• The Diversity, Equity and Inclusion programme.
• The Prevention of Harassment programme.
• Workforce engagement events.
The Board received quarterly updates at each of its meetings
on management’s engagement with independent investors.
During 2024 these were supplemented by meetings between
Dame Judith Macgregor (as Senior Independent Director)
and some institutional investors (see page 159). The 2024
Annual General Meeting also provided an opportunity for
the Chairman and some Directors to meet with independent
shareholders. Feedback from those discussions has informed
some of the reporting in this Governance Report.
Risk and controls governance
The primary responsibility for the governance of risk and
internal controls lies with the Audit Committee, which
reviewed the detail of the risk matrix and changes proposed by
management during the year along with regular reviews of the
emerging risks. The Chair of the Audit Committee reported to
the Board on the outcome of these discussions. In addition, at
its meetings in March and July 2024, the Board received reports
from management on the process used by management in
assessing the Company’s risk matrix and the proposed changes
in the executives’ assessment of the likelihood and impact of
the Principal Risks and Uncertainties. The Board also reviewed
the changes in the executives’ assessment of the emerging
risks compared to the previous year. These analyses formed the
basis on which the Board reviewed and approved the Principal
Risks and Uncertainties during the year.
On a quarterly basis, the Board reviews reports prepared by
Internal Audit on the internal controls environment (which
were reviewed in more detail by the Audit Committee prior
to being submitted to the Board). During 2024, the Board
accepted the assessments set out in each quarterly report.
At its meeting in February 2025, the Board, through the
Executive Committee and the Audit Committee, reviewed
the effectiveness of the Group’s system of internal controls.
Following this review, the Board considers that the measures
that have been or are planned to be implemented, particularly
those specifically highlighted in this report, complement
Fresnillo’s risk management framework and are appropriate
to the Group’s circumstances. The Board is committed to the
continued development of its internal control regime with a
view to achieving and maintaining best practice levels of risk
management and internal control for international mining
companies listed on the London Stock Exchange.
The Board also received reports from the Audit Committee
on the effectiveness of the Whistleblowing Hotline based
on its half-yearly reviews of the work of the Honour
Commission in assessing its responses to individual cases.
It also received regular updates on the operation of the
Company’s external anti-bribery and corruption plan and
the procedures being developed to further enhance the
Company’s anti-fraud procedures.
The Board has been briefed on and, through the Audit
Committee, has monitored the steps being taken by
Management to meet the new requirements of the UK
Corporate Governance Code on internal controls (further
information is set out in the Audit Committee Report on
pages 175 and 176).
The Board was informed about the cybersecurity incident
suffered by Peñoles during the year which had some indirect
impacts on the Company’s systems. Along with the Audit
Committee, it has received regular reports from Management
on the steps being taken to further enhance the security of
the Company’s data and systems as a result of that incident.
The Audit Committee Report on pages 165-177 provides
further details on the governance of the Company’s risk
management processes and internal controls. Information
about the Company’s Risk Management and Internal
Controls Framework can be found on pages 116-120.
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Governance
Financial Statements
Additional Information
CASE STUDY
JULY 2024 WORKING MEETING
The Board held a Working Meeting in July 2024, with members accompanied by the
members of the Executive Committee. Sessions were held over a three-day period
during which the Company’s wider strategic issues were discussed in detail.
The meeting began with a visit to the Company’s Saucito and
Juanicipio mines where Board members were briefed on the
operation of the mine, including production scope and the
mine infrastructure.
Key topics covered during later sessions included the
Company’s strategic plan, opportunities and challenges
in delivering that plan, as well as mining industry trends.
The Board considered how the Company is responding to
these trends, including how they could evolve in the future.
The meeting also included a session dedicated to the
Company’s risk management framework, enabling Board
members to consider market, technology and mining risks
in a more focused and detailed way.
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BOARD ROLES AND RESPONSIBILITIES
Roles
The composition of the Board is structured to ensure that no
one individual can dominate its decision-making processes.
Chairman’s independence
Mr Alejandro Baillères, was appointed as the Chairman of
the Company in April 2021, when his father Alberto Baillères
stepped down from that role. Mr Alejandro Baillères is
beneficially interested in more than 50% of the share capital of
the Company through his interest in Industrias Peñoles S.A.B.
de C.V., the Company’s controlling shareholder. Mr Alejandro
Baillères is the Chairman of Peñoles and other companies
within the BAL Group, thus at the time of his appointment,
he was not independent. With Peñoles having a significant
stake in the Company, the Board believes that the Chairman’s
non-independence is not a hindrance for his involvement
on the Board but an asset to other shareholders especially
as related-party transactions are reviewed and approved by
Independent Directors and the Audit Committee.
Relationship Agreement
Peñoles has entered into a relationship agreement with
the Company (the ‘Relationship Agreement’) to ensure
that relationships between the Fresnillo Group and the
Peñoles Group are conducted at arm’s length and on normal
commercial terms. Messrs Alejandro Baillères and Arturo
Fernández have been appointed to the Board by Peñoles
pursuant to the Relationship Agreement. Following changes
to the Listing Rules in 2024, the Board has determined that
the Relationship Agreement should continue to provide a
basis for the relationship between the Company and the
Peñoles Group.
The Relationship Agreement provides a constitutional
basis for ensuring that the Company is able to carry on its
business independently from the Peñoles Group and thus
comply with UK Listing Rule 5.3.1. The Independent Non-
Executive Directors annually review the good standing of the
Relationship Agreement (with the most recent review being
undertaken in July 2024). They are satisfied that the Company
has complied with the independence provisions included in
the Relationship Agreement during the financial year ended
31 December 2024. As far as the Company is aware, such
provisions have been complied with during the financial
year ended 31 December 2024 by Peñoles and/or any of
its associates.
The Relationship Agreement continues to provide a
foundation for a transparent governance system, which
ensures that the Company benefits from Mr Alejandro
Baillères’ leadership and experience whilst being able to
demonstrate to other shareholders that the Fresnillo Group
is capable of carrying on its business independently of any
companies with which he is connected.
Directors’ independence
Throughout 2024, the Board considered the following
Directors to be independent: Georgina Kessel, Dame Judith
Macgregor, Héctor Rangel, Alberto Tiburcio and Guadalupe
de la Vega. Charles Jacobs and Bárbara Garza Lagüera were
considered to be independent Directors from the beginning
of the year until the 2024 AGM. Luz Adriana Ramírez and
Rosa Vázquez were appointed as independent Non-Executive
Directors, with effect from the May 2024 AGM.
Further information on the consideration of Directors’
independence can be found on page 163 of the Nominations
Committee Report.
Senior Independent Director
Charles Jacobs stepped down as Senior Independent
Director at the 2024 AGM in May. He was succeeded by
Dame Judith Macgregor.
Time commitment
All Directors pre-clear any proposed appointments to listed
company boards with the Chairman, prior to committing to
them, and such appointments are ratified by the Board at
the next possible meeting. None of the Directors took on any
significant new additional external appointments in the year.
The Non-Executive Directors are required, by their letters
of appointment, to spend 14 days per annum on Company
business. More information on time commitment can be
found in the Nominations Report on page 164.
The other listed company directorships of the Fresnillo plc
Directors are set out on pages 148-151 of this report. The Board
and Committee attendance record of each of the Directors
during 2024 is set out in their biographies on pages 148-151
of this report.
Conflicts of interest
The Group requires that Directors complete a Directors’ list
which sets out details of situations where each Director’s
interest may conflict with those of the Company (situational
conflicts). Each Director re-submitted their Directors’ list as
at 31 December 2024 for the Board to consider and authorise
any new situational conflicts identified in the resubmitted
lists. In addition, at the beginning of each Board meeting,
the Company Secretary reminds the Directors of their duties
under sections 175, 177 and 182 of the Companies Act which
relate to the disclosure of any conflicts of interest prior to
any matter that may be discussed by the Board. Further
information about related-party matters considered by the
Board during the year is set out in the Audit Committee
Report on pages 169 and 176.
Director concerns
Directors have the right to raise concerns at Board meetings
and can ask for those concerns to be recorded in the Board
minutes. The Board has also established a procedure which
enables Directors, in relevant circumstances, to obtain
independent professional advice at the Company’s expense.
Board development and induction
Induction
Following their appointment to the Board at the 2024 AGM,
Luz Adriana Ramírez and Rosa Vázquez received a thorough
induction which included meetings with the Chairman,
other Directors, the CEO and Executive Committee members;
briefings on the Group’s strategy, UK corporate governance,
operations, projects and exploration activities; and visits to
the Group’s operations. The visits to the Group’s operations
primarily took place during the Working Meeting in July 2024.
They were also briefed on their responsibilities and duties
as directors of a UK listed plc by the Company’s external UK
legal counsel.
Continuing personal development
The Working Meeting also provided an opportunity for
the existing Directors to receive strategic, stakeholder and
operational updates on the Company’s business. At the
regular Board meetings, the Directors were briefed on
governance, legal, regulatory and market developments
that are relevant to Directors of UK-listed companies.
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Financial Statements
Additional Information
What do you see as the key responsibilities
of the SID?
I see my main duty as supporting the role and work of
the independent members on the Fresnillo Board. In this
capacity, I provide a channel of communication (if required)
with the Chairman and the senior executives, helping to
ensure that any concerns or uncertainties are understood
and addressed. I also see an important aspect of my role as
being available for investors if there are corporate questions
or concerns that I can usefully discuss with them.
Since being appointed in May, what activities
related to the role have you been engaged in?
Since the AGM, I have been actively in contact with my
fellow independent Board members to consider the
performance of the Chairman and our interaction with
the Executive Committee members. During the second
half of 2024, I also met with investors to see if they would
like to raise any questions about corporate governance
and performance.
In what ways do the independent directors
challenge the performance of the executives,
both within and without Board and committee
meetings?
In many ways! Primarily through our regular Board
meetings and the three-day working meeting in July,
which included visits to Fresnillo mines and having
discussions with external stakeholders and advisers. This
year, in particular, we have been pressing the executives
on the growth trajectory, especially in the older mines.
We have also challenged them hard on their cost
management and efficiency plans. One clear result of
this engagement was the revision to the Shared Services
Agreement during 2024, which yielded useful cost savings
for the Company.
Independent directors make up most of the Board
Committees’ membership and I think it is fair to say that
we are encouraged as Committee members to ask probing
questions on issues of concern and to add suggestions
on other issues of interest. And we do. I, myself, have
served on the HSECR Committee now for some five years.
We continue to press management on the Company’s
safety record in recent years and have seen first-hand
the management response in stepping up training,
communications and disciplinary measures to reinforce the
right health and safety culture. It is improving but not yet
where it should be.
Our visits to mines also offer us the chance to talk directly
to miners, site managers and local communities which
enables us to get different but related perspectives
first-hand. I have now visited the majority of our mines
and some more than once. I have found these visits –
particularly for a Board member living outside Mexico –
really invaluable.
When the independent directors meet without
management or non-independent directors
present, what do you talk about?
Our talks naturally turn to issues that are live or currently
on our agenda. These can range from the length or
format of board papers to more strategic subjects: risks
and opportunities. It is also a chance to consider how our
interactions and discussions could be improved and to
share insights reflecting our different backgrounds and
professional experience. This is particularly valuable as the
range of issues and challenges facing mining companies
worldwide are so wide-ranging. As the majority of our
independent members are women, the promotion of
greater diversity and bringing more women into mining
is certainly of considerable interest to us as a group.
What discussions do you have with the
Chairman in your capacity as SID?
Following the meeting of the independent Directors,
I briefed the Chairman on the points we had discussed.
Beyond that, notwithstanding that he is in contact with all
of the Directors, I think he particularly looks to the SID to
help him keep abreast of any concerns or questions that
independent Directors might have, or areas that we feel the
Board and committees should explore. Equally, he is keen to
assure himself that the independent NEDs are able to have
good interaction with the executives and receive timely
information to carry out our duties. I see that the Chairman
respects and values the role of the independent Directors
on the Board. It is a responsibility we all take seriously.
INTERVIEW WITH
DAME JUDITH MACGREGOR
SENIOR INDEPENDENT DIRECTOR
Dame Judith Macgregor was appointed
Fresnillo’s Senior Independent Director
(SID) at the Company’s AGM in May 2024.
Reflecting on her first few months in the role,
she explains how the independent directors
seek to bring independent judgement and
challenge to the work of the Board.
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BOARD PERFORMANCE EVALUATION
Board performance evaluation
The Board conducts an annual review of the effectiveness
of the performance of the Board and its Committees.
A combination of externally-facilitated and internally-run
evaluations is carried out over a three-year cycle and forms
the Board Development Programme. The Board recognises
that a continuous and constructive review of its performance
is an important factor in achieving its objectives and realising
its full potential.
In carrying out these reviews, performance, composition,
diversity and how effectively members work together to
achieve objectives forms the basis of the focus topics to
be covered.
The cycle of the Board performance evaluation is summarised
as follows:
In 2024, Ceradas assisted the Board in conducting its annual review of its performance and that of the Committees. The review
was conducted by way of an online questionnaire.
At its meeting in October 2024, the Board discussed the
results. The overall conclusion from the Board performance
evaluation process was that the performance of the Fresnillo
Board continues to be rated very highly, highlighting the
excellent work culture established both in the Board and
in the Committees. The recommendations were therefore
characterised as points of potential further improvement
rather than material changes of approach. Particular areas
of Board governance which were commended in the report
included: Board composition and, in particular, the more
recent Board and Executive changes and introduction of
more experience, knowledge and diversity; stakeholder
engagement, oversight of strategy, Board support and the
expansion of the July working meeting.
The Chairman’s Letter on Governance 2024, set out on pages
144 and 145, provides further details on the outcomes of the
2023 Board performance review and the priorities and actions
arising from that review.
Committee evaluation
The reports on each of the Board Committees prepared as
part of the Board effectiveness review were circulated to
the members of each of the Committees in October 2024
and discussed by the Audit, HSECR and Remuneration
Committees at their meetings in October 2024 and by
the Nominations Committee at its meeting in February
2025. Overall, the reviews of the effectiveness of all of the
Committees were very positive.
Director performance review
The Independent Non-Executive Directors meet annually in
order to evaluate the performance of the Chairman. A review
meeting was held in July 2024 to consider the Chairman’s
performance over the prior year and Dame Judith Macgregor,
a Senior Independent Director, subsequently discussed the
key points from that discussion with the Chairman.
YEAR 1
2023
Externally-facilitated Board
evaluation using questionnaires
and interviews.
YEAR 2
2024
Follow-up on action plan
prepared in response to Year 1
evaluation using questionnaires.
YEAR 3
2025
Focus on outstanding and
emerging issues arising from the
action plan using questionnaires.
MID-AUGUST 2024 END-AUGUST 2024 OCTOBER 2024 NOVEMBER/DECEMBER 2024
Preparation
and Scope
• Scope agreed.
• Question set prepared.
• Questionnaires
circulated to Directors.
Complete
and Analyse
• Questionnaires
completed by Directors.
• Results analysed and
results report prepared.
Review
and Discuss
• Results report reviewed
by Chairman and
distributed to the Board.
• Results report discussed
at Board meeting.
• Progress against
previous actions
discussed.
Action and
looking ahead
• Actions and priorities
for change agreed.
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Strategic Report
Governance
Financial Statements
Additional Information
NOMINATIONS COMMITTEE REPORT
Dear shareholder,
I am pleased to introduce the Nominations
Committee Report for the year ended
31 December 2024.
Key appointments
As part of the succession planning for the independent
members of the Board, the Committee undertook a search.
I am pleased to say resulted in shareholders at the 2024
AGM agreeing to the Board’s recommendation that
Ms Luz Adriana Ramírez and Ms Rosa Vázquez be elected
as Directors of Fresnillo. The Nominations Committee
made the decision to recommend Luz Adriana and Rosa
for appointment to the Board, having engaged Korn-Ferry,
an external search consultancy to assist it in identifying and
short-listing suitable candidates. The search focused mainly
on Mexico and the UK. Korn-Ferry does not have any formal
business connection with the Company or any of its Directors.
In support of the Company’s strategic focus on business
development and growth, during 2024 the Committee
recommended to the Board the creation of a new
Executive Committee position to broaden the focus on
the development and growth of the business and, at the
same time, the appointment of Marcelo Ramos as Vice
President of Business Development. This strategic expansion
of the Executive Committee was approved by the Board at its
July meeting.
Board diversity
We continue to recognise and embrace the benefits of
having a diverse Board, particularly the value that different
perspectives and experience bring to the quality of the
Board’s debate and decision-making. We hold fast to the
importance of making Board appointments on the basis
of merit, including considerations such as background
and experience, age, gender and shareholder perspectives
in our reviews of the composition of the Board. Following
the appointment of Luz Adriana Ramírez and Rosa
Vázquez, and Dame Judith Macgregor’s appointment as
Senior Independent Director, at the 2024 AGM, our Board
composition also meets the requirements of UK Listing
Rule 6.6.6R. Additionally, we meet the FTSE Women Leaders
targets, to have at least 40% of Board positions held by female
Directors by the end of 2025.
Since February 2020, the Board has benefited from seven
Independent Non-Executive Directors out of 12, the largest
number of Independent Directors the Company has ever had
on the Board. This adds diversity of thought and input into
our Board discussions. Since our IPO in 2008, the Board has
consisted predominantly of Mexican Directors, alongside at
least two British Directors, which enables the Board to benefit
from a sound understanding of both the UK and Mexican
cultural, regulatory and market contexts of the Company
in its decision-making.
Board evaluation
In 2024, Ceradas assisted the Board in conducting its annual
review of its performance and that of the Committees. The
review was conducted by way of an online questionnaire.
A summary of the overall approach adopted and findings
arising from this review is set out on page 160 of the Corporate
Governance Report. We were pleased that the overall
conclusion from the reviews was that the performance of the
Fresnillo Board of Directors and, indeed, the Nominations
Committee, both continue to be rated very highly.
I would be happy to speak with any shareholders who have
questions about the work of the Committee.
Yours faithfully,
Mr Alejandro Baillères
Chairman of the Nominations Committee
“The Committee continues to support the
Directors of Fresnillo to ensure that its
Board is diverse and able to continue to
provide high-quality debate and decision-
making as the Company develops.”
Members
Meetings
attended
Alejandro Baillères 2/2
Georgina Kessel 1/1
Guadalupe de la Vega 0/1
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Role
The Nominations Committee is responsible for making
recommendations to the Board on the structure, size and
composition of the Board and its Committees and succession
planning for the Directors and other senior executives. Before
making appointments of new Directors and members of
the Executive Committee, the Nominations Committee is
responsible for evaluating the balance of skills, knowledge
and experience on the Board and identifying and nominating
suitable candidates for approval by the Board. Prior to making
such recommendations, the Nominations Committee
considers the other time commitments and significant
external interests of such candidates to ensure that they
are able to contribute effectively.
The Board has approved Board Appointments and Diversity
policies which provide the framework for the Nominations
Committee and the Board’s approach to appointments.
The Board has also approved a Group Diversity policy. (Full
versions of these policies may be found on the Company’s
website – www.fresnilloplc.com). A further explanation of
the steps that the Company is taking to promote diversity
across its businesses is set out in the Sustainability Report
on pages 60-113.
Board appointments policy
The Nominations Committee and Board are strongly
committed to the principle of equality of opportunity when
making new appointments to the Board and its Committees,
including the Executive Committee, whilst ensuring that
appointments are based on merit. The Committee believes
that setting targets for the number of people from a particular
socio-economic, professional or educational background, sex
or gender identity, ethnicity, sexual orientation or disability
is not an effective approach and therefore it has no specific
quotas or targets. The Nominations Committee continues to
consider the composition of the Board and its Committees
with this commitment in mind.
The criteria for determining the composition of the Board and
future Board and Committee appointments continue to be
based on:
• Relationship Agreement requirements and guidelines
for appointments to the Board by Peñoles.
• The Company’s leading position as a precious metals
miner in Mexico.
• The Company’s inclusion in the FTSE 100 Index.
• The specific functions on Board Committees which
independent Directors will be required to fulfil.
• The provisions set out in the current terms of reference of
the Nominations Committee and the Board Diversity policy.
NOMINATIONS COMMITTEE REPORT CONTINUED
Diversity Tables
Sex
As at 31 December 2024
No of Board
members % of the Board
No of senior
positions
No in executive
management
(Note 2)
% of executive
management
Men 7 58.3% 3 7 100.0%
Women 5 41.7% 1 0 0
Ethnicity
1
As at 31 December 2024
No of Board
members % of the Board
No of senior
positions
No in executive
management
% of executive
management
Mixed or Multiple ethnic group: Mexican 9 75.0% 3 5 72.0%
White: British 2 16.7% 1 0 0
White: Spanish 1 8.3% 0 0 0
Mixed or Multiple ethnic group: Brazilian 0 0 0 1 14.0%
Mixed or Multiple ethnic group: Chilean 0 0 0 1 14.0%
Notes:
1 Data based on the 2024 Ethnic Diversity Voluntary Census return to the UK Department of Business and Trade
2 Executive management includes the six members of the Executive Committee and the Company Secretary
Directors’ length of tenure
As at 31 December 2024 0 to 3 years 3 to 6 years 6 to 9 years Over 9 years
Independent Directors 2 2 3 –
Non-independent Directors – 1 – 4
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Strategic Report Governance Financial Statements Additional Information
Directors’ independence
The Board, through the Nominations Committee, has assessed
each of these Directors by reference to the criteria set out in
Provision 10 of the Code and the Nominations Committee
remains satisfied that they are each independent in character
and judgement. Mr Tiburcio is an Independent Non-Executive
Director of Grupo Nacional Provincial, S.A.B. and Grupo Palacio
de Hierro, S.A.B. de C.V., which are companies within the BAL
Group. He is not involved in executive duties in any of those
companies and has a similar obligation to be independent for
those two companies as for Fresnillo. The Committee does not
consider that Mr Tiburcio’s position as an Independent Non-
Executive Director of the Company is adversely impacted by
those two appointments.
Executive succession planning
In February 2024, in line with its usual practice, the
Nominations Committee reviewed a schedule of possible
successors for all the positions on the Executive Committee.
This review considered both short-term emergency and long-
term planning scenarios.
The Company is committed to creating long-term value by
maximising the potential of its operations and delivering
profitable growth, whilst ensuring the wellbeing of its
stakeholders. Recognising that the Company has a strong
development pipeline and balance sheet, the Committee
considered the need to further strengthen the oversight
of the development and growth of the business, and
therefore recommended to the Board the expansion of
the Executive Committee to include a new position of Vice
President Business Development and, at the same time,
the appointment of Marcelo Ramos into that role.
Non-Executive Director’s succession planning
Each year, the Committee reviews the tenure of the Company’s
Independent Non-Executive Directors to ensure that there
are appropriate plans in place to ensure that the balance of
independent to non-independent Directors. This complies
with the Provision 11 of the UK Corporate Governance Code
(the Code). As a result of the Committee’s succession planning
activities in 2023 and early 2024, two new Independent Non-
Executive Directors were appointed to preserve that balance of
independent and non-independent Directors. The changes are
summarised in the Chairman’s Letter on page 145.
During the year, the Nominations Committee’s succession
planning has specifically focused on Mr Tiburcio’s status
as an Independent Non-Executive Director bearing in mind
that he will have served as an Independent Non-Executive
Director for nine years at the Company’s 2025 AGM. The
Committee has been particularly mindful that Mr Tiburcio
is currently Chairman of both the Audit Committee and
Remuneration Committee.
As indicated earlier in this report, the Committee continues to
consider that Mr Tiburcio approaches his duties and role on the
Board in a manner that demonstrates his independence both
in character and judgement. On this basis, the Committee has
decided that it will be beneficial for Mr Tiburcio to continue
to chair both the Audit Committee and Remuneration
Committee for a further year to enable smooth succession
planning for both Committees. The Board will therefore be
recommending that Mr Tiburcio is re-elected at the 2025
annual general meeting for a tenth year, as an Independent
Non-Executive Director. During 2025, the Committee will be
considering the options for appointing a new Independent
Non-Executive Director to the Board and potential successors
to Mr Tiburcio in his roles as a member and Chairman of the
Audit Committee and the Remuneration Committee.
Committee Membership
In February 2025, the Committee reviewed the membership
of the Board Committees and recommended certain
changes to the Board which were approved to take effect
from 4 March 2025 as follows:
• Ms Rosa Vázquez to be appointed as an additional
member of the Audit Committee.
• Ms Georgina Kessel to be appointed as an additional
member of the Remuneration Committee.
• Ms Kessel to step down as a member of the Health,
Safety, Environment and Community Relations
(HSECR) Committee.
Other Committee activity during 2024
The Nominations Committee also considered the following
matters as part of its usual programme of activity:
• Committee report: Approval of the 2023 Nominations
Committee report prior to publication.
• Committee evaluation: In February 2025, the
Nominations Committee reviewed the outcome of
the independent performance evaluation undertaken in
2024, which concluded that the Committee is performing
very well.
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NOMINATIONS COMMITTEE REPORT CONTINUED
Board skills and experience
Skill/Experience Description
% of Board
members
Commercial leadership Sustainable commercial success in business at a senior executive level. 83
Strategy Experience in enterprise-wide strategy development. Implementation in industries
with long cycles. Developing and leading business transformation strategies.
83
Mexican business
experience
Relevant experience and understanding of the Mexican political, cultural, regulatory
and business environments.
92
Capital allocation
and cost-efficiency
Extensive direct experience in environments requiring capital allocation, cost-efficiency
and cash flow management disciplines, with proven long-term performance.
92
Health, safety,
environment
and community
Extensive experience with complex workplace health, safety, environmental and
community risks, frameworks and issues.
75
Capital markets Relevant experience and understanding of capital markets, institutional investor
engagement and regulatory/governance expectations.
92
Mining and
natural resources
Board-level experience and/or long-term knowledge gained through working with
companies operating in the mining or natural resources sector.
67
Financial expertise Relevant experience in financial regulation and the capability to evaluate financial
statements, financial controls and risk.
83
Public policy expertise Extensive experience of public policy or regulatory matters, including fiscal and
economic, ESG (in particular climate change) and community issues, social
responsibility and transformation issues.
75
Workforce wellbeing Workforce learning and skills development, diversity and wellbeing. 92
Time commitment and overboarding
The Nominations Committee undertook a review of the time
commitment required from each Director and their other
external appointments, prior to making a recommendation
to the Board supporting that all of the continuing Directors
be proposed for re-election at the 2025 AGM.
In making this assessment, the Committee noted that the
Non-Executive Directors are required, by their letters of
appointment, to spend 14 days per annum on Company
business. More importantly, it also reviewed the time
commitments of each Director to ensure that all Board
members continue to be able to devote sufficient time and
attention to the Company’s business. Its philosophy in doing
so, is to consider the total workload of each Non-Executive
Director and the particular value that each Director brings
to the Board. In particular, the Nominations Committee took
into account the following factors:
1. With operations primarily in just one country, and because
of the relative commonality of the Company’s activities,
the Board does not consider that it needs more than four
scheduled Board meetings with an additional Working
Meeting each year; a factor which is reflected in the
relatively modest fees that the Company pays its Non-
Executive Directors. Further information regarding fees
paid to Non-Executive Directors can be found on page 181.
2. The calendar for Board and Committee meetings being
aligned with the meetings of other companies, including
listed companies, within the BAL Group ownership
structure. This ensures that Directors who are appointed to
the boards of other companies within the BAL Group will
not have any time conflicts with their other commitments
to Fresnillo plc.
The Nominations Committee notes that the time commitment
required of the Directors during 2024 increased as a result of:
(i) the inclusion of a three-day Working Meeting in July into
the Board calendar (see page 157) and; (ii) an increase in the
number of Board meetings during the year compared to
2023 in order to consider additional Board business. All of the
Directors were able to fulfil these additional time commitments
during 2024.
The Nominations Committee is therefore satisfied that all
of the Directors, but particularly the non-Independent
Non-Executive Directors, spend considerably more than
this amount of time on Board and committee activity than
they are required to by their letters of appointment.
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Strategic Report
Governance
Financial Statements
Additional Information
AUDIT COMMITTEE REPORT
Dear shareholder,
It gives me great pleasure to introduce
the Audit Committee Report for the year
ended 31 December 2024.
Although the financial performance of the Company has
benefitted from the devaluation of the Mexican peso against
the US dollar and high precious metals prices, the continuing
complex geopolitical environment both worldwide and in
Mexico and high interest and inflation rates have made 2024
another difficult year for the management team to navigate.
These factors have set the context for the Audit Committee’s
work during the year in assessing the Company’s risk
environment and financial reporting.
Notwithstanding the challenges presented during the
year, the Committee’s focus remained unchanged and it
has continued to closely monitor key aspects of Fresnillo’s
financial reporting and controls environment, including: areas
of judgement and estimation in the financial statements,
critical financial processes, material risks and internal control.
The Committee has continued to consider the impact on the
Company of changes arising from the new Mexican Mining
Law (see page 5 of the Strategic Report). With the support
of Internal Audit, Internal Control and Risk Management,
the Committee concluded that the internal controls and
processes were functioning appropriately, and no significant
weaknesses have been identified. Close consultation and
interaction by the Committee with management and the
external auditor has also been maintained during the year.
The items of particular focus for the Committee during the
year are detailed below:
• Soledad-Dipolos assets: During 2024 the Committee
continued to monitor the progress of the discussions the
Company held with the local, State and Federal authorities
to regain access to the assets at the Soledad & Dipolos
mine. Although there have been no changes in the legal
position since last year, Management has informed the
Committee that positive progress has been made during
the discussions with these authorities, which gives reason
to believe that the Company’s position of not reserving any
amount for these assets in the 2024 financial statements
remains appropriate.
• Silverstream: Following the Company’s announcement
in November 2024 that operational difficulties might
impact the Silverstream Agreement – which would require
significant adjustments to be made to that Agreement
– the Committee has been monitoring the work being
done by the Fresnillo and Peñoles management teams
to determine the different alternatives for the future
operation of the Sabinas mine and the implications
of these changes for the financial statements. This
assessment is being undertaken by a joint technical
team that will review the mine plans and reserves and
resources estimations used in the models and this is
expected to take some time to complete. However, taking
into consideration the current status of these discussions,
management has made a fair value assessment of the
asset (as disclosed in more detail on page 169), and
reduced the value of the Silverstream asset shown in the
balance sheet by approximately US$ 230 million, which
was charged to income for the year.
• Cybersecurity: IT (Information Technology) security
and data protection were reviewed by the Committee
throughout the year to ensure that the upgrade
programme agreed in previous years continued to be
implemented on schedule. In July 2024, Peñoles, which
hosts some of the Company’s systems, was the subject of
a cybersecurity incident which resulted in unauthorised
access to certain IT systems and data. Following the attack,
the Committee reviewed the assessments made by Peñoles
management, with the support of independent third-party
specialists, of the impact and mitigating actions noting
that the Company’s cybersecurity technology had worked
well and had protected the Company’s IT infrastructure,
with no material data losses, and the mine systems
(which are hosted separately) had not been affected. The
Committee has continued, and will continue, monitoring
the timely implementation of the different initiatives that
the Company has identified to improve the controls in
cybersecurity both after the incident and throughout 2025.
Further information about the Group’s approach to IT is set
out on pages 126 and 173-175 of the Strategic Report.
“Notwithstanding the challenges presented during
the year, the Committee’s focus remained unchanged
and it has continued to closely monitor key aspects
of Fresnillo’s financial reporting and controls
environment, including: areas of judgement and
estimation in the financial statements, critical financial
processes, material risks and internal control.”
Members
Meetings
attended
Alberto Tiburcio 5/5
Georgina Kessel 5/5
Héctor Rangel 5/5
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AUDIT COMMITTEE REPORT CONTINUED
• Tax contingencies: The Committee has continued
to closely monitor tax contingencies, in particular the
differences generated from prior years regarding payments
related to the Silverstream contract, which are considered
by the Company for tax purposes as a financial derivative
transaction and are being challenged by the Servicio de
Administration Tributaria (SAT), the Mexican Tax Authority.
During 2024, the Committee has received regular reports
from management on their discussions with the SAT
concerning this matter, and advice received from external
counsel. Taking into consideration the Company’s view
and the view of its external advisers that its assessment will
prevail, the Company did not record any reserve in addition
to the deferred tax liability already booked, as these are
considered temporary differences in its computation.
The Company has also been challenged recently by the
SAT with respect to the deductibility of certain categories
of payment made to the Union. In the Company’s and
its external advisers’ view, the Company’s position has
been appropriate, as such payments are included in the
Collective Bargain Agreements (CBAs). It will therefore
challenge the SAT’s position and not record any reserve
for this contingency. Based on the current evidence, the
Committee endorsed management’s position and will
continue closely monitoring this matter in 2025.
• Climate-related financial disclosures: This Annual Report
includes disclosures consistent with the guidelines set out
by the Taskforce on Climate-related Financial Disclosures
(TCFD). The HSECR Committee takes primary Board-
level responsibility for the Company’s progress towards
compliance with the TCFD recommendations. However,
the Company’s reporting against these disclosure
requirements was reviewed by the Committee and we
are satisfied that the disclosures are a fair reflection of the
Company’s current position. Further details of the progress
made during the year and actions to be taken during 2025
are set out in the letter from the Chairman of the HSECR
Committee on pages 58-59 and in the Sustainability
Report on pages 60-113.
• Reserves and resources: The Committee has noted
that there were some delays in the finalisation of the
computation of the Company’s reserves and resources.
While ultimately it did not compromise the reporting date,
it did impact on the reporting process but did not prevent
us from reporting on time. The Company has been
improving the internal control procedures in this area
over the past few years and the Committee will continue
monitoring planned improvements in the process
next year.
• Anti-bribery and corruption (ABAC): During the year, the
Committee continued to closely monitor implementation
of the recommendations accepted following the externally
facilitated audit carried out in 2022 to assess the conformity
of the Company’s ABAC programme with ISO 37001 (in line
with the UK Ministry of Justice Guidance). It also reviewed,
on a six-monthly basis, a summary of the whistleblowing
reports and presented this summary to the Board. Further
information about the Company’s approach to bribery and
corruption is set out on pages 65-67 of the Strategic Report.
• Fraud detection: The Committee has continued to work
closely with Internal Control, Risk Management and the
internal audit teams following the review of the Company’s
fraud risk assessment process undertaken in line with
guidelines published by the Association of Certified Fraud
Examiners (ACFE) during 2024. The Committee has
been monitoring the steps that management is taking
to prepare for the implementation of the new corporate
criminal offence of failure to prevent fraud which will
take effect in September 2025. More information on risk
management systems can be found on pages 116-120.
• Proposed changes to regulations: The Committee
has continued to evaluate the Company’s response to
proposed changes to the UK Corporate Governance
Code in relation to internal controls and plan for meeting
the new requirements in 2026 (see section on Internal
Controls below).
In the second half of the year, an evaluation of the
performance of the Board and its committees was carried
out. With respect to the Audit Committee, I am pleased to
report that the results of the evaluation were very positive.
Nevertheless, we continue to look for ways to improve the
efficiency of the meetings making sure that we remain well-
briefed on the subjects of interest to the Committee.
At the end of the year, the Committee undertook a
questionnaire-based evaluation of the performance of the
internal audit function and was satisfied with the outcome.
In closing, I would like to acknowledge the effort and valuable
contributions made by the members of the Committee,
and by the Company executives who work closely with it; as
well as the invaluable support and trust that the Committee
continues to receive from the Board.
I would be happy to speak with any shareholders who have
questions about the work of the Committee.
Yours faithfully,
Alberto Tiburcio
Chairman of the Audit Committee
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Strategic Report Governance Financial Statements Additional Information
www.fresnilloplc.com
Details of the membership of the Committee and the
Committee’s effectiveness review are set out on pages 150-151
and page 160 respectively of the Governance section
REPORTING
• Financial reporting: Overseeing the Company’s
financial and narrative reporting to shareholders
(including considering whether it was fair, balanced
and understandable).
• Stakeholder relationships and reporting:
Overseeing the Company’s reporting on certain
stakeholder issues.
• Whistleblowing: Overseeing on behalf of the Board,
the cases reported through the whistleblower line and
the work of the Honour Commission.
• External audit: Overseeing the work of and the
Company’s relationship with the external auditor.
• Internal audit: Overseeing the work and findings of
internal audit.
ASSURANCE
• Risk: Overseeing the operation of the Company’s risk
management framework.
• Internal control: Monitoring the Company’s internal
control environment.
• Related parties: Overseeing the financial aspects
of the Company’s commercial relationships with
related parties.
RISK AND CONTROLS
The Audit Committee
Membership
The members of the Audit Committee and their relevant
financial and auditing experience is summarised as follows:
Committee members Financial and auditing experience
Alberto Tiburcio
(appointed to the Committee
on 4 May 2016 and appointed
Chairman of the Committee
on 30 May 2018)
Previously Chairman and CEO
of EY (Mexico). Experience in
national and international
accounting and audit practice
and corporate governance.
Georgina Kessel
(appointed to the
Committee on 1 March 2021)
Public finance experience
from her career in government.
Has served on the Audit and
Risk Committees of major
companies in Mexico
and Spain.
Héctor Rangel
(appointed to the
Committee on 24 June 2021)
Extensive corporate and
investment banking expertise.
All of the members of the Audit Committee are Independent
Non-Executive Directors.
Audit Committee activity in 2024 and early 2025
This report sets out the key activities of the Committee in
discharging its duties during 2024, and those undertaken
in 2025 in respect of the audit and publication of the
financial statements for 2024. The Committee met five times
during 2024 and once more in February 2025 with all the
meetings being either hybrid or virtual via video conference.
Notwithstanding this, the Committee was able to operate
in accordance with its terms of reference and it was able to
follow its usual pattern of work which is reported under the
following headings:
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Financial reporting
The Company reports to shareholders on its financial
performance twice a year.
The principal steps taken by the Committee during the period
from 1 January 2024 to the date of this report in relation to its
review of the published financial statements were:
• Review of the financial statements and Annual Report
for the year ending 31 December 2023 and consideration
of EY’s comments on these documents.
• Review of the 2024 interim financial statements and
2024 interim announcement and consideration of EY’s
comments on the drafts of these documents.
• Review of plan for preparing the financial statements and
Annual Report for the year ending 31 December 2024.
• Review of the significant judgements and estimates
that impact the financial statements (see below).
• Review of the financial statements and Annual Report
for the year ending 31 December 2024 and consideration
of EY’s comments on these documents.
To aid the Committee members’ understanding of the
reported financial results during the year, the Chief Financial
Officer updated the Committee on the Group’s financial
performance at each of its meetings in February, April, July
and October.
Significant judgement areas
The Committee considered the principal areas of financial
statement risk and judgements made in relation to both
the interim and full-year financial statements, prior to
recommending those financial statements to the Board
for approval. In many cases, these significant judgement
areas were the same as those considered in previous years;
however, as the mining cycle progresses these areas of
judgement or estimation evolve, and new ones may need
to be considered while others may become less important.
Process for the review of significant judgements
The significant judgement process may be summarised
in the following way:
Annual
assessment of
key financial
statement risks
Identification
of key variables
to consider
Review of
sources of
assurance
Discussions with
management
and the auditor
Committee’s
conclusion
on accounting
treatment,
presentation
and disclosure
Significant areas of judgement in 2024
The significant judgement areas considered by the Committee in 2024 are set out below. In each case, the Audit Committee
concluded that the accounting treatment and disclosure in the financial statements are appropriate.
Soledad & Dipolos (see Note 2 to the financial statements)
Assessment of risk: Minera Penmont lost access to the leaching pads at Soledad-Dipolos in 2013 due to opposition
by local agrarian group members from a community known as ejido (i.e., agrarian community)
‘El Bajio’, members of which have also presented several claims over land in the proximity of
the operations of Minera Penmont. Nevertheless, Minera Penmont continues to own the land
and mining assets and is seeking to regain access. The litigation has been protracted and
management has had to consider whether it remains likely that access to the land and assets
will be regained.
Variables considered: In 2013, the Company re-assessed and wrote-off the carrying value of certain property, plant
and equipment that could not be utilised or re-assigned to other mine units or remains at the
site and was no longer considered to have a future economic benefit to the Company. The
Company has subsequently prepared an operating plan to re-commence mining operations
considering that access is recovered. The plan is reviewed annually to consider the future
investments for restarting such operations, as well as the timing of recovery of inventory and
associated processing costs. Based on the current reserves and existing inventory, the Company
has estimated a seven-year period for the foregoing, once the access to the land is regained.
The Company has a reasonable expectation that it will regain access, and thus has considered
that the assets held as property plant, and equipment and inventories – as at 31 December
2024 – will produce economic benefits once the Company has regained access to them.
Sources of assurance: In making this judgement, the Committee has relied on information provided by management
concerning their discussions with the relevant authorities supported by advice received from
the Company’s internal and external legal counsel.
REPORTING
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Strategic Report Governance Financial Statements Additional Information
Related-party transactions including revenue recognition (see Note 27 to the financial statements)
Assessment of risk: Fresnillo has a controlling shareholder and as a result has very strong ties both to Peñoles
and the broader BAL group. There is a risk that related-party relationships could be taken
advantage of to manipulate earnings or otherwise distort the Company’s financial position
and/or transfer value to Peñoles or another BAL company inappropriately. Furthermore,
related-party transaction disclosure requirements allow investors to understand the nature
and extent of the Company’s transactions with related parties and there is a risk that
disclosures in the financial statements could be inaccurate or incomplete.
Variables considered: Every year, the Committee scrutinises the probity of all major related-party transactions to
ensure that they are entered into transparently and fairly to all shareholders.
Sources of assurance: The Committee considered management reports on the transactions with related parties
during the year. In particular, it received confirmation from the Chief Executive Officer on
the trading relationship with Met-Mex and the basis on which pricing is determined (using a
methodology which was adopted in 2019) (see the ‘Related parties’ section on pages 176 -177).
The Committee discussed EY’s procedures to ensure that related-party transactions are
recognised accurately and correctly reported in the relevant disclosures in the Annual
Report, as well as their related conclusions.
Internal audit routinely review agreements between the Company and Peñoles, the results of
which are reported to the Committee as part of its annual Internal Audit programme updates.
In addition, PricewaterhouseCoopers (PWC) conducts annual reviews of the intercompany
transactions each year (including related-party transactions). In previous years, these reviews
have not resulted in any adverse comments thus providing a degree of assurance that the
Company’s usual approach to the pricing of such transactions is reasonable.
Silverstream contract (see Note 14 to the financial statements)
Assessment of risk: The Silverstream contract represents a large asset on the balance sheet which can, as
a result of movements in variables discussed below, give rise to significant albeit non-
cash, movements in the income statement. Following the Company’s announcement in
November 2024 that operational difficulties at the Sabinas mine, owned and operated by
Peñoles, might impact the Silverstream Agreement in a way which would require significant
adjustments to be made, the Committee has been monitoring progress in discussions
between Fresnillo and Peñoles management (which might take a few more months to
conclude) to determine the different alternatives for the future operation of the Sabinas mine.
Variables considered: The Silverstream contract is a derivative financial instrument which must be reflected at fair
value at each balance sheet date. The fair value is most sensitive to the timing and volume
of forecast production derived from the reserves and resources and production profile of the
Sabinas mine, estimated future silver price and the discount rate applied in the valuation.
In light of the operational difficulties at the Sabinas Mine, the Company has recalculated
the value of the asset based on an increased discount rate and a revised production profile
for the Sabinas mine. As a result of that review, the asset was reduced by US$ 231.6 million
which was charged to operations. The effect of this amount in the income statement was
partially compensated by the reduction of deferred taxes in the amount of US$ 69.5 million.
Sources of assurance: Based on the significant amount of detailed analysis undertaken by the joint Peñoles and
Fresnillo teams at an operational level to identify the likely production profile for the Sabinas
mine, the Committee discussed with Management and EY the inputs into the valuation at
the balance sheet date and associated sensitivity analysis. It also reviewed Management’s
suggested disclosures relating to the Silverstream contract. It discussed with EY their
procedures and conclusions for their audit of the valuation.
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Recoverable amount of long-term non-financial mining assets (see Note 13 to the financial statements)
Assessment of risk: The recoverable amount of long-term non-financial assets is influenced by the level of
reserves and resources for each mine at any moment in time, the likelihood that the
resources can be economically mined and the expected phasing of planned production
(mine plan). Other key variables considered include the expected metals prices, costs and
discount rates. The estimated valuation of the recoverable amount of long-term mining
assets will change year-on-year in response to changes in these inputs. If the financial
statements are not adjusted accordingly there is a risk of significant financial misstatement.
Variables considered: The estimation of reserves and resources, prices, costs, discount rates and related mine
plans for each business unit, along with management’s assessment of impairment
indicators were considered.
Sources of assurance: The Committee noted that the specialist third-party reports on estimates of reserves and
resources and estimates of recoverable value had been prepared by Management and then
reviewed by EY, using specialists where necessary. The Committee also noted the reports
from SRK and AMC on reserves and resources and scrutinised the process by which they
were prepared to ensure that improvements made during the year had been properly
implemented. Internal audit also followed up on steps taken by management during the
year. The Committee further evaluated EY’s assessment of management’s position on
the mines most at risk and sensitivities performed by EY for alternative metals prices and
discount rate scenarios.
Mineral reserves and resources (see pages 284-285)
Assessment of risk: Reserves and resources are a primary driver of Fresnillo’s market valuation and a significant
input into calculations of depreciation and assessments of impairment. Such calculations
are dependent on significant amounts of geological data provided by the Company’s
business units and the ability of the exploration and operational teams to find new reserves
and replenish resources that have been mined during the financial period.
Variables considered: The estimation of mineral reserves and resources requires significant judgement, not only
in respect of mineral physically in place but also metals prices and cost assumptions used
to determine the cut-off grade for identifying economically viable ore bodies. There is also
judgement in developing and maintaining the mine plans which estimate the timing and
quantities of related production.
