Well placed to address cyclical uncertainties
Preliminary Results
12 months ended 31 December 2015
Mario Arreguín, CFO
Roberto Díaz, COO
David Giles, VP Exploration
1 March 2016
Disclaimer
This document includes statements that are, or may be deemed to be, “forward-looking statements”. These forwardlooking statements can be identified by the use of forward-looking terminology, including the terms “believes”,
“estimates”, “plans”, “projects”, “anticipates”, “expects”, “intends”, “may”, “will”, or “should” or, in each case, their
negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future
events or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a
number of places throughout this document and include, but are not limited to, statements regarding the Fresnillo
Group’s intentions, beliefs or current expectations concerning, among other things, the Fresnillo Group’s results of
operations, financial position, liquidity, prospects, growth, strategies and the silver and gold industries.
By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and
circumstances. Forward-looking statements are not guarantees of future performance and the actual results of the
Fresnillo Group’s operations, financial position and liquidity, and the development of the markets and the industry in
which the Fresnillo Group operates, may differ materially from those described in, or suggested by, the forward-looking
statements contained in this document. In addition, even if the results of operations, financial position and liquidity, and
the development of the markets and the industry in which the Fresnillo Group operates are consistent with the forwardlooking statements contained in this document, those results or developments may not be indicative of results or
developments in subsequent periods. A number of factors could cause results and developments to differ materially
from those expressed or implied by the forward-looking statements including, without limitation, general economic and
business conditions, industry trends, competition, commodity prices, changes in regulation, currency fluctuations
(including the US dollar and Mexican Peso exchange rates), the Fresnillo Group’s ability to recover its reserves or
develop new reserves, including its ability to convert its resources into reserves and its mineral potential into resources
or reserves, changes in its business strategy, political and economic uncertainty.
Forward-looking statements may, and often do, differ materially from actual results. Any forward-looking statements in
this document speak only as of the date of this document, reflect the Fresnillo Group’s current view with respect to
future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to
the Fresnillo Group’s operations, results of operations, growth strategy and liquidity. Investors should specifically
consider the factors identified in this document which could cause actual results to differ before making an investment
decision. Subject to the requirements of the Prospectus Rules, the Disclosure and Transparency Rules and the Listing
Rules or applicable law, the Fresnillo Group explicitly disclaims any obligation or undertaking publicly to release the
result of any revisions to any forward-looking statements in this document that may occur due to any change in the
Company’s expectations or to reflect events or circumstances after the date of this document.
1
Agenda
§
Overview
> Mario Arreguín, CFO
§
Operations Review
& Development Projects
> Roberto Díaz, COO
•
Financial Review
> Mario Arreguín
§
Exploration
> David Giles, VP of Exploration
§
Strategy & Outlook
> Roberto Díaz & Mario Arreguín
§
Q&A
2
Well placed to address cyclical uncertainties
Overview
Introduction
Ø Strong headwinds continue to challenge industry:
Ø
Cyclically low precious metals prices
Ø
Increased technical difficulty in accessing metal resources
Ø However, Fresnillo continues to demonstrate its capacity to meet these challenges:
Ø
Strong balance sheet
Ø
High quality assets
Ø
Low-cost and flexible operations
Ø
Disciplined approach to exploration and development
Ø
Commitment to sustainable business practices
Ø Confident in our ability to build on these solid foundations to create value throughout price cycles
Ø
Balancing growth, returns and financial strength
Ø
Continued focus on further cost reductions and productivity improvements
Driving long-term value from solid foundations
3
Overview
Ø Record year of production
Ø Silver at top end of guidance
Ø Surpassed long-term 2018 gold target
Ø Substantial operational progress
Ø Saucito II ramped up ahead of schedule
Ø Reached steady state at Herradura
Ø Improvements in grade and throughput in 4Q15 as a result