Sources of assurance: During 2024, the Committee continued monitoring the process and has observed
improvements to align more closely to International Practices. Due to delays in the
Company providing the related information to SRK and AMC, their reports were delivered
two months later than previously. However, the Committee noted that the Group has made
improvements in terms of enhancing the reconciliation process along with changes to the
bases for estimating costs and prices. The Committee was satisfied as to the completeness
of the reports and thus was able to make an informed assessment of the position as at
31 December 2024.
REPORTING
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Strategic Report Governance Financial Statements Additional Information
Taxation and PTU (see Note 11 to the financial statements)
Assessment of risk: The taxation of mining companies in Mexico has been the subject of much attention as
reflected by a number of tax inspections that are ongoing, or have been initiated by the tax
authorities. Some aspects of Mexican tax legislation are open to interpretation. During the
year, the Committee has continued to closely monitor tax contingencies, in particular, the
differences generated from prior years regarding the Silverstream contract and received
reports from management on ongoing discussions with the tax authorities. In relation to
the Silverstream contract, the Company has assessed and continues to challenge the SAT
position of not accepting the tax deductibility of the amortisation of the original premium
on the Silverstream agreement.
Certain tax assets and liabilities are denominated in Mexican pesos and are revalued in US
dollars during the period, resulting in foreign exchange gains or losses which need to be taken
into account when assessing the tax charge for the period and the deferred taxes computation.
In accordance with the Mexican legislation, local companies also pay employee profit
sharing (PTU) in accordance with the legally applicable formulas.
Variables considered: The Committee reviewed the status and potential outcomes of tax audits commenced
during the year and ongoing dialogue with the SAT. Further information is set out in the
Stakeholder Reporting (Government/Tax Authorities) section below.
The Company has considered and challenged the SAT position of not accepting the
deductibility of some payments to the Union.
Sources of assurance: Throughout the year the Committee received updates on the status of tax inspections.
Reviews of tax related matters were also undertaken by internal audit. The Committee
reviewed management’s supporting memoranda on the consolidation of tax and PTU
and sought EY’s views on the same. It ascertained the degree to which judgements and
adjustments are supported by internal and/or external subject matter experts and ensured
that they corresponded with information presented during the year prior to approving the
relevant disclosures in the Annual Report.
Financial Reporting Council Enquiry
During October 2024, the Company was advised by the
Financial Reporting Council (FRC) that it had undertaken a
limited scope review of the Company’s Annual Report and
Accounts for the year ended 31 December 2023. The extent
of the limited scope review was to consider whether the
Company had satisfied the relevant reporting requirements
in respect of the recoverability of assets at Soledad & Dipolos;
and claims from the El Bajio community. Further information
requested by the FRC in relation to these matters was
provided during November 2024 and, in January 2025,
the FRC confirmed that it had closed its enquiries.
Stakeholder reporting
The Committee plays a role in overseeing, on behalf of
the Board, some key aspects of the Company’s reporting
concerning its relationships with key stakeholder groups.
• Employees: The Committee reviewed the work of the
Honour Commission in relation to matters raised via the
whistleblower line (see following section).
• Government/Tax authorities: The Committee closely
monitors the Company’s relationship with the SAT, with
the status of any outstanding tax audits reviewed at
most meetings. The Committee receives regular reports
from the Head of Tax on her interactions with the SAT
concerning current tax audits.
• The Environment: The oversight of the Company’s
approach to managing environmental and climate-related
risks is primarily the responsibility of the HSECR Committee
who regularly review Fresnillo’s response to the operational
implications of such risks. The Audit Committee reviews the
Company’s reporting on such risks and initiatives, particularly
through the TCFD Report to ensure that such disclosures are
consistent with the Company’s financial reporting.
During 2024, the Committee reviewed the Company’s
Payments to Governments data, published in June; and the
Company’s UK Tax Strategy Statement, published in November.
Whistleblowing
The Línea Correcta Whistleblower Hotline allows stakeholders
to anonymously report (via an independent third party)
violations of the Company’s Code of Conduct. The hotline is
reviewed by the Committee twice a year (February and July
meetings) and the Chairman of the Committee gives a report
to the Board every six months on the key trends and steps
taken as a result of these reviews.
The effectiveness of the Linea Correcta is routinely reviewed
twice a year. In addition, the results of a more detailed review
of its effectiveness were considered in February 2024. Actions
taken following the review included: (i) a communication
campaign to improve awareness of the hotline; (ii) targeted
training linked to levels of involvement in the whistleblowing
arrangements; (iii) steps to reinforce confidentiality
throughout the investigation process; and (iv) strengthening
the role of the Labour Commission in the mines.
In 2024, there were a total of 161 reports (compared to 163 in
2023). Further details about the operation of the whistleblowing
arrangements and the reports made in 2024 is set out in the
Sustainability report on pages 60-113. During the year, the
Committee was satisfied that all matters had been or continue
to be properly investigated with appropriate action taken.
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AUDIT COMMITTEE REPORT CONTINUED
External audit
Relationship with EY
EY was re-appointed as the Company’s auditor at the
2024 AGM. EY was originally appointed in 2008 and their
appointment was re-confirmed in 2016 (for the financial year
ending 31 December 2017) following a rigorous external audit
tender process in 2016. The next tender process, to select the
external auditor for the year-ending 31 December 2027 is
expected to be held in 2026. Initial planning for that tender
process is expected to commence during 2025.
The current lead partner, Steve Dobson, has been in place
since 2020 and will be rotating off the Company’s audit in
2025. His successor has been identified and agreed with the
Committee. During the year, the members of the Committee
met twice with representatives from EY without management
present and once with management without representatives
of EY present, to ensure that there are no issues in the
relationship between management and the external auditor
which it should address. There were none noted as a result of
such discussions.
The Company complied with the Statutory Audit Services for
Large Companies Market Investigation (Mandatory Use of
Competitive Processes and Audit Committee Responsibilities)
Order 2014 during the year.
External audit process
The key steps in the Committee’s interactions with EY during
the period from 1 January 2024 to the date of this report were:
• The review of a report from EY providing their observations
arising from the 2023 audit process and management
responses to those observations in April 2024.
• Discussion with EY of the findings from their review of the
interim results for the period ended 30 June 2024.
• The review of the 2024 half-year representation letter given
to EY.
• The review and approval of the external audit plan, fees
and terms of audit engagement.
• The review of the results of the ‘hard close audit’ for the ten
months to 31 October 2024.
• The review of the representation letter given to EY for the
2024 full-year audit.
• The review of EY’s report following completion of the audit
for the year ended 31 December 2024.
Quality, objectiveness and independence of the external
auditor: The Committee is mindful of its responsibility to
ensure that the external auditor maintains its independence
and objectivity and is appropriately qualified with sufficient
resources and expertise to fulfil the role. The Committee
specifically reviewed, and is satisfied with, the independence
of EY as the external auditor based on disclosures provided
by EY in accordance with UK Ethical Standards for the
audit profession. The Committee discussed the quality,
objectiveness and independence of the EY team with the
Management Team and was satisfied that there were no
concerns in this regard.
Non-audit services policy: The Committee has adopted a
policy for the provision of non-audit services to the Fresnillo
Group by the external auditor (the Policy). The Committee
has maintained an ongoing dialogue with EY during the
year concerning the services that it provides to the Company
and the wider Peñoles Group. That ensures that where
such services are provided, they are in line with the Policy
or discussed with the Committee on a timely basis.
The current Policy permits the engagement of the external
auditor to provide a narrow range of permitted services which
are closely related to the audit and/or required by law or
regulation. Any engagement of the external auditor to provide
permitted services above US$5,000 is subject to the specific
approval of the Committee. During 2024, EY provided audit-
related assurance services in connection with the review of
the interim financial statements (US$587,000), the climate
related non-audit service (US$102,400) and Mexican tax opinion
(US$160,000). The ratio of fees paid for non-audit work in relation
to audit work during the year was 0.31:1.00 (2023: 0.34:1.00).
Details of the fees paid to EY during the year are shown in
Note 28 to the financial statements.
Evaluation of the effectiveness of the external audit and
the auditor
The Committee assesses the effectiveness of EY as its external
auditor from two perspectives:
• Reviews of the work of EY’s UK practice, as a firm,
undertaken by the Financial Reporting Council’s Audit
Quality Review Team.
• Its own assessment of the effectiveness of the external
audit process and the role played by both EY’s UK and
Mexican teams in the performance of the annual audit.
Audit quality review: The Committee reviewed the report
of the Financial Reporting Council (FRC) on its Audit Quality
Review on EY as a firm and discussed with the EY Audit
Partner whether any of the FRC’s findings were relevant
to the firm’s audit of the Fresnillo financial statements. The
conclusion from this review was that there were no major
matters of concern to consider.
Audit Committee assessment of EY: Following the
completion of the 2024 Annual Report, the Committee
undertook a review of the performance and effectiveness
of EY at its April 2024 meeting. As part of this process, the
Chief Financial Officer and Finance Team were invited to
provide their insights into their interaction with the EY teams
during that process. The Committee concluded that EY was
performing well with an overall consensus being that the
working relationship was good.
Re-appointment of the external auditor
In February 2025, taking account of the reviews of the
effectiveness of the external auditor, the Committee
recommended to the Board the re-appointment of
EY as external auditor at the Company’s 2025 Annual
General Meeting.
ASSURANCE
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Internal audit
The 2024 Internal Audit annual plan was approved by the
Audit Committee in October 2023, incorporating audits
across all of Fresnillo’s business units with a focus on
strategic priorities and key risks. Internal audit continued
to deploy technology and apply data analytics to achieve
a satisfactory depth of audit coverage and gain deeper
insights into Fresnillo’s risk and control profile. Internal audit
completed a number of risk reviews along with process and
controls assessments focusing on efficiency, productivity,
cost management and regulatory compliance. In addition,
Internal Audit carried out its annual process of verifying
the validity and accuracy of the non-financial information
included in the 2024 Annual Report and reported the results
to the Audit Committee at the beginning of 2025.
Due to the continued importance of cybersecurity and the
evolving technology landscape, internal audit is continuing its
assessments aimed at validating the design and effectiveness
of Fresnillo’s cybersecurity, IT (Information Technology)
processes and controls. The Audit Committee continues to
review progress made in raising the level of cybersecurity
maturity and actions taken by management to ensure
compliance with laws and regulations.
Towards the end of each year, internal audit presents
the proposed annual internal audit plan and resourcing
requirements for the following year. The 2025 internal audit
plan was presented to the Committee and approved in
October 2024. The plan was developed according to the
International Standards for the Professional Practice of
Internal Auditing, and considered the following:
The internal audit plan includes planned audits relating to
strategic priorities and higher-risk areas such as exploration,
ongoing capital projects, compliance with laws and
regulations (e.g. environmental laws, labour law, permitting
requirements), reserves and resources procedures, Tailings
Dam management, health and safety, taxes, cybersecurity
and IT/OT processes and multi-risk operational compliance
processes at mines.
The Head of Internal Audit attended all Audit Committee
meetings during the year. Members of the Audit Committee
meet with the Head of internal audit twice a year without
management present.
At each meeting, the Audit Committee also monitored
progress made by management in addressing ‘red flag’ items
(i.e. relevant control observations) identified through internal
audit work. The Audit Committee’s focus is on ensuring that
the management responses to remediation are appropriate,
and that timely progress is made in reducing the number of
red flags over time.
In addition, the Audit Committee monitored the quality
of the dialogue between Internal Audit and the Executive
Committee in reviewing internal audit findings and agreeing
action plans with appropriate levels of operational buy-in to
address the points raised. The Audit Committee met with
the Chief Executive Officer and Chief Operating Officers
several times during the year to review the outstanding
internal audit points and is satisfied with the progress
achieved through this dialogue.
At the end of the year, the Audit Committee carried out an
evaluation of the performance of the internal audit function,
based on a focused questionnaire, and was satisfied with
the outcome.
Fresnillo’s
strategic plan
Enterprise risk
assessment
(including emerging
risks)
Management’s
concerns and
previous internal
audit results
Universe of
processes, business
units, and projects
Internal Audit
Plan 2025
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Risk
The Committee monitors how the Company’s risk
management framework is operating. Operational
responsibility for risk lies with line management (details of the
Risk Management System are set out on pages 116-120). The
Audit Committee discusses potential changes to the Group’s
risk profile through its regular reviews of the Risk Matrix
and its consideration of any associated recommendations
from management proposing changes to the Risk Matrix to
take account of changing and emerging risk. The Company
defines emerging risk as: ‘A new manifestation of risk that
cannot yet be fully assessed, risks that are known to some
degree but are not likely to materialise or have an impact
for several years, or a risk that the Company is not aware of
but that could, due to emerging macro trends in the mid or
long-term future, have significant implications to achieve the
organisation’s strategic plan.’
The emerging risks were evaluated and reviewed by the
Committee during the year. The Committee also specifically
reviewed the two new emerging risk areas identified during
2023 and added to the Principal Risks and Uncertainties
during 2024: (i) the impact on the Company’s operations
of water stress and drought; and (ii) geopolitical instability.
No new risk categories were identified during 2024.
The Principal Risks and Uncertainties are reviewed every
six months prior to the publication of both the interim and
full-year reports. The Committee assessed the increased risk
of potential actions by the government arising from the new
Mining Law and the Labour Law, which contain relevant
implications for mining operations and projects.
Finally, the planned developments in UK regulatory matters
relating to corporate governance and FRC Guidance on audit
were considered, as were the Company’s initiatives to prevent
fraud with updated internal controls.
Ethical risk
The Committee monitors the Company’s Ethics and
Compliance programme through regular reviews of progress
on the Group’s ABAC programme (including consideration
of reports received through the Whistleblowing Hotline as
well as the online training programme). This demonstrates
that the Group’s corporate values and elements of the control
culture in relation to ethics remain embedded throughout
the organisation. To this end, during the year the Committee
received reports on: the roll out of training in relation to the
disclosure of conflicts of interest; the Code of Conduct; Step-
Up culture and harassment. The Committee also reviewed
progress on the implementation of recommendations made
following an external evaluation of the ABAC programme in
2022. For the past two years, the main area of focus was on
the Procurement, Controllership and Finance departments,
whose processes include most of the recommended anti-
bribery controls. The recommendations have required each
of these processes to be redesigned, and whilst this has
taken time the changes were completed during 2024; the
recommendations have therefore now all been implemented
.
In recent years, the Company has widened the evaluation
of its Fraud Risk Assessment Process to reinforce the
controls to prevent and detect material fraud. Although the
Company has always maintained a firm commitment to
prevent and detect fraud through well-established practices
and procedures, the Committee has been working closely
with internal control and internal audit areas to identify
any perceived weaknesses. During the year, a review of the
Company’s Fraud Risk Assessment Process was undertaken
in line with guidelines published by the Association of
Certified Fraud Examiners (ACFE). Although the review
concluded that the Company’s process fully complies with
the standard recommended by the ACFE; some process areas
were identified where the risk exposure is high and steps have
been taken to run workshops in those process areas to further
assess the risks and improve the control processes.
The external auditors also expanded their procedures in
this area.
Further information about the Company’s approach
to bribery and corruption is set out on pages 65-68
of the Strategic Report.
Financial risk management
The Company’s objectives and policies on financial risk
management – including information on the Company’s
exposures to market risk, such as foreign currency, commodity
price, interest rate, inflation rate and equity price risks, credit
risk and liquidity risk – can be found in Note 31 to the financial
statements. During the year, the Committee reviewed the
Company’s Treasury Policy and concluded that no further
changes were required.
Non-financial risk areas
The Committee regularly reviews and receives management
updates on current issues and developments that could
have potential to give rise to specific risks. It is guided by
regular updates from management on specific issues that
it considers should be kept under review. During 2024,
regular reports were received on legal matters (including
changes to regulation and litigation) and a review of the
Group’s compliance with mining licence conditions at each
of its business units. Where new potential areas of risk are
identified by Management during regular reviews of the Risk
Matrix, the Committee may request further bespoke updates
from Management to supplement its general review of risk
and internal controls. No new areas of non-financial risk were
identified during 2024.
Information technology and cyber risk
Throughout 2024, the Committee continued to receive
updates on the Group’s IT strategy, its linkage to the Group’s
overall business strategy and the financial implications of
that strategy for the business plan. It also monitored the
progress of the Peñoles and Fresnillo Management Teams
in developing the cybersecurity framework for the Group.
Further information about the Group’s approach to IT is set
out on pages 126 and 173-175 of the Strategic Report.
Following a cyberattack on Peñoles’ IT infrastructure (which
supports some of the Company’s IT systems) detected on
18 July 2024, the Committee reviewed the Company and
Peñoles’ assessment of the impact and mitigating actions.
The Committee noted that the Company’s cybersecurity
technology had worked well and had protected the
Company’s IT infrastructure and the mine systems (which
are hosted separately). The attack resulted in a minor impact
that was identified and corrected in a short period of time
with no material data loss or damage to the Company’s IT
infrastructure. In particular, the functionality and integrity
of Company’s financial systems was not affected and
management’s ability to prepare and disclose financial
AUDIT COMMITTEE REPORT CONTINUED
RISK AND CONTROLS
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Strategic Report Governance Financial Statements Additional Information
information was not impacted. Nevertheless, the Committee
continues to rigorously monitor the steps being taken to
further improve the Company’s cybersecurity maturity level.
The Committee also noted that the Company’s financial
systems had not been compromised by the cyberattack and
had not resulted in any delays in the Company’s financial
reporting timetable or process.
Going concern
The Directors must satisfy themselves as to the Group’s
ability to continue as a going concern for a minimum of
12 months from the approval of the financial statements.
The Committee supported the Board in this assessment
by considering whether the Company has adequate liquid
resources to meet its obligations as they fall due. In February
2025, the Committee reviewed the Group’s budget and cash
flow forecasts for the period to 31 December 2026, taking into
account the Company’s anticipated production profiles at
each mine, budgeted capital and exploration expenditure
and the sensitivity of the cash flow forecasts to movements
in metals prices. This includes stress testing those forecasts
to identify the levels to which metals prices must fall to put
pressure on working capital levels.
The Committee also considered EY’s report on this
assessment and on the reasonableness of assumptions
therein, including their consistency with assumptions and
estimates used elsewhere in the preparation of the financial
statements. The Committee also challenged management
on the feasibility of the mitigating actions and the potential
speed of their implementation. Following this assessment,
the Committee satisfied itself that the going concern basis
of preparation is appropriate and the financial statements
appropriately reflect the conclusions on going concern. The
going concern statement is set out in the Strategic Report on
page 141.
Viability assessment
The Executive Team has developed a comprehensive
approach to the viability assessment which is then reported
in the Viability Statement. The key steps of this approach are
explained within the Viability Statement, which is set out in
the Strategic Report on pages 139-140. In December 2024,
the Committee received an update on the approach the
Executive Team proposed to take in preparing the Viability
Statement and confirmed that the scenarios presented in
the previous year, together with a new scenario related to a
possible strike at the Herradura mine (in light of the events
of May 2023), should be maintained for the purposes of the
Viability Statement.
In February 2025, it reviewed the proposed Viability
Statement. It also considered the potential steps that could
be taken to mitigate the cash flow impacts arising from the
most negative scenarios (including delaying project capex or
reducing exploration expenditure).
Monitoring and strengthening Internal controls during
the year
The Committee assists the Board in monitoring the
effectiveness of the Company’s internal control environment.
This monitoring includes oversight of all material controls
including financial, operational, regulatory and compliance.
To accomplish this, there is a governance and organisational
structure in place where internal control is secured by three
lines of defence: process owners (1st line); committees,
controllers, risk management and other oversight bodies
(2nd line); and internal audit (3rd line).
During 2024, the Committee continued to review at its regular
meetings each of the quarterly internal controls reports
which were prepared by Internal Audit and subsequently
submitted to the Board. These documents specifically report
on developments in the Key Risk Indicators and the key
internal control issues arising from the quarterly internal audit
reports. From time to time, the Committee has proposed
changes to those reports based on its own discussion of
Internal Audit’s findings. Remediation actions arising from the
control exceptions identified throughout the year were those
related to: (i) enhancing operative discipline and training for
safety, environment, and fortification procedures; (ii) improving
some information security controls and, (iii) strengthening the
supervision controls and documentation of services on safety
and tailings dam management.
During 2023, the Company engaged PWC to assist
Management in undertaking a gap analysis to identify areas
where improvements were needed to the internal control
framework for financial processes to bring it into line with the
COSO Framework. The Audit Committee received an initial
report from PWC in April outlining the controls it proposed
to strengthen the Internal Control System. Following a
tender process, Deloitte was engaged to assist management
in reinforcing the opportunity areas identified in the gap
analysis. They also documented, implemented and tested
the Company’s internal control framework during 2024 and
2025 in order to be prepared for compliance with the new UK
Corporate Governance Code requirements. The scope of the
implementation included financial, operational, reporting,
compliance and IT processes based on the COSO framework.
The Committee received an update on the implementation
workstreams at its meeting in December 2024 and will be
monitoring the implementation plan, particularly for non-
financial reporting controls, during 2025 ahead of the effective
implementation date for the new Provision 29 of the UK
Corporate Governance Code on 1 January 2026.
Financial reporting controls
Fresnillo management has adopted a series of policies,
practices and controls in relation to the financial reporting
and consolidation process, designed to address key financial
reporting risks, including risks arising from changes in the
business or accounting standards and to provide assurance of
the completeness and accuracy of financial statements and
the Annual Report. These policies and procedures set out the
Group’s accounting policies, its treatment of transactions and
its internal reporting requirements.
The internal reporting of financial information to prepare the
Group’s annual and half-year financial statements is signed
off by the Chief Financial Officer and the Group Financial
Controller. The Chief Financial Officer and the Accounting
Information Manager must also confirm annually that all
information relevant to the Group audit has been provided
and that reasonable steps have been taken to ensure full
disclosure in response to requests for information from the
external auditors. The Committee Chair, Chief Financial
Officer and Group Financial Controller have all participated in
the drafting and review processes for the Annual Report and
the Head of Internal Audit also reviews information disclosed
in the Annual Report.
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AUDIT COMMITTEE REPORT CONTINUED
RISK AND CONTROLS
Annual review of the system of internal controls
The Committee undertakes an annual review of the Group’s
system of internal controls in accordance with Provision 29 of
the Code. In this task, the Committee is directly supported by
the independent work of the internal audit team. This review
aims to improve the understanding of how the various sources
of assurance (through the three lines of defence) interact in the
review and execution of material controls by identifying and
addressing any gaps in the control framework. Consequently,
once a year, the Committee oversees the review of the Group’s
system of internal controls through an assessment, conducted
by management of the various sources of assurance over the
execution of material internal controls. This is a comprehensive
review incorporating operational management, financial
management and Executive Management, complementing
the independent assessment of material risks and internal
controls by internal audit within the third line of defence.
The Chief Executive Officer, Chief Operating Officers and
other senior managers were invited to meet with the Audit
Committee to discuss their action plans and progress for
remediating the issues identified.
This work underpins the Board’s statement on the annual
review of the system of internal controls (see statement on
page 156).
Related parties
With the Company’s Parent Company, Peñoles, owning
just under 75% of the issued share capital of the Company
(see page 196), it has, and will continue to have, a significant
level of influence over the affairs and operations of Fresnillo.
Being part of the same Group provides an opportunity to
achieve synergistic operational, financial and administrative
improvements by combining the resourcing of common
services that can be shared between Peñoles and Fresnillo.
Although these arrangements are beneficial to Fresnillo, the
Committee performs a role in overseeing these arrangements
to ensure that they continue to operate impartially.
The principal arrangements entered into between
the Company and related parties and reviewed by the
Committee during the year were:
The Shared Services Agreement is an agreement between
the Company and Peñoles which sets out, on an arm’s-
length basis, the terms under which several categories of
services are provided to the Company by Peñoles. The Shared
Services Agreement was renewed with effect from 1 January
2023 and must be renewed every five years. Internal audit
conducts reviews of approximately one-third of main services
provided each year to ensure that these services are provided
in accordance with the agreed KPIs. As a result, all services
are reviewed by internal audit over a three-year cycle. Internal
audit reports to the Committee on its review of the Shared
Services Agreement.
During the year, Management reviewed the scope of the
current Shared Services Agreement with Peñoles which
resulted in some services previously within the scope of the
Shared Services Agreement being transferred back to the
Company. This change coincided with a reorganisation of
the Baluarte business unit within Peñoles which no longer
operates as a separate function and, as a result, the fees
payable to Peñoles were reduced accordingly. The Audit
Committee monitored the progress of these discussions
and concurred with the agreed outcome.
The following table summarises the approach taken to
identify and manage related-party transactions under the
Relationship Agreement.
The Met-Mex agreement As it does every year, the Audit Committee considered the reasonableness of proposed
treatment and refining charges in respect of the Met-Mex arrangements for 2024, as
disclosed in Notes 27 and 31 to the consolidated financial statements. Management
circulated a paper setting out the methodology to determine the charges, which takes
industry benchmark charges and adjusts to reflect ore composition and transport costs.
The methodology used in 2024 was the same as that used in the previous three years.
The Committee reviewed this paper and recommended approval of the proposed charges
by the Independent Directors at the Board meeting in October 2024.
As part of its review of the Met-Mex arrangements, the Committee also confirmed with
management that the transfer pricing assessments in respect of prior year transactions
(which are undertaken for tax reasons by the Group’s external adviser, PWC), had been
completed with no issues noted. A similar assessment in respect of the 2024 transactions
will be received in due course.
Other agreements There are other dealings with related parties in the ordinary course of business (e.g. insurance
brokerage) which, although not requiring approval by Independent Directors, will from time-
to-time be reviewed by the Committee to ensure that the arrangements are on a reasonable
arm’s-length basis. During the year, the Audit Committee reviewed the annual insurance
renewal for which Grupo Nacional Provincial, S.A.B., a related-party, acted as broker.
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Process Process Responsibility
Monitoring of
Directors’ interests
If a Director has an interest in a company that could potentially
enter into transactions with a Fresnillo Group Company, the Board
will normally consider that interest under its arrangements for
authorising conflicts of interest under s175, Companies Act 2006.
Directors
Contract negotiation
and verification
The best possible commercial terms are negotiated by
management and, where possible, they will seek to verify
them against international benchmarking reports and/or
independent valuation or assessment.
Fresnillo Executive
Committee and
management
Financial scrutiny Review of the key financial terms of any major transaction
which are verified where possible as to price and quality by
external consultants or independent benchmarking.
Audit Committee
Independent
Director approval
Under the Relationship Agreement and the Listing Rules,
the Independent Non-Executive Directors must approve any
transaction with the Peñoles Group or its associates without the
Non-independent Directors voting.
Independent Non-
Executive Directors
Ensuring that the Annual Report is fair, balanced
and understandable
In relation to the Annual Report and Financial Statements
for the year ended 31 December 2024, there are a number
of steps that the Board, supported by the Audit Committee,
undertook to ensure that the Annual Report is fair, balanced
and understandable. An explanation of the process adopted
in preparing the Annual Report and analysis of the basis
upon which each requirement for it to be ‘fair’, ‘balanced’ and
‘understandable’ had been met was summarised in a paper
which the Board reviewed at its meeting on 27 February 2025.
The key features of this process were:
• The narrative sections of the Annual Report were drafted
by the members of the team with specific responsibility
for the areas referred to in the sections that they prepare.
The individuals involved included the Head of Investor
Relations, the Head of Risk, the Head of Sustainability,
the General Counsel and Compliance Officer, Company
Secretary and Mine Managers.
• As narrative sections of the Annual Report were prepared,
copies were circulated to Board members for review
and comment. Such comments were incorporated into
updated versions of the Annual Report.
• About a month prior to the Annual Report being approved
by the Board, members of the Audit Committee and
other Directors reviewed a current draft enabling them to
assess whether the information was consistent with their
understanding of the Company’s business and the nature
and content of discussions at the Board during the year.
Comments were received from the Directors on most
areas of the Annual Report, and these were incorporated
into subsequent drafts of the Annual Report. The sections
of the Annual Report which were particularly commented
on included: the Review of Operations, the Sustainability
Report and climate-related disclosures in particular, the
presentation of information on diversity and inclusion and
the presentation of health and safety information.
• Suggested changes put forward by the Directors, based
on knowledge obtained through Board and Audit
Committee papers and discussion and other interactions
with management were considered by Management in
preparing the final version of the Annual Report.
• The disclosures relating to climate change, in particular
the TCFD statements, were reviewed by members of
the Board to ensure that they were consistent with the
approach and discussions relating to climate-related
change at Board and Committee (particularly the Audit
Committee and HSECR Committee) levels.
• At the same time, internal audit undertook a review exercise
of the principal non-financial information in the Annual
Report which are extracted from the Company’s operational
records and their findings were appropriately reflected.
• The Audit Committee also reviewed the Annual Report
and financial statements, taking into account comments
made and reports issued by EY and decided to
recommend them to the Board for approval.
As a result of the above procedures, the Board considers that,
taken as a whole, the Annual Report is fair, balanced and
understandable.
The Corporate Governance report which is set out
on pages 144-198 has been approved by the Board
of Directors of Fresnillo plc.
Signed on behalf of the Board.
Alberto Tiburcio
Independent Non-Executive Director
3 March 2025
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DIRECTORS’ REMUNERATION REPORT
REMUNERATION AT A GLANCE
Remuneration Policy in summary
The Company currently has no Executive Directors; however, the Remuneration Committee treats the Chief Executive Officer
as if he were an Executive Director for the purposes of the Remuneration Policy and for reporting on his remuneration.
WHAT DOES THE POLICY SEEK TO ACHIEVE?
The Group’s Remuneration policy seeks to ensure that the Company is able to attract, retain
and motivate its Executive Directors and members of the Executive Committee. The retention
of key management and the alignment of management incentives to the Group’s purpose are
essential objectives of this Policy.
Components of Directors’ remuneration structure
HOW IS EXECUTIVE REMUNERATION STRUCTURED?
Component
SALARY BONUS BENEFITS PENSION
Rationale
Setting base salary levels
for Executive Directors and
members of the Executive
Committee at an appropriate
level is key to managerial
retention in Mexico. Salaries
are positioned within a range
of possible salaries according
to experience and length
of service.
Ordinarily, subject to
performance, the same
percentage will be applied
to salary increases across
the Company for senior
management and other
employees alike.
The annual bonus rewards
the achievement of financial
and strategic business targets
and the delivery of personal
objectives. Annual bonus is
capped at six months’ salary
and is paid on the basis
of metrics set out in the
Remuneration policy.
Benefits are provided in line
with the Group’s policy on
employee benefits.
The Group operates a
defined contribution
scheme for all employees.
Executive Directors and key
management are entitled to
membership of the defined
contribution scheme.
Component
LONG-TERM INCENTIVES SHARE-BASED REMUNERATION
SHAREHOLDING GUIDELINES RECOVERY OF BONUS
Rationale Rationale
The annual bonus scheme
sets targets which are aligned
to the Company’s long-term
strategic objectives so that
these priorities are embedded
within the day-to-day
activities of our business. The
Company does not operate a
long-term incentive plan.
The Company does not
use share-based forms of
remuneration because the
Remuneration Committee
does not currently consider
them to be a common form
of executive remuneration
in Mexico.
In the absence of share-
based incentive schemes,
the Company does not adopt
shareholding guidelines
for executives.
The absence of long-
term incentives and the
operation of Mexican
law makes it difficult
to adopt clawback and
malus arrangements.
There is, however, scope
within the bonus scheme
for bonus awards to be
adjusted downwards
at the discretion of the
Remuneration Committee.
Objective of the Remuneration policy
WHAT DOES THE POLICY SEEK TO ACHIEVE?
The annual bonus is set for, and based on, performance over a single-year period but
the KPIs and targets are also designed to ensure that both short-term objectives and
the long-term development of the Fresnillo Group are given broadly equal priority within
variable remuneration.
Additional features of Fresnillo’s Remuneration Policy
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Strategic Report Governance Financial Statements Additional Information
4
SUSTAIN
2
DEVELOP
3
OPERATE
1
EXPLORE
ALIGNMENT OF THE REMUNERATION POLICY TO PURPOSE AND STRATEGY
1
EXPLORE
Extend and maintain
a robust growth
pipeline.
2
DEVELOP
Deliver profitable
growth, optimise cash
flows and returns.
3
OPERATE
Maximise the
potential of
our operations.
4
SUSTAIN
Advance and enhance
the sustainability of
our business.
Our Purpose is to contribute to the wellbeing of people, through the sustainable mining of gold and silver
Key components of the annual bonus in 2024
WHAT WAS ACHIEVED?
2024 2023 Change (%)
Total silver reserves (moz) 331.3 356.6 (7.1%)
Total gold reserves (moz) 7.2 7.1 2.5%
EBITDA (US$m) 1,547.3 655.7 (136.0%)
Profit for the year (US$m) 187.2 288.3 (35.1%)
Silver production (moz) 56.3 56.3 0%
Gold production (koz) 631.6 610.6 (3.4%)
Total relevant environmental incidents 0 0 0%
Fatalities 2 4 (50%)
CEO’s remuneration Total salary (US$000) 1,277 1,111 14.94%
Bonus (US$000) 458 0 n/a
• Replenishment and
expansion of reserves
and resources.
• Exploration projects
progress.
• Development
projects progress.
• Contractors’
performance.
• EBITDA
• Production – increase
in ounces produced.
• Synergies and
teamwork.
• Management
of contractors.
Employees/Contractors
• Safety (various metrics).
• Labour relations.
Communities
• Project-based metrics.
Environment
• Environmental risk
management.
Shareholders
• EBITDA.
RELEVANT BONUS METRICS
STRATEGIC PRIORITIES
Performance
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DIRECTORS’ REMUNERATION REPORT CONTINUED
CHAIRMAN’S ANNUAL STATEMENT
Dear shareholder,
I am delighted to introduce the Directors’
Remuneration Report.
This year has been a year of reflection for the Remuneration
Committee. We continue to welcome the support of our
shareholders for our remuneration arrangements, and I
was pleased to see that this support was again strongly
demonstrated at our 2024 AGM.
The Remuneration Committee recognises the need to ensure
that executive remuneration rewards excellent performance
whilst also incentivising executives in a way that is consistent
with the expectations of the Company’s shareholders. In this
regard, the Committee continues to monitor the annual bonus
arrangements for our senior management team to ensure
that they are aligned to our strategy and the business context
within which the Company operates. In 2024 we introduced
minor changes to the KPIs to calculate the annual bonus to
Executive Committee members and we are planning to review
them again in 2025.
The 2025 targets, performance against those targets and the
basis of calculation of bonus points awarded will be disclosed
in next year’s report.
In our Remuneration Report, we continue to publish
remuneration information in respect of our Chief Executive
Officer as if he were a member of the Board, even though that
is not the case. As ever, I am always interested to hear the views
of shareholders on our approach to executive remuneration.
During the year, we have applied the Remuneration Policy
to executive remuneration without needing to exercise any
form of discretion other than those elements of the executive
bonus plan which require an element of judgement in
determining outcomes for the year.
Salaries, bonus and our application of the
Remuneration policy in 2024
Levels of salary increase for the members of the Executive
Committee, with the exception of the CEO, continued to be
aligned to the level of increase for all employees (at around
6%). The CEO’s pay was increased by 15%, which was supported
by evidence from Willis Towers Watson, showing that the
CEO’s remuneration has fallen behind the levels seen across
the peer group used to benchmark any Executive Committee
member’s remuneration (the Peer Group) under the terms
of the Company’s Directors Remuneration Policy (which
shareholders approved in 2023).
For 2024, the Committee has agreed to award bonuses to
the members of the Executive Committee to reflect their
performance against the targets set out in the annual bonus
plan. The Chief Executive Officer was awarded 127.8 points
under the plan and therefore has been awarded a bonus
equivalent to six months’ salary.
Historically, it has been the Committee’s view that it is not
appropriate, as a Mexican mining company, to include
long-term share-based remuneration as a component of
the executive remuneration arrangements. The Committee
reviews this subject from time to time and during 2024
discussed whether it was now appropriate to introduce this
element into the remuneration framework. The Committee
decided not to change its position in the short-term. However,
it will continue to assess the role of long-term incentives in
the Company’s approach to executive remuneration during
2025 as part of the review of the Directors Remuneration
Policy, which it will need to undertake prior to the 2026 AGM.
Committee discussions during 2024
In the last 12 months, the Remuneration Committee met four
times and its discussions and decisions included the following:
• Review of the performance of the Chief Executive Officer
and members of the Executive Committee compared to
the KPIs set for 2023 and 2024.
• Review of KPI targets for the Chief Executive Officer and
members of the Executive Committee for 2024 and 2025.
• Review of the Non-Executive Directors’ fees. Due to the
fact that there had not been a general increase in the Non-
Executive Directors’ fees for the past few years, a general
increase of 20% in the fees paid to Non-Executive Directors
was approved effective on 26 July 2024. No fees increase is
considered for 2025.
• Discussion of the results of the effectiveness review
of the Committee undertaken as part of the wider
Board effectiveness review, which were considered
to be satisfactory.
• Review and revision of the terms of reference of the
Committee in response to UK regulatory developments.
I am always happy to discuss our approach to remuneration
with shareholders and will attend the 2025 AGM to answer
any questions prompted by this report. I would be happy to
speak with any shareholders who have questions about the
work of the Committee.
Yours faithfully,
Alberto Tiburcio
Chairman of the Remuneration Committee
“The Remuneration Committee
considers that its approach to executive
remuneration incentivises the right
priorities for our Executive Team for
the benefit of stakeholders.”
Members
Meetings
attended
Alejandro Baillères 4/4
Alberto Tiburcio 4/4
Guadalupe de la Vega 4/4
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Strategic Report Governance Financial Statements Additional Information
ANNUAL REPORT ON REMUNERATION 2024
Introduction
This report sets out information about the remuneration of
the Directors and Chief Executive Officer of the Company for
the year ended 31 December 2024. In accordance with the
regulations, the information provided in the section entitled
Directors’ remuneration – 1 January 2024 to 31 December
2024 and accompanying notes, has been audited by Ernst &
Young LLP.
The Remuneration Committee has responsibility for
making recommendations to the Board on the Group’s
Remuneration Policy for Executive Directors and the Chief
Executive Officer and other members of the Executive
Committee, and for determining specific remuneration
packages for senior management, including pension
arrangements and any compensation packages, as well
as remuneration of the Chairman within agreed terms
of reference.
Audited information – Directors’ remuneration –
1 January 2024 to 31 December 2024
Single total figure of remuneration
The detailed emoluments received by the Executive and Non-
Executive Directors and the Chief Executive Officer during the
year ended 31 December 2024 are detailed below:
US$ thousands
2024 2023
Salary/
Fees Benefits Bonus Pension
Total
fixed
pay
Total
variable
pay Total
Salary/
Fees Benefits Bonus Pension
Total
fixed
pay
Total
variable
pay Total
Chairman
Alejandro Baillères 54 0 0 0 54 0 54 47 0 0 0 47 0 47
Non-Executive
Directors
Juan Bordes
2
20 0 0 0 20 0 20 47 0 0 0 47 0 47
Arturo Fernández 54 0 0 0 54 0 54 47 0 0 0 47 0 47
Bárbara Garza
Lagüera
2
20 0 0 0 20 0 20 47 0 0 0 47 0 47
Charles Jacobs 138 0 0 0 138 0 138 122 0 0 0 122 0 122
Georgina Kessel 61 0 0 0 61 0 61 54 0 0 0 54 0 54
Judith Macgregor 138 0 0 0 138 0 138 122 0 0 0 122 0 122
Fernando Ruiz 54 0 0 0 54 0 54 47 0 0 0 47 0 47
Alberto Tiburcio 77 0 0 0 77 0 77 68 0 0 0 68 0 68
Guadalupe
de la Vega 54 0 0 0 54 0 54 47 0 0 0 47 0 47
Eduardo Cepeda 54 0 0 0 54 0 54 47 0 0 0 47 0 47
Héctor Rangel 61 0 0 0 61 0 61 47 0 0 0 47 0 47
Luz Adriana
Ramírez
2
33 0 0 0 33 0 33 n/a n/a n/a n/a n/a n/a n/a
Rosa Vázquez
2
33 0 0 0 33 0 33 n/a n/a n/a n/a n/a n/a n/a
Total 851 0 0 0 851 0 851 749 0 0 0 749 0 749
Chief Executive
Officer
Octavio Alvídrez
1
1,277 160 458 148 1,585 458 2,043 1,111 157 0 102 1,370 0 1,370
Grand total
3
2,128 160 458 148 2,436 458 2,894 1,860 157 0 102 2,119 0 2,119
1 Details of benefits and the bonus paid to Mr Alvídrez are set out in the tables below.
2 Luz Adriana Ramírez and Rosa Vázquez were elected to the Board on 21 May 2024. Bárbara Garza Lagüera and Juan Bordes retired from the Board on the same date.
3 The Company does not operate a long-term incentive plan or any share-based incentives.
Benefits
The Chief Executive Officer participates in the Company-wide benefits scheme. The benefits provided to Mr Alvídrez during the
year consisted of:
US$ 2024 2023 2024 2023
Life insurance premiums 71,563 65,023 Medical insurance premiums 4,642 9,373
Chauffeur 37,637 61,561 Club memberships 2,412 3,498
Subsistence/meal benefits 9,299 3,306 Social security 1,475 1,444
Car 32,792 12,928
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DIRECTORS’ REMUNERATION REPORT CONTINUED
ANNUAL REPORT ON REMUNERATION 2024
Pension
The pension entitlement of the Chief Executive Officer is as follows and is explained further on pages 182 and 185:
US$‘000 Defined Contribution Scheme (DCS) Defined Benefit Scheme (DBS)
Rights as at 31 December 2024 1,651 983
Additional benefit in the event that the
Chief Executive Officer retires early.
In the event of early retirement,
Mr Alvídrez is entitled to receive his
accumulated contributions (both
member and Company) to the DCS.
Mr Alvídrez is not currently entitled to any
additional benefit on early retirement in
the DBS.
US$ thousands
Accumulated accrued benefits
(as at 31 December)
Increase (decrease) in accrued benefits
during the year (see note)
Increase (decrease), before inflation and
the effect of foreign exchange, in accrued
benefits during the year
2024 2023 2024 2023 2024 2023
Octavio Alvídrez
1
2,474 2,129 679 334 358 12
Note: The increase in accrued benefits during the year includes a revaluation effect of +US$272k (2023: +US$256k) and inflation of +US$49k (2023: +US$56k).
Shares held by Directors
The number of Ordinary Shares of the Company in which the
Directors were beneficially interested at 1 January 2024 and at
31 December 2024 was:
1 January 2024 31 December 2024
Alejandro Baillères
1
552,595,191 552,595,191
Juan Bordes 15,000 n/a
Arturo Fernández – –
Bárbara Garza Lagüera – n/a
Charles Jacobs 1,600 1,600
Georgina Kessel – –
Dame Judith Macgregor – –
Fernando Ruiz 30,000 30,000
Alberto Tiburcio – –
Guadalupe de la Vega – –
Eduardo Cepeda – –
Héctor Rangel – –
Luz Adriana Ramírez n/a -
Rosa Vázquez n/a -
Chief Executive Officer – –
Octavio Alvídrez – –
1 Mr Alejandro Baillères is beneficially interested in more than 50% of the
share capital of the Company through his interest in Industrias Peñoles S.A.B.
de C.V. (‘Peñoles’). The Company and Peñoles are part of the consortium
known as Grupo BAL which is now controlled and directly or indirectly
majority-owned by a Baillères Family Trust, Mr Alejandro Baillères being the
major beneficiary. Mr Alejandro Baillères and companies controlled by him
hold, in aggregate 68.9% of the issued share capital (and voting rights) of
Peñoles. Peñoles holds 552,595,191 Ordinary Shares (74.99%) of the issued
share capital in the Company.
Our stakeholders and remuneration
• The Committee seeks to ensure that its approach
to executive remuneration matters is aligned
with the interests of all of its key stakeholders.
In particular, the current Policy seeks to take
account of the interests of our key stakeholders
in the following ways:
Shareholders
• Feedback from major shareholders and proxy
voting agencies provided prior to the AGM is
considered by the Remuneration Committee
in the course of its discussions during the
following year.
Workforce
• Salary reviews for the members of the Executive
Committee are decided after taking account
of the average salary increases discussed and
agreed with the Unions.
• Metrics that promote good employment practices,
e.g. appropriate management of health and safety
and the relations with unionised employees and
contractors, are included in the targets for the
Annual Bonus Plan.
Communities and environment
• Metrics that promote good community relations
and sound environmental stewardship are
included in the targets for the Annual Bonus Plan.
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Salary
Policy on the consideration of wider
employment conditions and remuneration
When setting pay and benefits for Executive Directors
and members of the Executive Committee, the
Remuneration Committee takes account of pay and
conditions across the Group. It will consider the overall
pay increase percentage negotiated each year with
employee representatives as its starting point taking
account of inflation and other information supporting
the annual pay award for employees.
Factors considered in setting salary and workforce
engagement on remuneration
Benchmarking information on pay and employment
conditions provided by Mercer, Hay Group and Data
Compensation was used across the Group in determining
salaries for all employee grades including Senior
Management. These reports benchmarked salaries by
reference to peer groups in mining, large companies in
Mexico and internationally.
The Company negotiates salary increases with the Unions
annually, to take effect from 1 April each year. The agreed
rates may also be used as the point of reference in setting the
annual salary review for the Chief Executive Officer, members
of the Executive Committee and non-unionised employees.
In 2024, it was agreed that the Chief Executive Officer
would receive a salary increase of 15.0% in 2024 following a
benchmarking review undertaken by WillisTowersWatson.
Consequently, the salary payable under Mr Alvídrez’ service
agreement is MX$1,396,678 (US$76,311) per month, which
excludes payments for holidays, Company-paid savings
contributions and other cash benefits.
Policy on the alignment of executive
remuneration and the market
Reviews of the Executive Director and Executive
Committee members’ remuneration is conducted by
Willis Towers Watson, from time to time, at the request
of the Remuneration Committee. These enable the
Remuneration Committee to validate the Company’s
policy towards remuneration and ensure that it is
globally, as well as locally, competitive. The analysis
evaluates the elements of base salary, short-term
compensation (guaranteed payments and short-
term bonus) and long-term compensation (primarily
stock programmes) separately. With assistance from
Willis Towers Watson, the Remuneration Committee
has established a peer group which will be used to
benchmark any Executive Director’s and any Executive
Committee member’s remuneration (the Peer Group) to
ensure that it remains within the parameters set out in
the policy.
The Peer Group will be updated where necessary,
to ensure that it remains an appropriate comparator
group of companies.
Benchmarking
The Remuneration Committee has agreed that the Chief
Executive’s salary should be set within a range of 25-75% of
the Peer Group for base salary. This was reviewed in October
2024. The Peer Group consists of the following companies.
Policy benchmarking Peer Group
Region Peer group companies
Mexico • Southern Copper (Peru)
• Alamos Gold
US/Canada • Agnico Eagle Mines Ltd
• Centerra Gold
• Hecla Mining Co.
• IAM Gold
• Newmont Goldcorp
• Pan American Silver Corp.
• Capstone Copper Corp.
Europe • Hochschild Mining
• Antofagasta
Variable remuneration
Policy on Annual Bonus Plan
and variable remuneration
It is the Company’s policy not to use its equity to
incentivise long-term performance. The Company’s
core strategy is one of long-term sustainable growth.
Sustainable growth in mining requires the steady and safe
expansion of the Group’s operations through the discovery
of new resources and construction, maintenance and/or
expansion of new mines. No distinction is therefore made
between short and long-term incentives.
Factors considered in setting the bonus
The Annual Bonus Plan includes metrics and targets which
are aligned to at least one of the four main themes of the
Group’s strategy (see Remuneration at a Glance section on
pages 178-179).
The Remuneration Committee has set a cap on each of the
KPIs (other than the Safety KPI) such that the points awarded
on any KPI (other than Safety) cannot exceed 135% of the
target set for that KPI at the beginning of the year.
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Annual bonus
Mr Alvídrez achieved 127.2 points under the bonus scheme
for the year ended 31 December 2024 (2023: 56.8 points)
and therefore has received a bonus for 2024 of US$457,867
(2023: nil).
The objectives, the measures associated with each objective,
and the relative weighting between objectives, as applied
to Mr Alvídrez’ annual bonus payment, are detailed in the
following table:
Objective
1
Measure
Weighting
points
1
2024
Target
2024
Results
Points
awarded
Financial
2
(Adjusted EBITDA for the year/Budgeted EBITDA) x 100 20 645 783 41.4
Production
3
Increase in silver equivalent ounces produced compared to the prior year
production level
20 116.3 119.0 22.3
Exploration Increase of total resources
4
(total resources for the year – total resources prior
year) x 100
4 0.5 .75 6.0
Upgrade from inferred to measured and indicated (MI) resources
(MI resources for the year – MI resources prior year) x 100
5
5 0.5 -1.12 0.0
Reserves replenishment
(Reserves at year end/Reserves prior year) x100
5 100% 100% 5.0
Compliance
with cost control
vs budget
Corporate + Admin. expenses + Adjusted production cost
Note: Staying in budget: 11 points
1 points for each additional 1% reduction
1 point less for each 1% increase
11 0% -1% 12.1
Exploration
projects’
progress
6
Progress compared to project plan for three key development projects
(to be reviewed each year)
2 90% 106% 2.4
(maximum 20% increase reaching 100% of the programme) 2 90% 90% 2.0
Proportional decrease to 0 points below 90% progress 1 90% 148% 1.2
Projects Progress according to programme (Real vs Plan) (to be reviewed each year) 3 90% 98% 4.9
3 points at 95% programme – Proportional to 6 points at 100% 4 100% 103% 5.3
Unionised labour relations (discretionary award)
(Score: 100 – Best relationships …to... 0 – Worst relationships)
2 90.0 90.0 2.0
Safety Fatal accidents
7
0 0 2 0.0
Sustainability area plan progress in implementing the safety plan for the
year
8
(Target = 95% progress: Maximum = 100% progress, proportional
decrease to nil points from 95% to 0%)
3 95% 95% 3.0
Reduction in the Lost Time Incidence Ratio
9
compared to previous year
(Including contractors)
3.5 7.4 4.8 4.8
Reduction in the Incidence Frequency Rate
9
compared to previous year
(Including contractors)
3.5 12.1 7.6 4.8
ESG
9
Determined by Fresnillo coordinator and Chairman HSECR Committee
according to annual programme.
5.0 5.0 5.0 5.0
Water consumption (m
3
/Tonne)
9
2.5 0.390 0.436 2.2
CO
2
emissions (CO
2
/Tonne)
9
2.5 0.025 0.018 3.2
Synergies and
teamwork
Increase collective teamwork
10
Discretionary target as agreed by the Chairman
1 95 95 1.0
Total 100 128.5
Adjustments Safety
7
0 0 2 -1.3
Environmental
11
0 0 0 0.0
Other:
Special adjustment due to special/extraordinary events, determined by the
Remuneration Committee
(maximum 15 points)
0 0 0 0.0
Total 100 127.2
1 The performance evaluation’s items, weights and targets (Budget) will be determined on a yearly basis according to the Strategic Plan.
2 Metals prices, Silverstream and Devaluation effects will be eliminated.
Budgeted metals prices: Gold – 1,950 US$/oz; Silver – 23.0 US$/oz; Lead – 0.95 US$/lb; Zinc – 1.15 US$/lb Budgeted exchange rate: 17.00 MX$/US$
Increase of 1.0 point per each 1% increase in EBITDA. Decrease of 1 point in case of a 1% decline in EBITDA.
3 Total production in silver equivalent ounces. Silver production + (Gold production X 70) + Lead and Zinc production (converted into silver equivalent ounces at
prevailing price and NSR terms). Same conversion rate will be used for real production and target.
Total production = 57.3 moz silver + (0.605 moz gold X 70) + (57,604 lead tonnes X .000099) + (107,219 zinc tonnes X .000102) 116.3 moz AgEq = 57.3 moz silver + 42.3 moz
AgEq from gold + 5.7 moz AgEq from lead + 10-.9 moz AgEq from Zinc.
Increase of 1.0 point per each 1% increase. Decrease of 1 point in case of a 1% decline.
4 Proportional increase in points per increase in Resources above target. A proportional decrease in points will be applied in case of an increase in Resources below the
target. Weighted Average Resources according to Quality.
5 Increase of 2.0 points per each 1% of Resources increase above target. A decrease of 2 point per each 1% below target will be applied. Weighted Average Resources
according to Quality.
6 Relevant ongoing projects which progress will be measured compared to plan.
7 10 points in case of zero fatal accidents (premium of 10 points over the weight). 0 points in case of one accident. The total score will be reduced by 1% in the case of two
fatal accidents. From the remaining total score, an additional 2% will be reduced in the case of three fatal accidents. In the case of four fatal accidents, an additional 3%
will be reduced from the remaining total score and so on consecutively. Includes own workers and contractors.
8 Progress of the programme set by the Sustainable team. Chairman and coordinator will set the score.
9 Decrease of the previous year corresponding rate.
10 Foster teamwork and relationship improvement with Group companies. Chairman and coordinator will set the score.
11 The total score is reduced by 2% in the case of an environmental incident. From the remaining total score, an additional 3% will be reduced in the case of two
incidents. In the case of three incidents, an additional 4% will be reduced from the remaining total score and so on consecutively.
DIRECTORS’ REMUNERATION REPORT CONTINUED
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Strategic Report Governance Financial Statements Additional Information
Reconciliation of adjusted net profit targets and outcomes to the financial statements
US$ million 2024 2023
Profit for year as shown in financial statements 226.7 288.3
Interest, tax, depreciation and amortisation 1,138.4 375.1
Adjustments:
Changes due to currency fluctuations (68.3) 100.6
Changes due to year-on-year movements in metals prices (including the effects of metals hedging) (696.3) 183.7
Changes due to the movement in the valuation of the Silverstream contract 182.3 7.7
Adjusted EBITDA total for bonus purposes 782.7 572.5
The Chief Executive Officer is prohibited from participating in
the PTU scheme and may receive a bonus not greater than
six months’ pay. All other Mexican employees are eligible for
PTU payments annually. The PTU payable in respect of 2024,
payments are capped at the higher of three months’ salary or
the average PTU received in the last three years.
2025 Bonus targets
The Remuneration Committee agreed that 2025 indicators,
weightings and measures should be similar as in 2024. In
2024, the Committee introduced minor changes to the KPIs to
calculate the annual bonus to Executive Committee members
and it is planning to review them again in 2024 to complete
the alignment of these with the Company’s strategy.
The 2025 targets, performance against those targets and the
basis of calculation of bonus points awarded will be disclosed
in next year’s Directors’ Remuneration Report.
Pension entitlement
Policy on pensions
The Group operates two pension schemes: (i) a defined
benefit scheme which was closed to new members on
1 July 2007 with benefits frozen at this date for existing
members – subject to indexation with reference to
the Mexican National Consumer Price Index; and (ii) a
defined contribution scheme (which was introduced
on 1 July 2007). Membership of the latter scheme is
voluntary; members earning a salary of no more than
25 times the minimum wage in force from time to time
may make contributions of 5% to the scheme.
On behalf of members earning a salary of no more
than 25 times the minimum wage in force at the time
the employing company may make contributions of 5%
to the scheme. The employing company may also make
additional contributions between 5-8% of salary to this
plan. Members may elect to match percentages between
5-8% of salary. Executive Directors may participate in the
Group’s pension schemes on the same basis as any
other employee.
Mr Alvídrez is a member of the defined benefit scheme in
relation to services with the Company prior to 1 July 2007. He
is also a member of the defined contribution scheme. He is
expected to retire at his normal retirement age of 60 years.
Chairman and Non-Executive Directors
Policy on Chairman and Non-Executive Directors
The remuneration of the Chairman of the Company and the
Non-Executive Directors consists of fees that are paid quarterly
in arrears. The Chairman and Non-Executive Directors do
not participate in any long-term incentive or annual bonus
schemes, nor do they accrue any pension entitlement. The
Chairman of the Company does not receive any fees for acting
as Chairman other than his fees as a Non-Executive Director.
The fees payable to Non-Executive Directors are calculated on
the following bases:
• A base fee of £42,000 per annum is paid to each non-
UK-based Non-Executive Director to reflect the time
commitment and level of involvement they are required
to make in the activities of the Board as a whole.
• There are no set fees for membership of any Board
committees or for the chairmanship of the Board, other
than as follows:
– The UK-based Non-Executive Directors receive a
higher fee, currently £108,000 per annum, to reflect
the additional time commitment that they make in
order to travel to Board meetings in Mexico and for
responsibilities as committee members and, where
appropriate, as Senior Independent Director and/or
Chairman of any committee.
– The Chairman of the Audit Committee will receive an
additional fee of £18,000 per annum.
– Members of the Audit Committee will receive an
additional fee of £6,000 per annum.
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Fresnillo plc Annual Report and Accounts 2024
The key terms of the Non-Executive Directors’ letters of appointment for the Directors serving at the end of the year are as follows:
Director
Date of original letter
of appointment
1
Notice period from
Director to the
Company Duration of term
2
Fees p.a.
Alejandro Baillères 16 April 2012 3 months 1 year £42,000
Arturo Fernández 15 April 2008 3 months 1 year £42,000
Fernando Ruiz 15 April 2008 3 months 1 year £42,000
Charles Jacobs 11 April 2014 3 months 1 year £108,000
Alberto Tiburcio 4 May 2016 3 months 1 year £60,000
Dame Judith Macgregor 22 May 2017 3 months 1 year £108,000
Georgina Kessel 7 May 2018 3 months 1 year £48,000
Guadalupe de la Vega 30 May 2020 3 months 1 year £42,000
Eduardo Cepeda 24 June 2021 3 months 1 year £42,000
Héctor Rangel 28 June 2021 3 months 1 year £48,000
Luz Adriana Ramírez 21 May 2024 3 months 1 year £42,000
Rosa Vázquez 17 May 2024 3 months 1 year £42,000
1 Copies of the Directors’ letters of appointment and service agreements are available for inspection at the Company’s registered office.
2 Unexpired term: the Non-Executive Directors all have rolling contracts which are subject to the annual re-election at the Annual General Meeting. The current term
expires on the date of the next Annual General Meeting, but the appointment will continue after that date provided that each Director is re-elected at the AGM.
Shareholders and remuneration
Policy on engagement with shareholders on remuneration
The composition of the Remuneration Committee has
been designed to ensure that the views of the controlling
shareholder (through the membership of the Chairman of the
Board on the Committee) and the independent shareholders
can be represented. The Remuneration Committee has
considered the views of organisations such as Institutional
Shareholder Services (ISS) and the Investment Association
both generally and as reported to the Company in relation to
its own executive remuneration practices prior to each Annual
General Meeting, when considering the Remuneration Policy
and its application.
AGM voting on the Remuneration Report
The Remuneration Committee’s approach to executive
remuneration has received strong support from shareholders
at every Annual General Meeting since the Company’s
listing on the London Stock Exchange in 2008. More than
65% of independent share votes cast on the advisory vote
at each AGM have been in favour of the Directors’
Remuneration Report.
Year
All shares voted Independent shares voted No. of votes withheld
For Against For Against
2022: Remuneration policy 97.94% 1.76% 89.21% 10.79% 32,689
2022: Remuneration Report 98.24% 2.6% 90.77% 9.23% 34,737
2023: Remuneration policy 94.15% 5.85% 68.15% 31.85% 752,104
2023: Remuneration Report 98.47% 1.53% 91.74% 8.26% 17,493
2024: Remuneration Report 98.72% 1.28% 94.07% 5.93% 10,250
Advisers to the Remuneration Committee
Remuneration consultants (Mercer, Hay Group and Data
Compensation) are engaged by Group companies to provide
benchmarking information on remuneration across the
Fresnillo Group, but not to provide guidance on the structure
of remuneration. Such information is taken into account when
considering Executive Committee remuneration. Willis Towers
Watson advises the Remuneration Committee on executive
remuneration matters from time to time. During 2024 the
Group paid Willis Towers Watson US$5k (2023: US$nil). All
of the consultants that the Group uses are independent of
the Company and each of the Directors. No remuneration
consultants are directly engaged by the Remuneration
Committee itself.
The Company Secretary ensures that the Remuneration
Committee fulfils its duties under its terms of reference and
arranges regular updates to the Remuneration Committee
on relevant regulatory developments in the UK. The Group
Human Resources department provides information on
Mexican market trends and compensation structures for the
broader employee population in the Fresnillo Group.
DIRECTORS’ REMUNERATION REPORT CONTINUED
ANNUAL REPORT ON REMUNERATION 2024
187
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Strategic Report Governance Financial Statements Additional Information
0
100
200
300
400
500
2025
2009 2011 2012 2013 2014 2015 2016 201920172010 2018 20232022202120202008
2024
Fresnillo total return index FTSE 100 total return index
Additional information on remuneration
Share price performance
As required by the Regulations, the following graph sets out the performance of the Company’s share price since its listing
compared to the FTSE 100 Index. As the Company was a constituent of the FTSE 100 Index for most of the year, this is deemed
to be the most appropriate index for comparative purposes for the year ended 31 December 2024.
Chief Executive Officer’s service agreement
During the year, Mr Alvídrez served as Chief Executive
Officer but was not a member of the Board. Mr Alvídrez is
employed under a contract of employment with Servicios
Administrativos Fresnillo S.A. de C.V., a subsidiary of Fresnillo
plc. Mr Alvídrez’ contract commenced on 15 August 2012
and is governed by Mexican Federal Labour Law. Mr Alvídrez’
service agreement does not have a fixed term and may be
terminated in writing by either party. There is no provision
in Mr Alvídrez’ service agreement entitling him to additional
compensation for termination other than those required
by Mexican labour laws for termination without cause. No
benefits are payable on termination.
Under his service agreement, Mr Alvídrez is entitled to 26
working days’ paid holiday per year. He is not entitled to profit-
sharing (PTU). Mr Alvídrez is also entitled to life insurance, the
use of a chauffeur and company car, the payment of medical
insurance premiums covering limited expenses and check-
ups, meals and subsistence payments and club subscriptions.
Total remuneration of the Chief Executive Officer
The total remuneration of the Chief Executive Officer for the past ten years, in US dollars, has been as follows
Year ending 31 December 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Total remuneration US$‘000s
Octavio Alvídrez 1,166 1,111 1,072 886 1,164 939 975 916 1,370 2,043
Percentage change on previous year (4.2%) (4.7%) (3.5%) (10.7%) 31.4% (19.3%) 3.8% 6.1% 49.6% 49.1%
Proportion of maximum bonus
paid to CEO in year
Octavio Alvídrez 33.33% 66.66% 33.33% Nil% Nil% 20.83% Nil% Nil% Nil% 100.00%
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Fresnillo plc Annual Report and Accounts 2024
Changes in Directors’ remuneration 2020-2024
The changes in Directors total remuneration between 2020 and 2024 and a comparison with changes in average employee
remuneration over that period are as follows:
2024 2023 2022 2021 2020
Year-on-year
change (%)
3
Salary Bonus Benefits Salary Bonus Benefits Salary Bonus Benefits Salary Bonus Benefits Salary Bonus Benefits
Directors
4
Alejandro
Baillères 13.1 % n/a n/a 11.09% n/a n/a (13.12%) n/a n/a (8.26%) n/a n/a (14.65%) n/a n/a
Juan Bordes (57 %) n/a n/a 11.09% n/a n/a (13.12%) n/a n/a (8.26%) n/a n/a (14.65%) n/a n/a
Arturo
Fernández 13.1 % n/a n/a 11.09% n/a n/a (13.12%) n/a n/a (8.26%) n/a n/a (14.65%) n/a n/a
Bárbara Garza
Lagüera (57%) n/a n/a 11.09% n/a n/a (13.12%) n/a n/a (8.26%) n/a n/a (14.65%) n/a n/a
Charles Jacobs 13.1% n/a n/a 11.09% n/a n/a (14.66%) n/a n/a (11.53%) n/a n/a (14.65%) n/a n/a
Georgina
Kessel 13.1% n/a n/a 11.09% n/a n/a (11.33%) n/a n/a 2.27% n/a n/a (14.65%) n/a n/a
Judith
Macgregor 13.1% n/a n/a 11.09% n/a n/a (13.12%) n/a n/a (8.26%) n/a n/a (14.65%) n/a n/a
Fernando Ruiz 13.1% n/a n/a 11.09% n/a n/a (13.12%) n/a n/a (8.26%) n/a n/a (14.65%) n/a n/a
Alberto Tiburcio 13.1% n/a n/a 11.09% n/a n/a (13.12%) n/a n/a (8.26%) n/a n/a (14.65%) n/a n/a
Guadalupe
de la Vega 13.1% n/a n/a 11.09% n/a n/a (13.12%) n/a n/a 67.51% n/a n/a n/a n/a n/a
Eduardo
Cepeda 13.1% n/a n/a 11.09% n/a n/a 66.02% n/a n/a (8.26%) n/a n/a n/a n/a n/a
Héctor Rangel 13.1% n/a n/a 11.09% n/a n/a 66.02% n/a n/a (8.26%) n/a n/a n/a n/a n/a
Chief
Executive
Officer
2
Octavio
Alvídrez 15.0% n/a
6
45.1% 20.63% 0% 30.83% 5.98% 0% 25.0% 18.07% n/a
5
9.09% (15.44%) n/a
5
(8.30%)
Average
employee
remuneration
1
0.1% 6.8% 9.2% 35.95% 87.34% 29.65% 11.06% 11.49% 6.26% 7.06% 2.78% 6.82% (3.76%) (10.18%) (7.28%)
1 Average employee remuneration is calculated by dividing the relevant personnel costs (as disclosed in Note 8 to the consolidated financial statements on page 286)
by the average number of employees (as disclosed in Note 8 (b) to the consolidated financial statements on page 235). PTU is excluded in order to make a like-for-like
comparison with the Chief Executive Officer who does not receive PTU.
2 The Chief Executive Officer’s salary, bonus and benefit amounts are excluded from the calculation of average employee remuneration. A bonus of 2.5 months was
paid to the Chief Executive Officer for 2020, and no bonus was paid to the Chief Executive Officer for 2021, 2022 and 2023.
3 Calculated using the data from the single figure table in the Annual Report on Remuneration (page 181) in US dollars. The Non-Executive Directors are paid fees in UK
sterling and therefore will be subject to year-on-year changes in exchange rates.
4 The Non-Executive Directors do not receive bonuses or benefits from the Company.
5 The Chief Executive Officer’s salary, bonus and benefit amounts were excluded from the calculation of Average Employee Remuneration in 2019 and 2020. No bonus
was paid to the Chief Executive Officer for 2019 but a bonus of 2.5 months was paid for 2020, and no bonus was paid to the Chief Executive Officer for 2021, thus it is
not possible to present the change as a meaningful percentage.
6 No bonus was paid to the Chief Executive Officer for 2023 but a bonus of 6 months was paid for 2024, thus it is not possible to present the change as a meaningful
percentage.
Relative importance of the spend on pay
2024 2023 % change
Staff costs (US$000s)
1
253,849 247,669 2.5%
Distributions to shareholders (US$000s) 78,111 108,323 (27.9%)
Income tax mining rights and profit sharing paid 97,062 244,043 (60.2%)
Purchases of property, plant and equipment 370,542 483,409 (23.3%)
1 Staff costs are taken without PTU in order to make a like-for-like comparison with the Chief Executive Officer who does not receive PTU.
Payments to new or departing Directors
During the year, the Company has not recruited any Executive Directors; nor has it made any payments to past Directors or
made any payments to Directors for loss of office.
This report has been approved by the Board of Directors of Fresnillo plc.
Signed on behalf of the Board.
Alberto Tiburcio
Chairman of the Remuneration Committee
3 March 2025
DIRECTORS’ REMUNERATION REPORT CONTINUED
ANNUAL REPORT ON REMUNERATION 2024
189
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Strategic Report Governance Financial Statements Additional Information
APPENDIX: DIRECTORS’ REMUNERATION POLICY
Introduction
The current Remuneration Policy of the Company has
been prepared in accordance with The Large and Medium-
sized Companies and Groups (Accounts and Reports)
(Amendment) Regulations 2013 (the Regulations). The
Remuneration Committee has assessed the criteria
recommended by provision 40 of the 2018 UK Corporate
Governance Code and believes that the Policy has always
been inherently clear, simple, designed to avoid excessive
rewards, predictable and proportionate. The effective date
of the Policy is 23 May 2023. The full text of the current
Remuneration Policy can be found on pages 206 to 210 of the
Fresnillo plc 2022 Annual Report and Accounts, which can be
found on the Company’s website (www.fresnilloplc.com).
As required by English law, the Company’s approved
Remuneration Policy is binding in relation to Directors. The
Company currently has no Executive Directors who would be
bound by the Remuneration Policy. However, the Company
will (as it has previously done) treat the Chief Executive Officer
as if he were an Executive Director for the purposes of the
Remuneration Policy and for reporting on his remuneration.
Details of the remuneration paid to the Chief Executive Officer
for the year ended 31 December 2024 can be found in this
year’s Annual Report on Remuneration at page 181.
Remuneration policy
The Group’s Remuneration Policy seeks to ensure that the
Company is able to attract, retain and motivate its Executive
Directors and members of the Executive Committee.
The retention of key management and the alignment of
management incentives and the creation of shareholder
value being key objectives of this policy.
Setting base salaries for Executive Directors and members
of the Executive Committee at an appropriate level is
a key to managerial retention in Mexico. Therefore, the
Remuneration Committee seeks to ensure that salaries
are market competitive both within the Mexican context
and internationally for comparable companies. Total
compensation is set within a range around the median
level for the Company’s peer group within Mexico and
internationally, total remuneration is benchmarked triennially
to ensure that the whole remuneration package is maintained
at this level over the long term. Salaries are positioned within
the range according to experience and service.
The table below sets out the key elements of Executive
Directors’ pay set out in the Remuneration Policy
(the policy table):
Base salary
Provides the core reward for the role.
Operation Normally reviewed annually and fixed for 12 months starting on 1 April each year. Each review will
take into account:
• Role, experience and performance.
• Average workforce salary adjustments.
• Mexican economic factors.
• Comparison with the Company’s peer group in Mexico and internationally.
• The effect an increase will have on the overall levels of the Executive Director’s remuneration.
When benchmarking salaries, the Remuneration Committee will normally benchmark
by reference to companies of similar size and complexity to the Company in Mexico and
internationally. Details of the peer group used will be disclosed in the Annual Report
on remuneration.
Maximum value Subject to the review process described above, the maximum value of an Executive Director’s
base salary will be determined by the Remuneration Committee in its absolute discretion
and ordinarily it will be increased in line with increases applied across the whole workforce.
In exceptional circumstances, an Executive Director’s salary may be increased by up to, but
never more than, 10% above the average pay increase for the whole workforce of the Company
in any financial year. The rationale for any such increase will be fully explained in the Annual
Report on Remuneration.
Performance metric The Remuneration Committee considers individual salaries at the appropriate review meeting
each year by reference to the factors noted under the Operation heading in this Policy Table.
Discretion The Remuneration Committee established the Company’s comparator peer group in Mexico
and internationally as part of a triennial review which it undertook in October 2023 and will be
reviewed again in April 2026, if not before. The Committee will report on the outcome of these
reviews within the relevant Annual Report on Remuneration.
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DIRECTORS’ REMUNERATION REPORT CONTINUED
APPENDIX: DIRECTORS’ REMUNERATION POLICY
Annual bonus
Rewards the achievement of both short and long-term financial and strategic business targets and delivery of personal
objectives.
Operation Targets are renewed annually and relate to the strategic aims of the business as a whole. A
scoring system is used for the plan. Each objective set for the executive at the beginning of the
year is allocated a points-rating which represents a median performance target for that objective.
Upper and lower thresholds are set to allow for outstanding performance and to ensure that
underperformance is not rewarded. For each member of the Executive Committee (including the
Chief Executive Officer, the Chief Financial Officer, the Vice President of Exploration and the Chief
Operating Officer), a bonus is only payable if the aggregate performance equals or exceeds 100
points. Bonus payments are paid for aggregate performance against target at or above 100 points
on a prorated basis between two months’ salary paid for the achievement of 100 points and six
months’ salary paid for the achievement of 115 points or more, as follows:
Number of points:
100.00
100.01-115.00
115.01+
Months’ salary paid
Two months’ salary
Prorated on a linear basis between two months’ salary and six months’ salary
Six months’ salary
Maximum value The maximum percentage of salary payable as an annual bonus to an Executive Director is 50%
(six months’ salary) and is paid where the Executive Director achieves 115.01 points or more under
the Annual Bonus Plan (the target is 100 points).
Performance metric The KPI targets set out in the previous table will apply and are intended to focus on risks that
are within the control and influence of management. Thus, the management of safety, security,
project, human resource, exploration teamwork, synergies, community and environmental risks
are all currently implicitly covered within the KPIs. The KPIs and targets, which are set by reference
to the reserves and resources and financial metrics at the previous year end and/or set in the
budget for the forthcoming financial year, are also designed to ensure that both short-term
objectives and the long-term development of the Fresnillo Group are given equal priority. The
achievement of project milestones will be used to measure project management performance
and the Committee’s discretion will be applied for subjective metrics such as teamwork.
Details of the measures, targets and performance which are tested on an annual basis will be
provided in the relevant Annual Report on Remuneration.
The Remuneration Committee considers that the KPIs, upon which bonuses are based, may
need to evolve from year-to-year in line with the strategy and therefore it retains the discretion
to make appropriate adjustments to the KPIs themselves, the bonus bands within the overall
maximum and the individual KPI weightings from year-to-year.
Discretion The Remuneration Committee retains the discretion to adjust bonus payments in the following
circumstances:
(i) A downward adjustment where the KPI outcomes would result, in the opinion of the
Remuneration Committee, in a bonus payment which cannot be justified by the Company’s
financial or operational performance during the year (or in respect of previous years).
(ii) A modest upward adjustment may be considered either: (i) where factors outside the control
of Executive Directors (e.g. force majeure circumstances) have significantly depressed the
level of points awarded (and in deciding whether and to what extent an adjustment is
merited, the Remuneration Committee will consider the appropriateness of the response
to those circumstances); and/or (ii) when the Executive Directors, individually or collectively,
have demonstrated a level of performance which has resulted in significant benefits to the
Company which, in the opinion of the Remuneration Committee, merits an increase in the
number of points awarded.
(iii) Poor executive response to adverse health, safety or environmental performance during the
year, in which case a downward adjustment would be considered.
(iv) Where the bonus payment is not, in the opinion of the Remuneration Committee,
commensurate with the wider stakeholder experience (especially those of employees in
relation to remuneration outcomes for the year and/or shareholders in relation to dividend
payments), a downward adjustment may be considered.
The use of any such discretions will be fully explained in the relevant Annual Report
on Remuneration.
Note: Any adjustment in individual KPI weightings will not result in their achievement being any less difficult to satisfy.
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Benefits
Help recruit and retain employees.
Operation Executive Directors may (at the Company’s discretion) be offered life insurance, meal and
subsistence benefits, the payment of premiums for medical insurance covering expenses and
check-ups (for themselves and their family members) death in service benefits and remote working
expenses (as applicable). Benefits may be changed if the Company’s policy on benefits changes.
Maximum value The maximum value of any benefits provided will be determined by the Company policy on
benefits that is applicable from time to time.
Performance metric None.
Discretion The Remuneration Committee may consider changes to the benefits made available to Executive
Directors in line with any changes in the Company’s policy for benefits provided to all employees.
Pension
Rewards continued employment and sustained contribution.
Operation The Group operates a defined contribution scheme. Executive Directors are entitled to
membership of the defined contribution scheme.
Maximum value The maximum Company contribution for any employee (including Executive Directors) may not
exceed 13% of salary. Company contributions made for Executive Directors will be aligned with
Company contributions provided to the majority of the workforce from time to time.
Performance metric None.
Discretion The Remuneration Committee may consider changes to the pension contributions made for
Executive Directors, including increases, in line with any changes in the Company’s policy for
pension contributions provided to all employees.
Alignment of executive remuneration
and the market
In setting the fixed remuneration of Executive Directors
and the members of the Executive Committee, information
relating to the mining company comparators is provided
by various consultants. Information relating to the Mexican
economic metrics is collated by management for the
Remuneration Committee to consider.
Reviews of the Executive Directors’ and Executive Committee
members’ remuneration are conducted by Willis Towers
Watson, from time to time, at the request of the Remuneration
Committee. These enable the Remuneration Committee to
validate the Company’s policy towards remuneration and
ensure that it is globally as well as locally competitive. The
analysis evaluates the elements of base salary, short-term
compensation (guaranteed payments and short-term bonus)
and long-term compensation (primarily stock programmes)
separately. With assistance from Willis Towers Watson, the
Remuneration Committee has established a peer group
which will be used to benchmark any Executive Director’s
and any Executive Committee member’s remuneration (the
Peer Group) to ensure that it remains within the parameters
set out in this Policy (see page 183 of the Annual Report
on Remuneration). The Peer Group will be updated where
necessary, to ensure that it remains an appropriate comparator
group of companies.
The consideration of wider employment conditions
and remuneration
When setting pay and benefits for Executive Directors and
members of the Executive Committee, the Remuneration
Committee takes account of pay and conditions across the
Group. It will consider the overall pay increase percentage
negotiated each year, with employee representatives as
its starting point taking account of inflation and other
information supporting the annual pay award for employees.
Subject to the 10% limit in the Policy Table, the Remuneration
Committee may agree pay increases above or below the
agreed percentage in exceptional circumstances, where
in its discretion it considers such variance to the norm to
be justified. Other than the Willis Towers Watson report
specifically commissioned by the Remuneration Committee,
the same benchmark reports are used in the evaluation of
executive and employee remuneration, thus providing a
common approach to both.
Below Board level, a statutory profit-sharing arrangement
(PTU) is operated which in some years has enabled employees
to receive significant levels of bonus in line with the increased
profitability of the relevant employing company. The Chief
Executive Officer does not participate in a PTU scheme within
the Fresnillo Group. Members of the senior management
group below Board-level are employed by Servicios
Administrativos Fresnillo S.A. de C.V. or Operaciones Fresnillo,
S.A. de C.V., which pay annual PTU payments. However, such
payments are modest.
The Group operates two pension schemes: (i) a defined
benefit scheme which was closed to new members on 1 July
2007 with benefits frozen at this date for existing members,
subject to indexation with reference to the Mexican National
Consumer Price Index; and (ii) a defined contribution scheme
(which was introduced on 1 July 2007). Membership of the
latter scheme is voluntary, members earning a salary of no
more than 25 times the minimum wage in force from time
to time may make contributions of 5% to the scheme.
On behalf of members earning a salary of no more than
25 times the minimum wage in force at the time, the
employing company may make contributions of 5% to the
scheme. The employing company may also make additional
contributions between 5-8% of salary to this plan. Members
may elect to match percentages between 5-8% of salary.
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DIRECTORS’ REMUNERATION REPORT CONTINUED
APPENDIX: DIRECTORS’ REMUNERATION POLICY
Executive Directors may participate in the Group’s pension
schemes on the same basis as any other employee.
The Remuneration Committee does not consult with
employees in setting Directors’ remuneration. Engagement
with employees as a stakeholder group is primarily the
responsibility of the Board; however, where appropriate,
the Remuneration Committee will consider any relevant
feedback from employees to the Board in relation to
remuneration matters when discharging its responsibilities
under this Policy.
Engagement with shareholders on remuneration
The composition of the Remuneration Committee has
been designed to ensure that the views of the controlling
shareholder (through the membership of the Chairman
of the Board on the Committee) and the independent
shareholders can be represented. The Remuneration
Committee has considered the views of organisations such
as Institutional Shareholder Services (ISS) and the Investment
Association both generally and as reported to the Company
in relation to its own executive remuneration practices
prior to each Annual General Meeting, when considering
the Remuneration policy and its application. Following the
Company’s AGM in 2024, details of votes cast for and against
the resolutions to approve the proposed Remuneration policy
and Annual Report on Remuneration for the year ended
31 December 2024, will be announced to the market.
Policy on recruitment
The Remuneration Committee will consider the
remuneration of new Executive Directors by reference to the
Policy Table set out above. The Remuneration Committee
will not, as a matter of standard practice, pay sign-on
payments or compensate new Directors for any variable
remuneration forfeited from any employment prior to joining
the Board. However, it may choose to do so in exceptional
circumstances, when it considers this to be in the best
interests of the Company (and therefore shareholders),
in which case any buy-out payments will not exceed the
remuneration relinquished and will mirror (as far as possible)
the delivery mechanism, time horizons and performance
requirements attached to that remuneration. Where possible
this will be facilitated through the Company’s existing Annual
Bonus Plan, as set out in the Policy Table above, but if not, the
Remuneration Committee may fulfil this requirement in line
with the provisions of 9.3.2 of the UK Listing Rules.
For the avoidance of doubt, the value of any ‘sign-on’ and/
or ‘buy-out’ payments will not count towards the limits
on annual bonus in the Policy Table above. Any such
payments will be fully explained in the next Annual Report
on Remuneration both as to the reason for payment and the
rationale for the quantum.
Salary will be set so as to be market competitive both within
the Mexican context and internationally for comparable
companies and taking account of the experience and
seniority of the appointee coming into the new role. The
Remuneration Committee is likely to set base salaries below
median on appointment, whilst retaining discretion to award
increases during the first and, possibly, subsequent years to
bring salaries into the normal range expected for Executive
Directors, in line with the Company’s stated Policy. Such
increases will not exceed the maximum level set out in the
Policy Table. New Executive Directors will receive benefits
and pensions in line with the Company’s existing Policy and
will be able to participate in the Annual Bonus Plan on a
pro-rated basis for the portion of the financial year for which
they are in post. The maximum level of variable pay for new
recruits will be the same as that set out in the Policy Table for
existing employees (pro-rated as necessary).
In the case of an internal appointment or promotion, any
variable pay element awarded in respect of the prior role
will be allowed to pay out according to its original terms
stipulated on grant or adjusted as considered desirable to
reflect the new role.
Where appropriate, to recruit, promote or transfer individuals
to a different location of residence, the Remuneration
Committee may also, to the extent it considers reasonable,
approve the payment of one-off relocation and repatriation
related expenses. It may also pay or make a contribution
towards any legal fees appropriately incurred by the individual
in connection with their employment by the Group.
Policy on loss of office
Other than in circumstances of gross misconduct, Executive
Directors and members of the Executive Committee,
including the Chief Executive Officer, leaving employment
from the Group, will be entitled to receive salary and pro-
rated annual bonus based on performance to the date of
leaving. Statutory entitlements are payable according to
Mexican labour law, based on length of service. Employee and
Company pension contributions are payable in accordance
with the applicable pension plan rules. Mexican labour law
does not make any provision for employers and employees
to give or receive notice of termination of employment.
Therefore, the Committee will not generally make payments
in lieu of notice to departing executives. However, the
Committee reserves the right to make additional payments
where such payments are made in good faith in discharge
of an existing legal obligation (or by way of damages for
breach of such an obligation), or by way of settlement or
compromise of any claim arising in connection with the
termination of an Executive Director’s office or employment
or by way of contribution to legal fees appropriately incurred
by the individual in connection with the termination of their
employment by the Group. No contractual commitments
concerning loss of office were entered into with any Director
prior to 27 June 2012.
Annual Bonus Plan and policy
on variable remuneration
It is the Company’s policy not to use its equity to incentivise
long-term performance. The Company’s core strategy is
one of long-term sustainable growth. Sustainable growth in
mining requires the steady and safe expansion of the Group’s
operations through the discovery of new resources and
construction, maintenance and/or expansion of new mines.
No distinction is therefore made between short and long-
term incentives.
The Company operates a single cash-based Annual Bonus
Plan for Executive Directors and the members of the
Executive Committee, including the Chief Executive Officer as
described in the Policy Table above. In the event of a change
of control, the Remuneration Committee shall, in accordance
with the Annual Bonus Plan rules, as amended from time to
time, and in its absolute discretion, determine whether and to
what extent the annual bonus will vest and be paid early. The
Committee may also decide that the bonus award will vest,
to a greater or lesser, extent having regard to the Director’s or
the Group’s performance or such other factors it may consider
appropriate. The Remuneration Committee may decide that
bonus awards will vest pro-rata to take account of early vesting
or in full.
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Recovery of bonus
The absence of long-term incentives and the operation
of Mexican law makes it difficult to adopt clawback
arrangements in order to recover bonuses that have already
been paid. The Remuneration Committee has considered
whether clawback provisions should be incorporated into
the service agreement for the Chief Executive Officer. Given
that the Company does not operate any remuneration plans
with a timeframe of more than one year, the Remuneration
Committee does not consider that there is much value
in introducing clawback provisions into the contractual
arrangements with the Chief Executive Officer at this stage.
However, within this Remuneration Policy, the Remuneration
Committee reserves the right to apply malus to bonuses
before they are paid where the KPI outcomes would result,
in the opinion of the Remuneration Committee, in a bonus
payment which cannot be justified by the Company’s financial
performance or the Executive Director’s personal performance
during the year (or previous years). In this case a downward
adjustment to the bonus payment would be applied.
Illustrations of the application of the Remuneration
Policy for the Chief Executive Officer
The following table sets out the fixed and variable
remuneration of the Chief Executive Officer in the different
scenarios where he receives, minimum, target and maximum
variable pay (based on 31 December 2024 remuneration).
Component Maximum value US$ thousands Minimum Target Maximum
Share incentives
1
US$1,766k
Annual bonus
US$396k Annual variable pay
2, 4
US$1,502k 22.4%
US$1,370k 8.8%
Pension benefits 102 Fixed pay
3
100% 91.2% 77.6%
Other benefits 157
Base salary 1,111
1 Fresnillo plc does not operate any share option or share-based long-term incentive plans.
2 Variable pay consists only of remuneration where performance measures or targets relate only to one financial year.
3 Fixed pay includes salary, benefits and pension.
4 The Company does not operate any equity-based long-term incentives, consequently, the Company’s share price does not have any impact on the variable
remuneration paid to Executive Directors and members of the Executive Committee who do not sit on the Board.
External appointments
It is the Board’s policy to allow Executive Directors to accept
directorships of other quoted and non-quoted companies and
retain any fees or other remuneration for doing so, provided
that they have obtained the consent of the Chairman of the
Company. Any such directorships must be formally notified
to the Board.
Chairman and Non-Executive Directors
The remuneration of the Chairman of the Company and the
Non-Executive Directors consists of fees that are paid quarterly
in arrears. The Chairman and Non-Executive Directors do
not participate in any long-term incentive or annual bonus
schemes, nor do they accrue any pension entitlement. Neither
the Chairman nor any of the Non-Executive Directors has a
service contract with the Company; however, each has entered
into a letter of appointment with the Company.
Non-Executive Directors’ letters of appointment
On their initial appointment, each of the Non-Executive
Directors sign a letter of appointment with the Company.
The letters of appointment of serving Non-Executive
Directors are drafted in accordance with Provision 18 of the
UK Corporate Governance Code, thus obliging them to retire
at each Annual General Meeting and be subject to annual
re-election by shareholders to serve for a further term of one
year. The amendments have been drafted such that renewed
appointment will not necessitate a new letter of appointment.
The Chairman of the Company shall not receive any fees for
acting as Chairman other than his fees as a Non-Executive
Director. Each Non-Executive Director is expected to commit
a minimum of 14 days per year in fulfilling their duties as a
Director of the Company.
The total fees for Non-Executive Directors, including the
Chairman, will not exceed the maximum stated in the
Company’s Articles of Association.
The level of fees is reviewed periodically and takes into
account the time commitment, responsibilities, market
levels and the skills and experience required. Non-Executive
Directors normally receive a basic fee and an additional fee
for specific Board responsibilities, including chairmanship or
membership of Board committees or acting as the Senior
Independent Director. Additional fees may be paid to Non-
Executive Directors on a per diem basis to reflect increased
time commitment in certain limited circumstances.
Expenses incurred in the performance of non-executive
duties for the Company may be reimbursed or paid for
directly by the Company, as appropriate, including any tax
and social security due on the expenses.
Non-Executive Directors may be provided with benefits to
enable them to undertake their duties.
Shareholding guidelines
Fresnillo has not introduced share ownership guidelines.
The Company does not operate share-based incentive
arrangements given that the culture for incentives in the
Mexican market does not favour share-based incentives.
Consequently, there would be neither opportunity nor
appetite for executives to build a shareholding in the
Company and therefore the Remuneration Committee
has not adopted any shareholding guidelines.
Payments under previous policies
Any remuneration payment or benefit, or any payment for
loss of office which a Director received, or became entitled to
under a previous Remuneration Policy or before the person
became a Director (unless the payment was in consideration
of becoming a director) shall lawfully be paid out under
this policy, even though it may not be consistent with, or
otherwise provided for under, the Policy Table set out above.
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FRESNILLO PLC DIRECTORS’ REPORT 2024
In accordance with Section 415 of the Companies Act 2006, the Directors of Fresnillo plc present their report for the year ended
31 December 2024.
The Directors believe that the requisite components of this report are set out elsewhere in this Annual Report and/or on the
Company’s website www.fresnilloplc.com. The table below sets out where the necessary disclosures can be found.
Business performance
Results Results for the year ended 31 December 2024 are set out in the Financial Review on pages 51-57
and the consolidated income statement on page 212.
Dividends Information regarding the proposed dividend can be found in the Financial review on page 57.
Information regarding dividend payments can be found in the notes to the financial statements
on page 245.
Strategic Report The Strategic Report can be found on pages 1-143.
Corporate Governance
statement
The Company’s statement on Corporate Governance can be found on page 153.
Directors’
Remuneration Report
The Directors’ Remuneration Report can be found on pages 178-193.
Activities in research
and development
The Company does not have any research and development activities.
Future developments Details about the Company’s future developments can be found in the Strategic Report
on pages 14-19.
Post-balance sheet events There were no post-balance sheet events.
Directors
Directors Directors that have served during the year and summaries of the current Directors’ key skills and
experience are set out in the Corporate Governance report on pages 148-151 and 164.
Directors’ Interests Details of the Directors’ beneficial interests are set out in the Directors’ Remuneration Report
on page 182.
Directors’ indemnities The Company has given indemnities to each of the Directors in respect of any liability arising
against them in connection with the Company’s (and any associated company’s) activities in the
conduct of their duties. These indemnities are subject to the conditions set out in the Companies
Act 2006 and remain in place at the date of this report.
Directors’ and Officers’
Liability Insurance
Directors’ and Officers’ Liability Insurance cover is in place at the date of this report. Cover is
reviewed annually.
Constitution
Articles of Association Any amendments made to the Articles of Association may be made by a special resolution
of shareholders. The following is a summary of the structure, rights and restrictions of the
Company’s share capital:
The Company has two classes of share capital: 736,893,589 Ordinary Shares of US$0.50
(‘Ordinary Shares’) and 50,000 deferred shares of £1.00 each (Sterling Deferred Shares). The
Ordinary Shares are listed on the London Stock Exchange and the Mexican Stock Exchange.
The rights and obligations attaching to these shares are governed by UK law and the Company’s
Articles of Association.
Ordinary shareholders are entitled to receive notice and to attend and speak at any general
meeting of the Company. On a show of hands every shareholder present in person or by proxy
(or being a corporation represented by a duly authorised representative) shall have one vote,
and on a poll every shareholder who is present in person or by proxy shall have one vote for every
share held. The Notice of Annual General Meeting specifies deadlines for exercising voting rights
and appointing a proxy or proxies.
There are no restrictions on the transfer of the Ordinary Shares other than:
• The standard restrictions for a UK-quoted company set out in article 32 of the Articles
of Association;
• Where, from time to time, certain restrictions may become imposed by laws and regulations
(for example, insider trading laws); and
• Pursuant to the Listing Rules of the Financial Conduct Authority whereby certain Directors,
officers and employees of the Company require the approval of the Company to deal in the
Ordinary Shares.
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Strategic Report Governance Financial Statements Additional Information
Constitution
The appointment and replacement of Directors is governed by the Company’s Articles of
Association, the UK Corporate Governance Code, the Companies Act 2006 and related legislation.
The Articles of Association provide that a Director may be elected by ordinary resolution of
the shareholders or appointed by the existing Directors either to fill a casual vacancy or as an
additional Director, but so that the total number of Directors shall not thereby exceed the
maximum in accordance with the Company’s Articles of Association. At every Annual General
Meeting, all Directors must automatically retire. A retiring Director is eligible for election or re-
election, as applicable.
Subject to the Articles of Association, the Companies Act 2006 and related legislation, and
any regulations as may be prescribed by special resolution of the Company, the Directors may
exercise all the powers of the Company.
No shareholder holds securities carrying special rights as to the control of the Company. There
are no limitations on the holding of securities. There are no restrictions on voting rights or any
arrangements by which, with the Company’s cooperation, financial rights carried by securities
are held by a person other than the holder of the securities. There are no agreements between
holders of securities that are known to the Company which may result in restrictions on the
transfer of voting rights.
The Sterling Deferred Shares only entitle the shareholder to payment of the amount paid up
after repayment to ordinary shareholders on winding up or on a return of capital. The Sterling
Deferred Shares do not entitle the holder to payment of any dividend, or to receive notice or to
attend and speak at any general meeting of the Company. The Company may also at its option
redeem the Sterling Deferred Shares at a price of £1.00 or, as custodian, purchase or cancel the
Sterling Deferred Shares or require the holder to transfer the Sterling Deferred Shares. Except at
the option of the Company, the Sterling Deferred Shares are not transferable.
Branches outside the UK The Company’s operations are outside the UK. The Company, through various subsidiaries, has
established branches in a number of jurisdictions in which it operates (mainly in Mexico).
Change of control The following represents the likely effect on significant agreements with the Company were it to
be subject to a change of control:
• The Shared Services Agreement contains a discretionary provision for Servicios Administrativos
Peñoles, S.A. de C.V., to terminate the agreement should they so wish if there is a change of
control of Fresnillo plc.
• There are no formal ‘change of control’ provisions within the Silverstream contract or Met-Mex
arrangements.
• The Group’s mining concessions are held by several of its Mexican subsidiary companies. As
long as the companies holding the mining concessions remain Mexican resident companies,
there are no provisions within the concession agreements which would be triggered by a
change of control of the Company.
The Company does not have any agreements with any Non-Executive Director, Executive
Director or employee that would provide compensation for loss of office or employment resulting
from a change of control.
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FRESNILLO PLC DIRECTORS’ REPORT 2024 CONTINUED
Stakeholders and policies
Section 172 Statement The Company’s Section 172 Statement can be found in the Strategic Report on page 29.
Workforce engagement Details of how the Company engages with its workforce can be found in the Strategic Report
on page 30.
Principal decisions Overview of the key decisions and discussions of the Board during the year and the main
stakeholder inputs into those decisions are set out in the Corporate Governance Report
on pages 154-155.
Stakeholder engagement Details of the Company’s relevant stakeholders and how it engages with them are set out in the
Strategic Report on pages 22-28.
Payments to governments In July 2024, the Company approved and published a report disclosing payments made to
governments. The report can be found on the Company’s website. https://www.fresnilloplc.com/
investors/regulatory-announcements/
Modern Slavery Statement The Company has approved and published on its website its Modern Slavery Statement in
accordance with the Modern Slavery Act 2015. https://www.fresnilloplc.com/responsibility/our-
approach/modern-slavery/
Diversity policy In February 2018 the Company approved and published on its website its policy on diversity and
inclusion. https://www.fresnilloplc.com/media/nnwj11vk/fres-plc-diversity-and-inclusion-policy.pdf
The Company has also approved a policy on labour equality and non-discrimination.
https://www.fresnilloplc.com/responsibility/our-approach/code-of-conduct/
UK tax strategy The Company’s UK tax strategy for the financial year ending 31 December 2024 is published on
its website. https://www.fresnilloplc.com/media/wscmwkgl/091221-52-tax-strategy.pdf
Greenhouse gas emissions Details of the Company’s greenhouse gas emissions can be found on page 81 in the
Sustainability section of the Strategic Report.
Political contributions The Company did not make any donations to political organisations during the year.
Financial risk Details of the Company’s policies on financial risk management and the Company’s
exposure to price risk, credit risk, liquidity risk and cash flow risk are outlined in Note 31
to the financial statements.
Shareholders and share capital
Share capital Details of the Company’s share capital are set out in Note 18 to the Financial Statements
on pages 244-245.
Authority to purchase
own shares
The Company was authorised by a shareholders’ resolution passed at the Annual General
Meeting held in May 2024 to purchase up to 10% of its issued Ordinary Share capital. Any
shares which have been bought back may be held as treasury shares or, if not so held, must be
cancelled immediately upon completion of the purchase, thereby reducing the amount of the
Company’s issued and authorised share capital. This authority will expire at the forthcoming
Annual General Meeting and a resolution to renew the authority for a further year will be
proposed. No shares were purchased by the Company during the year.
Major interests in shares As at 31 December 2024, in accordance with DTR 5, the Company had been advised of the
following notifiable interests (whether directly or indirectly held) in its voting rights:
Industrias Peñoles, S.A.B. de C.V. holds 552,595,191 shares (74.99%).
As at 3 March 2025, the Company has not been advised of any changes to those notifiable interests.
2024 Annual
General Meeting
At the 2024 Annual General Meeting, all resolutions put to shareholders were passed by a majority.
In accordance with UK Listing Rules applicable to companies with a controlling shareholder,
the resolutions relating to the re-election of the Independent Non-Executive Directors required
approval by a majority of votes cast by independent shareholders as well as all the shareholders of
the Company.
Further to the Code provisions, details of proxy voting are presented at the AGM and final figures
are announced to the London Stock Exchange and uploaded to the Company’s website as soon
as practicable after the AGM.
2025 Annual
General Meeting
The Company’s 17th Annual General Meeting will be held in May 2025 and the Notice of Meeting
will be issued to all shareholders 20 business days before the meeting date. In planning the
business of each AGM, the Board takes account of institutional shareholder guidelines on pre-
emption rights, share buy-backs, and shareholder rights in relation to general meetings when
drafting the usual resolutions dealing with those matters. In each case, resolutions are presented
to the AGM to give the Board flexibility to respond to market developments.
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Auditors and audit
Auditor reappointment A resolution to re-appoint Ernst & Young LLP as auditor will be proposed at the 2025 AGM.
Audit information Each of the Directors, as at the date of the approval of this report, confirms that:
• So far as he/she is aware, there is no relevant audit information of which the Company’s
auditor is unaware.
• He/she has taken all the reasonable steps that he/she ought to have taken as a Director
to make himself/herself aware of any relevant audit information and to establish that the
Company’s auditor is aware of the information.
• The confirmation is given and should be interpreted in accordance with the provisions of
section 418 of the Companies Act 2006.
UK Listing rules disclosures
UK Listing Rule (UKLR) 6.6.4 Disclosure requirements under UKLR 6.6.4, where applicable to the Company, are identified
below along with cross-references indicating where the relevant information is set out in the
Annual Report:
• Capitalised interest for the year ended 31 December 2024 can be found on page 241.
• Details of significant contracts with controlling shareholders can be found on page 176.
• Details pertaining to services provided to the Company by Peñoles are set out on pages 252-253.
• A statement in relation to the agreement that the Company has entered into with the
controlling shareholder can be found in the Corporate Governance report on page 158.
The Directors’ report has been approved by the Board of Directors of Fresnillo plc.
Signed on behalf of the Board.
Alberto Tiburcio
Independent Non-Executive Director
3 March 2025
Fresnillo plc
Registered Office:
21 Upper Brook Street
London, W1K 7PY
United Kingdom
Company Number: 6344120
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STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for preparing the Annual
report and the Group and Parent Company financial
statements in accordance with applicable United Kingdom
law and regulations.
The Directors are required to prepare financial statements
for each financial year which present a true and fair view of
the financial position of the Company and of the Group and
the financial performance and cash flows of the Company
and of the Group for that period. The Directors have elected
to prepare the Group and Parent Company financial
statements in accordance with UK-adopted International
Accounting Standards.
In preparing those financial statements, the Directors are
required to:
• Select suitable accounting policies in accordance with
IAS 8: ‘Accounting Policies, Changes in Accounting
Estimates and Errors’ and then apply them consistently;
• Make judgements and accounting estimates that are
reasonable and prudent;
• Present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
• Provide additional disclosures when compliance with the
specific requirements in IFRSs is insufficient to enable
users to understand the impact of particular transactions,
other events and conditions on the Company and of the
Group’s financial position and financial performance;
• State whether UK-adopted international accounting
standards have been followed, subject to any material
departures disclosed and explained in the financial
statements; and
• Prepare the accounts on a going concern basis unless,
having assessed the ability of the Company and the Group
to continue as a going concern unless it is appropriate
to presume that the Company and/or the Group will not
continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company’s
and Group’s transactions and which disclose with reasonable
accuracy at any time the financial position of the Company
and of the Group and enable them to ensure that the financial
statements comply with the Companies Act 2006. They are
also responsible for safeguarding the assets of the Company
and the Group and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
Under applicable UK law and regulations, the Directors
are responsible for the preparation of a Strategic Report,
Directors’ Report, Directors’ Remuneration Report and
Corporate Governance statement that comply with that
law and regulations. In addition, the Directors are responsible
for the maintenance and integrity of the corporate and
financial information included on the Company’s website.
Legislation in the UK governing the preparation and
dissemination of financial statements may differ from
legislation in other jurisdictions.
Neither the Company nor the Directors accept any liability to
any person in relation to the annual financial report except
to the extent that such liability could arise under English law.
Accordingly, any liability to a person who has demonstrated
reliance on any untrue or misleading statement or omission
shall be determined in accordance with section 90A and
schedule 10A of the Financial Services and Markets Act 2000.
Directors’ responsibility statement under
the UK Corporate Governance Code
In accordance with Provision 27 of the 2018 UK Corporate
Governance Code, the Directors consider that the Annual
Report and Accounts, taken as a whole, is fair, balanced
and understandable and provides information necessary
to enable shareholders to assess the Company’s position,
performance, business model and strategy.
Responsibility statement of the Directors
in respect of the Annual Report and Accounts
Each of the Directors whose names are listed on pages 148-151
confirm that to the best of their knowledge:
a) the consolidated financial statements, prepared in
accordance with UK-adopted international accounting
standards give a true and fair view of the assets, liabilities,
financial position and profit and loss of the Company and
the undertakings included in the consolidation taken as a
whole; and
b) the Annual Report (including the Strategic Report
encompassed within the ‘Overview’, ‘Strategic Report’,
‘Performance’ and ‘Governance’ sections) includes a
fair review of the development and performance of
the business, and the position of the Company and
the undertakings included in the consolidation taken
as a whole, together with a description of the principal
risks and uncertainties that they face.
For and on behalf of the Board.
Independent Non-Executive Director
3 March 2025
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF FRESNILLO PLC
Opinion
In our opinion:
• Fresnillo plc’s Group Financial Statements and Parent Company Financial Statements (the Financial Statements) give a true
and fair view of the state of the Group’s and of the Parent Company’s affairs as at 31 December 2024 and of the Group’s profit
for the year then ended;
• The Group Financial Statements have been properly prepared in accordance with UK adopted international accounting
standards;
• The Parent Company Financial Statements have been properly prepared in accordance with UK adopted international
accounting standards as applied in accordance with section 408 of the Companies Act 2006; and
• The Financial Statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the Financial Statements of Fresnillo plc (the ‘Parent Company’) and its subsidiaries (the ‘Group’) for the year
ended 31 December 2024 which comprise:
Group Parent Company
Consolidated balance sheet as at 31 December 2024 Balance sheet as at 31 December 2024
Consolidated income statement for the year then ended Statement of changes in equity for the year then ended
Consolidated statement of comprehensive income
for the year then ended
Statement of cash flows for the year then ended
Consolidated statement of changes in equity for
the year then ended
Related Notes 1 to 16 to the Financial Statements including
material accounting policy information
Consolidated statement of cash flows for the year then ended
Related Notes 1 to 31 to the Financial Statements, material
accounting policy information
The financial reporting framework that has been applied in their preparation is applicable law and UK adopted international
accounting standards and as regards the Parent Company Financial Statements, as applied in accordance with section 408
of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Independence
We are independent of the Group and parent in accordance with the ethical requirements that are relevant to our audit of the
Financial Statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we have
fulfilled our other ethical responsibilities in accordance with these requirements.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group or the Parent Company and
we remain independent of the Group and the Parent Company in conducting the audit.
Conclusions relating to going concern
In auditing the Financial Statements, we have concluded that the Directors’ use of the going concern basis of accounting
in the preparation of the Financial Statements is appropriate. Our evaluation of the directors’ assessment of the Group and
Parent Company’s ability to continue to adopt the going concern basis of accounting included the following procedures:
• We walked through the process to confirm our understanding of management’s going concern assessment process;
• During January 2024, the Group entered into a US$350 million revolving credit facility that contains financial covenants. We
confirmed through inquiries of management, review of bank statements and subsequent event procedures that, as of the
date of our audit opinion, no amounts have been drawn. As a result, the Group is not subject to covenant compliance criteria
nor is it expected to be throughout the going concern period, as none of the scenarios forecast a requirement to draw down;
• We verified the terms, maturity, interest rates, and any restrictions or covenants that are relevant to the senior notes and
revolving credit facility held by the Group at the date of approving of the Financial Statements against the original contracts;
• We assessed Management’s forecasting accuracy by comparing forecasts to actuals for the year ended 31 December 2024
and assessed the reasons for differences, including the effect of market-driven factors;
• We assessed the completeness of the factors included in the going concern assessment by verifying the consistency of key
assumptions with our understanding of the business and the environment within which it operates, including consideration
of climate related impacts;
• We obtained Management’s going concern assessment, including cash forecast for the going concern period which extends
to 31 December 2026. The Group has modelled plausible adverse changes and applied reverse stress testing in respect of
prices to assess the impact on the forecast liquidity of the Group (before considering the facility entered into in January 2024);
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CONTINUED
• We tested the factors and assumptions included in the base case and most severe adverse scenario for the cash forecast,
in particular comparing forecast metals prices to analyst forecasts and comparing production forecasts to 2024 production,
plant capacity and our understanding of the business and its future plans;
• We considered the mitigating actions available to management and challenged whether these are within Management’s
control, although no additional mitigating actions have been modelled due to the level of headroom in the plausible
adverse cases;
• We have challenged and concluded that Management’s downside scenarios modelled are appropriately severe and the
price reduction required to exhaust liquidity in the reverse stress test is remote; and
• We reviewed the Group’s going concern disclosures included in Note 2 of the Financial Statements, in order to evaluate
whether the disclosures were appropriate.
Our key observations:
• The Directors’ assessment forecasts that the Group will maintain sufficient liquidity and will comply with the financial
covenants throughout the going concern assessment period in all reasonably plausible scenarios, prior to the consideration
of any mitigating actions available at their discretion. Considering the short-term nature of the cash forecasts, we do not
consider climate change to impact the going concern forecast estimations.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on the Group and Parent Company’s ability to continue as a going
concern for the period which extends to 31 December 2026.
In relation to the Group and Parent Company’s reporting on how they have applied the UK Corporate Governance Code, we
have nothing material to add or draw attention to in relation to the directors’ statement in the Financial Statements about
whether the directors considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities, and the responsibilities of the Directors with respect to going concern, are described in the relevant
sections of this report. However, because not all future events or conditions can be predicted, this statement is not a guarantee
as to the Group’s ability to continue as a going concern.
Overview of our audit approach
Audit scope • Out of 12 components in scope, we performed an audit of the complete financial information of eight
components being the six operating mining units (Fresnillo, Penmont, Saucito, Juanicipio, San Julián and
Ciénega), the Parent Company and Comercializadora de Metales Fresnillo (CMF), the entity which holds
the Silverstream contract. These eight components represented 100% of revenues, 100% of the Silverstream
revaluation effects and 97% of Total assets.
• We performed specified procedures on certain balances at a further four components. These components
represented 3% of total assets.
Key audit
matters
• Recognition of related party transactions, including revenue recognition.
• Valuation of the Silverstream contract.
• Recoverable amount of mining assets.
• Recoverable amount of investments in subsidiaries (Parent Company only).
Materiality • Overall Group materiality was set at US$24.0 million which represents 5% of the five-year average of
profit before tax prior to Silverstream revaluation effects and material non-recurring items (Adjusted
Normalised Profit).
An overview of the scope of the Parent Company and Group audits
Tailoring the scope
In the current year our audit scoping has been updated to reflect the new requirements of ISA (UK) 600 (Revised). We have
followed a risk-based approach when developing our audit approach to obtain sufficient appropriate audit evidence on which
to base our audit opinion. We performed risk assessment procedures with input from our component auditors, to identify and
assess risks of material misstatement of the Group Financial Statements, and identified significant accounts and disclosures.
When identifying components at which audit work needed to be performed to respond to the identified risks of material
misstatement of the Group Financial Statements, we considered our understanding of the Group and its business environment,
the potential impact of climate change, the applicable financial framework, the Group’s system of internal control at the entity
level, the existence of centralised processes, applications and any relevant internal audit results.
We determined that centralised audit procedures could be performed for eight components in the following audit areas:
Key audit area on which procedures were performed centrally Component subject to central procedures
Valuation of the Silverstream Contract Comercializadora de Metales Fresnillo
Recoverable amount of mining assets Fresnillo, Penmont, Saucito, Juanicipio, San Julián and Ciénega
Recoverable amount of investments
in subsidiaries (Parent Company only)
Parent Company
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We then identified eight components as individually relevant to the Group due to significant risks and areas of higher
assessed risk of material misstatement, including higher risk estimates, of the Group Financial Statements being associated
with the components. Seven of these eight are individually relevant due to materiality or financial size of the component
relative to the Group.
For those individually relevant components, we identified the significant accounts where audit work needed to be performed
at these components by applying professional judgement, having considered the Group significant accounts on which
centralised procedures will be performed, the reasons for identifying the financial reporting component as an individually
relevant component and the size of the component’s account balance relative to the Group significant financial statement
account balance.
We then considered whether the remaining Group significant account balances not yet subject to audit procedures, in
aggregate, could give rise to a risk of material misstatement of the Group Financial Statements. We selected four components
of the Group to include in our audit scope to address these risks.
Having identified the components for which work will be performed, we determined the scope to assign to each component.
Of the 12 components selected, we designed and performed audit procedures on the entire financial information of eight
components (full scope components). For the remaining four components, we performed specified audit procedures to obtain
evidence for one or more relevant account assertions.
We noted that some entities presented financial losses in 2024, which, consistent with 2023, distorted the coverage assessment
over the Group’s Adjusted Normalised Profit. Therefore, when calculating their overall contribution, this shows a coverage
exceeding 100% of the Group’s Adjusted Normalised Profit.
Our scoping to address the risk of material misstatement for each key audit matter is set out in the Key audit matters section of
our report.
Involvement with component teams
In establishing our overall approach to the Group Audit, we determined the type of work that needed to be undertaken at each
of the components by us, as the Group Audit engagement team, or by component auditors operating under our instruction.
All of the Group’s significant operations are in Mexico and are audited by local teams under our direct supervision.
Work performed by
Primary team Component team under our direct supervision
Full scope components
*
Components on which specified
audit procedures are performed
* The two full scope components relate to the Parent Company and CMF. For CMF, the primary team performs the main procedures relating to the valuation of the
Silverstream contract with the testing of cash receipts performed by the component team. In addition to these, the auditor of Peñoles performs certain supporting
procedures on the estimation of reserve and resource quantities and the related mine plan at the Sabinas mine.
Senior members of the component teams attended our virtual global planning meetings during the planning phase of the
audit, and we discussed the results of interim procedures and interacted regularly with the local teams in Mexico. The primary
engagement team is predominantly composed of Spanish speakers to further enhance our interactions with both the
component team and management.
The primary team, including the Senior Statutory Auditor, visited Mexico during both the planning and execution phases,
with members of the team working with and supervising the component team in Mexico for a number of weeks over two
visits. These visits involved discussion and oversight of the component team audit approach, consideration of significant
accounting and auditing issues arising from their work, reviewing key audit working papers, meeting with management
and attending closing meetings.
The primary team was responsible for the scope and direction of the audit process. For certain procedures, in particular
areas involving significant judgement and heightened audit risk, we performed work ourselves with support where required
from the component team. In other cases, we reviewed key working papers including, but not limited to, the risk areas
described below.
Based upon the above approach we are satisfied that we have been able to perform sufficient and appropriate oversight of our
component team and the work performed by the auditor of Peñoles relevant to our audit. This, together with the additional
procedures performed at Group level, gave us appropriate evidence for our opinion on the Group Financial Statements.
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Climate change
Stakeholders are increasingly interested in how climate change will impact Fresnillo plc. The Group has determined that the
most significant future impacts from climate change on its operations are likely to be from water stress and drought, transition
to a low-carbon future and increasing societal and investor expectations. These are explained on pages 82-94 in the Task Force
On Climate Related Financial Disclosures and on page 136 in the principal risks and uncertainties, which form part of the ‘Other
information’, rather than the audited Financial Statements. Our procedures on these unaudited disclosures therefore consisted
solely of considering whether they are materially inconsistent with the Financial Statements or our knowledge obtained in the
course of the audit or otherwise appear to be materially misstated, in line with our responsibilities on ‘Other information’.
In planning and performing our audit we assessed the potential impacts of climate change on the Group’s business and
any consequential material impact on its Financial Statements. As explained in Note 2(c) to the Group and Parent Company
Financial Statements, governmental and societal responses to climate change risks are still developing, and are interdependent
upon each other, and consequently Financial Statements cannot capture all possible future outcomes as these are not yet
known. The degree of certainty of these changes may also mean that they cannot be taken into account when determining
asset and liability valuations and the timing of future cash flows under the requirements of UK adopted international accounting
standards and in accordance with the provisions of the Companies Act 2006. Significant judgements and estimates relating to
climate change have been described in Note 2(c).
Our audit effort in considering the impact of climate change on the Financial Statements was focused on evaluating
Management’s assessment of the impact of climate risk, physical and transition, their climate commitments, the effects of
material climate risks disclosed on page 136 and whether these have been appropriately considered in the assessment of
indicators of impairment of long-term non-financial assets and the timing and quantum of future cash flows underpinning
the provision of mine closure costs and associated disclosures. We also considered whether other assets and liabilities were
susceptible to material changes in measurement as a result of climate risks and opportunities. As part of this evaluation, we
performed our own risk assessment, supported by our climate change internal specialists, to determine the risks of material
misstatement in the Financial Statements from climate change which needed to be considered in our audit. Details of our
procedures and findings on the assessment of impairment indicators are included in our key audit matters below where relevant.
We also challenged the Directors’ considerations of climate change risks in their assessment of going concern and viability and
associated disclosures. Where considerations of climate change were relevant to our assessment of going concern, these are
described above.
Based on our work we have not identified the impact of climate change on the Financial Statements to be a key audit matter
or to impact a key audit matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Financial
Statements of the current period and include the most significant assessed risks of material misstatement (whether or not
due to fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy, the
allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the
context of our audit of the Financial Statements as a whole, and in our opinion thereon, and we do not provide a separate
opinion on these matters.
Key audit matter: Recognition of related party transactions, including revenue recognition
1
• 99.6% of the Group’s current year revenue from the sale of goods being concentrates, doré, activated carbon, slag and
precipitates (2024: US$3,481.8 million; 2023: US$2,704.7 million), and a significant amount of its expenses incurred (2024:
US$251.7 million; 2023: US$240.4 million), arise from transactions with related parties. The Silverstream contract is also with a
related party. These related parties are all subsidiaries of the Group’s direct parent, Industrias Peñoles, S.A.B. de C.V. (Peñoles).
• Principal transactions include the sale of goods to the Met-Mex Peñoles refinery, administrative services received and the
Silverstream contract.
• There is a risk that, if not at arm’s length or not reflecting the goods or services provided in the period, such transactions
could be used to manipulate earnings or to distribute profits to the Group’s parent.
• There is also a risk that revenues are inappropriately recognised as a result of incorrect cut-off or inappropriate
measurement of product sold.
• There is an ongoing focus by the Mexican tax authorities on transfer pricing as reflected by recently concluded and
ongoing tax inspections. There is therefore the potential risk of tax exposures arising from related party transactions.
Our judgement is that the level of risk in this area remains consistent
with the prior year.
Related party transactions are disclosed
in Note 27 to the consolidated Financial
Statements, revenues in Note 5 and
relevant accounting policies in Note 2.
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Our audit response
We performed full scope audit procedures over this risk area in eight components, which covered 100% of the aggregate risk
amount relating to revenue, 100% of the risk related to the Silverstream contract and 96% relating to related party expenses.
In addition, we performed specified procedures in components which covered 4% of related party expenses.
Identification
of related
parties and
related party
transactions
• We read new and amended contracts and agreements with related parties, including Met-Mex
Peñoles, to understand the nature of the transactions.
• We evaluated the appropriateness of management’s process for identifying, recording and reporting
related party transactions. For this purpose, we have performed a walkthrough of Management’s
process, we inquired of management and tested the design and implementation of relevant controls.
• As part of our procedures on completeness of related party transactions, we reviewed those
transactions that have been identified, monitored, reviewed and approved by the Audit Committee.
• We made inquiries of management at various levels and inspected board minutes and confirmation
letters to assess the completeness of related parties.
• We performed a consistency check with our other audit procedures in order to identify any related party
transactions not already identified by management or that are outside the normal course of business.
Revenue
recognition
• In order to test completeness of revenue transactions, we obtained confirmations totalling 100% of
sales to Peñoles (which represents 99.6% of total revenue), including quantities delivered, the period-
end receivable balance, and subsequent cash settlement where applicable.
• We evaluated the risk of material misstatement due to assay adjustments at 31 December 2024 by
performing a retrospective review of the quantum of previous adjustments made during the year
and determining the maximum plausible adverse effect on period-end provisional sales.
• We performed revenue cut-off testing, by reference to shipment dates.
• On a sample basis, we performed testing to verify physical deliveries of product in the year and related
party expenses against the underlying contract terms. Since this is a significant risk, our testing
threshold was lower, and our sample sizes are larger than they would otherwise have been.
• We obtained an understanding of the basis of the treatment and refining charges (T&RCs) negotiated
between the Group and Peñoles for the current year, these being deducted from revenue.
• We compared principal inputs to external benchmarks or other external evidence. We recalculated
T&RCs based on actual production and contractual terms.
• We performed overall analytical procedures which consisted of comparing actual revenues on a
disaggregated basis to detailed expectations developed based on production in the year and market
prices for relevant metals and obtained explanations for any material variances.
Silverstream
contract
• We tested a sample of cash receipts in respect of silver that was payable to Fresnillo under the contract
in the year.
• The valuation of the Silverstream contract is described separately as a key audit matter below.
Other
transactions
with related
parties
• On a sample basis, we tested related party expenses against underlying contractual terms.
• We compared actual results against detailed expectations of income statement line items impacted
by related party transactions to determine whether there was any evidence of manipulation.
Accuracy of
disclosures
• We verified that related party disclosures in the Financial Statements are consistent with the results
of our audit procedures.
Transfer pricing
considerations
• We read new and amended contracts and agreements with related parties, including Met-Mex
Peñoles to understand the nature and accounting impacts of related transactions.
• With the involvement of our transfer pricing specialist, we obtained and reviewed the most recent
transfer pricing studies provided to management by its transfer pricing specialist.
• Assisted by our internal transfer pricing specialists, we reviewed the updated letter provided by the
external specialist for the year ended 31 December 2024 (providing an update since the final 2023
studies). We met with the specialist to further understand the content of the update letter and review
any changes made.
• We assessed the competence, capabilities and objectivity of management’s specialist.
• We confirmed the principal inputs to external benchmarks used to determine transfer pricing ranges. In
respect of T&RCs, these include confirmations from the auditor of Peñoles in respect of T&RCs charged
to other customers.
Management
override
• We compared actual revenues on a disaggregated basis to detailed expectations developed based on
production in the year and market prices for relevant metals to identify and understand variances for
further investigation.
• We utilised data analysis tools to test revenue and search entire data sets for potential related party
transactions.
• We compared actual results against detailed expectations of income statement line items impacted
by related party transactions to determine whether there is evidence of manipulation.
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Key observations communicated to the Audit Committee
• Our procedures did not identify issues with the identification, recording or reporting of related party transactions.
• We concluded that revenue recognition in the year is appropriate, including the treatment of related provisional
pricing terms.
• As a result of our consistency check with other audit procedures, we did not identify any additional or undisclosed related
party transactions.
• In respect of transfer pricing in transactions with related parties, we confirmed that the methodology for determining
transfer pricing in respect of the transactions with other Peñoles companies has not changed during the year and
remains reasonable.
Key audit matter: Valuation of the Silverstream contract
2
• The valuation of the Silverstream contract is a derivative financial instrument, which is estimated by management using a
discounted cash flow model. The asset value decreased to US$258.6 million at 31 December 2024 (2023: US$482.3 million);
with the total pre-tax loss revaluation effect of US$182.3 million in 2024 (2023: US$7.7 million pre-tax gain).
• Key assumptions are the estimation of the reserves and resources and the related production profile of the Sabinas
mine (owned and operated by Peñoles), future silver prices and the discount rate applied. These assumptions require
management judgement and estimation.
• The resulting valuation is sensitive to changes in future silver prices, total volume of production and the discount rate
applied which may result in material revaluation effects in the Financial Statements.
Our judgement is that the level of risk in this area has increased
compared to prior year due to the operational issues identified
in the Sabinas mine. These have resulted in a reduction in the
forecast production volume underpinning the Silverstream
contract and an increase in the discount rate.
As a result, we have performed additional procedures in response
to the increased risk.
The nature of the Silverstream contract and
related valuation considerations are disclosed in
Note 14 to the consolidated Financial Statements
and the relevant accounting policies in Note 2.
Our audit response
We performed full scope audit procedures over the valuation of the Silverstream contract at 31 December 2024 and related
income statement revaluation effects. Consistent with 2023, these procedures covered 100% of the risk amount.
Valuation model • In conjunction with our valuation specialists, we evaluated the appropriateness of the valuation approach
and integrity of the model used by the Company to determine the fair value of the Silverstream contract
under IFRS 9 ‘Financial instruments’ by ensuring consistency in the methodology applied and review of
formulas used in the model, corroborating key inputs to internal and external sources of evidence,
as applicable.
• We assessed whether any of the key inputs to the valuation model required changes related to climate-
related risks through our inquiries of management and our understanding of the Sabinas mine.
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Reserves and
resources and
production
profile of the
Sabinas mine
• With the assistance of our external specialist geologist, we made inquiries of the Sabinas mine
geologist and the mine planning team, in order to understand the assumptions used in the estimation
of reserves and resources and movements in the estimation in the year. We challenged the changes
to the reserves and resources estimations and assessed the resulting impact on the mine plan and
longer-term forecasts.
• We made inquiries of management in financial and operational areas in respect of their review of the
Sabinas mine plan prepared by Peñoles, focusing on the comparisons between the following:
– 2024 plan and the 2023 plan;
– 2024 plan and the 2024 actuals;
– 2025 plan and the 2024 actuals.
• We confirmed that the members of the Sabinas mine planning team involved in the preparation of the
mine plan underpinning the Silverstream valuation have the appropriate experience.
• The reserves and resources estimate, as well as the mine plan, are some of the key inputs to the valuation.
We therefore issued instructions to the auditor of Peñoles to perform procedures and report to us in
respect of the reserves and resources estimate and the mine plan of the Sabinas mine. These procedures
detailed in the instructions included:
– Conducting walkthroughs to confirm our understanding of Peñoles management’s processes to
estimate quantities of reserves (as included in the Sabinas mine plan) and resources and how those
were included in the valuation model;
– Gaining an understanding of reasons for changes in estimates of reserves and resources in the year;
– Assessing the professional competence, capabilities and objectivity of the Sabinas mine geologist
involved in the estimation of reserves and resources quantities; and
– Evaluating the reasonableness and appropriateness of inputs to the reserves and resources estimates
and Sabinas mine plan that were used in the valuation of the contract as at 31 December 2024.
• We discussed the results of the above procedures with the auditor of Peñoles and reviewed their key
working papers.
• In response to the increase in risk identified, we performed additional procedures to evaluate the
reasonableness and appropriateness of changes to the mine plan underpinning the Silverstream
contract. This included inquiries of both Fresnillo and Peñoles management and assessing the
reasonability of the changes made to the mine plan with the support of our external specialist geologist.
Key economic
assumptions in
the valuation
• With assistance from our valuation specialists, we challenged key economic assumptions in the
valuation, including future silver prices and the discount rate applied.
• This challenge included comparison to market data to consider the appropriateness of silver price
and discount rate assumptions when considered together in the valuation model and analysis
of the consistency of assumptions with other accounting estimates, such as recoverable amounts
of mining assets.
• We performed sensitivity analysis on the combination of silver price assumptions, total production and
discount rate.
Appropriateness
and completeness
of disclosures
• We assessed the appropriateness and completeness of disclosures included in the notes to the
Financial Statements and their consistency with the disclosures made in the front half of the Annual
Report.
Key observations communicated to the Audit Committee
• Management has continued to use a consistent valuation methodology in order to estimate the fair value of the
Silverstream contract as a long-term derivative financial instrument. Although we have noted changes some key inputs
to the valuation, notably the exclusion of resources from the valuation in light of the mine’s operational challenges, the
model used remains appropriate and in line with prior year. We also tested the model’s integrity noting no exceptions.
• Considering the additional challenges raised in respect of the production profile at Sabinas, based on our procedures
performed, we concluded that the reserves volumes, as well as the updated mine plan underpinning the valuation were
appropriately estimated.
• We have noted an increase in the discount rate applied to the Silverstream contract related to the uncertainty in the future
production profile of the Sabinas mine, and assessed the reasonability thereof together with our valuation specialists.
• We concluded that the overall valuation of the contract is reasonable.
• We confirmed the appropriateness and completeness of relevant disclosures in the Financial Statements.
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF FRESNILLO PLC
CONTINUED
Key audit matter: Recoverable amount of mining assets
3
• The identification of indicators of impairment requires management judgement, as changes in key economic assumptions
are subject to risk and uncertainty that may be beyond the control of the Group.
• The key assumptions underpinning Management’s assessment of the recoverable amount of mining assets are
reserves and those resources with a high likelihood of being converted into reserves, related mine plans and production
profiles, estimated future operating and capital expenditure, future commodity prices, exchange rates and the discount
rates applied.
• The estimation of mineral reserves and resources quantities of the Group’s mines requires significant judgment
and estimation.
• The Group’s estimates of mineral reserves and resources are audited by third party specialists engaged by management
(Reserves and Resources Specialists).
• Changes to assumptions could lead to material changes in estimated recoverable amounts, resulting in impairment
of property plant and equipment with a net book value of US$2,557.6 million (2023: US$2,860.9 million). There is no
impairment recorded in prior years that may be reversed.
Our judgement is that the level of risk in this area has decreased
from prior year as no impairment triggers were identified in any
of the mining units.
We have considered the possible effect of climate change in the
impairment trigger assessment, in line with the prior year.
Management’s assessment of the judgement
and estimation required is set out in Note 2 to
the consolidated Financial Statements, with
the results of management’s impairment
assessment in Note 13. The reserves and
resources tables are presented after the Parent
Company notes to the Financial Statements as
unaudited information.
Our audit response
We performed full scope audit procedures over this risk area in six components and specified procedures over this risk in one
component, which covered 100% of the risk amount.
Indicators of
impairment
and
methodology
used to
estimate
recoverable
values
• We evaluated Management’s identification of indicators of impairment under IAS 36 ‘Impairment of
assets’, and considered whether climate risks could represent indicators.
• We challenged Management’s assessment with particular emphasis on whether operational issues, cost
increases and decreases in estimations of reserves and resources would result in an impairment trigger
by performing our own independent assessment based on inputs calculated by our valuation specialists.
• We verified information from our procedures in respect of reserves and resources (as described below)
to Management’s indicator assessment to ensure that the most recent reserves information was used.
• We considered the results of our other procedures, including in respect of the mine closure provision
and our analytical review procedures over production to evaluate whether there were any unidentified
indicators of impairment.
Estimation
process for
reserves and
resources
including
external
specialists
engaged by
management
• We performed substantive procedures over the estimation of reserves and resources to evaluate the
extent to which we can rely on those estimates when concluding whether an indicator of impairment
existed.
• We walked through the process of the estimation of the reserves and resources quantities and
identified relevant controls.
• We walked through the process of determining mine plans from estimated reserves and resources
quantities.
• We assessed the competence of the Reserves and Resources Specialists, as well as capabilities and
objectivity as specialists engaged by management to audit the Group’s estimates of reserves and
resources and confirmed the scope of their work was appropriate for the purpose of financial reporting.
• We assessed the potential impact of climate related matters on the estimates.
• We read the reports prepared by the Reserves and Resources Specialists, gained an understanding
of the changes in reserves and resources estimates in the year and considered their observations on
the Group’s reserve and resource estimation process insofar as they affect the Financial Statements.
• We engaged our own specialist (geologist) to evaluate the information provided by the Reserves and
Resources specialists.
• We discussed directly with the Reserves and Resources specialists the results of their reports.
Sensitivity
disclosures
• We assessed the appropriateness of sensitivity disclosures included in the Financial Statements in light
of our other audit procedures.
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Key observations communicated to the Audit Committee
• We assessed the Reserves and Resources Specialists as appropriate specialists engaged by Management for the purposes of
auditing the reserves and resources of the Group.
• We concluded that no impairment indicators were identified in any of the mining units.
Key audit matter: Recoverable amount of investment in subsidiaries (Parent Company only)
4
• Investments in subsidiaries (US$4,189.7 million, 2023: US$3,320.7 million) are more sensitive to changes in recoverable
value than the Group’s underlying mining assets because these investments were measured at fair value in 2008
when the Group was established ahead of its Initial Public Offering and have been subject to previous impairment
charges, including in the prior year.
• The principal driver of the recoverable amount of investments in subsidiaries is the estimated value of underlying mining
assets held by the Group’s subsidiaries. Refer to related considerations in the key audit matter above.
• In addition, management estimates the recoverable value of exploration projects in considering the recoverable value of
subsidiaries.
• Increases in prices and revisions of the reserves and resources estimates in the underlying assets could lead to material
changes in estimated recoverable amounts, resulting in reversals of impairment charges recognised in prior years (2024
aggregate net impairment reversal of US$855.7 million, 2023: net impairment of US$730.8 million).
Our judgement is that the level of risk in this area, overall, remains
consistent with the prior year.
As with the recoverable amount of mining assets, in the current year
we have also considered the possible effect of climate change in the
impairment trigger assessment.
Management’s assessment of the judgement
and estimation required is set out in Note 2 to
the Parent Company Financial Statements,
with the required disclosures around the
recoverability of investments in subsidiaries
included in Note 5.
Our audit response
We performed full scope audit procedures over this risk area in one component, which covered 100% of the risk amount.
Indicators of
impairment and
methodology
used to estimate
recoverable values
• We assessed the methodology used by management to determine whether there were any indicators
of impairment or reversals of previously recognised impairment charges for each investment in
subsidiaries to ensure that this is consistent with accounting standards. Refer to the ‘our audit response’
section of the key audit matter above with respect to procedures performed relating to the recoverable
value of mining assets.
• We evaluated management’s approach to valuing exploration prospects.
Key assumptions
used in
management’s
estimate of the
recoverable values
of investments in
subsidiaries
As the assessment of impairment of investments in subsidiaries is directly linked to the recoverable value
of mining units underlying each investment, we have performed the following procedures in respect of
the mine operations:
• We compared related production profiles to the current mine plans for each mine and considered their
consistency with our understanding of future plans at the mines obtained through enquiries with both
operating and senior management.
• We assessed operating and capital costs included in the cash flow forecasts to ensure consistency
with current operating costs, forecast mine production and other forecast information, by reviewing
the cost assumptions and understanding the methodology applied by management in their
budgeting process. We considered the possible effect of climate change on cost estimates.
• With the assistance of our valuation specialists, we assessed management’s assumptions relating to
future metals prices and discount rates by comparing these to market data and also for consistency
with other estimates used in the Financial Statements.
• We performed sensitivity analysis on management’s calculated recoverable values for alternative
assumptions for metals prices, costs and the discount rate applied.
Sensitivity
disclosures
• We assessed the appropriateness of sensitivity disclosures included in the Parent Company Financial
Statements considering our other audit procedures.
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF FRESNILLO PLC
CONTINUED
Key observations communicated to the Audit Committee
• We confirmed that our observations with respect to reserves and resources set out in the key audit matter in respect of the
recoverable amount of mining assets above are also relevant for the recoverable amounts of investments in subsidiaries.
• We considered the approach to determining the recoverable value of investments in subsidiaries, including the valuation
of exploration assets, to be appropriate.
• Our procedures confirmed that the estimates of production, operating and capital costs are consistent with the
production profiles of respective mines and related mine plans. We considered those to be reasonable.
• We concluded gold and silver prices used by management fall within our range of acceptable values calculated
independently by our engaged specialists.
• We consider that management’s discount rates applied are within the range of acceptable values for most mining
units, except for Herradura and Juanicipio where the rate applied is below our independently calculated range.
Consequently, we assessed the impact of using discount rates within our range and concluded that no material
adjustments were required.
• We concluded that the impairment and sensitivity disclosures reflected in the Parent Company Financial Statements
is appropriate.
In the prior year, our auditor’s report included a key audit matter in relation to the re-estimation of quantities held in leaching
pads at Herradura. For this year’s audit, we no longer consider this to be a key audit matter as the risk and extent of our related
audit procedures have decreased following the reduced degree of estimation uncertainty in light of the lack of significant
variations between actual and expected recovery rates since the last re-estimation.
Materiality
We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified misstatements
on the audit and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be expected to
influence the economic decisions of the users of the Financial Statements. Materiality provides a basis for determining the
nature and extent of our audit procedures.
We determined materiality for the Group to be US$24.0 million (2023: US$17.0 million), which is 5% (2023: 5%) of the five-year
average profit before tax prior to Silverstream revaluation effects, adjusted for any material one-off transactions (Adjusted
Normalised Profit). We believe this measure of profit represents one of the main considerations for members of the Group,
particularly as the Silverstream revaluation effects are principally non-cash in nature and one-off transactions are not reflective
of the ongoing operations of the business.
We have concluded that, solely for the purposes of determining materiality, there are sufficient indicators to normalise the
basis for determining materiality using the five-year average, which is in line with the directors’ viability assessment period. An
illustration of our approach to Adjusted Normalised Profit is set out below, with profit before tax prior to Silverstream revaluation
effects as the starting point.
24.9
480.3
611.1
229.8
106.3
926.2
475.7
2020
0
1,000
US$ million
600
800
400
200
2021 2022 2023 2024
Excluded one-off expense Five-year average
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Strategic Report Governance Financial Statements Additional Information
We determined materiality for the Parent Company to be US$49.9 million (2023: US$42.4 million), which is 1% (2023: 1%) of equity.
The materiality of the Parent Company is higher than that of the Group, reflective of the Parent Company’s primary role being
that of a holding company.
Performance materiality
The application of materiality at the individual account or balance level. It is set at an amount to reduce to an appropriately
low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality.
On the basis of our risk assessments, together with our assessment of the Group’s overall control environment, our judgement
was that performance materiality was 75% (2023: 75%) of our planning materiality, namely US$18.0 million (2023: US$13.0 million).
We have set performance materiality at this percentage due to the level of historical misstatements, our ability to assess the
likelihood of misstatements and the effectiveness of the internal control environment.
Audit work was undertaken at component locations for the purpose of responding to the assessed risks of material
misstatement of the Group Financial Statements. The performance materiality set for each component is based on the
relative scale and risk of the component to the Group as a whole and our assessment of the risk of misstatement at that
component. Assigned performance materiality decreased in all components, reflecting the overall performance of the Group.
Where assigned performance materiality decreased, this represents the changes in the relative contribution of profit of that
component. The allocation of performance materiality to full scope components is as follows:
2024 2023
13.0
13.0
7.8
6.0
6.0
5.0
5.0
2.8
16.8
16.8
4.2
7.1
11.0
7.0
3.0
3.4
Comercializadora
de Metales
Penmont
mining unit
Saucito
mining unit
Juanicipio
mining unit
Fresnillo PLC
Key audit matters*:
San Julián
mining unit
Fresnillo
mining unit
Ciénega
mining unit
1 4
1 2
1 3
1 3
1 3
1 3
1 3
1 3
5
* The icons correspond to the key audit matters set out above. Audit procedures in respect of the recoverable amount of investments in subsidiaries are performed at the
performance materiality of the standalone parent company Financial Statements.
Reporting threshold
An amount below which identified misstatements are considered as being clearly trivial.
We agreed with the Audit Committee that we would report to them all uncorrected audit differences in excess of US$1.2 million
(2023: US$0.85 million), which is set at 5% of planning materiality, as well as differences below that threshold that, in our view,
warranted reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed above and in
light of other relevant qualitative considerations in forming our opinion.
Other information
The other information comprises the information included in the Annual Report other than the Financial Statements and our
auditor’s report thereon. The directors are responsible for the other information contained within the Annual Report.
Our opinion on the Financial Statements does not cover the other information and, except to the extent otherwise explicitly
stated in this report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially
inconsistent with the Financial Statements or our knowledge obtained in the course of the audit or otherwise appears to
be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement in the Financial Statements themselves. If, based on the work we
have performed, we conclude that there is a material misstatement of the other information, we are required to report that fact.
We have nothing to report in this regard.
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF FRESNILLO PLC
CONTINUED
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with
the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
• The information given in the Strategic Report and the Directors’ Report for the financial year for which the Financial
Statements are prepared is consistent with the Financial Statements and those reports have been prepared in accordance
with applicable legal requirements;
• The information about internal control and risk management systems in relation to financial reporting processes and
about share capital structures, given in compliance with rules 7.2.5 and 7.2.6 in the Disclosure Rules and Transparency Rules
sourcebook made by the Financial Conduct Authority (the FCA Rules), is consistent with the Financial Statements and has
been prepared in accordance with applicable legal requirements; and
• Information about the company’s corporate governance statement and practices and about its administrative,
management and supervisory bodies and their committees complies with rules 7.2.2, 7.2.3 and 7.2.7 of the FCA Rules.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the Parent Company and its environment obtained in the
course of the audit, we have not identified material misstatements in:
• The Strategic Report or the Directors’ report; or
• The information about internal control and risk management systems in relation to financial reporting processes and about
share capital structures, given in compliance with rules 7.2.5 and 7.2.6 of the FCA Rules
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to
report to you if, in our opinion:
• Adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been
received from branches not visited by us; or
• The Parent Company Financial Statements and the part of the Directors’ Remuneration Report to be audited are not in
agreement with the accounting records and returns; or
• Certain disclosures of Directors’ remuneration specified by law are not made; or
• We have not received all the information and explanations we require for our audit; or
• A Corporate Governance Statement has not been prepared by the company
Corporate Governance Statement
We have reviewed the Directors’ statement in relation to going concern, longer-term viability and that part of the Corporate
Governance Statement relating to the Group and Company’s compliance with the provisions of the UK Corporate Governance
Code specified for our review by the UK Listing Rules.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the Financial Statements or our knowledge obtained during the audit:
• Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any
material uncertainties identified set out on page 141;
• Directors’ explanation as to its assessment of the company’s prospects, the period this assessment covers and why the
period is appropriate set out on pages 139-140;
• Directors’ statement on whether it has a reasonable expectation that the Group will be able to continue in operation and
meets its liabilities set out on page 141;
• Directors’ statement on fair, balanced and understandable set out on page 177;
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 120;
• The section of the Annual Report that describes the review of effectiveness of risk management and internal control
systems set out on pages 174-177; and
• The section describing the work of the audit committee set out on pages 165-177.
Responsibilities of Directors
As explained more fully in the Directors’ responsibilities statement set out on page 198, the Directors are responsible for
the preparation of the Financial Statements and for being satisfied that they give a true and fair view, and for such internal
control as the Directors determine is necessary to enable the preparation of Financial Statements that are free from material
misstatement, whether due to fraud or error.
In preparing the Financial Statements, the Directors are responsible for assessing the Group and Parent Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the Group or the Parent Company or to cease operations, or have no
realistic alternative but to do so.
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Strategic Report Governance Financial Statements Additional Information
Auditor’s responsibilities for the audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a
high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these Financial Statements.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with
our responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement
due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by,
for example, forgery or intentional misrepresentations, or through collusion. The extent to which our procedures are capable of
detecting irregularities, including fraud is detailed below.
However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of
the company and management.
• We obtained an understanding of the legal and regulatory frameworks that are applicable to the Group and determined
that the most significant are those related to the reporting framework (UK adopted international accounting standards and
Companies Act 2006 and UK Corporate Governance Code), regulations impacting mining operations including mining laws,
environmental and labour regulations and tax and employee profit-sharing requirements in Mexico.
• With the assistance of our forensics specialists, we understood how Fresnillo plc is complying with those frameworks by
making enquiries of management, internal audit, those responsible for legal and compliance procedures and the company
secretary. We corroborated our enquiries through our review of board minutes and papers provided to the Audit Committee.
• We have involved our forensic specialists in obtaining an understanding of the process established by management to identify,
evaluate and respond to fraud risks, who have placed specific focus on bribery and corruption risks.
• We assessed the susceptibility of the Group’s Financial Statements to material misstatement, including how fraud
might occur by meeting with management from various parts of the business to understand where it is considered
there was a susceptibility of fraud. We also considered performance targets and their propensity to influence efforts made
by Management to manage earnings. We considered the programmes and controls that the Group has established to
address risks identified, or that otherwise prevent, deter and detect fraud; and how senior management monitors those
programmes and controls. Where the risk was considered to be higher, we performed audit procedures to address each
identified fraud risk. These procedures included using data analytics to test manual journals and were designed to provide
reasonable assurance that the Financial Statements were free of fraud or error. In the current year, forensic specialists
reviewed our fraud risk assessment and assisted on our journal entry testing procedures.
• Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations.
Our procedures involved enquiries of Group management and those charged with governance, legal counsel, internal audit,
and the risk and compliance departments; journal entry testing, with a focus on manual journals and those indicating large
or unusual journals based on our understanding of the business; and challenging the assumptions and judgements made by
management in respect of significant accounting estimates. Where observations are raised about management’s process or
controls surrounding compliance with laws and regulations by us or others, we consider the potential effect of those observations.
A further description of our responsibilities for the audit of the Financial Statements is located on the Financial Reporting
Council’s website at https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Other matters we are required to address
• Following the recommendation from the Audit Committee, we were appointed by the company in May 2008 to audit the
Financial Statements for the year ending 31 December 2008 and subsequent financial periods. Following a competitive
tender process, we were reappointed as auditor of the Company for the period ending 31 December 2017 and subsequent
financial periods. Our total uninterrupted period of engagement is 17 years, covering periods from our initial appointment
through to the period ended 31 December 2024.
• The audit opinion is consistent with the additional report to the Audit Committee.
Use of our report
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required
to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this
report, or for the opinions we have formed.
Steven Dobson
(Senior statutory auditor)
for and on behalf of Ernst & Young LLP , Statutory Auditor
London
4 March 2025
212
Fresnillo plc Annual Report and Accounts 2024
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2024
| Year ended 31 December 2024 | Year ended 31 December 2023 | ||||||
| US$ thousands | US$ thousands | ||||||
| Pre- | Pre- | ||||||
| Silverstream | Silverstream | Silverstream | Silverstream | ||||
| revaluation | revaluation | revaluation | revaluation | ||||
| Notes | effect | effect | Total | effect | effect | Total | |
Revenues | 5 | ||||||
Cost of sales | 6 | ( | ( | ( | ( | ||
Gross profit | |||||||
Administrative expenses | ( | ( | ( | ( | |||
Exploration expenses | 7 | ( | ( | ( | ( | ||
Selling expenses | ( | ( | ( | ( | |||
Other operating income | 9 | ||||||
Other operating expenses | 9 | ( | ( | ( | ( | ||
Profit before netfinance costs and income tax | |||||||
Finance income | 10 | ||||||
Finance costs | 10 | ( | ( | ( | ( | ||
Revaluation effects of Silverstream contract | 14 | ( | ( | ||||
Foreign exchange gain | |||||||
Profit before income tax | ( | ||||||
Corporate income tax | 11 | ( | ( | ( | |||
Special mining right | 11 | ( | ( | ( | ( | ||
Income tax | 11 | ( | ( | ( | |||
Profit for the year | ( | ||||||
| Attributable to: | |||||||
Equity shareholders of the Company | ( | ||||||
Non-controlling interest | |||||||
( | |||||||
| Earnings per share: (US$) | |||||||
| Basic and diluted earnings per Ordinary | |||||||
Share | 12 | ||||||
| Adjusted earnings per share: (US$) | |||||||
| Adjusted basic and diluted earnings per | |||||||
Ordinary Share | 12 | ||||||
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Strategic Report Governance Financial Statements Additional Information
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
| Year ended 31 December | |||
| 2024 | 2023 | ||
| Notes | US$ thousands | US$ thousands | |
Profit for the year | |||
| Other comprehensive income/(expense) | |||
| Items that may be reclassified subsequently to profit or loss: | |||
Foreign currency translation | ( | ( | |
Net other comprehensive loss that may be reclassified subsequently to profit or loss: | ( | ( | |
| Items that will not be reclassified to profit or loss: | |||
Changes in the fair value of cash flow hedges | ( | ||
Total effect of cash flow hedges | ( | ||
Changes in the fair value of equity investments at fair value through other comprehensive income (FVOCI) | ( | ||
Remeasurement loss on defined benefit plans | 22 | ( | ( |
Income tax effect on items that will not be reclassified to profit or loss | 11 | ( | |
Net other comprehensive income/(loss) that will not be reclassified to profit or loss | ( | ||
Other comprehensive income/(loss), net of tax | ( | ||
Total comprehensive income for the year, net of tax | |||
| Attributable to: | |||
Equity shareholders of the Company | |||
Non-controlling interests | |||
214
Fresnillo plc Annual Report and Accounts 2024
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2024
| As at 31 December | |||
| 2024 | 2023 | ||
| Notes | US$ thousands | US$ thousands | |
| ASSETS | |||
| Non-current assets | |||
Property, plant and equipment (PPE) | 13 | ||
Equity instruments at FVOCI | 30 (b) | ||
Silverstream contract | 14 | ||
Deferred tax asset | 11 | ||
Inventories | 15 | ||
Other receivables | 16 | ||
Other assets | |||
| Current assets | |||
Inventories | 15 | ||
Trade and other receivables | 16 | ||
Prepayments | |||
Income tax recoverable | |||
Derivative financial instruments | 30 | ||
Silverstream contract | 14 | ||
Short-term investments | 17 | ||
Cash and cash equivalents | 17 | ||
Total assets | |||
| EQUITY AND LIABILITIES | |||
| Capital and reserves attributable to shareholders of the Company | |||
Share capital | 18 | ||
Share premium | 18 | ||
Capital reserve | 18 | ( | ( |
Hedging reserve | 18 | ( | |
Fair value reserve of financial assets at FVOCI | 18 | ||
Foreign currency translation reserve | 18 | ( | ( |
Retained earnings | 18 | ||
Non-controlling interests | |||
Total equity | |||
| Non-current liabilities | |||
Interest-bearing loans | 20 | ||
Notes payable | 30 (a) | ||
Lease liabilities | 25 | ||
Provision for mine closure cost | 21 | ||
Pensions and other post-employment benefit plans | 22 | ||
Deferred tax liability | 11 | ||
| Current liabilities | |||
Trade and other payables | 23 | ||
Notes payable | 30 (a) | ||
Income tax payable | |||
Derivative financial instruments | 30 | ||
Lease liabilities | 25 | ||
Provision for mine closure cost | 21 | ||
Employee profit sharing | |||
Total liabilities | |||
Total equity and liabilities |
215
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Strategic Report Governance Financial Statements Additional Information
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
| Year ended 31 December | |||
| 2024 | 2023 | ||
| Notes | US$ thousands | US$ thousands | |
Net cash from operating activities | 29 | ||
| Cash flows from investing activities | |||
Purchase of property, plant and equipment | 3 | ( | ( |
Proceeds from the sale of property, plant and equipment and other assets | |||
Proceeds from the sale of mining concessions | 9 | ||
Proceeds from Silverstream contract | 14 | ||
Proceeds from the Layback Agreement 1 | 2 (c) | ||
Purchase of equity instruments at FVOCI | 30 (b) | ( | ( |
Disposal of equity instruments at FVOCI | 30 (b) | ||
Short-term investments | 17 | ( | |
Interest received | |||
Net cash used in investing activities | ( | ( | |
| Cash flows from financing activities | |||
Proceeds from notes payable | 30(a) | ||
Payment of notes payable | 30(a) | ( | ( |
Repayment of interest-bearing loans | 20 | ( | |
Principal element of lease payments | 25 (a) | ( | ( |
Dividends paid to shareholders of the Company 2 | 19 | ( | ( |
Dividends paid to non-controlling interests in subsidiaries | 4 (a) | ( | |
Capital contribution 3 | |||
Interest paid 4,5 | ( | ( | |
Net cash used in financing activities | ( | ( | |
Net decrease in cash and cash equivalents during the year | ( | ||
Effect of exchange rate on cash and cash equivalents | ( | ||
Cash and cash equivalents at 1 January | |||
Cash and cash equivalents at 31 December | 17 |
1 Corresponds to the last payment of the Layback Agreement entered with Orla Mining Ltd in December 2020 for the right to expand the Camino Rojo oxide pit onto
Fresnillo mineral concession.
2 Includes the effect of hedging of dividend payments made in currencies other than US dollar (Note 19).
3 Corresponds to capital contributions provided by Minera los Lagartos, S.A. de C.V.
4 During the year ended 31 December 2024 there were no amounts capitalised. Total interest during the year ended 31 December 2023 less amounts capitalised
totalling US$2.1 million which is included within the caption Purchase of property, plant and equipment.
5 As of 31 December 2024 includes US$1.2 million related to a commitment fee in respect of undrawn amounts of the syndicated revolving credit facility entered by the
Group. No amounts have been drawdown from the credit facility as of 31 December 2024.
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
| Attributable to the equity holders of the Company | |||||||||||
| Fair value | |||||||||||
| reserve of | Foreign | ||||||||||
| financial | currency | Non- | |||||||||
| Share | Share | Capital | Hedging | assets at | translation | Retained | controlling | Total | |||
| capital | premium | reserve | reserve | FVOCI | reserve | earnings | Total | interests | equity | ||
Notes | US$ thousands | ||||||||||
Balance at 1 January 2023 | ( | ( | ( | ||||||||
Profit for the year | |||||||||||
Other comprehensive income, net of tax | ( | ( | ( | ( | ( | ||||||
Total comprehensive income for the year | ( | ( | |||||||||
Hedging loss transferred to the carrying value of PPE | |||||||||||
purchased during the year | ( | ( | ( | ( | |||||||
Capital contribution | |||||||||||
Dividends declared and paid | 19 | ( | ( | ( | |||||||
| Balance at 31December | |||||||||||
2023 | ( | ( | |||||||||
Profit for the year | |||||||||||
Other comprehensive income, net of tax | ( | ( | ( | ( | |||||||
Total comprehensive income for the year | ( | ( | |||||||||
Hedging loss transferred to the carrying value of PPE | |||||||||||
purchased during the year | ( | ( | ( | ( | |||||||
| Transfer of gain on disposal | |||||||||||
| of equity investments | |||||||||||
| at FVOCI to retained | |||||||||||
earnings (net of tax) | 30(b) | ( | |||||||||
Recognition of non- controlling interest | 4(a) | ( | ( | ||||||||
Dividends declared and paid | 19 | ( | ( | ( | ( | ||||||
| Balance at 31December | |||||||||||
2024 | ( | ( | ( |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2. Significant accounting policies
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
2. Significant accounting policies continued
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
2. Significant accounting policies continued
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| Years | |
Buildings | 6 |
Plant and equipment | 10 |
Mining properties and development costs 1 | 10 |
Other assets | 5 |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
2. Significant accounting policies continued
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
2. Significant accounting policies continued
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
2. Significant accounting policies continued
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
2. Significant accounting policies continued
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
2. Significant accounting policies continued
3. Segment reporting
For management purposes, the Group is organised into operating segments based on producing mines.
At 31 December 2024, the Group has seven reportable operating segments as follows:
The Fresnillo mine, located in the state of Zacatecas, an underground silver mine;
The Saucito mine, located in the state of Zacatecas, an underground silver mine;
The Ciénega mine, located in the state of Durango, an underground silver-gold mine;
The Herradura mine, located in the state of Sonora, a surface gold mine;
The Noche Buena mine, located in state of Sonora, a surface gold mine;
The San Julián mine, located on the border of Chihuahua/Durango states, an underground silver-gold mine, and
The Juanicipio mine, in the State of Zacatecas, an underground silver mine.
The operating performance and financial results for each of these mines are reviewed by management. As the Group’s chief
operating decision maker (CODM) does not review segment assets and liabilities, the Group has not disclosed this information.
Management monitors the results of its operating segments separately for the purpose of performance assessment
and making decisions about resource allocation. Segment performance is evaluated without taking into account certain
adjustments included in Revenue as reported in the consolidated income statement, and certain costs included within Cost
of sales and Gross profit which are considered to be outside of the control of the operating management of the mines. The table
below provides a reconciliation from segment profit to Gross profit as per the consolidated income statement. Administrative
expenses, Exploration expenses, Selling expenses, and Other income and expenses not related to production activities included
in the consolidated income statement are not allocated to operating segments. Also, the Group’s financing (including finance
cost and finance income) and income taxes are managed on a Group basis and are not allocated to operating segments.
Transactions between reportable segments are accounted for on an arm’s length basis similar to transactions with third parties.
In 2024 99.6% of revenue was derived from customers based in Mexico (2023: 99.9% of revenue was derived from customers
based in Mexico).
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Operating segments
The following tables present revenue and profit information regarding the Group’s operating segments for the year ended
31 December 2024 and 2023, respectively. Revenues for the year ended 31 December 2024 and 2023 include those derived from
contracts with customers and other revenues, as shown in Note 5.
| Year ended 31 December 2024 | ||||||||||
| US$ thousands | ||||||||||
| Adjustments | ||||||||||
| Noche | San | and | ||||||||
Fresnillo | Herradura | Ciénega | Saucito | Buena | Julián | Juanicipio | Other 4 | eliminations | Total | |
| Revenues: | ||||||||||
Third party 1 | 499,519 | 883,571 | 222,455 | 764,708 | 42,923 | 455,995 | 627,214 | – | – | 3,496,385 |
Inter-segment | 36,409 | – | – | – | – | – | 152 | 50,839 | (87,400) | – |
Segment revenues | 535,928 | 883,571 | 222,455 | 764,708 | 42,923 | 455,995 | 627,366 | 50,839 | (87,400) | 3,496,385 |
Segment profit 2 | 277,333 | 323,696 | 92,898 | 405,077 | 4,348 | 253,494 | 475,113 | 49,102 | (2,662) | 1,878,399 |
| Depreciation and amortisation | ||||||||||
in cost of sales | (619,779) | |||||||||
Employee profit sharing in cost of sales | (12,347) | |||||||||
Gross profit as per the income statement | 1,246,273 | |||||||||
Capital expenditure 3 | 90,335 | 55,049 | 17,111 | 97,270 | – | 49,429 | 59,263 | 2,085 | 370,542 | |
1 During 2024 all segment revenues were derived from Met-Mex, except in Juanicipio which includes sales of iron concentrate to another external customers of
US$14.7 million.
2 The Group’s CODM primarily uses this measure to monitor the operating results directly related to the production of its business units separately to make decisions
about resource allocation and performance assessment. Segment profit excluding foreign exchange hedging gains, depreciation and amortisation and employee
profit sharing.
3 Capital expenditure represents the cash outflow in respect of additions to property, plant and equipment, excluding additions relating to changes in the mine closure
provision. Significant additions include expansions of tailings damn at Saucito, Fresnillo, Juanicipio and San Julián, mining works at San Julián, Fresnillo and Saucito
and stripping cost and construction of leaching pads at Herradura mine.
4 Other inter-segment revenue corresponds to leasing services provided by Minera Bermejal, S.A. de C.V; capital expenditure mainly corresponds to Minera Bermejal,
S. de R.L. de C.V.
| Year ended 31 December 2023 | ||||||||||
| US$ thousands | ||||||||||
| Adjustments | ||||||||||
| Noche | San | and | ||||||||
Fresnillo | Herradura | Ciénega | Saucito | Buena | Julián | Juanicipio 4 | Other 5 | eliminations | Total | |
| Revenues: | ||||||||||
Third party 1 | 422,963 | 708,242 | 162,013 | 590,269 | 84,210 | 385,469 | 351,920 | – | – | 2,705,086 |
Inter-segment | 4,254 | – | – | – | – | – | 90,368 | 52,287 | (146,909) | – |
Segment revenues | 427,217 | 708,242 | 162,013 | 590,269 | 84,210 | 385,469 | 442,288 | 52,287 | (146,909) | 2,705,086 |
Segment profit 2 | 156,849 | 157,233 | 18,926 | 185,995 | 5,632 | 158,663 | 271,558 | 33,602 | 14,312 | 1,002,770 |
| Depreciation and amortisation | ||||||||||
in cost of sales | (497,303) | |||||||||
Employee profit sharing in cost of sales | (2,229) | |||||||||
Gross profit as per the income statement | 503,238 | |||||||||
Capital expenditure 3 | 97,809 | 56,923 | 43,841 | 125,052 | 52 | 74,824 | 82,167 | 2,741 | – | 483,409 |
1 During 2023 all segment revenues were derived from Met-Mex, except in Juanicipio which includes sales to another external customer of US$0.6 million.
2 The Group’s CODM primarily uses this measure to monitor the operating results directly related to the production of its business units separately to make decisions
about resource allocation and performance assessment. Segment profit excluding foreign exchange hedging gains, depreciation and amortisation and employee
profit sharing. Segment profit for Fresnillo and Saucito considers the sales and the corresponding processing cost of the ore from Juanicipio.
3 Capital expenditure represents the cash outflow including interest capitalised in respect of additions to property, plant and equipment, excluding additions relating
to changes in the mine closure provision. Significant additions include stripping cost at Herradura mine and the construction of tailing damns at San Julián and
Saucito mines.
4 Some of the ore production of Juanicipio mine has been processed through Fresnillo and Saucito facilities.
5 Other inter-segment revenue corresponds to leasing services provided by Minera Bermejal, S.A. de C.V; capital expenditure mainly corresponds to Minera Bermejal,
S. de R.L. de C.V.
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Fresnillo plc Annual Report and Accounts 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
4. Group information
The list of the Company’s subsidiaries included in the consolidated Financial Statements and its principal activities are shown
in Note 5 on the Parent Company’s separate Financial Statements. The country of incorporation or registration is also their
principal place of business.
(a) Material partly-owned subsidiaries
The table below shows the detail of non-wholly owned subsidiaries of the Group that have non-controlling interests:
| Portion of ownership interest | ||||||
| held by non-controlling | Profit (loss) allocated | Accumulated | ||||
| interest | to non-controlling interest | non-controlling interest | ||||
31-Dec-24 | 31-Dec-23 | 31-Dec-24 | 31-Dec-23 | 31-Dec-24 | 31-Dec-23 | |
Minera Juanicipio, S.A. de C.V. | 44% | 44% | 90,616 | 35,853 | 266,153 | 195,991 |
Equipos Chaparral, S.A. de C.V. | 44% | 44% | (10,891) | 18,311 | 86,443 | 97,377 |
Other subsidiaries with non-controlling interests not considered to be material 1 | – | – | 6,046 | 227 | 2,433 | 1,977 |
1 In October 2024 the Group entered into an exploration joint venture in Chile through its subsidiary Minera Capricorno, SCM (Capricornio) and Sociedad Quimica y
Minera de Chile, S.A. de C.V. (SQM), a Chilean mining company. The agreement considers a transfer of 25% ownership which represent a net share of US$0.4 million.
Set out below is the summarised financial information for each subsidiary that has non-controlling interests that are material
to the Group. Figures are presented in thousands of US dollars unless otherwise indicated.
Summarised income statement for the year ended 31 December 2024 and 2023
| Minera Juanicipio, | Equipos Chaparral, | |||
| S.A. de C.V. | S.A. de C.V. | |||
31–Dec–24 | 31–Dec–23 | 31–Dec–24 | 31–Dec–23 | |
Revenue | 627,366 | 442,288 | – | – |
Profit/(loss) before income tax | 366,541 | 102,447 | (21,698) | 45,412 |
Income tax charge | 160,595 | 20,962 | 3,054 | 3,797 |
Profit/(loss) for the year | 205,946 | 81,485 | (24,752) | 41,615 |
Other comprehensive (loss)/gain | (30) | 31 | 90 | 8 |
Total comprehensive income/(loss) | 205,946 | 81,516 | (24,842) | 41,623 |
Attributable to non-controlling interests | 90,629 | 35,867 | (10,930) | 18,314 |
Dividends paid to non-controlling interests | (26,400) | – | – | – |
Summarised statement of financial position as at 31 December 2024 and 2023
| Minera Juanicipio, | Equipos Chaparral, | |||
| S.A. de C.V. | S.A. de C.V. | |||
31-Dec-24 | 31-Dec-23 | 31-Dec-24 | 31-Dec-23 | |
| Current | ||||
Assets | 161,736 | 120,396 | 29,462 | 34,990 |
Liabilities | (82,572) | (197,260) | (7,919) | (35,708) |
Total current net assets/(liabilities) | 79,164 | (76,864) | 21,596 | (718) |
| Non-current | ||||
Assets | 730,074 | 776,156 | 174,871 | 222,030 |
Liabilities | (204,266) | (253,858) | (6) | – |
Total non-current net assets | 525,808 | 522,298 | 174,865 | 222,030 |
Net assets | 604,972 | 445,434 | 196,461 | 221,312 |
| Attributable to: | ||||
Equity holders of parent | 338,819 | 249,443 | 110,018 | 123,935 |
Non-controlling interest | 266,153 | 195,991 | 86,443 | 97,377 |
Summarised cash flow information for the year ended 31 December 2024 and 2023
| Minera Juanicipio, | Equipos Chaparral, | |||
| S.A. de C.V. | S.A. de C.V. | |||
31-Dec-24 | 31-Dec-23 | 31-Dec-24 | 31-Dec-23 | |
Operating | 354,895 | 133,299 | 17,521 | (33,126) |
Investing | (40,104) | (48,936) | 692 | 340 |
Financing | (297,489) | (57,448) | (24,485) | 509 |
Net increase/(decrease) in cash and cash equivalents | 17,302 | 26,915 | (6,272) | (32,277) |
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5. Revenues
Revenues reflect the sale of goods, being concentrates, doré, slag, precipitates and activated carbon of which the primary
contents are silver, gold lead and zinc.
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$ thousands | US$ thousands | |
Revenues from contracts with customers | 3,503,662 | 2,706,292 |
| Revenues from other sources: | ||
Provisional pricing adjustment on products sold | (7,277) | (1,206) |
3,496,385 | 2,705,086 |
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$ thousands | US$ thousands | |
Lead concentrates (containing silver, gold, lead and by-products) | 1,652,909 | 1,320,155 |
Doré and slag (containing gold, silver and by-products) | 753,747 | 708,036 |
Zinc concentrates (containing zinc, silver and by-products) | 380,169 | 290,138 |
Precipitates (containing gold and silver) | 522,077 | 301,707 |
Activated carbon (containing gold, silver and by-products) | 172,747 | 84,416 |
Iron concentrates (containing silver, gold, lead and by-products) | 14,736 | 634 |
3,496,385 | 2,705,086 |
(c) Value of metal content in products sold
Invoiced revenues are derived from the value of metal content which is determined by commodity market prices and adjusted
for the treatment and refining charges to be incurred by the metallurgical complex of our customer. The value of the metal
content of the products sold, before treatment and refining charges is considered as an alternative performance measure for
the Group. The Group considers this a useful additional measure to help understand underlying factors driving revenue in
terms of volumes sold and realised prices. The value of production sold by metal is as follows:
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$ thousands | US$ thousands | |
Silver | 1,673,901 | 1,319,423 |
Gold | 1,514,702 | 1,177,386 |
Zinc | 311,557 | 250,782 |
Lead | 139,789 | 121,483 |
Value of metal content in products sold | 3,639,949 | 2,869,074 |
Refining and treatment charges 1 | (143,564) | (163,988) |
Total revenues 2 | 3,496,385 | 2,705,086 |
1 The methodology to determine the refining and treatment charges takes into account industry benchmark charges and adjustments to reflect ore composition and
transport costs (refer to Note 27(b).
2 Includes provisional price adjustments which represent changes in the fair value of trade receivables resulting in a loss of US$7.2 million (2023: loss of US$1.2 million).
For further detail, refer to Note 2(o).
The average realised prices for the gold and silver content of products sold, prior to the deduction of treatment and refining
charges, were:
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$ per ounce | US$ per ounce | |
Gold | 2,453.58 | 1,957.72 |
Silver | 28.78 | 23.64 |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$ thousands | US$ thousands | |
Depreciation and amortisation | 619,779 | 497,303 |
Contractors | 351,474 | 393,997 |
Operating materials | 304,946 | 292,450 |
Maintenance and repairs | 289,475 | 299,924 |
Energy | 249,517 | 256,507 |
Personnel expenses (Note 8(a)) | 230,312 | 210,583 |
Mine equipment leased 1 | 59,156 | 69,754 |
Mining concession rights and contributions | 27,192 | 23,045 |
Surveillance | 21,705 | 23,983 |
Insurance | 12,727 | 12,056 |
IT services | 10,785 | 11,464 |
Freight | 7,607 | 9,365 |
Other | 29,672 | 23,154 |
Cost of production | 2,214,347 | 2,123,585 |
Unabsorbed production costs 2 | – | 25,920 |
Gain on foreign currency hedges | – | (232) |
Change in work in progress and finished goods (ore inventories) | 35,765 | 52,575 |
2,250,112 | 2,201,848 |
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$ thousands | US$ thousands | |
Contractors | 101,514 | 122,973 |
Mining concession rights and contributions | 30,437 | 28,777 |
Personnel expenses (Note 8(a)) | 15,461 | 13,315 |
Assays | 5,746 | 8,950 |
Administrative services | 1,406 | 2,057 |
Rentals | 869 | 570 |
Other | 7,615 | 5,805 |
163,048 | 182,447 |
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$ thousands | US$ thousands | |
Operating cash outflows related to exploration activities | 162,837 | 182,359 |
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| Year ended 31 December | ||
| 2024 | 2023 | |
| US$ thousands | US$ thousands | |
Salaries and wages | 108,800 | 109,470 |
Statutory healthcare and housing contributions | 48,214 | 42,393 |
Bonuses | 36,547 | 34,099 |
Other benefits | 29,704 | 28,414 |
Employees’ profit sharing | 13,609 | 2,390 |
Post-employment benefits | 9,684 | 12,799 |
Vacations and vacations bonus | 8,727 | 6,541 |
Legal contributions | 5,625 | 6,104 |
Training | 1,923 | 2,532 |
Other | 4,625 | 5,313 |
267,458 | 250,055 |
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$ thousands | US$ thousands | |
Cost of sales (Note 6) 1 | 230,312 | 215,952 |
Administrative expenses | 21,685 | 20,788 |
Exploration expenses (Note 7) | 15,461 | 13,315 |
267,458 | 250,055 |
| Year ended 31 December | ||
| 2024 | 2023 | |
| No. | No. | |
Mining | 3,572 | 3,497 |
Plant | 1,040 | 1,091 |
Exploration | 101 | 270 |
Maintenance | 1,261 | 1,327 |
Administration and other | 1,266 | 1,118 |
Total | 7,303 |
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Fresnillo plc Annual Report and Accounts 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$ thousands | US$ thousands | |
| Other income: | ||
Gain on sale of mining concessions 1 | 24,149 | – |
Reversal of accruals 2 | – | 25,793 |
Recovery of personnel expenses | – | 4,156 |
Insurance claims recovered | 6,302 | – |
Gain on sale of property, plant and equipment and other assets | 1,004 | 882 |
Selling of sundry materials and scrap | 1,549 | – |
Change in mine closure cost provision 3 | 1,222 | – |
Indemnities from suppliers | 599 | – |
Rentals | 543 | 35 |
Other | 4,191 | 4,458 |
39,559 | 35,324 |
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$ thousands | US$ thousands | |
| Other expenses: | ||
Write-off of inventories (Note 2 (c)) | – | 21,861 |
Cost subject to insurance claims | – | 8,349 |
Allowance for obsolete and slow-moving inventories | 6,165 | 1,221 |
Donations | 4,517 | 1,685 |
Maintenance 4 | 3,554 | 3,477 |
Indemnities to suppliers | 2,151 | – |
Write-off of PPE assets 5 | 1,704 | 1,920 |
Change in mine closure cost provision 3 | 1,214 | 3,226 |
Environmental activities 6 | 599 | 3,963 |
Consumption tax expensed | 709 | 943 |
Other | 683 | 4,524 |
21,296 | 51,169 |
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$ thousands | US$ thousands | |
| Finance income: | ||
Interest on short-term deposits and investments | 42,210 | 47,592 |
Interest on tax receivables | 3,117 | 2,479 |
Other | 1,609 | 552 |
46,936 | 50,623 |
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$ thousands | US$ thousands | |
| Finance costs: | ||
Interest on interest-bearing loans and notes payables | 43,845 | 60,741 |
Unwinding of discount on provisions (Note 21) | 24,997 | 22,578 |
Interest on lease liabilities (Note 25(a)) | 1,574 | 1,220 |
Other | 3,155 | 4,307 |
73,571 | 88,846 |
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| Year ended 31 December | ||
| 2024 | 2023 | |
| US$ thousands | US$ thousands | |
| Consolidated income statement: | ||
| Corporate income tax | ||
| Current: | ||
Income tax charge | 187,027 | 80,769 |
Amounts (over)/under provided in previous years | (158) | 4,235 |
186,869 | 85,004 | |
| Deferred: | ||
Origination and reversal of temporary differences | 258,001 | (292,371) |
Revaluation effects of Silverstream contract | (54,683) | 2,320 |
203,318 | (290,051) | |
Corporate income tax | 390,187 | (205,047) |
| Special mining right | ||
| Current: | ||
Special mining right charge (Note 11 (e)) | 66,469 | 22,708 |
Amounts (over)/under provided in previous years | (238) | 1,686 |
66,231 | 24,394 | |
| Deferred: | ||
Origination and reversal of temporary differences | 60,793 | 6,371 |
Special mining right | 127,024 | 30,765 |
Income tax expense reported in the income statement | 517,211 | (174,282) |
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$ thousands | US$ thousands | |
| Consolidated statement of comprehensive income: | ||
| Deferred income tax (charge)/credit related to items recognised directly | ||
| in other comprehensive income: | ||
Changes in fair value of cash flow hedges | 60 | (135) |
Changes in fair value of equity investments at FVOCI | (10,593) | 15,941 |
Remeasurement losses on defined benefit plans | 31 | 20 |
Income tax effect reported in other comprehensive income | (10,502) | 15,826 |
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$ thousands | US$ thousands | |
Accounting profit before income tax | 743,902 | 114,018 |
Tax at the Group’s statutory corporate income tax rate 30.0% | 223,170 | 34,205 |
Exchange rate effect on tax value of assets and liabilities 1 | 300,243 | (214,521) |
Expenses not deductible for tax purposes | 7,122 | 14,277 |
Inflationary uplift of the tax base of assets and liabilities | (55,170) | (54,763) |
Special mining right deductible for corporate income tax | (38,107) | (9,230) |
Non-taxable/non-deductible foreign exchange effects | (18,601) | 16,689 |
Update of tax values 2 | (13,468) | – |
Incentive for Northern Border Zone | (12,921) | 1,760 |
Deferred tax asset not recognised | 6,392 | 11,688 |
Inflationary uplift of tax losses | (4,701) | (5,361) |
Current income tax (over)/underprovided in previous years | (1,977) | 2,137 |
Inflationary uplift on tax refunds | (935) | (744) |
Other | (861) | (1,184) |
Corporate income tax at the effective tax rate of 52.5% (2023: (179.8%)) | 390,187 | (205,047) |
Special mining right | 127,024 | 30,765 |
Tax at the effective income tax rate of 69.5% (2023: (152.9%)) | 517,211 | (174,282) |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
11. Income tax expense continued
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$ thousands | US$ thousands | |
Opening net asset/(liability) | 532,100 | 232,568 |
Income statement (charge)/credit arising on corporate income tax | (203,318) | 290,051 |
Income statement charge arising on special mining right | (60,793) | (6,371) |
Exchange difference | 34 | 26 |
Net charge related to items directly charged to other comprehensive income | (10,502) | 15,826 |
Closing net asset | 257,521 | 532,100 |
Consolidated balance sheet | Consolidated income statement | |||
| 2024 | 2023 | 2024 | 2023 | |
| US$ thousands | US$ thousands | US$ thousands | US$ thousands | |
Related party receivables | (352,650) | (181,236) | 171,414 | 22,439 |
Other receivables | (11,656) | (6,233) | 5,423 | 2,259 |
Inventories | 148,629 | 152,378 | 3,749 | (36,995) |
Prepayments | (2,939) | (3,499) | (560) | 1,076 |
Derivative financial instruments including Silverstream contract | (71,833) | (138,171) | (66,278) | (9,852) |
Property, plant and equipment arising from corporate income tax | 300,222 | 366,694 | 66,472 | (224,453) |
Exploration expenses and operating liabilities | 90,201 | 107,711 | 17,510 | (16,446) |
Other payables and provisions | 73,659 | 87,705 | 14,046 | (13,543) |
Losses carried forward | 90,124 | 141,091 | 50,999 | (23,402) |
Post-employment benefits | 1,821 | 2,100 | 310 | (576) |
Deductible profit sharing | 3,974 | 852 | (3,121) | 2,243 |
Special mining right deductible for corporate income tax | 39,886 | 7,445 | (32,441) | 3,293 |
Equity investments at FVOCI | (10,017) | 1,368 | 792 | (2,364) |
Other | 7,580 | (17,416) | (24,996) | 6,270 |
Net deferred tax asset related to corporate income tax | 307,001 | 520,789 | ||
Deferred tax credit related to corporate income tax | 203,319 | (290,051) | ||
Related party receivables arising from special mining right | (99,487) | (44,963) | 54,524 | 5,422 |
Inventories arising from special mining right | 41,664 | 37,124 | (4,540) | (8,439) |
Property plant and equipment arising from special mining right | (22,444) | (11,689) | 10,756 | 19,576 |
Other | 30,787 | 30,839 | 52 | (10,188) |
Net deferred tax liability related to special mining rights | (49,480) | 11,311 | ||
Deferred tax credit | 264,111 | (283,680) | ||
| Reflected in the statement of financial position as follows: | ||||
Deferred tax assets | 466,734 | 665,302 | – | – |
Deferred tax liabilities | (209,213) | (133,202) | – | – |
Net deferred tax asset | 257,521 | 532,100 | – | – |
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12. Earnings per share
Earnings per share (EPS) is calculated by dividing profit for the year attributable to equity shareholders of the Company by the
weighted average number of Ordinary Shares in issue during the period.
The Company has no dilutive potential Ordinary Shares.
As of 31 December 2024 and 2023, earnings per share have been calculated as follows:
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$ thousands | US$ thousands | |
| Earnings: | ||
Profit attributable to equity holders of the Company | 140,920 | 233,909 |
Adjusted profit attributable to equity holders of the Company | 268,513 | 228,497 |
Adjusted profit is profit as disclosed in the Consolidated Income Statement adjusted to exclude revaluation effects of the
Silverstream contract of US$240.3 million loss (US$168.2 million net of tax) (2023: US$7.7 million gain (US$5.4 million net of tax)).
Adjusted earnings per share have been provided in order to provide a measure of the underlying performance of the Group,
prior to the revaluation effects of the Silverstream contract, a derivative financial instrument.
| 2024 | 2023 | |
| thousands | thousands | |
| Number of shares: | ||
Weighted average number of Ordinary Shares in issue | 736,894 | 736,894 |
| 2024 | 2023 | |
| US$ | US$ | |
| Earnings per share: | ||
Basic and diluted earnings per share | 0.191 | 0.317 |
Adjusted basic and diluted earnings per Ordinary Share | 0.364 | 0.310 |
240
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
Year ended 31 December 2024 1 | ||||||
| US$ thousands | ||||||
| Mining | ||||||
| properties and | ||||||
| Land and | Plant and | development | Construction in | |||
| buildings | equipment 2 | costs | Other assets 3 | progress | Total | |
| Cost | ||||||
At 1 January 2024 | 435,884 | 3,132,445 | 3,240,706 | 453,048 | 285,473 | 7,547,556 |
Additions | 40,627 | 32,215 | 144,041 | (51,426) | 136,565 | 302,022 |
Disposals 4 | (70) | (27,069) | (4,148) | (6,318) | – | (37,605) |
Transfers and other movements | 2,154 | 100,488 | 50,058 | (275) | (152,425) | – |
At 31 December 2024 | 478,595 | 3,238,079 | 3,430,657 | 395,029 | 269,613 | 7,811,973 |
| Accumulated depreciation | ||||||
At 1 January 2024 | (246,713) | (1,991,095) | (2,185,700) | (263,132) | – | (4,686,640) |
Depreciation for the year 5 | (35,483) | (265,219) | (281,539) | (40,119) | – | (622,360) |
Disposals 5 | 68 | 25,513 | 4,082 | 6,029 | – | 35,692 |
At 31 December 2024 | (282,128) | (2,230,801) | (2,463,157) | (297,222) | – | (5,273,308) |
| Net book amount at 31 December | ||||||
2024 | 196,467 | 1,007,278 | 967,500 | 97,807 | 269,613 | 2,538,665 |
Year ended 31 December 2023 3 | ||||||
| US$ thousands | ||||||
| Mining | ||||||
| properties and | ||||||
| Land and | Plant and | development | Construction in | |||
| buildings | equipment 4 | costs | Other assets 2 | progress | Total | |
| Cost | ||||||
At 1 January 2023 | 412,984 | 2,828,920 | 3,001,661 | 377,813 | 461,490 | 7,082,868 |
Additions | 903 | 103,835 | 5,428 | 37,839 | 358,579 | 506,584 |
Disposals 5 | (308) | (26,480) | (2,763) | (12,345) | – | (41,896) |
Transfers and other movements | 22,305 | 226,170 | 236,380 | 49,741 | (534,596) | – |
At 31 December 2023 | 435,884 | 3,132,445 | 3,240,706 | 453,048 | 285,473 | 7,547,556 |
| Accumulated depreciation | ||||||
At 1 January 2023 | (222,166) | (1,810,484) | (1,947,868) | (239,786) | – | (4,220,304) |
Depreciation for the year 1 | (24,837) | (205,238) | (240,595) | (30,276) | – | (500,946) |
Disposals 5 | 290 | 24,627 | 2,763 | 6,930 | – | 34,610 |
At 31 December 2023 | (246,713) | (1,991,095) | (2,185,700) | (263,132) | – | (4,686,640) |
| Net book amount at 31 December | ||||||
2023 | 189,171 | 1,141,350 | 1,055,006 | 189,916 | 285,473 | 2,860,916 |
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$ thousands | US$ thousands | |
Fresnillo | 60,674 | 73,761 |
Saucito | 81,712 | 94,092 |
Juanicipio | 48,846 | 29,028 |
Ciénega | 13,843 | 13,432 |
San Julián | 15,820 | 56,938 |
Herradura | 48,422 | 13,307 |
Other 1 | 296 | 4,915 |
269,613 | 285,473 |
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Strategic Report Governance Financial Statements Additional Information
| 2024 | 2023 | |
| US$ thousands | US$ thousands | |
Balance at 1 January | 482,340 | 511,474 |
Cash received in respect of the year | (24,907) | (31,816) |
Cash receivable | (16,515) | (5,050) |
Remeasurement gains recognised in profit and loss | (182,276) | 7,732 |
Balance at 31 December | 258,641 | 482,340 |
Less – Current portion | 44,204 | 35,802 |
Non-current portion | 214,437 | 446,538 |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
14. Silverstream contract continued
Year ended 31 December | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Long-term |
2024 | 29.70 | 31.36 | 32.74 | 33.31 | 33.77 | 24.5 |
2023 | 24.41 | 25.44 | 26.43 | 26.64 | 26.85 | 19.58 |
Commodity price | Discount rate | Volumes produced | ||||
| Effect on profit | Effect on profit | Effect on profit | ||||
| before tax: | Basis point | before tax: | Increase/ | before tax: | ||
| Increase/ | increase/ | increase/ | increase/ | (decrease) | increase/ | |
| (decrease) in | (decrease) | (decrease) | (decrease) | in reserves and | (decrease) | |
| Year ended 31 December | silver price | US$ thousands | in interest rate | US$ thousands | resources | US$ thousands |
2024 | 15% | 47,906 | – | – | 25% | 64,660 |
(15%) | (47,906) | (75) | 3,677 | (25%) | (64,660) | |
2023 | 10% | 63,222 | – | – | 10% | 48,141 |
(10%) | (63,222) | (75) | 27,473 | (10%) | (48,141) |
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Strategic Report Governance Financial Statements Additional Information
15. Inventories
| As at 31 December | ||
| 2024 | 2023 | |
| US$ thousands | US$ thousands | |
Finished goods 1 | 36,766 | 34,212 |
Work in progress 2 | 274,936 | 314,802 |
Ore stockpile 3 | 6,281 | 4,779 |
Operating materials and spare parts | 177,043 | 185,624 |
495,026 | 539,417 | |
Allowance for obsolete and slow-moving inventories | (12,849) | (6,684) |
Balance as 31 December | 482,177 | 532,733 |
Less – Current portion | 412,417 | 462,973 |
Non-current portion 4 | 69,760 | 69,760 |
1 Finished goods include metals contained in concentrates and doré bars on hand or in transit to a smelter or refinery.
2 Work in progress includes metals contained in ores on leaching pads for an amount of US$253.5 million (2023: US$292.7 million) and in stockpiles US$21.4 million
(2023: US$22.1 million) that will be processed in dynamic leaching plants (Note 2(c)).
3 Ore stockpile includes ore mineral obtained at Juanicipio.
4 Non-current inventories relate to ore in leaching pads where the leaching process has stopped and is not expected to restart within twelve months. As at
31 December 2024 and 2023 non-current inventories corresponds to Soledad & Dipolos mine unit (Note 2 (c)).
Concentrates are a product containing sulphides with variable content of precious and base metals and are sold to smelters
and/or refineries. Doré is an alloy containing a variable mixture of gold and silver that is delivered in bar form to refineries.
Activated carbon is a product containing variable mixture of gold and silver that is delivered in small particles.
The amount of inventories recognised as an expense in the year was US$2,254 million (2023: US$2,201.8 million). During 2024
and 2023, there was no adjustment to net realisable value allowance against work-in-progress inventory. The adjustment to the
allowance for obsolete and slow-moving inventory recognised as an expense was US$6.2 million (2023: US$1.2 million).
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$ thousands | US$ thousands | |
Trade receivables from related parties (Note 27) | 548,760 | 306,668 |
Value Added Tax receivable | 89,441 | 93,010 |
Other receivables from related parties (Note 27a) | 17,339 | 11,509 |
Other receivables from contractors | – | 2,662 |
Other trade receivables | 2,079 | 174 |
Other receivables | 16,885 | 8,658 |
674,504 | 422,681 | |
Expected credit loss of Other receivables | (293) | (353) |
Trade and other receivables classified as current assets | 674,211 | 419,666 |
Other receivables classified as non-current assets: | – | – |
Other receivable | 5,264 | 773 |
Value Added Tax receivable | – | 42,755 |
Trade and other receivables classified as non-current assets | 5,264 | 43,528 |
Total trade and other receivables | 679,475 | 463,194 |
244
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
| As at 31 December | ||
| 2024 | 2023 | |
| US$ thousands | US$ thousands | |
Cash at bank and on hand | 2,194 | 3,556 |
Short-term deposits | 1,108,219 | 531,024 |
Cash and cash equivalents | 1,110,413 | 534,580 |
| As at 31 December | ||
| 2024 | 2023 | |
| US$ thousands | US$ thousands | |
Short-term investments | 187,403 | – |
| As at 31 December | ||||
2024 | 2023 | |||
Class of share | Number | Amount | Number | Amount |
Ordinary Shares each of US$0.50 | 1,000,000,000 | $500,000,000 | 1,000,000,000 | $500,000,000 |
Sterling Deferred Ordinary Shares each of £1.00 | 50,000 | £50,000 | 50,000 | £50,000 |
Ordinary Shares | Sterling Deferred Ordinary Shares | |||
Number | US$ | Number | £ | |
At 1 January 2023 | 736,893,589 | $368,545,586 | 50,000 | £50,000 |
At 31 December 2023 | 736,893,589 | $368,545,586 | 50,000 | £50,000 |
At 31 December 2024 | 736,893,589 | $368,545,586 | 50,000 | £50,000 |
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Strategic Report Governance Financial Statements Additional Information
19. Dividends declared and paid
The dividends declared and paid during the years ended 31 December 2024 and 2023 are as follows:
| US cents per | Amount | |
| Ordinary Share | US$ thousands | |
| Year ended 31 December 2024 | ||
Final dividend for 2023 declared and paid during the year 1 | 4.2 | 30,950 |
Interim dividend for 2024 declared and paid during the year 2 | 6.4 | 47,161 |
10.6 | 78,111 | |
| Year ended 31 December 2023 | ||
Final dividend for 2022 declared and paid during the year 3 | 13.3 | 98,007 |
Interim dividend for 2023 declared and paid during the year 4 | ||
14.7 | 108,324 |
1 This dividend was approved by the Shareholders on 21 May 2024 and paid on 29 May 2024.
2 This dividend was approved by the Board of Directors on 29 July 2024 and paid on 17 September 2024.
3 This dividend was approved by the Shareholders on 23 May 2023 and paid on 26 May 2023.
4 This dividend was approved by the Board of Directors on 31 July 2023 and paid on 14 September 2023.
A reconciliation between dividend declared, dividends affected to retained earnings and dividend presented in the cash flow
statements is as follows:
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$ thousands | US$ thousands | |
Dividends declared | 78,111 | 108,324 |
Foreign exchange effect | – | (1) |
Dividends recognised in retained earnings | 78,111 | 108,323 |
Foreign exchange and hedging effect | 45 | 28 |
Dividends paid | 78,156 | 108,351 |
The directors have proposed a final dividend of US$26.1 cents per share, which is subject to approval at the annual general
meeting and is not recognised as a liability as at 31 December 2024. Dividends paid from the profits generated from 1 January
2014 to residents in Mexico and to non-resident shareholders may be subject to an additional tax of up to 10%, which will be
withheld by the Group.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
| As at 31 December | ||
| 2024 | 2023 | |
| US$ thousands | US$ thousands | |
Opening balance | 839,002 | 1,158,557 |
Payments of 5.500% Notes | – | (317,879) |
Accrued interest | 38,093 | 53,919 |
Interest paid 1 | (37,986) | (56,371) |
Amortisation of discount and transaction costs | 398 | 776 |
Closing balance | 839,507 | 839,002 |
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Strategic Report Governance Financial Statements Additional Information
| As at 31 December | ||
| 2024 | 2023 | |
| US$ thousands | US$ thousands | |
Opening balance | 292,316 | 247,207 |
Decrease to existing provision | (4,072) | (2,111) |
Effect of changes in discount rate | (28,736) | 1,436 |
Unwinding of discount rate | 24,997 | 22,578 |
Payments | (3,093) | (4,376) |
Foreign exchange | (35,883) | 27,582 |
Closing balance | 245,529 | 292,316 |
Less – Current portion | 11,781 | 11,849 |
Non-current portion | 233,748 | 280,467 |
Discount rate | Foreign currency | Estimated costs | Change in LOM | |||||
| Effect on | Effect on | Effect on | Effect on | |||||
| Basis point | provision: | provision: | provision: | provision: | ||||
| increase/ | increase/ | increase/ | Increase/ | increase/ | increase/ | |||
| (decrease) | (decrease) | Strengthening/ | (decrease) | (decrease) | (decrease) | Increase/ | (decrease) | |
| Year ended | in interest | US$ | (weakening) | US$ | in estimated | US$ | (decrease) | US$ |
| 31 December | rate | thousands | of US dollar | thousands | costs | thousands | in years | thousands |
2024 | 50 | 8,783 | 10% | (19,030) | 5% | 12,991 | 2 | (9,751) |
(50) | (11,708) | (5%) | 11,017 | (5%) | (12,991) | (2) | 11,764 | |
2023 | 50 | 11,710 | 10% | (21,990) | 5% | 14,616 | 2 | (10,061) |
(50) | (24,205) | (5%) | 12,731 | (5%) | (14,616) | (2) | 10,044 |
22. Pensions and other post-employment benefit plans
The Group has a defined contribution plan and a defined benefit plan.
The defined contribution plan was established as from 1 July 2007 and consists of periodic contributions made by each Mexican
non-unionised worker and contributions made by the Group to the fund matching workers’ contributions, capped at 8% of the
employee’s annual salary.
The defined benefit plan provides pension benefits based on each worker’s earnings and years of services provided by
personnel hired up to 30 June 2007 as well as statutory seniority premiums for both unionised and non-unionised workers.
The overall investment policy and strategy for the Group’s defined benefit plan is guided by the objective of achieving an
investment return which, together with contributions, ensures that there will be sufficient assets to pay pension benefits and
statutory seniority premiums for non-unionised workers as they fall due while also mitigating the various risks of the plan.
However, the portion of the plan related to statutory seniority premiums for unionised workers is not funded. The investment
strategies for the plan are generally managed under local laws and regulations. The actual asset allocation is determined by
current and expected economic and market conditions and in consideration of specific asset class risk in the risk profile. Within
this framework, the Group ensures that the trustees consider how the asset investment strategy correlates with the maturity
profile of the plan liabilities and the respective potential impact on the funded status of the plan, including potential short-term
liquidity requirements.
Death and disability benefits are covered through insurance policies.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
22. Pensions and other post-employment benefit plans continued
The following tables provide information relating to changes in the defined benefit obligation and the fair value of plan assets:
Pension cost charge to income statement | Remeasurement gains/(losses) in OCI | |||||||||||
| Return on | ||||||||||||
| plan assets | Actuarial | Defined | ||||||||||
| (excluding | changes | benefit | ||||||||||
| amounts | arising from | decrease | ||||||||||
| Balance at | Sub-total | included | changes in | Sub-total | due to | Balance at | ||||||
| 1 January | Service | Net | Foreign | recognised | Benefits | in net | financial | included | Contributions | personnel | 31 December | |
| 2024 | cost | interest | exchange | in the year | paid | interest) | assumptions | in OCI 1 | by employer | transfer | 2024 | |
| US$ thousands | ||||||||||||
| Defined | ||||||||||||
| benefit | ||||||||||||
obligation | (32,671) | 222 | (2,664) | 5,713 | 3,271 | 1,458 | (672) | (672) | (496) | (29,110) | ||
Fair value of plan assets | 19,460 | 1,486 | (3,252) | (1,766) | (1,120) | 474 | 474 | 256 | 352 | 17,656 | ||
| Net benefit | ||||||||||||
liability | (13,211) | 222 | (1,178) | 2,461 | 1,505 | 338 | 474 | (672) | (198) | 256 | (144) | (11,454) |
Pension cost charge to income statement | Remeasurement gains/(losses) in OCI | |||||||||||
| Return on | ||||||||||||
| plan assets | Actuarial | Defined | ||||||||||
| (excluding | changes | benefit | ||||||||||
| amounts | arising from | decrease | ||||||||||
| Balance at | Sub-total | included | changes | Sub-total | due to | Balance at | ||||||
| 1 January | Service | Net | Foreign | recognised | Benefits | in net | in financial | included | Contributions | personnel | 31 December | |
| 2023 | cost | interest | exchange | in the year | paid | interest) | assumptions | in OCI1 | by employer | transfer | 2023 | |
| US$ thousands | ||||||||||||
| Defined | ||||||||||||
| benefit | ||||||||||||
obligation | (26,014) | (1,797) | (2,559) | (3,952) | (8,308) | 2,133 | (457) | (457) | (25) | (32,671) | ||
Fair value of plan assets | 16,552 | 1,871 | 2,527 | 4,398 | (2,133) | 331 | 331 | 332 | (20) | 19,460 | ||
| Net benefit | ||||||||||||
liability | (9,462) | (1,797) | (688) | (1,425) | (3,910) | – | 331 | (457) | (126) | 332 | (45) | (13,211) |
Of the total defined benefit obligation, US$12.1 million (2023: US$13.9 million) relates to statutory seniority premiums for
unionised workers which are not funded. The expected contributions to the plan for the next Annual Reporting period are nil.
The principal assumptions used in determining pension and other post-employment benefit obligations for the Group’s plans
are shown below:
| As at 31 December | ||
| 2024 | 2023 | |
| % | % | |
Discount rate | 10.14 | 10.08 |
Future salary increases (National Consumer Price Index) | 5.25 | 5.25 |
The life expectancy of current and future pensioners, men and women aged 65 and older will live on average for a further 22.5
and 23.7 years respectively (2023: 23.2 years for men and 26.0 for women). The weighted average duration of the defined benefit
obligation is 7.8 years (2023: 8.7 years).
The fair values of the plan assets were as follows:
| As at 31 December | ||
| 2024 | 2022 | |
| US$ thousands | US$ thousands | |
State owned companies | 279 | 337 |
Mutual funds (fixed rates) | 17,377 | 19,123 |
17,656 | 19,460 |
As at 31 December 2024 and 2023, all the funds were invested in quoted debt instruments.
The pension plan has not invested in any of the Group’s own financial instruments nor in properties or assets used by
the Group.
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A quantitative sensitivity analysis for significant assumptions as at 31 December 2024 is as shown below:
| Future salary increases | Life expectancy | ||||
Assumptions | Discount rate | (NCPI) | of pensioners | ||
| 0.5% | 0.5% | 0.5% | 0.5% | + 1 | |
| Sensitivity Level | Increase | Decrease | increase | decrease | Increase |
| Year ended 31 December 2024 | |||||
| (Decrease)/increase to the net defined benefit | |||||
obligation (US$ thousands) | (1,026) | 1,101 | 270 | (260) | 167 |
| Year ended 31 December 2023 | |||||
| (Decrease)/increase to the net defined benefit | |||||
obligation (US$ thousands) | (1,152) | 1,243 | 215 | (226) | 289 |
The sensitivity analysis above has been determined based on a method that extrapolates the impact on net defined benefit
obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period. The pension plan
is not sensitive to future changes in salaries other than in respect of inflation.
| As at 31 December | ||
| 2024 | 2023 | |
| US$ thousands | US$ thousands | |
Trade payables | 110,891 | 118,110 |
Other payables to related parties (Note 27(a)) | 39,203 | 56,434 |
Accrued expenses | 38,188 | 54,749 |
Other taxes and contributions | 35,497 | 28,812 |
223,779 | 258,105 |
| As at 31 December | ||
| 2024 | 2023 | |
| US$ thousands | US$ thousands | |
Saucito | 28,030 | 30,761 |
Fresnillo | 20,324 | 26,503 |
San Julián | 4,785 | 14,655 |
Juanicipio | 21,776 | 12,246 |
Herradura | 16,167 | 6,610 |
Ciénega | 2,603 | 2,984 |
Noche Buena | – | 206 |
Other 1 | 657 | 4,040 |
94,342 | 98,005 |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
| As at | ||
| 31 December | 31 December | |
| 2024 | 2023 | |
| US$ thousands | US$ thousands | |
IT equipment | 5,925 | 10,387 |
Plant and equipment | 3,123 | 3,501 |
Buildings | 2,845 | 702 |
Total lease liability | 11,893 | 14,590 |
Less – Current portion | 4,312 | 4,813 |
Non-current portion | 7,581 | 9,777 |
| Year ended 31 December 2024 | ||||
| US$ thousands | ||||
| Computer | Plant and | |||
| Buildings | equipment | Equipment | Total | |
| Cost | ||||
At 1 January 2024 | 5,035 | 19,279 | 4,056 | 28,370 |
Additions | 942 | 1,329 | 83 | 2,354 |
Disposals | (70) | (4,820) | – | (4,890) |
At 31 December 2024 | 5,907 | 15,788 | 4,139 | 25,834 |
| Accumulated depreciation | ||||
At 1 January 2024 | (3,034) | (11,155) | (801) | (14,990) |
Depreciation for the year | (763) | (3,926) | (589) | (5,278) |
Disposals | 68 | 4,780 | – | 4,848 |
At 31 December 2024 | (3,729) | (10,301) | (1,390) | (15,420) |
Net book amount at 31 December 2024 | 2,178 | 5,487 | 2,749 | 10,414 |
| Year ended 31 December 2023 | ||||
| US$ thousands | ||||
| Computer | Plant and | |||
| Buildings | equipment | Equipment | Total | |
| Cost | ||||
At 1 January 2023 | 4,620 | 21,284 | 3,933 | 29,837 |
Additions | 723 | 4,286 | 123 | 5,132 |
Disposals | (308) | (6,291) | – | (6,599) |
At 31 December 2023 | 5,035 | 19,279 | 4,056 | 28,370 |
| Accumulated depreciation | ||||
At 1 January 2023 | (2,585) | (12,394) | (234) | (15,213) |
Depreciation for the year | (739) | (4,880) | (567) | (6,186) |
Disposals | 290 | 6,119 | – | 6,409 |
At 31 December 2023 | (3,034) | (11,155) | (801) | (14,990) |
Net book amount at 31 December 2023 | 2,001 | 8,124 | 3,255 | 13,380 |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
Accounts receivable | Accounts payable | |||
As at 31 December | As at 31 December | |||
| 2024 | 2023 | 2024 | 2023 | |
| US$ thousands | US$ thousands | US$ thousands | US$ thousands | |
| Trade: | ||||
Metalúrgica Met-Mex Peñoles, S.A. de C.V. | 548,760 | 306,668 | 6,622 | 5,840 |
| Other: | ||||
Industrias Peñoles, S.A.B. de C.V. 1 | 16,516 | 5,050 | – | – |
Metalúrgica Met-Mex Peñoles, S.A. de C.V. | 322 | 261 | 1,791 | 739 |
Servicios Administrativos Peñoles, S.A. de C.V. | – | – | 6,420 | 24,486 |
Servicios Especializados Peñoles, S.A. de C.V. | – | – | 10,374 | 7,147 |
Fuentes de Energía Peñoles, S.A. de C.V. | – | – | 6,373 | 6,239 |
Termoeléctrica Peñoles, S. de R.L. de C.V. | – | – | 439 | 3,362 |
Peñoles Tecnología, S.A. de C.V. | – | – | 1,640 | 1,261 |
Eólica de Coahuila S.A. de C.V. | – | – | 2,693 | 2,986 |
Minera Capela, S.A. de C.V. | – | – | 2 | 9 |
Grupo Nacional Provincial, S.A.B. de C.V. 2 | 357 | 5,715 | – | – |
Other | 144 | 483 | 2,849 | 4,365 |
Sub–total | 566,099 | 318,177 | 39,203 | 56,434 |
Less–current portion | 566,099 | 318,177 | 39,203 | 56,434 |
Non-current portion | – | – | – | – |
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$ thousands | US$ thousands | |
| Silverstream contract: | ||
Industrias Peñoles, S.A.B. de C.V. | 258,641 | 482,340 |
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$ thousands | US$ thousands | |
| Income: | ||
| Sales: | ||
Metalúrgica Met-Mex Peñoles, S.A. de C.V. 1 | 3,481,650 | 2,704,452 |
| Insurance recovery | ||
Grupo Nacional Provincial, S.A.B. de C.V. | 8,317 | 241 |
Other income | 4,678 | 4,012 |
Total income | 3,494,645 | 2,708,705 |
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| Year ended 31 December | ||
| 2024 | 2023 | |
| US$ thousands | US$ thousands | |
| Expenses: | ||
| Administrative services: | ||
Servicios Administrativos Peñoles, S.A. de C.V. 1 | 52,352 | 56,636 |
Servicios Especializados Peñoles, S.A. de C.V. 2 | 18,738 | 26,626 |
Peñoles Tecnología, S.A. de C.V. | 4,970 | 5,343 |
76,060 | 88,605 | |
| Energy: | ||
Termoeléctrica Peñoles, S. de R.L. de C.V. | 7,295 | 28,454 |
Fuentes de Energía Peñoles, S.A. de C.V. | 35,711 | 15,945 |
Eólica de Coahuila S.A. de C.V. | 46,057 | 33,563 |
89,063 | 77,962 | |
| Operating materials and spare parts: | ||
Wideco Inc | 5,315 | 5,383 |
Metalúrgica Met-Mex Peñoles, S.A. de C.V. | 55,525 | 35,551 |
60,840 | 40,934 | |
| Equipment repair and administrative services: | ||
Serviminas, S.A. de C.V. | 2,760 | 10,068 |
| Insurance premiums: | ||
Grupo Nacional Provincial, S.A.B. de C.V. | 21,068 | 18,909 |
Other expenses: | 2,755 | 3,960 |
Total expenses | 252,546 | 240,438 |
| Year ended 31 December | ||
| 2024 | 2023 | |
| US$ thousands | US$ thousands | |
Salaries and bonuses | 6,044 | 3,412 |
Post-employment benefits | 395 | 290 |
Other benefits | 342 | 435 |
Total compensation paid in respect of key management personnel | 6,781 | 4,137 |
| As at 31 December | ||
| 2024 | 2023 | |
| US$ thousands | US$ thousands | |
Accumulated accrued defined benefit pension entitlement | 4,325 | 5,035 |
| Year ended 31 December | ||
| 2024 | 2023 | |
| Class of services | US$ thousands | US$ thousands |
Fees payable to the Group’s auditor for the audit of the Group’s annual accounts | 2,048 | 1,616 |
| Fees payable to the Group’s auditor and its associates for other services as follows: | ||
The audit of the Company’s subsidiaries pursuant to legislation | 975 | 650 |
Audit-related assurance services 1 | 748 | 773 |
Total | 3,771 | 3,039 |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
29. Notes to the consolidated statement of cash flows
| 2024 | 2023 | ||
| Notes | US$ thousands | US$ thousands | |
| Reconciliation of profit for the year to net cash generated from operating activities | |||
Profit for the year | 226,691 | 288,300 | |
Adjustments to reconcile profit for the period to net cash inflows from operating activities: | |||
| Depreciation and amortisation | 13 | 620,867 | 498,469 |
| Employee profit sharing | 8 | 13,609 | 2,390 |
| Deferred income tax expense/(credit) | 11 | 264,111 | (283,680) |
| Current income tax expense | 11 | 253,100 | 109,398 |
| Write-off of assets | 9 | 1,704 | 1,920 |
Gain on the sale of property, plant and equipment and other assets | (1,004) | (882) | |
Net finance costs | 25,131 | 36,974 | |
Foreign exchange loss/(gain) | (2,200) | (1,142) | |
| Difference between pension contributions paid and amounts recognised | |||
in the income statement | (63) | 2,061 | |
Non-cash movement on derivatives | (301) | (2) | |
| Changes in fair value of Silverstream | 14 | 182,276 | (7,732) |
| Change in mine closure cost provision | 9 | 8 | 3,226 |
| Gain in sale of mining concessions | 9 | (24,149) | – |
Other Working capital adjustments | – | 38 | |
Increase in trade and other receivables | (196,196) | (45,597) | |
Decrease in prepayments and other assets | 10,741 | 10,396 | |
Decrease in inventories | 50,556 | 54,631 | |
(Decrease)/increase in trade and other payables | (28,016) | 1,196 | |
Cash generated from operations | 1,396,865 | 669,964 | |
Income tax paid 1 | (94,957) | (233,060) | |
Employee profit sharing paid | (2,106) | (10,982) | |
Net cash from operating activities | 1,299,802 | 425,922 |
1 Income tax paid includes US$72.1 million corresponding to corporate income tax (2023: US$187.0 million) and US$22.9 million corresponding to special mining right
(2023: US$46.0 million), for further information refer to Note 11.
| As at 31 December 2024 | ||||
| US$ thousands | ||||
| Fair value | Fair value | |||
| Amortised | Fair value | (hedging | through profit | |
| Financial assets: | cost | through OCI | instruments) | or loss |
Trade and other receivables 1 | 8,542 | – | – | 565,276 |
Equity instruments at FVOCI | – | 139,968 | – | – |
Silverstream contract (Note 14) | – | – | – | 258,641 |
| Fair value | Fair value | ||
| Amortised | (hedging | through profit | |
| Financial liabilities: | cost | instruments) | or loss |
Interest-bearing loans (Note 20) | 839,507 | – | – |
Notes payable 2 | 2,055 | – | – |
Trade and other payables (Note 23) | 2,150,094 | – | – |
Derivative financial instruments | – | 189 | – |
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| As at 31 December 2023 | ||||
| US$ thousands | ||||
| Fair value | Fair value | |||
| Amortised | Fair value | (hedging | through profit | |
| Financial assets: | cost | through OCI | instruments) | or loss |
Trade and other receivables 1 | 9,894 | – | – | 311,718 |
Equity instruments at FVOCI | – | 107,991 | – | – |
Silverstream contract (Note 14) | – | – | – | 482,340 |
Derivative financial instruments | – | – | 79 | – |
| Fair value | Fair value | |||
| Amortised | (hedging | through profit | ||
| Financial liabilities: | cost | instruments) | or loss | |
Interest-bearing loans (Note 20) | 839,002 | – | – | |
Notes payable 2 | 95,360 | – | – | |
Trade and other payables (Note 23) | 174,544 | – | – |
| As at 31 December | ||||
Carrying amount | Fair value | |||
| 2024 | 2023 | 2024 | 2023 | |
| US$ thousands | US$ thousands | US$ thousands | US$ thousands | |
| Financial assets: | ||||
Trade and other receivables | 8,542 | 9,894 | 8,542 | 9,894 |
| Financial liabilities: | ||||
Interest-bearing loans 1 (Note 20) | 839,507 | 839,002 | 605,396 | 645,745 |
Trade and other payables | 150,094 | 174,544 | 150,094 | 174,544 |
Notes payable | 2,055 | 95,360 | 2,055 | 95,324 |
| As of 31 December 2024 | ||||
| Fair value measure using | ||||
| Quoted prices in | Significant | Significant | ||
| active markets | observable | unobservable | ||
| Level 1 | Level 2 | Level 3 | Total | |
| US$ thousands | US$ thousands | US$ thousands | US$ thousands | |
| Financial assets: | ||||
Trade receivables | – | – | 548,760 | 548,760 |
Other receivables from related parties 1 | – | – | 16,516 | 16,516 |
| Derivative financial instruments: | ||||
Option and forward foreign exchange contracts | – | – | – | – |
Silverstream contract | – | – | 258,641 | 258,641 |
| Other financial assets: | ||||
Equity instruments at FVOCI | 139,968 | – | – | 139,968 |
139,968 | – | 823,917 | 963,885 |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
30. Financial instruments continued
| As of 31 December 2023 | ||||
| Fair value measure using | ||||
| Quoted prices in | Significant | Significant | ||
| active markets | observable | unobservable | ||
| Level 1 | Level 2 | Level 3 | Total | |
| US$ thousands | US$ thousands | US$ thousands | US$ thousands | |
| Financial assets: | ||||
Trade receivables | – | – | 306,668 | 306,668 |
Other receivables from related parties 1 | – | – | 5,050 | 5,050 |
| Derivative financial instruments: | ||||
Option and forward foreign exchange contracts | 79 | – | 79 | |
Silverstream contract | – | 482,340 | 482,340 | |
| Other financial assets: | ||||
Equity instruments at FVOCI | 107,991 | – | – | 107,991 |
107,991 | 79 | 794,058 | 902,128 |
| 2024 | 2023 | |
| US$ thousands | US$ thousands | |
Balance at 1 January: | 306,668 | 275,844 |
Sales | 3,503,662 | 2,706,292 |
Cash collection | (3,254,312) | (2,674,262) |
Changes in fair value | 32,638 | 27,034 |
Realised embedded derivatives during the year | (39,896) | (28,240) |
Balance at 31 December | 548,760 | 306,668 |
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Strategic Report Governance Financial Statements Additional Information
31. Financial risk management
Overview
The Group’s principal financial assets and liabilities, other than derivatives, comprise trade and other receivables, cash, equity
instruments at FVOCI, interest-bearing loans, notes payable and trade payables.
The Group has exposure to the following risks from its use of financial instruments:
• Market risk, including foreign currency, commodity price, interest rate and equity price risks
• Credit risk
• Liquidity risk
This note presents information about the Group’s exposure to each of the above risks and the Group’s objectives, policies and
processes for assessing and managing risk. Further quantitative disclosures are included throughout the Financial Statements.
The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework.
The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate
risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed
regularly to reflect changes in market conditions and the Group’s activities. The Group, through its training and management
standards and procedures, aims to develop a disciplined and constructive control environment in which all employees
understand their roles and obligations.
The Fresnillo Audit Committee has responsibility for overseeing how management monitors compliance with the Group’s risk
management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks
faced by the Group. The Audit Committee is assisted in its oversight role by Internal Audit, which undertakes both regular and
ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
31. Financial risk management continued
| Effect on | |||
| profit before tax: | Effect on equity: | ||
| Strengthening/ | increase/ | increase/ | |
| (weakening) | (decrease) | (decrease) | |
| Year ended 31 December | of US dollar | US$ thousands | US$ thousands |
2024 | 10% | 955 | (582) |
(5%) | (2,228) | 582 | |
2023 | 10% | (1,504) | (275) |
(5%) | 871 | 276 |
US$ thousands | ||||||
| Effect on profit | ||
| Basis point | before tax: | |
| increase/ | increase/ | |
| (decrease) | (decrease) | |
| Year ended 31 December | in interest rate | US$ thousands |
2024 1 | – | – |
(50) | (6,556) | |
2023 1 | – | – |
(75) | (3,307) |
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| Effect on | |||
| profit before tax: | Effect on equity: | ||
| Increase/ | increase/ | increase/ | |
| (decrease) | (decrease) | (decrease) | |
| Year ended 31 December | in equity price | (US$ thousands) | US$ thousands |
2024 | 80% | – | 111,958 |
(20%) | – | (27,989) | |
2023 | 40% | – | 43,196 |
(45%) | – | (48,596) |
| US$ thousands | |||||
Within 1 year | 2–3 years | 3-5 years | > 5 years | Total | |
| As at 31 December 2024 | |||||
Interest-bearing loans | 37,986 | 75,973 | 75,973 | 1,647,713 | 1,837,645 |
| Trade and other payables | 150,094 | – | – | – | 150,094 |
Notes payable | 2,055 | – | – | – | 2,055 |
Lease liabilities | 4,994 | 6,092 | 2,604 | – | 13,691 |
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
31. Financial risk management continued
| US$ thousands | |||||
Within 1 year | 2–3 years | 3-5 years | > 5 years | Total | |
| As at 31 December 2023 | |||||
Interest-bearing loans | 37,986 | 75,973 | 75,973 | 1,685,699 | 1,875,631 |
Trade and other payables | 180,565 | – | – | – | 180,565 |
Notes payable | 72,634 | 22,726 | – | – | 95,360 |
Lease liabilities | 5,944 | 7,502 | 2,829 | 494 | 16,769 |
| US$ thousands | |||||
Within 1 year | 2-3 years | 3-5 years | > 5 years | Total | |
| As at 31 December 2024 | |||||
Inflows | 13,191 | – | – | – | 13,191 |
Outflows | (12,403) | – | – | – | (12,403) |
Net | 788 | – | – | – | 788 |
| US$ thousands | |||||
Within 1 year | 2-3 years | 3-5 years | > 5 years | Total | |
| As at 31 December 2023 | |||||
Inflows | 5,777 | – | – | – | 5,777 |
Outflows | (5,587) | – | – | – | (5,587) |
Net | 190 | – | – | – | 190 |
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Strategic Report Governance Financial Statements Additional Information
PARENT COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2024
As at 31 December
Notes
2024
US$ thousands
2023
US$ thousands
ASSETS
Non-current assets
Investments in subsidiaries 5 4,189,712 3,320,703
Equity instruments at FVOCI 15 139,968 107,991
Deferred tax asset 4 43,481 68,916
Loans to subsidiaries 12 – 28,924
4,373,161 3,526,534
Current assets
Loans to subsidiaries 12 1,026,470 1,358,798
Income tax recoverable 135 24
Trade and other receivables 6 1,149 708
Derivative financial instruments 15 – 79
Cash and cash equivalents 7 446,353 215,894
1,474,107 1,575,503
Total assets 5,847,268 5,102,037
EQUITY AND LIABILITIES
Capital and reserves attributable to shareholders of the Company
Share capital 8 368,546 368,546
Share premium 8 1,153,817 1,153,817
Merger reserve 8 2,173,782 1,318,114
Fair value reserve of financial assets at FVOCI 8 59,712 35,708
Retained earnings 8 1,234,914 1,367,044
Total equity 4,990,771 4,243,229
Non-current liabilities
Interest-bearing loans 10 839,507 839,002
839,507 839,002
Current liabilities
Trade and other payables 16,801 19,806
Derivative financial instruments 15 189 –
16,990 19,806
Total liabilities 856,497 858,808
Total equity and liabilities 5,847,268 5,102,037
The Company profit is US$800.9 million for the year ended 31 December 2024 (2023: loss of US$319.9 million). In accordance
with the exemption granted under section 408 of the Companies Act 2006 a separate income statement for the Company has
not been presented.
These Financial Statements were approved by the Board of Directors on 3 March 2025 and signed on its behalf by:
Non-Executive Director
3 March 2025
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PARENT COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
Year ended 31 December
Notes
2024
US$ thousands
2023
US$ thousands
Net cash from operating activities 14 (71,450) 15,736
Cash flows from investing activities
Capital contribution to subsidiaries 5 (13,341) (35,358)
Loans granted to subsidiaries (2,005,228) (2,303,026)
Proceeds from repayment of loans granted to subsidiaries 2,251,753 2,125,429
Interest received 153,935 102,920
Dividends received 33,600 233,610
Purchase of equity instruments at FVOCI (1,466) (2,313)
Disposal of equity instruments at FVOCI 5,098 –
Net cash generated from investing activities 424,351 121,262
Cash flows from financing activities
Loans granted by subsidiaries – 50,000
Repayment of loans granted by subsidiaries – (50,000)
Repayment of interest-bearing loans 10 – (317,879)
Dividends paid
1
9 (78,156) (108,267)
Interest paid (37,986) (56,422)
Net cash used in financing activities (116,142) (482,568)
Net increase/(decrease) in cash and cash equivalents during the year 236,759 (345,570)
Effect of exchange rate on cash and equivalents (6,300) 1,783
Cash and cash equivalents at 1 January 215,894 559,681
Cash and cash equivalents at 31 December 7 446,353 215,894
1 Includes the effect of hedging of dividend payments made in currencies other than US Dollar.
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PARENT COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
Notes
Share
capital
Share
premium
Merger
reserve
Fair value
reserve of
financial
assets at
FVOCI
Retained
earnings
Total
equity
Balance at 1 January 2023 368,546 1,153,817 2,048,880 72,903 1,064,540 4,708,686
Loss for the year – – – – (319,939) (319,939)
Other comprehensive loss net of tax – – – (37,195) – (37,195)
Total comprehensive income for the year – – – (37,195) (319,939) (357,134)
Transfer of reserves – – (730,766) – 730,766 –
Dividends declared and paid 9 – – – – (108,323) (108,323)
Balance at 31 December 2023 368,546 1,153,817 1,318,114 35,708 1,367,044 4,243,229
Income for the year – – – – 800,937 800,937
Other comprehensive gain net of tax – – – 24,716 – 24,716
Total comprehensive income for the year – – – 24,716 800,937 825,653
Transfer of gain on disposal of equity
investments at FVOCI to retained
earnings (net of tax) – – – (713) 713 –
Transfer of reserves – – 855,668 – (855,668) –
Dividends declared and paid 9 – – – – (78,111) (78,111)
Balance at 31 December 2024 368,546 1,153,817 2,173,782 59,711 1,234,915 4,990,771
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NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
1. Corporate information
and is the holding company for the Fresnillo subsidiaries detailed in Note 5. The Company is a Mexican resident for taxation
purposes with tax residency in Mexico City. For further information see Note 4.
Industrias Peñoles S.A.B. de C.V. (Peñoles) currently owns 75 percent of the shares of the Company and the ultimate controlling
party of the Company is the Baillères family, whose beneficial interest is held through Peñoles. The country of incorporation of
Peñoles is Mexico. Copies ofPeñoles’ accounts can be obtained from www.penoles.com.mx.
The primary activity of the Company is as a holding company for the Fresnillo Group of companies. See Note 5.
The Financial Statements of the Company for the year ended 31 December 2024 were authorised for issue by the Board of
Directors of Fresnillo plc on 3 March 2025.
2. Significant accounting policies
(a) Basis of preparation and statement of compliance
The Company’s separate Financial Statements have been prepared in accordance with UK adopted international accounting
standards and the requirements of the Companies Act 2006.
The Financial Statements of the Company have been prepared on a historical cost basis, except for certain derivative financial
instruments and equity securities which have been measured at fair value.
The Financial Statements are presented in dollars of the United States of America (US dollars or US$) and all monetary
amounts are rounded to thenearest thousand (US$000) except when otherwise indicated.
The basis of preparation and accounting policies used in preparing the Financial Statements are set out below. These
accounting policies have been consistently applied to all the periods presented unless otherwise stated.
Going concern
The financial position of the Company and its cash flows are set out in the balance sheet and statement of cash flows
respectively. In addition, Note 16 includes the Company’s objectives, policies and processes for managing its capital; its financial
risk management objectives; details of its financial instruments; and its exposures to credit risk and liquidity risk.
In making their assessment of the Company’s ability to manage its future cash requirements, the Directors have considered
the Company budgets and the cash flow forecasts for the period to 31 December 2025 (being the going concern assessment
period). The Directors have also considered the cash position as of 31 December 2024 (US$446.3 million) and the net current
asset position (US$1,474.1 million).
After reviewing all of the above considerations, the Directors have a reasonable expectation that management have sufficient
flexibility in adverse circumstances to maintain adequate resources to continue in operational existence for the foreseeable
future. The Directors, therefore, continue to adopt the going concern basis of accounting in preparing the Financial
Statements.
(b) Changes in accounting policies
The accounting policies adopted in the preparation of the separate Financial Statements are consistent with those applied
in the preparation of the separate Financial Statements for the year ended 31 December 2023.
New standards, interpretations and amendments (new standards) adopted by the Company
A number of new, or amended, standards became applicable for the current reporting period. The Company did not have
to change its accounting policies or make retrospective adjustments as a result of adopting these standards.
Standards, interpretations and amendments issued but not yet effective
The International Accounting Standards Board (IASB) has issued other amendments resulting from improvements to IFRSs
that Management considers do not have any impact on the accounting policies, financial position or performance of the
Company, except for the new standard IFRS 18-Presentation and Disclosure in Financial Statements; this new standard replaces
IAS1-Presentation of Financial Statements, with a focus on updates to the statement of profit or loss. This new standard is
applicable for periods commencing 1 January 2027, early adoption is permitted. The Company is currently assessing the impact
of IFRS 18 and plans to adopt the new standard on the required effective date.
The Company has not early adopted any standard, interpretation or amendment that was issued but is not yet effective
(c) Significant accounting judgements, estimates and assumptions
The preparation of the Company’s Financial Statements in conformity with IFRS requires management to make judgements,
estimates and assumptions that affect the reported amounts of assets, liabilities and contingent liabilities at the date
of the Financial Statements. These judgements and estimates are based on management’s knowledge of the relevant
facts and circumstances, with regard to prior experience, but actual results may differ from the amounts included in the
Financial Statements. Information about such judgements and estimates is in the accounting policies and the Notes to the
FinancialStatements.
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Strategic Report Governance Financial Statements Additional Information
Judgements
Areas of judgement, apart from those involving estimations, that have the most significant effect on the amounts recognised
in the separate Financial Statements for the year ended 31 December 2024 are:
Deferred tax asset (Note 4):
The Company has recognised a deferred tax asset of US$43.5 million (2023: US$68.9 million) mainly in respect of tax losses
amounting to US$192.9 million (2023: US$239.0 million). In accordance with the tax legislation applicable, there are no tax
losses expiring in a period of four years (2023: US$nil ) and US$192.9 million (2023: US$239.0 million) will expire in a period
between six and eight years. The Company is a Mexican resident for taxation purposes and calculate the tax payable based
in its local currency that is the Mexican peso which generate difference between financial and taxable profits. The Company
has performed an assessment of the recoverability of tax losses before their expiration based on financial and tax projections.
Despite an accounting loss in the current and prior periods, Management has considered the taxable profit generated in the
current year of US$15.8 million and based on a consideration of this, combined with future projections of taxable profit, consider
that there is evidence that sufficient taxable profits will be available against which the unused tax losses can be utilised.
Climate change:
We describe how climate-related risks and opportunities (CROs) may affect, and, was considered in, the preparation of
the Financial Statements in Note 2(c) to the Consolidated Financial Statements. Because the cash flows underpinning the
recoverable amount of mining assets also underpin the recoverable amount of investments in subsidiaries holding those
mining assets, the considerations set out in that note also apply to the Parent Company Financial Statements. The Company
does not have any assets or liabilities for which measurement is directly linked to climate change performance (for example:
Sustainability-Linked Bonds).
As disclosed in Note 2(c) to the Consolidated Financial Statements, future changes to the Group’s Climate Change Strategy,
global decarbonisation signposts and regulation may impact the Group’s significant judgements and key estimates and result
in material changes to financial results and the carrying values of certain of the Group’s assets and liabilities in future reporting
periods, which could ultimately result in material changes in the carrying value of the Company’s assets and liabilities. However,
as at the balance sheet date, management believes there is no material impact on the Company’s balance sheet carrying
values of assets or liabilities.
Estimates and assumptions
The significant area of estimation uncertainty considered by management in preparing the Financial Statements is:
• Recoverable value of investments in subsidiaries (Notes 2(e) and 5):
The Company assesses investments in subsidiaries annually to determine whether any indication of impairment exists.
Where an indicator of impairment exists, a formal estimate of the recoverable amount is made, which is considered to
be the higher of the fair value less costs ofdisposal (FVLCD) and the value in use. Due to the nature of the subsidiaries,
the assessment of the recoverable amount is generally determined based on the net present value of future cash flows
related to the subsidiaries requiring the use of estimates and assumptions such as long-term commodity prices, estimated
and economically proven and probable reserves, as well as certain other resources that are assessed as highly likely to be
converted into reserves and the associated production profiles, discount rates, future capital requirements, and production
costs. Estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset. The determination of that rate requires
certain judgements.
Where an impairment charge has previously been recognised, the Company assesses at the end of each reporting period
whether there is any indication that the impairment loss may no longer exist, or may have decreased. If any such indication
exists, the Company estimates the recoverable amount of that investment, requiring similar estimates and assumptions
as those for determining an impairment charge. At 31 December 2024 the Company recognised an impairment reversal
of US$800.9 million (2023: net impairment charge of US$730.8 million) resulting in a cumulative impairment relating to
subsidiaries of US$3,615.8 million (2023: US$4,471.5 million).
(d) Foreign currency translation
The Company’s Financial Statements are presented in US dollars, which is the functional currency of the Company. The
functional currency for the Company is determined by the currency of the primary economic environment in which it operates.
Transactions denominated in currencies other than the functional currency of the Company are translated at the exchange rate
ruling at the date ofthe transaction. Monetary assets and liabilities denominated in foreign currencies are re-translated at the
rate of exchange ruling at the balance sheet date. All differences that arise are recorded in the income statement. Non-monetary
items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates
of the initial transactions. Non-monetary items measured at fair value in aforeign currency are translated into US dollars using
the exchange rate at the date when the fair valued is determined.
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NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS CONTINUED
2. Significant accounting policies continued
(e) Investments in subsidiaries
Subsidiaries are entities which the Company controls due to it being exposed to, or having the right to, variable returns from
its involvement with the entity and has the ability to affect those returns through its power over the entity. Investments in
subsidiaries are recognised at acquisition cost less any provision for impairment. Impairment charges and reversals, up to the
value of the merger reserve, are reclassified from retained earnings to the merger reserve.
When the Company increases its capital investment in or where there is a return of share capital from its subsidiaries, such
movements are recognised as an addition to, or return of the original cost recognised in investment in subsidiaries. Dividends
are recognised as other income in the income statement when the right of payment has been established.
At each reporting date, an assessment is made to determine whether there are any indicators of impairment. Where an indicator
of impairment exists, an estimate of the recoverable amount of the investment in subsidiary is made, which is considered to be
the higher of the fair value less costs of disposal and the value in use. The Company usually determines FVLCD based on the net
present value of the future cash flows related to its subsidiaries. If the carrying amount of an investment exceeds the recoverable
amount, a provision is recorded in the income statement to reflect the investment at the recoverable amount.
Where an impairment charge has previously been recognised, an assessment is made at the end of each reporting period
whether there is any indication that the impairment loss may no longer exist or may have decreased. If any such indication
exists, an estimate of the recoverable amount is made. An impairment loss is reversed to profit or loss to the extent that
the increased carrying value of the investment in subsidiary does not exceed that would have been determined had no
impairment loss been recognised for the asset in prior years.
(f) Financial assets and liabilities
Financial assets
The Company classifies its financial assets in the following measurement categories:
• Those to be measured at amortised cost.
• Those to be measured subsequently at FVOCI, and.
• Those to be measured subsequently at FVPL.
The classification depends on the Company’s business model for managing the financial assets and the contractual terms
of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in equity
instruments that are not held for trading, this will depend on whether the Company has made an irrevocable election at the
time of initial recognition to account for the equity investment at FVOCI.
Subsequent measurement of debt instruments depends on the Company’s business model for managing the asset and the
cash flow characteristics of the asset.
Classification
The Company holds the following financial assets:
Amortised cost
Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and
interest are measured at amortised cost. Interest income from these financial assets is included in finance income using the
effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in
other gains/(losses) together with foreign exchange gains and losses.
The Company’s financial assets at amortised cost include receivables from loans granted to subsidiaries.
Equity instruments designated as fair value through other comprehensive income
Upon initial recognition, the Company can elect to classify irrevocably its equity investments as equity instruments designated
at FVOCI when they meet the definition of equity under IAS 32 Financial Instruments: Presentation and are not held for trading.
The classification is determined on an instrument-by-instrument basis.
Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognised as other income in the
income statement when the right of payment has been established, except when the Company benefits from such proceeds
as a recovery of part of the cost of the financial asset, in which case, such gains are recorded in OCI. Equity instruments
designated at FVOCI are not subject to impairment assessment.
The Company elected to classify irrevocably its listed equity investments under this category.
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Strategic Report Governance Financial Statements Additional Information
Fair value through profit or loss
Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. A gain or loss on a debt investment that
is subsequently measured at FVPL is recognised in profit or loss and presented net within other gains/(losses) in the period in
which it arises.
Changes in the fair value of financial assets at FVPL are recognised in other gains/(losses) in the income statement as applicable.
The Company’s derivative financial instruments are classified as fair value through profit or loss.
De-recognition of financial assets
Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been
transferred and the Company has transferred substantially all the risks and rewards of ownership.
Impairment of financial assets
For loans granted to subsidiaries the Company evaluate the expected credit loss using a one-year probability of default
corresponding to the mining industry determined by a specialised financial institution and considering an appropriate severity
based on the cost of capital of the Company.
Financial liabilities
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and
borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly
attributable transaction costs.
The Company’s financial liabilities include trade and other payables, loans and borrowings and derivative financial instruments.
Classification
For purposes of subsequent measurement, financial liabilities held by the Company are classified as financial liabilities at
amortised cost.
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR
method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR
amortisation process.
Amortised cost is calculated by considering any discount or premium on acquisition and fees or costs that are an integral part
of the EIR. The EIR amortisation is included as finance costs in the income statement.
De-recognition of financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing
financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability
are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the
recognition of a new liability. The difference in the respective carrying amounts is recognised in the income statement.
(g) Cash and cash equivalents
For the purposes of the balance sheet, cash and cash equivalents comprise cash at bank, cash on hand and short-term deposits
held with banks that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in
value. Short-term deposits earn interest atthe respective short-term deposit rates between one day and three months.
(h) Share capital
Ordinary shares issued by the Company are recorded at the net proceeds received, which is the fair value of the consideration
received less costs that are incurred in connection with the share issue. The nominal par value of the shares issued is taken to
the share capital account and any excess is recorded in the share premium account, including the costs that were incurred
with the share issue.
(i) Dividends receivable
Dividends are recognised when the Company’s right to receive payments is established. Dividends received are recorded in the
income statement.
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NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS CONTINUED
2. Significant accounting policies continued
(j) Income tax
Current income tax
Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered
from or paid to thetaxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or
substantively enacted by the balance sheet date.
Deferred income tax
Deferred income tax is provided using the liability method on temporary differences at the balance sheet date between the tax
bases of assets andliabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences, except:
• Where the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction
that is not a business combination and, at the time of transaction, affects neither the accounting profit nor taxable profit
loss; and
• In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint
ventures, where thetiming of the reversal of the temporary differences can be controlled, and it is probable that the
temporary differences will not reverse in theforeseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and
unused tax losses, to theextent that it is probable that taxable profit will be available against which the deductible temporary
differences, and the carry forward of unused tax credits and unused tax losses can be utilised except:
• Where the deferred income tax asset relating to deductible temporary differences arise from the initial recognition of an
asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; and
• In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint
ventures, deferred income tax assets are recognised only to the extent that it is probable that the temporary differences will
reverse in the foreseeable future, and taxable profit will be available against which the temporary differences can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that
it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to
beutilised.
Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that it
has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset
is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the
balance sheet date.
Deferred income tax relating to items recognised directly in equity is recognised in equity and not in the income statement.
Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and liabilities
and where the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where
the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the
liability simultaneously.
(k) Derivative financial instruments and hedging
The Company enters into derivative contracts in order to manage certain market risks derived from changes in foreign
exchange and commodity prices which impact the financial and business transactions of its subsidiaries. Such derivative
financial instruments are initially recognised at fair value on the date on which aderivative contract is entered into and are
subsequently re-measured at fair value. Derivatives are carried as assets when the fair value is positive and as liabilities when
the fair value is negative.
In the Group’s consolidated Financial Statements certain of these derivative instruments are designated as cash flow hedges
but for the purposes of the Company’s stand-alone Financial Statements the related hedged items are not held by the
Company, so do not qualify as cash flow hedges.
Any gains and losses arising from changes in fair value on derivatives during the year that do not qualify for hedge accounting
are taken directly totheincome statement.
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Strategic Report Governance Financial Statements Additional Information
Derivatives are valued using valuation approaches and methodologies (such as Black Scholes and Net Present Value) applicable
to the specific type ofderivative instrument. The fair value of forward currency contracts is calculated by reference to current
forward exchange rates for contracts with similar maturity profiles.
(l) Fair value measurement
The Company measures financial instruments at fair value at each balance sheet date. Fair values of financial instruments
measured at amortised cost are disclosed in Note 15.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The fair value measurement is based on the presumption that the transaction
to sell the asset or transfer the liability takes place either:
• In the principal market for the asset or liability, or
• In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible to the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the
asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset considers a market participant’s ability to generate economic benefits by
using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest
and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available
to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the Financial Statements are categorised within the fair
value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
Level 2 – Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or
indirectly observable.
Level 3 – Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For assets and liabilities that are recognised in the Financial Statements on a recurring basis, the Company determines
whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input
that is significant to the fair value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities based on the nature,
characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above. Further information
on fair values is described in Note 15.
(m) Dividend distribution
Dividends on the Company’s ordinary shares are recognised when they have been appropriately authorised and are no longer at
the Company’s discretion. Accordingly, interim dividends are recognised when they are paid and final dividends are recognised
when they are declared following approval by shareholders at the Company’s Annual General Meeting.
Mexican Income Tax Law establishes a 10% withholding tax on earnings from 2014 and thereafter, for dividends paid to foreign
residents and Mexican individuals.
Dividends paid are not subject to income tax if paid from the Net Tax Profit Account (CUFIN). Dividends paid that exceed CUFIN
are subject to an income tax payable at a rate of 30%. The tax is payable by the Company and may be credited against the normal
income tax payable by the Company in the year in which the dividends are paid or in the following two years. Dividends paid from
earnings previously taxed are not subject to any withholding or additional tax payment.
3. Segment reporting
Segmental information is not presented in the Company’s stand-alone Financial Statements as this is presented in the Group’s
consolidated Financial Statements.
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NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS CONTINUED
4. Income tax
(a) Movements in the deferred income tax liability and asset:
Year ended 31 December
2024
US$ thousands
2023
US$ thousands
Opening net asset 68,916 61,689
Income tax expense (14,842) (8,714)
Net (charge)/credit related to items directly charged to other comprehensive income (10,593) 15,941
Closing net asset 43,481 68,916
The amounts of deferred income tax assets and liabilities before offset as at 31 December considering the nature of the
temporary differences are asfollows:
Year ended 31 December
2024
US$ thousands
2023
US$ thousands
Prepayments and other assets (4,701) (4,405)
Provision for expected credit losses on loans granted to subsidiaries 303 251
Derivative financial instruments – (10)
Losses carried forward 57,896 71,712
Equity instruments at FVOCI (10,017) 1,368
Net deferred tax asset 43,481 68,916
(b) Unrecognised deferred tax on investments in subsidiaries
The Company has not recognised all the deferred tax liability in respect of distributable reserves of its subsidiaries because
it controls them and only part of the temporary differences is expected to reverse in the foreseeable future. The temporary
differences for which a deferred tax liability has not been recognised aggregate to US$1,139.3 million (2023: US$1,015.0 million).
(c) Corporate Income Tax (‘Impuesto Sobre la Renta’ or ‘ISR’)
The Company is a Mexican resident for taxation purposes. The rate of current corporate income tax is 30%.
5. Investments in subsidiaries
Year ended 31 December
2024
US$ thousands
2023
US$ thousands
Opening balance 3,320,703 4,016,111
Impairment reversal/(charge) 855,668 (730,766)
Capital contributions 13,341 35,358
Closing balance 4,189,712 3,320,703
During 2024, the Company made an impairment assessment to determine whether the carrying value of each of its
subsidiaries was recoverable as at 31 December 2024 and determine if prior year impairment could be reversed. As a result,
a cumulative impairment loss of US$3,615.8 million is recognised with respect to certain of the Company’s investment in
subsidiaries (2023: US$4,471.5 million). The recoverable amount was estimated based on the Fair Value Less Cost of Disposal
(FVLCD) model (2023: FVLCD).
The following tables provide relevant information in respect of each impaired subsidiary:
Year ended 31 December 2024
Impairment
loss/(reversal)
in the year
US$thousand
Cumulative
Impairment
US$thousand
Recoverable
amount
US$ thousands
Discount rate
(post-tax)
Minera Fresnillo, S.A. de C.V. (358,709) 2,603,847 1,243,478 7.35%
Minera Mexicana la Ciénega, S.A. de C.V. (10,806) 839,678 288,650 7.35%
Minera Saucito, S.A. de C.V. (225,376) – 1,307,706 7.34%
Minera San Julián, S.A. de C.V. (73,360) 48,760 442,970 7.33%
Minera Penmont, S. de R.L. de C.V. (130,920) 47,169 915,312 7.38%
Exploraciones Mineras Parreña, S.A. de C.V. (56,497) 76,363 145,969 7.34%
(855,668) 3,615,817
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Strategic Report Governance Financial Statements Additional Information
Year ended 31 December 2023
Impairment
loss/(reversal)
in the year
US$thousand
Cumulative
Impairment
US$thousand
Recoverable
amount
US$ thousands
Discount rate
(post-tax)
Minera Fresnillo, S.A. de C.V. 484,667 2,962,556 916,935 5.96%
Minera Mexicana la Ciénega, S.A. de C.V. 158,723 850,484 308,907 6.07%
Minera Saucito, S.A. de C.V. (106,844) 225,376 1,003,111 5.95%
Minera San Julián, S.A. de C.V. 120,570 122,120 501,537 5.97%
Minera Penmont, S. de R.L. de C.V. 1,071 178,089 822,812 5.99%
Exploraciones Mineras Parreña, S.A. de C.V. 72,579 132,860 89,473 5.96%
730,766 4,471,485
In determining FVLCD it is necessary to make a series of assumptions to estimate future cash flows including reserves and
resources volumes and related production profile, price assumptions, cost estimates and discount rate. Accordingly, the fair
value is categorised as Level 3 in the fair value hierarchy. The price assumptions used to calculate FVLCD are determined with
reference analysts’ consensus of long-term prices. As at 31 December 2024, the Company used long term price assumptions of
US$2,169/ounce (2023: US$1,714/ounce) and US$27.6/ounce (2023: US$22.5/ounce) for gold and silver, respectively.
Sensitivity analysis
The key assumptions on which management bases the recoverable value calculations of the investment in subsidiaries are
commodity prices, future capital requirements, production costs, reserves and resources volumes (reflected in production
volumes) and discount rate.
The models are most sensitive to changes in commodity price assumptions, operating costs and production volumes.
Other than as disclosed below, management has considered that the fair value of the investments in subsidiaries are not
significantly sensitive to reasonably possible change in any other key assumptions.
In the absence of any changes to any of the other key assumptions, a change in the below assumptions would have the
following impact as at 31 December 2024:
• A decrease of 10% in gold and 15% in silver prices would result in an impairment charge of US$17.6 million.
• An increase of 10% in operating costs would result in a decrease of the reversal of the year of US$313.7 million.
• A decrease of 5% in the forecasted volume of gold and silver produced would result in a decrease of the reversal of the year
of US$276.7 million.
The subsidiaries in which investments are directly held as at 31 December 2024 and 2023 are as follows:
Legal company Principal activity
Country of
incorporation
Equity interest %
Year ended
31 December
2024 2023
Minera Fresnillo, S.A. de C.V. Production of lead/silver and zinc concentrates
Mexico
4
100 100
Minera San Julián, S.A. de C.V. Production of lead/silver and zinc concentrates
Mexico
4
100 100
Minera Penmont, S. de R.L. de C.V.
1
Production of doré bars (gold/silver)
Mexico
4
56 56
Minera Mexicana La Ciénega, S.A. de C.V. Production of lead and zinc concentrates and silver
precipitates
Mexico
4
100 100
Minera Saucito, S.A. de C.V. Production of lead and zinc concentrates
Mexico
4
100 100
Equipos Mineros Nazas, S.A. de C.V. Leasing of mining equipment
Mexico
4
100 100
Proveedora de Equipos Fresne, S de R.L. de C.V.
1
Leasing of mining equipment
Mexico
4
56 56
Equipos Mineros la Hacienda, S.A. de C.V. Leasing of mining equipment
Mexico
4
100 100
Proveedora de Equipos Jerez, S.A. de C.V. Leasing of mining equipment
Mexico
4
100 100
Equipos Chaparral, S.A. de C.V. Leasing of mining equipment
Mexico
4
56 56
Minera Juanicipio, S.A. de C.V. Production of lead/silver and zinc concentrates
Mexico
4
56 56
Comercializadora de Metales Fresnillo, S.A. de C.V. Holds rights over silver production from Peñoles’
polymetallic Sabinas mine through the Silverstream
contract
Mexico
4
100 100
Exploraciones Mineras Parreña, S.A. de C.V. Exploration services
Mexico
4
100 100
Exploraciones y Desarrollos Mineros Coneto,
S.A. P. I. de C.V.
Exploration services
Mexico
4
55 55
Minera El Bermejal, S. de R.L. de C.V. Mining equipment leasing
Mexico
4
56 56
Compañía Minera Las Torres, S.A. de C.V. Mine project
Mexico
4
100 100
Servicios Administrativos Fresnillo, S.A. de C.V. Administrative services
Mexico
4
100 100
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NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS CONTINUED
Legal company Principal activity
Country of
incorporation
Equity interest %
Year ended
31 December
2024 2023
Operaciones Fresnillo, S.A. de C.V. Administrative services
Mexico
4
100 100
Servicios de Exploración Fresnillo, S.A. de C.V. Administrative services
Mexico
4
100 100
Prestadora de Servicios Jarillas, S.A. de C.V. Administrative services
Mexico
4
100 100
Fresnillo Management Services, Ltd Administrative services
UK
5
100 100
Fresbal Investments, Ltd Holding company for mining Investments
Canada
6
100 100
Fresnillo Perú, S.A.C. Exploration services
Peru
7
100 100
Parreña Perú, S.A.C. Exploration services
Peru
7
100 100
Fresnillo Chile, SpA Exploration services
Chile
8
100 100
Minera Capricornio, SCM
2
Exploration services
Chile
8
75 100
Caja de Ahorros Fresnillo, S.C.
3
Administrative services Mexico
4
– –
The list of subsidiary undertakings presented in this note represents the full list of subsidiary undertakings, required to be
submitted by Section 409 of the Companies Act 2006.
1 The remaining 44% interest in these companies are held by Comercializadora de Metales Fresnillo, S.A. de C.V. a wholly-owned subsidiary of the Company.
2 In October 2024 the Group entered into an exploration joint venture in Chile through its subsidiary Minera Capricorno, SCM. The agreement is between Sociedad
Quimica y Minera de Chile, S.A. de C.V. (SQM), a Chilean mining company and Minera Capricorno, SCM, which considers a transfer of 25% ownership in Minera
Capricornio through a capital increase from SQM.
3 Whilst Fresnillo plc holds no direct ownership in Caja de Ahorros Fresnillo, S.C. the entire share capital of the company is held through its subsidiaries.
4 The registered address for all Mexican subsidiaries is: Calzada Saltillo 400 No. 989, Torreón, Coahuila 27250.
5 Registered address is: Second Floor, 21 Upper Brook Street, London W1.
6 Registered address is: 355 Burrard Street, Suite 1800, Vancouver, BC, V6C 2G8.
7 Registered address is: República de Colombia 643, Piso 9, Distrito San Isidro, Lima 27.
8 Registered address is: Apoquindo 4775 oficina 1002 – Las Condes, Santiago de Chile.
6. Trade and other receivables
Year ended 31 December
2024
US$ thousands
2023
US$ thousands
Other receivables from subsidiaries (Note 12) 199 –
Prepayments 950 708
1,149 708
As of 31 December for each year presented, other receivables from related parties were neither past due nor credit-impaired.
In determining the recoverability of a receivable, the Company performs a risk analysis considering the type and age of the
outstanding receivable and the credit worthiness of the counterparty.
Balances corresponding to Prepayments and Other receivables are not considered as financial assets.
7. Cash and cash equivalents
Year ended 31 December
2024
US$ thousands
2023
US$ thousands
Cash at bank and on hand 2 101
Short-term deposits 446,351 215,793
Cash and cash equivalents 446,353 215,894
Cash at bank earns interest at floating rates based on daily bank deposits. Short-term deposits are made for varying periods of
between one day and three months, depending on the immediate cash requirements of the Company, and earn interest at
the respective short-term deposit rates. Short-term deposits can be withdrawn at call without any penalty or loss in value.
5. Investments in subsidiaries continued
273
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Strategic Report Governance Financial Statements Additional Information
8. Equity
Share capital and share premium
Authorised share capital of the Company is as follows:
Class of share
As at 31 December
2024 2023
Number Amount Number Amount
Ordinary Shares each of US$0.50 1,000,000,000 $500,000,000 1,000,000,000 $500,000,000
Sterling Deferred Ordinary Shares each of £1.00 50,000 £50,000 50,000 £50,000
Issued share capital of the Company is as follows:
Ordinary Shares Sterling Deferred Ordinary Shares
Number US$ Number £
At 1 January 2023 736,893,589 $368,545,586 50,000 £50,000
At 31 December 2023 736,893,589 $368,545,586 50,000 £50,000
At 31 December 2024 736,893,589 $368,545,586 50,000 £50,000
As at 31 December 2024 and 2023, all issued shares with a par value of US$0.50 each are fully paid. The rights and obligations
attached to these shares are governed by law and the Company’s Articles of Association. Ordinary shareholders are entitled to
receive notice and to attend and speak at any general meeting of the Company. There are no restrictions on the transfer of the
Ordinary shares.
The Sterling Deferred Ordinary Shares only entitle the shareholder on winding up or on a return of capital to payment of the
amount paid up after repayment to Ordinary shareholders. The Sterling Deferred Ordinary Shares do not entitle the holder to
payment of any dividend, or to receive notice or to attend and speak at any general meeting of the Company. The Company
may also at its option redeem the Sterling Deferred Ordinary Shares ata price of £1.00 or, as custodian, purchase or cancel the
Sterling Deferred Ordinary Shares or require the holder to transfer the Sterling Deferred Ordinary Shares. Except at the option
of the Company the Sterling Deferred Ordinary Shares are not transferable.
Reserves
Share premium
This reserve records the consideration premium for shares issued at a value that exceeds their nominal value.
Merger reserve
The merger reserve represents the difference between the value of the net assets acquired as part of the Pre-IPO reorganisation
andthe nominal value of the shares issued pursuant to the Merger Agreement. Movements in this reserve during 2024 and
2023 represent the impairment losses and reversals of the carrying value of Fresnillo’s investments in subsidiaries transferred
from retained earnings.
Fair value reserve of financial assets at FVOCI
The Company has elected to recognise changes in the fair value of certain investments in equity securities in OCI, as explained
in Note 2(f). These changes are accumulated within the FVOCI reserve within equity. The Company transfers amounts from this
reserve to retained earnings when the relevant equity securities are derecognised.
Retained earnings
This reserve records the accumulated results of the Company, less any distributions and dividends paid.
274
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NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS CONTINUED
9. Dividends declared and paid
The dividends declared and paid during the years ended 31 December 2024 and 2023 are as follows:
US cents per
Ordinary Share
Amount
US$ thousands
Year ended 31 December 2024
Final dividend for 2023 declared and paid during the year
1
4.2 30,950
Interim dividend for 2024 declared and paid during the year
2
6.4 47,161
10.6 78,111
Year ended 31 December 2023
Final dividend for 2022 declared and paid during the year
3
13.3 98,007
Interim dividend for 2023 declared and paid during the year
4
1.4 10,317
14.7 108,324
1 This dividend was approved by the Shareholders on 21 May 2024 and paid on 29 May 2024.
2 This dividend was approved by the Board of Directors on 29 July 2024 and paid on 17 September 2024.
3 This dividend was approved by the Shareholders on 23 May 2023 and paid on 26 May 2023.
4 This dividend was approved by the Board of Directors on 31 July 2023 and paid 14 September 2023.
A reconciliation between dividend declared, dividends affected to retained earnings and dividend presented in the cash flow
statements is as follows:
Year ended 31 December
2024
US$ thousands
2023
US$ thousands
Dividends declared 78,111 108,324
Foreign exchange effect – (1)
Dividends recognised in retained earnings 78,111 108,323
Foreign exchange and hedging effect 45 (56)
Dividends paid 78,156 108,267
The directors have proposed a final dividend of US$26.1 cents per share, which is subject to approval at the annual general
meeting and is not recognised as a liability as at 31 December 2024. Dividends paid from the profits generated from 1 January
2014 to residents in Mexico and to non-resident shareholders may be subject to an additional tax of up to 10%, which will be
withheld by the Company.
10. Interest-bearing loans
Senior Notes
On 13 November 2013, the Company completed its offering of US$800 million aggregate principal amount of 5.500% Senior
Notes due November 2023 (the 5.500% Notes). On 29 September 2020, the Company repurchased certain of its 5.500% Notes
that had a carrying value of US$482.1 million for a consideration of US$543.0 million.
On 2 October 2020, the Company completed its offering of US$850 million aggregate principal amount of 4.250% Senior Notes
due 2050 in Euronext Dublin. The proceeds were partially used to finance the repurchase mentioned above.
On 13 November 2023, the Company paid the outstanding amount of the 5.500% Notes at its maturity date including due
interest for a total of US$326.6 million.
Movements in the year in the debt recognised in the balance sheet are as follows:
As at 31 December
2024
US$ thousands
2023
US$ thousands
Opening balance 839,002 1,158,557
Payments of 5.500% Notes – (317,879)
Accrued interest
1
38,093 53,919
Interest paid (37,986) (56,371)
Amortisation of discount and transaction costs 398 776
Closing balance 839,507 839,002
1 Interest was payable semi-annually on 13 May and 13 November for 5.500% senior notes and is payable semi-annually on 2 April and 2 October for 4.250% senior notes.
The Company has the following restrictions derived from the issuance of all outstanding Senior Notes:
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Strategic Report Governance Financial Statements Additional Information
Change of control:
Should the rating of the Senior Notes be downgraded as a result of a change of control (defined as the sale or transfer of 35% or
more of the common shares; the transfer of all or substantially all the assets of the Group; starting a dissolution or liquidation
process; or the loss of the majority in the board of directors) the Company is obligated to repurchase the notes at an equivalent
price of 101% of their nominal value plus the interest earned at the repurchase date, if requested to do so by any creditor.
Pledge on assets:
The Company shall not pledge or allow a pledge on any property that may have a material impact on business performance
(key assets). Nevertheless, the Company may pledge the aforementioned properties provided that the repayment of the Notes
keeps the same level of priority as the pledge on those assets.
11. Contingencies
The Company is subject to various laws and regulations which, if not observed, could give rise to penalties. As of 31 December
2023, the Company has the following contingencies:
• Tax periods remain open to review by the Mexican tax authorities (SAT, by its Spanish acronym) in respect of income taxes
for five years following the date of the filing of corporate income tax returns, during which time the authorities have the
right to raise additional tax assessments including penalties and interest. Under certain circumstances, the reviews may
cover longer periods. As such, there is a risk that transactions, and in particular related party transactions, that have not
been challenged in the past by the authorities, may be challenged by them in the future. It is not practical to determine the
amount of any potential claims or the likelihood of any unfavourable outcome arising from these or any future inspections
that may be initiated. However, management believes that its interpretation of the relevant legislation is appropriate and
that the Company has complied with all regulations and paid or accrued all taxes and withholdings that are applicable.
• On 8 May 2008, the Company and Peñoles entered into the Separation Agreement (the Separation Agreement). This
agreement relates to theseparation of the Group and the Peñoles Group and governs certain aspects of the relationship
between the Fresnillo Group and the Peñoles Group following the initial public offering in May 2008 (Admission). The
Separation Agreement provides for cross-indemnities between the Company and Peñoles so that, in the case of Peñoles,
it is held harmless against losses, claims and liabilities (including tax liabilities) properly attributable to the precious metals
business of the Group and, in the case of the Company, it is held harmless by Peñoles against losses, claims and liabilities
which are not properly attributable to the precious metals business. Save for any liability arising in connection with tax, the
aggregate liability of either party under the indemnities shall not exceed US$250 million in aggregate.
12. Related party balances and transactions
Related parties are those entities owned or controlled by the ultimate controlling party and include the Company’s subsidiaries
disclosed in Note 5. Related party balances will be settled in cash. All the balances as at 31 December 2024 and 2023 and the
transactions carried-out with related parties for the years then ended correspond to subsidiaries.
(a) Related party accounts receivable and payable
Accounts receivable
US$ thousands
Accounts payable
US$ thousands
31 December
2024
31 December
2023
31 December
2024
31 December
2023
Loans
1
1,026,470 1,387,722 – –
Other (Note 6) 189 – 1,151 4,171
Balance as 31 December 1,026,659 1,387,722 1,151 4,171
Less – Current portion 1,026,659 1,358,798 1,151 4,171
Non-current portion – 28,924 – –
1 Accounts receivable derived from loans with subsidiaries are net of provision for expected credit loss of US$1.01 million (2023: US$0.8 million).
Effective interest rates on loans granted to related parties in US dollar range between 6.49% to 7.25% (2023: 7.14% to 7.49%) and
in Mexican peso range from 12.42% to 13.50% (2023: 12.86% to 13.55%).
During the year the Company granted short-term loans to its subsidiaries for an amount of US$2,005 million
(2023: US$2,303 million).
276
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NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS CONTINUED
12. Related party balances and transactions continued
(b) Principal transactions with related parties (apart from dividends, additional investments and returns of capital) are
as follows:
Year ended 31 December
2024
US$ thousands
2023
US$ thousands
Income:
Interest on loans 134,338 129,094
Total income 134,338 129,094
During 2024 the Company did not receive short-term loans from its subsidiaries. During 2023 the Company received short-
term loans from its subsidiaries that were fully paid for an amount of US$50 million.
Year ended 31 December
2024
US$ thousands
2023
US$ thousands
Expenses:
Administrative services 7,217 7,346
Interest – 52
Total expenses 7,217 7,398
(c) Compensation of key management personnel of the Company
Key management personnel comprise Non-Executive Directors. In 2024, their compensation was US$0.8 million (2023:
US$0.8million). This compensation paid is disclosed in the Directors’ Remuneration Report.
13. Auditor’s remuneration
The auditor’s remuneration for the Company was US$2.1 million (2023: US$1.6 million) in respect of the audit of its Financial
Statements.
Fees paid to Ernst & Young LLP and its associates for non-audit services to the Company itself are not disclosed in the stand-
alone Financial Statements because Group Financial Statements are prepared which include these fees on a consolidated basis.
14. Notes to the statement of cash flows
Notes
Year ended 31 December
2024
US$ thousands
2023
US$ thousands
Reconciliation of profit for the year to net cash generated from operating
activities
Profit/loss for the year 800,937 (319,939)
Adjustments to reconcile profit/(loss) for the year to net cash inflows from
operating activities:
Impairment (reversal)/loss of investment in subsidiaries 5 (855,668) 730,766
Dividend income (33,600) (233,610)
Income tax loss 14,842 8,713
Net finance gain (111,048) (102,557)
Foreign exchange loss/(gain) 115,355 (71,383)
Other expenses 273 489
Working capital adjustments
(Decrease)/increase in trade and other receivables (271) (1,147)
(Decrease)/increase in trade and other payables (2,167) 4,313
Cash (used)/generated from operations (71,347) 15,645
Income tax recovered – 108
Income tax paid (103) (17)
Net cash (used)/generated from operating activities (71,450) 15,736
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Strategic Report Governance Financial Statements Additional Information
15. Financial instruments
(a) Fair value category
As at 31 December 2024
US$ thousands
Financial assets:
Amortised
cost
Fair value
through OCI
Fair value
through profit
or loss
Loans to related parties 1,026,470 – –
Equity instruments at FVOCI – 139,968 –
Financial liabilities:
At amortised
Cost
Fair value
through profit
or loss
Interest-bearing loans 839,507 –
Derivative financial instruments 189
Trade and other payables 1,151 –
As at 31 December 2023
US$ thousands
Financial assets:
Amortised
cost
Fair value
through OCI
Fair value
through profit
or loss
Loans to related parties 1,387,722 – –
Equity instruments at FVOCI – 107,991 –
Derivative financial instruments – – 79
Financial liabilities:
At amortised
Cost
Fair value
through profit
or loss
Interest-bearing loans 839,002 –
Trade and other payables 4,171 –
(b) Fair values
The value of financial assets and liabilities other than those measured at fair value are as follows:
As at 31 December
Carrying amount Fair value
2024
US$ thousands
2023
US$ thousands
2024
US$ thousands
2023
US$ thousands
Financial assets:
Loans to related parties
1
1,026,470 1,387,722 1,026,470 1,1387,722
Financial liabilities:
Interest-bearing loans
2
839,507 839,002 605,396 645,745
Trade and other payables 1,151 4,171 1,151 4,171
1 Loans to related party are categorised in Level 3 of the fair value hierarchy. The carrying amount is a reasonable approximation of fair value due the short-term period
of the receivable.
2 Interest-bearing loans are categorised in Level 1 of the fair value hierarchy.
The financial assets and liabilities measured at fair value are categorised into the fair value hierarchy as at 31 December
asfollows:
As of 31 December 2024
US$ thousands
Fair value measure using
Quoted prices in
active markets
Level 1
US$ thousands
Significant
observable
Level 2
US$ thousands
Significant
unobservable
Level 3
US$ thousands
Total
US$ thousands
Financial assets:
Other financial assets:
Equity investments 139,968 139,968
139,968 139,968
278
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NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS CONTINUED
15. Financial instruments continued
As of 31 December 2023
US$ thousands
Fair value measure using
Quoted prices in
active markets
Level 1
US$ thousands
Significant
observable
Level 2
US$ thousands
Significant
unobservable
Level 3
US$ thousands
Total
US$ thousands
Financial assets:
Derivative financial instruments:
Option and forward foreign exchange contracts – 79 – 79
Other financial assets:
Equity investments 107,991 – – 107,991
107,991 79 – 108,070
There have been no transfers between Level 1 and Level 2 of the fair value hierarchy, and no transfers into and out of Level 3 fair
valuemeasurements.
The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in
a current transaction between willing parties, other than in a forced or liquidation sale.
The following valuation techniques were used to estimate the fair values:
Option and forward foreign exchange contracts
The Company enters into derivative financial instruments with various counterparties, principally financial institutions with
investment grade credit ratings. The foreign currency forward (Level 2) contracts are measured based on observable spot
exchange rates, the yield curves of the respective currencies as well as the currency basis spreads between the respective
currencies. The foreign currency option contracts are valued using the Black Scholes model, the significant inputs to which
include observable spot exchange rates, interest rates and the volatility of the currency.
Option commodity contracts
The Company enters into derivative financial instruments with various counterparties, principally financial institutions
with investment grade credit ratings. The option commodity (Level 2) contracts are measured based on observable spot
commodity prices, the yield curves of the respective commodity as well as the commodity basis spreads between the
respective commodities. The option contracts are valued using the Black Scholes model, the significant inputs to which
include observable spot commodities price, interest rates and the volatility of the commodity.
Equity investments:
The fair value of equity investments is derived from quoted market prices in active markets (Level 1). These investments
were irrevocably designated at fair value through OCI as the Group considers these investments to be strategic in nature.
As of 31 December 2024, approximately 90.4% of the investments correspond to 9,314,877 shares (2023: 9,314,877 shares) of
Mag Silver, Corp. for an amount of US$126.5 million (2023: US$96.9 million) and 7.3% of Endeavor Silver Corp. represented by
2,800,000 (2023: 2,800,000 shares) shares for an amount of US$10.3 million (2023: US$5.5 million). These equity investments are
listed on the Toronto Stock Exchange. The prices per share as 31 December 2024 were US$13.58 (2023: US$10.41) and US$3.66
(2023: US$1.96), respectively.
In August 2024 the Group purchased 500,000 shares of Osisko Mining Inc., a Canadian exploration company, for a total
consideration of US$1.5 million. In October 2024 the Group disposed of its equity investment of 1,500,000 shares in Osisko
Mining Inc. The shares sold had a fair value of US$5.1 million and the Group realised a gain of US$1.0 million which had already
been included in OCI. This gain has been transferred to retained earnings, net of tax of US$0.3 million.
Interest-bearing loans
Fair value of the Company’s interest-bearing loan, is derived from quoted market prices in active markets (Level 1).
Loans with related parties
Fair value of the Company’s loan to related party is determined using a discounted cash flow method based on market interest
rates at each reporting date.
279
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Strategic Report Governance Financial Statements Additional Information
16. Financial Risk Management
Overview
The Company’s principal financial assets and liabilities, other than derivatives, are comprised of equity investment at FVOCI,
cash, loans to related parties, interest-bearing loans andtrade payables.
The Company enters into certain derivative transactions with the purpose of managing foreign exchange risk arising on the
activity and transactions of its subsidiaries.
The Company has exposure to the following risks from its use of financial instruments:
• Market risk, including foreign currency, interest rate and equity price risks
• Credit risk
• Liquidity risk
This note presents information about the Company’s exposure to each of the above risks and the Company’s objectives,
policies and processes forassessing and managing risk. Further quantitative disclosures are included throughout the Financial
Statements.
The Board of Directors has overall responsibility for the establishment and oversight of the Company risk management
framework.
The Company’s risk management policies have been established to identify and analyse the risks faced by the Company, to
set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems
are reviewed regularly to reflect changes in market conditions and the Company activities. The Company, through its training
and management standards and procedures, aims to develop a disciplined and constructive control environment in which all
employees understand their roles and obligations.
The Fresnillo Audit Committee has responsibility for overseeing how Management monitors compliance with the Company
risk management policies and procedures and reviews the adequacy of the risk management framework in relation to
the risks faced by the Company. The Audit Committee isassisted in its oversight role by Internal Audit, which undertakes
both regular and ad hoc reviews of risk management controls and procedures, theresults of which are reported to the
AuditCommittee.
(a) Market risk
Market risk is the risk that changes in market factors, such as foreign exchange rates, or interest rates will affect the Company
income or the value ofits financial instruments.
The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while
optimising the return on risk.
Foreign currency risk
The Company is exposed to foreign currency risk on transactions and balances that are denominated in currencies other than
the US dollar. Transactions in foreign currencies include the purchase of services, payment or receipt of dividends and other
items. Asa result, the Company has financial liabilities denominated in currencies other than functional currency and holds
cash and cash equivalents in Mexican peso.
In order to manage the Group’s exposure to foreign currency risk on expenditure denominated in currencies other than the
US dollar, the Company has entered into certain forward and option derivative contracts.
The following table demonstrates the sensitivity of financial assets and financial liabilities to a reasonably possible change in the
US dollar exchange rate compared to the Mexican peso, reflecting the impact on the Company’s profit before tax with all other
variables held constant. It is assumed that the same percentage change in exchange rates is applied to all applicable periods.
There is no impact on the Company’s equity other than the equivalent change in retained earnings.
Year ended 31 December
Strengthening/
(weakening) of
US dollar
Effect on
profit before
tax: increase/
(decrease)
US$ thousands
2024 10% 40
(5%) (69)
2023 10% 426
(5%) (735)
The Company’s exposure to reasonably possible changes in other currencies is not material.
280
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NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS CONTINUED
16. Financial Risk Management continued
Commodity risk
The Company’s subsidiaries have exposure to changes in metals prices (specifically gold, lead and zinc) which have a significant
effect on the Group’s results. These prices are subject to global economic conditions and industry-related cycles.
The Company uses derivative instruments to hedge against precious metals commodity price exposure in its subsidiaries.
As the Company passes through the effect of derivatives to its subsidiaries, the Company is not sensitive to changes in
commodity prices.
Interest rate risk
The Company is exposed to interest rate risk from the possibility that changes in interest rates will affect future cash flows or
the fair values of its financial instruments. The Company’s earnings are sensitive to changes in interest rates on any floating
element of the loans with related parties and interest earned on cash balances. Interest-bearing loans are at a fixed rate,
therefore the possibility of a change in interest rate only impacts its fair value but not its carrying amount. Therefore, interest-
bearing loans and loans from related parties (for which exposure is not material) are excluded from the table below.
The following table demonstrates the sensitivity of all financial assets and financial liabilities to a reasonably possible change
in interest rate applied toa full year from the balance sheet date. There is no impact on the Company’s equity other than the
equivalent change in retained earnings.
Year ended 31 December
Basis point
increase/
(decrease)
in interest rate
Effect on
profit before
tax: increase/
(decrease)
US$ thousands
2024
1
– –
(50) (7,364)
2023
1
– –
(75) (11,810)
1 Based on actual market conditions management considers an increase in interest rates is likely remote.
Equity price risk
The Company has exposure to changes in the price of equity instruments that it holds as equity investments held at FVOCI.
The following table demonstrates the sensitivity of FVOCI assets to a reasonably possible change in market price of these
equity instruments, reflecting the effect on the Company’s profit before tax and equity:
Year ended 31 December
Increase/
(decrease)
in equity price
Effect on profit
before tax:
increase/
(decrease)
Effect on equity:
increase/
(decrease)
US$ thousands
2024 80% 111,958
(20%) (27,989)
2023 40% – 43,196
(45%) – (48,596)
(b) Credit risk
Exposure to credit risk arises as a result of transactions in the Company’s ordinary course of business and is applicable to cash
and cash equivalents, intercompany loans and derivative financial instruments.
The Company’s policies are aimed at minimising losses as a result of counterparties’ failure to honour their obligations.
Individual exposures are monitored with customers subject to credit limits to ensure that the Company’s exposure to bad
debts is not significant. The Company’s exposure tocredit risk is influenced mainly by the individual characteristics of each
counter party. The Company’s financial assets are with counterparties that the Company considers to have an appropriate
credit rating. As disclosed in Note 12, the counterparties to a significant proportion of these financial assets are related parties.
At each balance sheet date, the Company’s financial assets were neither credit-impaired nor past due other than ‘Related
party accounts receivables as is disclosed in Note 12. The Company’s policies are aimed at minimising losses from the foreign
currency and commodity hedging contracts. The Company’s foreign currency and commodity derivative contracts are entered
into with large financial institutions with strong credit ratings.
The Company’s surplus funds are managed by Servicios Administrativos Fresnillo, S.A. de C.V., which manages cash and cash
equivalents investing inseveral financial institutions. In order to minimise exposure to credit risk, the Company only deposits
cash and cash equivalents with financial institutions with a credit rating of M-1 (Moody’s) and mxA-1+ (Standard and Poor’s) and
above, and only for periods of less than three months.
The maximum credit exposure at the reporting date of each category of financial asset above is the carrying value as detailed
in the relevant notes. See Note 15 (a) for the maximum credit exposure for other financial assets, Note 7 for cash and cash
equivalents and Note 12 for related partybalances.
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Strategic Report Governance Financial Statements Additional Information
(c) Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company
monitors its risk of a shortage of funds using projected cash flows and by monitoring the maturity of both its financial assets
and liabilities.
The table below summarises the maturity profile of the Company financial liabilities based on contractual undiscounted
payments.
US$ thousands
Within 1 year 2–3 years 4-5 years > 5 years Total
As at 31 December 2024
Interest-bearing loans 37,986 75,973 75,973 1,647,713 1,837,645
Derivative financial instruments 189 – – – 189
Trade and other payables 1,151 – – – 1,151
US$ thousands
Within 1 year 2–3 years 4-5 years > 5 years Total
As at 31 December 2023
Interest-bearing loans 37,986 75,973 75,973 1,685,699 1,875,631
Trade and other payables 4,171 – – – 4,171
The disclosed financial derivative instruments in the above table are the gross undiscounted cash flows. However, those amounts
may be settled gross or net. The following table shows the corresponding estimated inflows based on the contractual terms:
US$ thousands
Within 1 year 2–3 years 4-5 years > 5 years Total
As at 31 December 2024
Inflows 13,191 – – – 13,191
Outflows (12,403) – – – (12,403)
Net 788 – – – 788
US$ thousands
Within 1 year 2–3 years 4-5 years > 5 years Total
As at 31 December 2023
Inflows 5,777 – – – 5,777
Outflows (5,587) – – – (5,587)
Net 190 – – – 190
The above liquidity tables include expected inflows and outflows from currency option contracts which the Company expects
to be exercised during 2025 as at 31 December 2024 and during 2024 as at 31 December 2023, either by the Company or
counterparty.
Management considers that the Company has adequate current assets and forecast cash from operations to manage liquidity
risks arising from current liabilities and non-current liabilities.
Capital management
The primary objective of the Company’s capital management is to ensure that it maintains a strong credit rating and healthy
capital ratios that support its business and maximise shareholder value. Management considers capital to consist of equity and
interest-bearing loans (Note 10), as disclosed in the balance sheet and equity investments at FVOCI (Note 15).
In order to ensure an appropriate return for shareholder’s capital invested in the Company, Management thoroughly evaluates
all material projects and potential acquisitions and approves them at its Executive Committee before submission to the Board
for ultimate approval, where applicable. The Company’s dividend policy aims to pay out 33-50% of profit after tax each year, while
making certain adjustments to exclude non-cash effects in the income statement. Dividends are paid in the approximate ratio of
one-third as an interim dividend and two-thirds as a final dividend. Before declaring a dividend, the Board carries out a detailed
analysis of the profitability of the business, underlying earnings, capital requirements and cash flow. The Company aim is to
maintain enough flexibility to be able to react to movements in precious metals prices and seize attractive business opportunities.
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Resource category Cut-off grade
2
Quantity Grade Contained metal
Tonnes
(kt)
Au
(g/t)
Ag
(g/t)
Pb
(%)
Zn
(%)
Au
(koz)
Ag
(koz)
Pb
(kt)
Zn
(kt)
Minera Fresnillo – Fresnillo/Proaño Mine –
Underground
Measured
192 g/t AgEq
11,480 1.00 602 1.19 2.17 369 222,297 137 249
Indicated 15,911 0.87 337 1.73 3.99 447 172,312 276 635
Measured and indicated 27,391 0.93 448 1.51 3.23 815 394,608 412 884
Inferred 25,750 0.78 358 1.09 2.17 650 296,047 280 559
Minera Saucito – Saucito Mine – Underground
Measured
213 g/t AgEq
6,318 2.34 326 1.65 2.89 476 66,139 104 183
Indicated 15,845 1.26 273 1.54 2.70 643 139,254 244 429
Measured and indicated 22,163 1.57 288 1.57 2.76 1,118 205,394 348 611
Inferred 18,406 0.90 238 1.23 2.78 533 140,889 227 512
Minera Ciénega – Ciénega Complex – Underground
Measured
Multiple
3
6,844 3.43 206 1.12 1.67 755 45,333 77 114
Indicated 4,592 2.13 198 0.72 1.16 314 29,163 33 53
Measured and indicated 11,436 2.91 203 0.96 1.47 1,069 74,496 110 168
Inferred 5,794 2.09 210 0.64 1.06 389 39,187 37 61
Minera San Julián – San Julián Mine Underground:
Veins
Measured
169 g/t AgEq
2,758 2.13 231 – – 189 20,449 – –
Indicated 7,439 1.51 206 – – 362 49,178 – –
Measured and indicated 10,197 1.68 212 – – 551 69,627 – –
Inferred 7,509 1.38 190 – – 332 45,781 – –
Minera San Julián – San Julián Mine Underground:
Disseminated
Measured
109 g/t AgEq
3,038 0.09 117 0.43 1.33 9 11,465 13 40
Indicated 722 0.06 112 0.42 1.15 2 2,593 3 8
Measured and indicated 3,759 0.08 116 0.42 1.29 10 14,058 16 49
Inferred 73 0.04 97 0.54 1.40 0 227 0 1
Totals – Underground
Measured and indicated
Multiple
74,947 1.48 315 1.18 2.28 3,563 758,183 886 1,711
Inferred 57,532 1.03 282 0.95 1.97 1,903 522,131 544 1,133
1 Mineral resources are reported inclusive of ore reserves. Mineral resources are not ore reserves and do not have demonstrated economic viability. All figures rounded
to reflect the relative accuracy of the estimates. Gold, silver, lead and zinc assays were capped where appropriate.
2 Mineral resources are reported at metal equivalent cut-off grades based on metals prices assumptions*, variable metallurgical recovery assumptions (variable
metallurgical recoveries as a function of grade and relative metal distribution), mining costs, processing costs, general and administrative (G&A) costs, and variable
NSR factors (NSR factors include smelting and transportation costs). The AgEq variable cut-offs grades are calculated by dividing the applicable costs by a variable Ag
net value factor which includes prices, recoveries, and payabilities.
3 The cut-off grade for Ciénega’s mineral resources varies between 224 and 247 g/t AgEq.
• All mineral resources were estimated by Fresnillo. William Cain, B.Sc, AIPG CPG 12063 of SRK, a Competent Person reviewed and audited the resource estimates for
Ciénega. Benjamin Parsons, BSc, MSc Geology, MAusIMM (CP) #222568 of SRK, a Competent Person, reviewed and audited the resource estimates for Fresnillo and
Saucito. Scott Burkett, SME-RM #04229765 of SRK Consulting (U.S.), Inc., a Competent Person, reviewed and audited the resource estimates for San Julián.
• Metals prices assumptions considered for the calculation of metal equivalent grades are: Gold (US$/oz 1,750.00), Silver (US$/oz 23.00), Lead (US$/lb 0.95) and Zinc (US$/lb 1.15).
• kt: thousand tonnes; Au: gold; Ag: silver; Pb: Lead; Zn: zinc; g/t: grams per tonne; %: percent; oz: troy ounce; koz: thousand troy ounces; lb: pound; AgEq: silver equivalent.
CONSOLIDATED AUDITED MINERAL RESOURCE STATEMENT FOR UNDERGROUND
OPERATIONAL PROPERTIES, SRK CONSULTING (U.S.), INC.
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AS AT 30 JUNE 2024
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Resource category Cut-off grade
Quantity Grade Contained metal
Tonnes
(kt)
Au
(g/t)
Au
(koz)
Minera Penmont: Herradura open pit
4,8
Measured
Multiple
4
224,851 0.81 5,861
Indicated 33,795 0.85 921
Measured and indicated 258,646 0.82 6,782
Inferred 5 0.66 0.1
Minera Penmont: Noche Buena open pit
5,8
Measured
0.19 g/t Au
10,034 0.52 166
Indicated 365 0.51 6
Measured and indicated 10,399 0.52 172
Inferred 36 0.51 0.6
Minera Penmont: Soledad-Dipolos open pit
6-8
Measured
0.20 g/t Au
77,953 0.48 1,202
Indicated 5,864 0.44 82
Measured and indicated 83,817 0.48 1,284
Inferred 310 0.49 5
Minera Penmont: Centauro Profundo underground
9,10
Measured
2.30 g/t Au
455 6.53 96
Indicated 5,149 6.66 1,102
Measured and indicated 5,603 6.65 1,197
Inferred 8,068 6.03 1,564
Total – Open pit
Measured and indicated
Multiple
352,861 0.73 8,239
Inferred 351 0.49 6
Totals – Underground
Measured and indicated
2.30 g/t Au
5,603 6.65 1,197
Inferred 8,068 6.03 1,564
1 Totals may not compute exactly due to rounding.
2 Mineral Resources are reported inclusive of Ore Reserves.
3 The JORC code was using for reporting of Mineral Resources.
4 Herradura open pit Mineral Resources are reported at various cut-offs dependent on material types and grade.
a Oxide material equal to or above 0.15 g/t Au and below 0.93 g/t Au reports to the heap leach.
b Transitional and sulfide material equal to or above 0.31 g/t and below 0.34 g/t Au reports to the heap leach.
c Oxide material equal to or above 0.93 g/t Au reports to the mill.
d Transitional and sulfide material equal to or above 0.34 g/t Au reports to the mill.
5 Noche-Buena open pit Mineral Resources are reported at a cut-off grade of 0.19 g/t Au reporting to the heap leach.
6 Soledad-Dipolos open pit Mineral Resources are reported at a cut-off grade of 0.20 g/t Au reporting to the heap leach.
7 The Soledad-Dipolos mine has been subject to legal actions regarding surface access; it is assumed these actions will eventually be setted favourably and mining
operations resumed.
8 Reasonable prospects for eventual economic extraction (RPEEE) criteria have been applied to open pit Mineral Resources through by reporting blocks above a cut-off
grade within a constraining pit shell based on a US$1,950/oz Au price, gold recoveries ranging between 30% and 90% based on material type, and using similar inter-
ramp angles used for Ore Reserve pits.
9 Centauro Profundo underground Mineral Resources are reported beneath the Herradura Mineral Resource open pit, above a cut-off grade of 2.3 g/t Au, based on a
gold price of US$1,950/oz and gold recovery of 93%.
10 RPEEE have been applied to the Centauro Profundo underground Mineral Resources. Discontinuous blocks reporting above the selected cut-off grade were
removed from the Mineral Resource. Sensitivity to minimum mining width was also tested on a vein-by-vein basis.
• Mineral Resources were estimated by Fresnillo. Simeon Robinson, P.Geo. (EGBC #43058, PGO #3904, MAIG #5609) of AMC reviewed and audited the Resource
estimates for Herradura and Centauro Profundo. Michael O’Brien. P.Geo. (EGBC #41338, FAusIMM #206669) of Red Pennant reviewed and audited the Resource
estimates for Soledad-Dipolos and Noche Buena.
CONSOLIDATED AUDITED MINERAL RESOURCE STATEMENT FOR SONORA
PROPIERTIES, AMC MINING CONSULTANTS (CANADA) LTD.
1-3
AS AT 30 JUNE 2024
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CONSOLIDATED AUDITED MINERAL RESOURCE STATEMENT OF EXPLORATION
PROJECTS AND PROSPECTS
1
AS AT 31 DECEMBER 2024
Deposit
1
Cut-off grade*
Quantity Grade Contained metal
Fresnillo subsidiary
Tonnes
(kt)
Gold
(g/t)
Silver
(g/t)
Lead
(%)
Zinc
(%)
Gold
(koz)
Silver
(koz)
Lead
(kt)
Zinc
(kt)
Measured mineral resource
Orisyvo – disseminated Au ** 0.34 g/t Au 42,330 1.34 2 – – 1,830 2,104 – –
Candameña –
disseminated Au ** – – – – – – – – –
Leones – breccia ** – – – – – – – – –
Lucerito – breccia/mantos ** – – – – – – – – –
Rodeo – disseminated Au – – – – – – – – –
Manzanillas – veins 1.65 AuEq g/t 75 6.76 130 – – 16 316 – –
San Juan – veins – – – – – – – – –
Opulencia – veins – – – – – – – – –
Guanajuato Centro – veins 1.55 AuEq g/t 1,281 0.84 54 – – 34 2,230 – –
Guanajuato Sur – veins – – – – – – – – –
Cebadillas – veins – – – – – – – – –
La Yesca – veins – – – – – – – – –
San Nicolas – veins – – – – – – – – –
Pilarica – mantos – – – – – – – – –
Total Measured 43,686 1.34 3 – – 1,881 4,650 – –
Indicated mineral resource
Orisyvo – disseminated Au ** 0.34 Au g/t 195,993 1.01 1 – – 6,334 8,542 – –
Candameña –
disseminated Au ** 0.27 AuEq g/t 70,793 0.63 15 0.03 0.06 1,435 34,478 19 40
Leones – breccia ** – – – –
Lucerito – breccia/mantos ** 0.56 AuEq g/t 116,154 0.39 26 0.28 0.45 1,474 96,462 324 521
Rodeo – disseminated Au 0.17 AuEq g/t 6,603 0.49 3 – – 104 721 – –
Manzanillas – veins 1.65 AuEq g/t 919 3.53 69 – – 104 2,034 – –
San Juan – veins 1.65 AuEq g/t 3,117 1.66 147 – – 166 14,763 – –
Opulencia – veins 1.69 AuEq g/t 2,724 3.11 138 – – 272 12,106 – –
Guanajuato Centro – veins 1.41 AuEq g/t 8,122 1.93 67 – – 504 17,591 – –
Guanajuato Sur – veins 1.65 AuEq g/t 587 5.02 757 – – 95 14,281 – –
Cebadillas – veins – – – – – – – – –
La Yesca – veins – – – – – – – – –
San Nicolas – veins – – – – – – – – –
Pilarica – mantos US$11.00/t 11,524 92 0.30 0.48 – 33,995 35 56
Total Indicated 416,537 0.78 18 0.09 0.15 10,489 234,972 378 617
Inferred mineral resource
Orisyvo – disseminated Au ** 0.34 Au g/t 68,539 0.64 1 – – 1,410 2,103 – –
Candameña –
disseminated Au ** 0.16 AuEq g/t 12,622 0.33 13 0.01 0.02 133 5,367 1 3
Leones – breccia ** 49 AgEq g/t 6,169 0.00 112 1.55 1.24 – 22,169 95 76
Lucerito – breccia/mantos ** 0.56 AuEq g/t 135,140 0.39 30 0.24 0.41 1,687 131,892 321 550
Rodeo – disseminated Au 0.17 AuEq g/t 102,248 0.40 4 – – 1,309 14,577 – –
Manzanillas – veins 1.65 AuEq g/t 318 2.03 46 – – 21 474 – –
San Juan – veins 1.65 AuEq g/t 8,051 1.59 145 – – 411 37,517 – –
Opulencia – veins 1.69 AuEq g/t 2,648 2.10 94 – – 179 8,035 – –
Guanajuato Centro – veins 1.56 AuEq g/t 16,268 2.03 86 – – 1,060 44,751 – –
Guanajuato Sur – veins 1.65 AuEq g/t 16,230 2.12 521 – – 1,105 271,911 – –
Cebadillas – veins 1.87 g/t AuEq 2,131 2.51 63 – – 172 4,329 – –
La Yesca – veins 146 AgEq g/t 1,528 0.70 131 – – 34 6,447 – –
San Nicolas – veins 1.55 AuEq g/t 2,674 1.44 198 – – 124 17,023 – –
Pilarica – mantos US$26.27/t 7,505 0.44 89 1.40 1.44 106 21,434 105 108
Total Inferred 382,071 0.63 48 0.14 0.19 7,753 588,029 523 737
1 Mineral resources are not ore reserves and do not have demonstrated economic viability. All figures rounded to reflect the relative accuracy of the estimates.
Composites were capped where appropriate. Mineral resources are reported at variable metal, metal equivalent or NSR cut-off grades, assuming reasonable metal
recoveries. Orisyvo, Lucerito, Candameña, and Rodeo mineral resources are reported inside a conceptual pit shell based on appropriate mining and processing costs
and metal recoveries for oxide and sulfide material. Equivalent metal grades are based on US$1,750 per ounce of gold, US$23.00 per ounce of silver, US$1.15 per pound
of zinc, US$0.95 per pound of lead and US$3.00 per pound of copper. Conceptual pit shell optimisations considered similar prices, except for a US$1,950 per ounce gold
price (other than for Orisyvo where US$1,400 per ounce was considered).
* Cut-off grade calculations assume variable metallurgical recoveries.
** Mineral Resources Statement prepared independently by SRK (Canada).
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Deposit
Cut-off grade
1
Quantity Grade Contained metal
Tonnes
(kt)
Au
(g/t)
Ag
(g/t)
Pb
(%)
Zn
(%)
Au
(koz)
Ag
(koz)
Pb
(kt)
Zn
(kt)
Minera Fresnillo – Fresnillo/Proaño Mine –
Underground
2
Proven
230 g/t AgEq
1,992 0.55 310 0.65 1.22 35 19,852 13 24
Probable 11,720 0.60 225 1.26 2.79 228 84,669 147 327
Proven and Probable 13,712 0.60 237 1.17 2.56 263 104,520 161 351
Minera Saucito – Saucito Mine – Underground
2
Proven
220 g/t AgEq
2,110 1.46 238 1.09 1.69 99 16,166 23 36
Probable 12,469 1.04 238 1.17 2.00 415 95,386 146 250
Proven and Probable 14,579 1.10 238 1.16 1.96 515 111,553 169 286
Minera Ciénega – Ciénega Complex –
Underground
2
Proven
Multiple
3
851 1.52 228 0.66 0.87 42 6,241 6 7
Probable 2,065 1.21 114 0.36 0.34 80 7,567 8 7
Proven and Probable 2,917 1.30 147 0.45 0.49 122 13,809 13 14
Minera San Julián – San Julián Mine Underground:
Veins
2
Proven
174 g/t AgEq
507 1.28 249 – – 21 4,053 – –
Probable 2,916 1.14 251 – – 107 23,507 – –
Proven and Probable 3,423 1.16 250 – – 128 27,559 – –
Totals – Underground
Proven
Multiple
5,461 1.12 264 0.76 1.23 197 46,312 42 67
Probable 29,170 0.88 225 1.03 2.00 830 211,129 301 584
Proven and Probable 34,631 0.92 231 0.99 1.88 1,027 257,441 343 651
1 All figures rounded to reflect the relative accuracy of the estimates. Mineral reserves are reported at metal equivalent cut-off grades based on metals prices
assumptions*, variable metallurgical recovery assumptions (variable metallurgical recoveries as a function of grade and relative metal distribution), mining costs,
processing costs, general and administrative (G&A) costs, sustaining capital costs, and variable NSR factors (NSR factors include smelting and transportation costs).
Each AgEq cut-off is calculated by dividing the appropriate cost by the corresponding Ag net value factor which includes prices, recoveries, and payabilities. A small
proportion of marginal material is included in the design.
2 Reserves include planned dilution to a minimum mining width and to minable outlines. Additionally, based on mining method, floor dilution is included, and
appropriate mining recovery factors are applied.
3 The cut-off grades for the Ciénega reserve vary between 245 and 253 g/t AgEq.
• Metals prices assumptions considered for the calculation of metal equivalent grades are: Gold (US$/oz 1,750.00), Silver (US$/oz 23.00), Lead (US$/lb 0.95) and Zinc (US$/lb 1.15).
• The reserves are valid as of June 30, 2024. All topography is valid as of June 30, 2024
• The ore reserves were estimated by Fresnillo. Anton Chan, B.Eng, M.Sc., P.Eng, MMSAQP (#01546QP) of SRK, a Competent Person, reviewed and audited the reserve
estimates. Fresnillo’s maiden reconciliation results show a need for improving the reserves process and adjusting factors as more information becomes available.
There is a risk that locally results will differ from estimates. In veins where large reconciliation differences were observed reserves material for that vein has been
reclassified to probable.
• kt: thousand tonnes; Au: gold; Ag: silver; Pb: Lead; Zn: zinc; g/t: grams per tonne; %: percent; oz: troy ounce; koz: thousand troy ounces; lb: pound; AgEq: silver equivalent.
CONSOLIDATED AUDITED ORE RESERVE STATEMENT FOR UNDERGROUND
OPERATIONAL PROPERTIES, SRK CONSULTING (U.S.), INC.
AS AT 30 JUNE 2024
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CONSOLIDATED AUDITED ORE RESERVE STATEMENT FOR SONORA
PROPERTIES, AMC MINING CONSULTANTS (CANADA) LTD.
AS AT 30 JUNE 2024
Cut-off grade
Quantity Grade Contained metal
Reserve category
Tonnes
(kt)
Au
(g/t)
Au
(koz)
Minera Penmont: Herradura open pit
Proven
Multiple
1
190,851 0.83 5,081
Probable 22,273 0.84 598
Proven and Probable 213,124 0.83 5,680
1 The Herradura Ore Reserves that are attributed to the heap leach are reported at cut-off grades of 0.16 g/t Au for oxide ore and 0.30 g/t Au for transition and sulfide ore.
Oxide material above 1.04 g/t Au and transitional and sulfide material above 0.38 g/t Au are attributed to the mill.
• Ore Reserves and all topography are valid as of 30 June 2024.
• Ore Reserves are based on a US$1,750/oz Au price.
• Exchange rate of 18 MXP to 1 US$.
• Full mining recovery assumed. Ore Reserves have no additional dilution added to that inherent in the selective mining unit (SMU) of 15 × 15 × 8 m
3
.
• Assumed metallurgical recoveries are based on operational experience and average 68% and 30% for Herradura oxide and sulfide ore, respectively, to the heap leach,
and 90% for Herradura ore to the mill.
• Ore Reserves are converted from Mineral Resources through the process of pit optimisation, pit design, and production scheduling, and are supported by a cash flow
model.
• All figures rounded to reflect the relative accuracy of the estimates; numbers may not compute exactly due to rounding.
• Ore Reserves were estimated by Fresnillo. David Warren, BSc, MSc, P.Eng. (EGBC #15053) of AMC, a Competent Person, reviewed and audited the Ore Reserve
estimates.
AUDITED MINERAL RESOURCE FOR THE JUANICIPIO PROPERTY (100% BASIS)
AS AT 30 JUNE 2024
Quantity Grade Contained metal
Resource category
Cut-off
grade
Tonnes
(kt)
Au
(g/t)
Ag
(g/t)
Pb
(%)
Zn
(%)
Au
(koz)
Ag
(koz)
Pb
(kt)
Zn
(kt)
Measured
213 g/t AgE
2,037 1.77 662 1.90 3.59 116 43,387 39 73
Indicated 16,826 1.93 242 2.77 5.04 1,042 130,991 466 848
Measured and indicated 18,863 1.91 288 2.68 4.08 1,157 174,379 505 921
Inferred 12,435 0.83 200 1.87 5.82 332 80,081 232 724
Notes:
• Totals may not compute exactly due to rounding.
• Mineral Resources are reported inclusive of Ore Reserves.
• Mineral Resources are reported above cut-off grade but some of the Mineral Resources do not meet the technical requirement for reasonable prospects of eventual
economic extraction.
• Mineral Resources are reported at or above 213 g/t Ag equivalent.
• Mineral Resources are reported at values based on metal price assumptions, metallurgical recovery assumptions, mining costs, processing costs, general and
administrative (G&A) costs, and variable smelting and transportation costs.”
• Metal price assumptions considered for the calculation of metal equivalent values are Au (US$1,750.00/oz), Ag(US$23.00/oz), Pb (US$0.95/lb), and Zn (US$1.15/lb).
• Assumed metal recoveries of 74.64%, 91.46%, 87.64%, and 79.29% for Au, Ag, Pb, and Zn, respectively and net smelter return (NSR) factors of US$33.91/g Au, US$0.558/g
Ag, US$16.60/% Pb, and US$13.64/% Zn were used.
• The Mineral Resources were estimated by Fresnillo. Justin Glanvill (SACNASP), of AMC, a Competent Person, reviewed and audited the Mineral Resources.
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Quantity Grade Contained metal
Reserve category
Cut-off
grade
Tonnes
(kt)
Au
(g/t)
Ag
(g/t)
Pb
(%)
Zn
(%)
Au
(koz)
Ag
(koz)
Pb
(kt)
Zn
(kt)
Proven
222 g/t
AgEq
1,546 1.18 450 1.45 2.69 59 22,375 22 42
Probable 16,987 1.61 201 2.33 4.21 882 109,571 395 715
Proven and Probable 18,533 1.58 221 2.25 4.08 940 131,946 417 757
Notes:
• Totals may not compute exactly due to rounding.
• All figures rounded to reflect the relative accuracy of the estimates. Ore Reserves are reported at variable cut-off value based on metal price assumptions,
metallurgical recovery assumptions, mining costs, processing costs, G&A costs, sustaining capital costs, and variable trucking costs.
• JORC Code was used for reporting of Ore Reserves.
• NSR values are calculated as:
– NSR = 33.91*Au+0.558*Ag+16.60*Pb+13.64*Zn. Units: Au (g/t), Ag (g/t), Pb (%), Zn (%).
– NSR factors are based on metal prices of $1,750/oz Au, $23.00/oz Ag, $0.95/lb Pb, and $1.15/lb Zn, and estimated recoveries of 74.64% Au, 91.46% Ag, 87.64% Pb, and
79.29% Zn.
– Payable metal assumptions for Au are 95% for lead concentrate, 65% for zinc concentrate, and 100% for pyrite concentrate; for Ag: 95% for lead concentrate, 70% for
zinc concentrate, and 100% for pyrite concentrate. Lead 95% payable and zinc 85% payable.
– The all-inclusive operating costs, exluding variable trucking costs, for longhole stopes and cut-and-fill stopes are $115/tonne and $138/tonne respectively (222 g/t AgEq
based on weighted average for mining method).
– Estimated stope hangingwall and footwall dilution (ELOS) was included in the stope optimisation process. The dilution thickness for stope hangingwall and footwall
varies by mining method.
– An additional operational floor mucking dilution of 0.5m for longhole and cut-and-fill stopes is applied to the Ore Reserve calculation. An extra endwall dilution for
longhole stope is 0.5m.
– Mining recovery factors are 95% for longhole stopes and cut-and-fill stopes. Mining recovery factor for ore drive development is 99%. Mining recovery factor for sill
pillars is 0%.
– Exchange rate of 18 MXP to 1 US$.
– The Ore Reserves were estimated by Fresnillo. Paul Salmenmaki, P.Eng. (EGBC #40227), a Competent Person, reviewed and audited the Ore Reserves.
AUDITED ORE RESERVES FOR THE JUANICIPIO PROPERTY (100% BASIS),
AMC MINING COUNSULTANTS (CANADA) LTD.
AS AT 30 JUNE 2024
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OPERATING STATISTICS
ORE PROCESSED
(tonnes)
SILVER
(grammes/tonne)
GOLD
(grammes/tonne)
ZINC
(%)
LEAD
(%)
2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024
Fresnillo 2,443,440 2,461,785 2,336,943 2,216,467 2,462,409 2,618,509 2,333,973 213.8 184.5 193.9 186.2 188.7 170.2 152.1 0.70 0.89 0.73 0.68 0.61 0.62 0.92 1.75 1.80 2.07 2.20 2.38 2.32 2.93 0.90 1.01 1.08 1.01 1.05 0.96 1.35
Ciénega 1,323,908 1,329,134 1,318,263 1,282,367 1,114,232 1,064,543 1,058,778 164.4 158.9 158.6 153.4 152.4 147.5 165.5 1.65 1.66 1.63 1.27 1.14 1.14 1.27 0.83 1.13 1.18 0.90 0.86 0.63 0.55 0.60 0.67 0.70 0.51 0.49 0.44 0.43
Herradura 22,156,792 22,926,542 19,797,063 20,311,876 22,195,187 20,223,914 22,742,296 2.7 2.9 2.6 2.1 1.6 1.6 1.2 0.76 0.80 0.77 0.76 0.69 0.76 0.71 – – – – – – – – – – – – – –
Saucito 2,792,057 2,752,638 2,767,432 2,434,449 2,072,812 2,163,982 2,363,960 257.6 227.6 205.8 182.9 201.3 195.2 214.0 1.25 1.19 1.24 1.46 1.40 1.34 1.40 1.61 1.57 2.21 2.08 1.78 1.96 1.85 0.94 0.90 1.22 1.18 1.01 1.06
1.12
Saucito Pyrites 131,780 167,513 172,233 159,635 135,044 109,433
91,313
393.4 299.4 220.1 150.5 164.0 199.6 264.8 2.77 2.32 1.92 1.50 1.44 1.43 1.87 – – – – – – – – – – – – – –
Soledad-Dipolos – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
Noche Buena 18,195,744 12,166,900 6,682,617 8,996,842 7,428,189 2,510,639 – 0.1 0.2 0.7 0.2 0.2 0.2 – 0.52 0.51 0.52 0.59 0.53 0.47 – – – – – – – – – – – – – – –
San Julián – Veins 1,270,781 1,265,030 1,254,970 1,202,826 1,175,764 1,142,309 1,236,682 144.1 115.4 108.6 119.2 134.6 165.6 231.6 2.01 1.61 1.61 1.42 1.21 1.17 1.31 – – – – – –
–
– – – – – – –
San Julián – DOB 2,221,433 2,226,956 2,229,612 2,070,563 2,092,971 2,073,847 1,554,108 154.4 139.5 150.3 220.6 167.9 136.2 80.7 0.09 0.08 0.09 0.10 0.08 0.08 0.06 1.35 1.36 1.19 1.27 1.09 0.94 1.04 0.43 0.44 0.41 0.51 0.43 0.43 0.33
Juanicipio (Total) – – 71,859 251,906 646,148 1,268,757 1,328,178 – – 327.8 470.2 519.8 472.4 468.2 – – 0.73 1.13 1.39 1.27 1.25 – – 0.60 1.20 1.72 2.06 2.78 – – 0.33 0.60 0.90 1.15 1.50
ZINC CONCENTRATE
(tonnes)
SILVER
(grammes/tonne)
GOLD
(grammes/tonne)
ZINC
(%)
LEAD
(%)
2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024
Fresnillo 59,987 61,639 67,851 68,192 84,466 89,932 99,740 773 622 627 572 549 504 351 2.3 2.6 2.2 1.9 1.8 1.7 1.8 51.8 51.2 50.3 50.6 51.3 50.5 50.8 – – – – – – –
Ciénega 12,472 16,897 17,470 12,339 10,264 7,219 6,646 2,042 1,177 1,336 2,056 1,982 3,548 4,208 13.1 7.1 7.6 10.2 9.4 16.1 21.5 47.2 53.2 53.0 51.6 52.5 49.2 47.7 – – – – – – –
Herradura – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
Saucito 60,879 62,171 86,451 76,696 56,531 65,273 66,712 704 692 501 397 501 532 533 2.8 3.1 2.4 1.6 1.6 1.9 1.6 48.5 47.2 49.5 48.9 50.3 50.5 51.1 – – – – – – –
Soledad-Dipolos – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
Noche Buena – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
San Julián – DOB 43,808 45,979 39,621 38,226 34,567 29,350 24,037 2,590 2,188 2,959 3,765 3,443 3,227 2,441 0.8 0.6 1.0 1.2 1.2 1.3 1.1 50.3 49.4 51.7 52.3 50.6 49.1 49.7 – – – – – – –
Juanicipio (Total) – – 576 4,117 16,438 40,790 59,332 – – 1,835 1,528 1,159 1,057 1,082 – – 3.7 3.6 2.4 1.8 1.6 – – 45.9 44.9 49.1 49.8 50.4 – – – – – – –
LEAD CONCENTRATE
(tonnes)
SILVER
(grammes/tonne)
GOLD
(grammes/tonne)
ZINC
(%)
LEAD
(%)
2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024
Fresnillo 53,930 58,679 60,157 52,035 60,094 62,548 74,905 7,859 6,241 6,042 6,415 6,272 5,627 3,785 21.8 25.0 17.3 17.6 15.4 15.9 19.0 – – – – – – – 36.4 36.6 35.4 36.1 36.2 34.2 36.2
Ciénega 12,951 13,032 14,450 9,725 8,375 6,575 6,186 10,689 10,797 9,292 12,465 12,519 13,125 15,717 85.4 78.2 72.0 80.0 69.0 73.0 81.8 – – – – – – – 37.1 44.8 42.3 40.6 42.0 43.8 47.2
Herradura – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
Saucito 63,756 56,844 71,982 64,825 47,130 52,490 60,075 8,978 8,632 6,110 5,499 7,304 6,510 6,903 39.3 40.2 33.8 40.5 46.6 40.8 41.0 – – – – – – – 35.5 36.5 39.7 38.0 37.8 37.2 37.8
Soledad-Dipolos – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
Noche Buena – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
San Julián – DOB 13,434 16,200 14,363 16,644 14,657 15,564 8,441 12,847 10,478 11,924 14,801 12,281 9,483 5,554 4.5 2.8 4.0 4.8 4.2 4.5 3.3 – – – – – – – 45.4 47.2 49.5 51.3 48.5 44.0 43.9
Juanicipio (Total) – – 894 4,457 14,440 31,157 43,057 – – 20,505 20,838 17,934 15,127 11,301 – – 34.2 42.4 44.0 33.6 23.7 – – – – – – – – – 21.5 26.9 34.1 41.3 41.3
DORÉ AND OTHER PRODUCTS
(tonnes)
SILVER
(grammes/tonne)
GOLD
(grammes/tonne)
2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024
Ciénega precipitates 70.5 56.5 58.9 54.7 46.8 49.0 50.6 321,707 348,315 366,889 417,407 454,399 467,989 497,015 11,504 15,918 13,940 11,249 10,489 10,647 11,400
Ciénega Gravimetric Concentrator – – – – – – – – – – – – – –
– – –
– – – –
Saucito Pyrites precipitates 87.3 83.3 60.0 39.0 37.3 26.7 29.2 348,123 437,279 476,801 451,681 441,459 551,136 570,187 1,267 1,510 1,788 1,828 1,634 1,428 1,612
Herradura doré 79.1 79.7 66.6 53.7 46.0 38.9 32.6 604,868 606,458 583,752 529,334 532,056 487,379 487,184 196,925 190,981 192,426 248,538 241,449 280,498 288,334
Herradura slag 773.4 1,284.3 1,323.7 608.9 – 34.8 – 1,174 1,041 1,634 1,550 – 480 – 435 334 494 662 – 3,833 –
Soledad-Dipolos doré – – – – – – – – – – – – – – – – – – – – –
Soledad-Dipolos slag – – – – – – –
– – –
– – – – – – – – – – –
Fresnillo Concentrates from Tailings Dam – – – – – – – – – – – – – – – – – – – – –
Noche Buena doré 7.7 7.8 0.4 – – 0.7 – 24,479.9 98,118.4 269,785.8 – – 254,727.9 – 509,555 406,858 475,146 – – 181,396 –
Noche Buena slag 292.5 248.7 11.6 – – 158.7 – 206.3 0.0 1,068.5 – – 962.6 – 324 206 1,025 – – 7,584 –
San Julián – Veins precipitates 202.1 155.6 142.8 151.1 172.2 215.7 346.8 836,331 862,812 877,909 869,458 837,831 801,541 757,151
12,193 12,432 13,461
10,670 7,839 5,913 4,451
Fresnillo precipitates – – – 0.2 – 21.2 76.7 – – – 454,780 – 566,560 569,270 – – – 1,473 – 1,074 664
Juanicipio precipitates – – – 0.4 15.5 8.4 – – – – 625,852 623,760 642,547 – – – – 972 1,131 712 –
METAL PRODUCED
1
SILVER
(ounces)
GOLD
(ounces)
ZINC
(tonne)
LEAD
(tonne)
2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024
Fresnillo 15,117,156 13,007,227 13,054,481 11,986,025 13,609,019 12,771,803 10,241,905 42,290 52,259 38,388 33,743 34,432 36,909 51,473 31,094 31,530 34,116 34,530 43,342 45,386 50,702 19,619 21,472 21,319 18,796 21,756 21,373 27,088
Ciénega 5,998,987 5,796,190 5,762,384 5,446,619 4,709,216 4,334,581 4,833,902 66,869 65,583 64,101 48,819 37,466 35,934 39,422 5,892 8,986 9,263 6,373 5,387 3,550 3,168 4,799 5,839 6,112 3,947 3,518 2,881 2,922
Herradura 1,523,453 1,563,060 1,305,572 925,825 775,948 610,764 524,461 474,168 482,722 425,288 421,535 349,715 355,485 360,598 – – – – – – – – – – – – – –
Saucito 19,780,721 17,159,627 15,532,298 12,438,843 11,977,292 12,101,782 14,474,389 86,092 79,539 84,878 88,440 73,497 72,763 82,718 29,506 29,365 42,774 37,469 28,415 32,991 34,097 22,662 20,764 28,592 24,615 17,816 19,535 22,729
Saucito Pyrites 977,414 1,171,298 920,212 567,030 529,355 473,912 535,599 3,556 4,045 3,452 2,294 1,959 1,228 1,514 – – – – – – – – – – – – – –
Soledad-Dipolos – – – – – – – – – – – – – – – – – – – – – – – – – – – –
Noche Buena 51,616 57,754 39,340 31,574 19,830 10,316 9,206 167,208 127,166 87,998 96,835 79,668 42,537 20,941 – – – – – – – – – – – – – –
San Julián – Veins 5,433,526 4,317,225 4,030,008 4,224,406 4,638,089 5,558,565 8,442,804 79,218 62,207 61,790 51,840 43,397 41,009 49,633 – – – – – – – – – – – – – –
San Julián – DOB 9,196,272 8,691,636 9,276,125 12,547,642 9,613,719 7,790,507 3,393,468 3,125 2,393 3,134 4,006 3,330 3,478 1,779 22,027 22,697 20,492 19,990 17,487 14,410 11,942 6,101 7,648 7,112 8,543 7,105 6,843 3,704
Juanicipio
(Attributable) – – 349,220 1,789,979 5,179,950 9,414,788 10,400,181 – – 590 3,683 12,461 20,570 21,856 – – 148 1,036 4,521 11,368 16,737 – – 108 671 2,755 7,202 9,957
Fresnillo DLP – – – 2,617 – 386,609 1,404,055 – – – 8 – 733 1,639 – – – – – – – – – – – – – –
Fresnillo Total 58,079,146 51,764,018 50,269,639 49,960,562 51,052,420 53,453,626 54,259,970 922,527 875,913 769,618 751,203 635,926 610,646 631,573 88,520 92,578 106,793 99,397 99,153 107,705 116,646 53,181 55,722 63,242 56,573 52,950 57,833 66,400
1 Including production from Fresnillo’s tailings dam.
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Strategic Report Governance Financial Statements Additional Information
ORE PROCESSED
(tonnes)
SILVER
(grammes/tonne)
GOLD
(grammes/tonne)
ZINC
(%)
LEAD
(%)
2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024
Fresnillo 2,443,440 2,461,785 2,336,943 2,216,467 2,462,409 2,618,509 2,333,973 213.8 184.5 193.9 186.2 188.7 170.2 152.1 0.70 0.89 0.73 0.68 0.61 0.62 0.92 1.75 1.80 2.07 2.20 2.38 2.32 2.93 0.90 1.01 1.08 1.01 1.05 0.96 1.35
Ciénega 1,323,908 1,329,134 1,318,263 1,282,367 1,114,232 1,064,543 1,058,778 164.4 158.9 158.6 153.4 152.4 147.5 165.5 1.65 1.66 1.63 1.27 1.14 1.14 1.27 0.83 1.13 1.18 0.90 0.86 0.63 0.55 0.60 0.67 0.70 0.51 0.49 0.44 0.43
Herradura 22,156,792 22,926,542 19,797,063 20,311,876 22,195,187 20,223,914 22,742,296 2.7 2.9 2.6 2.1 1.6 1.6 1.2 0.76 0.80 0.77 0.76 0.69 0.76 0.71 – – – – – – – – – – – – – –
Saucito 2,792,057 2,752,638 2,767,432 2,434,449 2,072,812 2,163,982 2,363,960 257.6 227.6 205.8 182.9 201.3 195.2 214.0 1.25 1.19 1.24 1.46 1.40 1.34 1.40 1.61 1.57 2.21 2.08 1.78 1.96 1.85 0.94 0.90 1.22 1.18 1.01 1.06
1.12
Saucito Pyrites 131,780 167,513 172,233 159,635 135,044 109,433
91,313
393.4 299.4 220.1 150.5 164.0 199.6 264.8 2.77 2.32 1.92 1.50 1.44 1.43 1.87 – – – – – – – – – – – – – –
Soledad-Dipolos – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
Noche Buena 18,195,744 12,166,900 6,682,617 8,996,842 7,428,189 2,510,639 – 0.1 0.2 0.7 0.2 0.2 0.2 – 0.52 0.51 0.52 0.59 0.53 0.47 – – – – – – – – – – – – – – –
San Julián – Veins 1,270,781 1,265,030 1,254,970 1,202,826 1,175,764 1,142,309 1,236,682 144.1 115.4 108.6 119.2 134.6 165.6 231.6 2.01 1.61 1.61 1.42 1.21 1.17 1.31 – – – – – –
–
– – – – – – –
San Julián – DOB 2,221,433 2,226,956 2,229,612 2,070,563 2,092,971 2,073,847 1,554,108 154.4 139.5 150.3 220.6 167.9 136.2 80.7 0.09 0.08 0.09 0.10 0.08 0.08 0.06 1.35 1.36 1.19 1.27 1.09 0.94 1.04 0.43 0.44 0.41 0.51 0.43 0.43 0.33
Juanicipio (Total) – – 71,859 251,906 646,148 1,268,757 1,328,178 – – 327.8 470.2 519.8 472.4 468.2 – – 0.73 1.13 1.39 1.27 1.25 – – 0.60 1.20 1.72 2.06 2.78 – – 0.33 0.60 0.90 1.15 1.50
ZINC CONCENTRATE
(tonnes)
SILVER
(grammes/tonne)
GOLD
(grammes/tonne)
ZINC
(%)
LEAD
(%)
2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024
Fresnillo 59,987 61,639 67,851 68,192 84,466 89,932 99,740 773 622 627 572 549 504 351 2.3 2.6 2.2 1.9 1.8 1.7 1.8 51.8 51.2 50.3 50.6 51.3 50.5 50.8 – – – – – – –
Ciénega 12,472 16,897 17,470 12,339 10,264 7,219 6,646 2,042 1,177 1,336 2,056 1,982 3,548 4,208 13.1 7.1 7.6 10.2 9.4 16.1 21.5 47.2 53.2 53.0 51.6 52.5 49.2 47.7 – – – – – – –
Herradura – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
Saucito 60,879 62,171 86,451 76,696 56,531 65,273 66,712 704 692 501 397 501 532 533 2.8 3.1 2.4 1.6 1.6 1.9 1.6 48.5 47.2 49.5 48.9 50.3 50.5 51.1 – – – – – – –
Soledad-Dipolos – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
Noche Buena – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
San Julián – DOB 43,808 45,979 39,621 38,226 34,567 29,350 24,037 2,590 2,188 2,959 3,765 3,443 3,227 2,441 0.8 0.6 1.0 1.2 1.2 1.3 1.1 50.3 49.4 51.7 52.3 50.6 49.1 49.7 – – – – – – –
Juanicipio (Total) – – 576 4,117 16,438 40,790 59,332 – – 1,835 1,528 1,159 1,057 1,082 – – 3.7 3.6 2.4 1.8 1.6 – – 45.9 44.9 49.1 49.8 50.4 – – – – – – –
LEAD CONCENTRATE
(tonnes)
SILVER
(grammes/tonne)
GOLD
(grammes/tonne)
ZINC
(%)
LEAD
(%)
2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024
Fresnillo 53,930 58,679 60,157 52,035 60,094 62,548 74,905 7,859 6,241 6,042 6,415 6,272 5,627 3,785 21.8 25.0 17.3 17.6 15.4 15.9 19.0 – – – – – – – 36.4 36.6 35.4 36.1 36.2 34.2 36.2
Ciénega 12,951 13,032 14,450 9,725 8,375 6,575 6,186 10,689 10,797 9,292 12,465 12,519 13,125 15,717 85.4 78.2 72.0 80.0 69.0 73.0 81.8 – – – – – – – 37.1 44.8 42.3 40.6 42.0 43.8 47.2
Herradura – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
Saucito 63,756 56,844 71,982 64,825 47,130 52,490 60,075 8,978 8,632 6,110 5,499 7,304 6,510 6,903 39.3 40.2 33.8 40.5 46.6 40.8 41.0 – – – – – – – 35.5 36.5 39.7 38.0 37.8 37.2 37.8
Soledad-Dipolos – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
Noche Buena – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
San Julián – DOB 13,434 16,200 14,363 16,644 14,657 15,564 8,441 12,847 10,478 11,924 14,801 12,281 9,483 5,554 4.5 2.8 4.0 4.8 4.2 4.5 3.3 – – – – – – – 45.4 47.2 49.5 51.3 48.5 44.0 43.9
Juanicipio (Total) – – 894 4,457 14,440 31,157 43,057 – – 20,505 20,838 17,934 15,127 11,301 – – 34.2 42.4 44.0 33.6 23.7 – – – – – – – – – 21.5 26.9 34.1 41.3 41.3
DORÉ AND OTHER PRODUCTS
(tonnes)
SILVER
(grammes/tonne)
GOLD
(grammes/tonne)
2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024
Ciénega precipitates 70.5 56.5 58.9 54.7 46.8 49.0 50.6 321,707 348,315 366,889 417,407 454,399 467,989 497,015 11,504 15,918 13,940 11,249 10,489 10,647 11,400
Ciénega Gravimetric Concentrator – – – – – – – – – – – – – –
– – –
– – – –
Saucito Pyrites precipitates 87.3 83.3 60.0 39.0 37.3 26.7 29.2 348,123 437,279 476,801 451,681 441,459 551,136 570,187 1,267 1,510 1,788 1,828 1,634 1,428 1,612
Herradura doré 79.1 79.7 66.6 53.7 46.0 38.9 32.6 604,868 606,458 583,752 529,334 532,056 487,379 487,184 196,925 190,981 192,426 248,538 241,449 280,498 288,334
Herradura slag 773.4 1,284.3 1,323.7 608.9 – 34.8 – 1,174 1,041 1,634 1,550 – 480 – 435 334 494 662 – 3,833 –
Soledad-Dipolos doré – – – – – – – – – – – – – – – – – – – – –
Soledad-Dipolos slag – – – – – – –
– – –
– – – – – – – – – – –
Fresnillo Concentrates from Tailings Dam – – – – – – – – – – – – – – – – – – – – –
Noche Buena doré 7.7 7.8 0.4 – – 0.7 – 24,479.9 98,118.4 269,785.8 – – 254,727.9 – 509,555 406,858 475,146 – – 181,396 –
Noche Buena slag 292.5 248.7 11.6 – – 158.7 – 206.3 0.0 1,068.5 – – 962.6 – 324 206 1,025 – – 7,584 –
San Julián – Veins precipitates 202.1 155.6 142.8 151.1 172.2 215.7 346.8 836,331 862,812 877,909 869,458 837,831 801,541 757,151
12,193 12,432 13,461
10,670 7,839 5,913 4,451
Fresnillo precipitates – – – 0.2 – 21.2 76.7 – – – 454,780 – 566,560 569,270 – – – 1,473 – 1,074 664
Juanicipio precipitates – – – 0.4 15.5 8.4 – – – – 625,852 623,760 642,547 – – – – 972 1,131 712 –
METAL PRODUCED
1
SILVER
(ounces)
GOLD
(ounces)
ZINC
(tonne)
LEAD
(tonne)
2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024
Fresnillo 15,117,156 13,007,227 13,054,481 11,986,025 13,609,019 12,771,803 10,241,905 42,290 52,259 38,388 33,743 34,432 36,909 51,473 31,094 31,530 34,116 34,530 43,342 45,386 50,702 19,619 21,472 21,319 18,796 21,756 21,373 27,088
Ciénega 5,998,987 5,796,190 5,762,384 5,446,619 4,709,216 4,334,581 4,833,902 66,869 65,583 64,101 48,819 37,466 35,934 39,422 5,892 8,986 9,263 6,373 5,387 3,550 3,168 4,799 5,839 6,112 3,947 3,518 2,881 2,922
Herradura 1,523,453 1,563,060 1,305,572 925,825 775,948 610,764 524,461 474,168 482,722 425,288 421,535 349,715 355,485 360,598 – – – – – – – – – – – – – –
Saucito 19,780,721 17,159,627 15,532,298 12,438,843 11,977,292 12,101,782 14,474,389 86,092 79,539 84,878 88,440 73,497 72,763 82,718 29,506 29,365 42,774 37,469 28,415 32,991 34,097 22,662 20,764 28,592 24,615 17,816 19,535 22,729
Saucito Pyrites 977,414 1,171,298 920,212 567,030 529,355 473,912 535,599 3,556 4,045 3,452 2,294 1,959 1,228 1,514 – – – – – – – – – – – – – –
Soledad-Dipolos – – – – – – – – – – – – – – – – – – – – – – – – – – – –
Noche Buena 51,616 57,754 39,340 31,574 19,830 10,316 9,206 167,208 127,166 87,998 96,835 79,668 42,537 20,941 – – – – – – – – – – – – – –
San Julián – Veins 5,433,526 4,317,225 4,030,008 4,224,406 4,638,089 5,558,565 8,442,804 79,218 62,207 61,790 51,840 43,397 41,009 49,633 – – – – – – – – – – – – – –
San Julián – DOB 9,196,272 8,691,636 9,276,125 12,547,642 9,613,719 7,790,507 3,393,468 3,125 2,393 3,134 4,006 3,330 3,478 1,779 22,027 22,697 20,492 19,990 17,487 14,410 11,942 6,101 7,648 7,112 8,543 7,105 6,843 3,704
Juanicipio
(Attributable) – – 349,220 1,789,979 5,179,950 9,414,788 10,400,181 – – 590 3,683 12,461 20,570 21,856 – – 148 1,036 4,521 11,368 16,737 – – 108 671 2,755 7,202 9,957
Fresnillo DLP – – – 2,617 – 386,609 1,404,055 – – – 8 – 733 1,639 – – – – – – – – – – – – – –
Fresnillo Total 58,079,146 51,764,018 50,269,639 49,960,562 51,052,420 53,453,626 54,259,970 922,527 875,913 769,618 751,203 635,926 610,646 631,573 88,520 92,578 106,793 99,397 99,153 107,705 116,646 53,181 55,722 63,242 56,573 52,950 57,833 66,400
1 Including production from Fresnillo’s tailings dam.
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SHAREHOLDER INFORMATION
Financial calendar
Preliminary statement 4 March 2025
First quarter production report 23 April 2025
Annual General Meeting 20 May 2025
Second quarter production report 23 July 2025
Interim statement 5 August 2025
Third quarter production report 22 October 2025
Dividend payment schedule
2024 Final Dividend Record Date 22 April 2025
2024 Final Dividend Payment Date 30 May 2025
2025 Interim Dividend Record Date 8 August 2025
2025 Interim Dividend Payment Date 16 September 2025
Registrar
Equiniti Ltd
Aspect House, Spencer Road, Lancing
West Sussex BN99 6DA
United Kingdom
Registered office
Corporate headquarters
Calzada Legaria No. 549
Torre 2, Piso 11
Delegación Miguel Hidalgo
11250 Mexico, D.F.
Mexico
Sponsor and corporate broker
JPMorgan Cazenove Limited
25 Bank Street
London E14 5JP
United Kingdom
Joint corporate broker
Merrill Lynch International
2 King Edward Street
London EC1A 1HQ
United Kingdom
Auditor
Ernst & Young LLP
1 More London Place
London SE1 2AF
United Kingdom
Travers Smith are Fresnillo plc UK Legal Advisers.
Share fraud warning
Share fraud includes scams where investors are called out of
the blue and offered shares that turn out to be worthless or
non-existent, or an inflated price for shares they own. These
calls come from fraudsters operating in ‘boiler rooms’, mostly
based abroad. While high profits are promised, those who
buy or sell shares in this way usually lose their money. Most
victims are experienced investors, losing on average £20,000.
Protect yourself
If you are offered unsolicited investment advice, discounted
shares, inflated prices for shares you own, or free company
or research reports, take these steps before handing over
any money:
1. Get the name of the person and organisation.
2. Check the Financial Services Register at www.fca.org.uk/
register to ensure they are authorised.
3. Use the details on the Financial Services Register to
contact the firm.
4. Call the FCA Consumer Helpline on 0800 111 6768 if there
are no contact details on the Register or you are told they
are out of date.
5. Search the list of unauthorised firms and individuals
to avoid doing business with.
6. REMEMBER: if it sounds too good to be true,
it probably is.
If you use an unauthorised firm to buy or sell shares, you
will not have access to the Financial Ombudsman Service
or Financial Services Compensation Scheme (FSCS) if things
go wrong.
Report a scam
If you are approached about a share scam you should tell the
FCA using the form at www.fca.org.uk/scams (where you can
also review the latest scams) or call the Consumer Helpline on
0800 111 6768.
If you have already paid money to share fraudsters then
contact Action Fraud on 0300 123 2040.
For further information, please visit our website:
www.fresnilloplc.com or contact:
Fresnillo plc
Tel: +44(0)20 7399 2470
Gabriela Mayor, Head of Investor Relations
291
www.fresnilloplc.com
Strategic Report Governance Financial Statements Additional Information
292
Fresnillo plc Annual Report and Accounts 2024
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CBP030350
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Fresnillo plc | Annual Report and Accounts 2024
21 Upper Brook Street
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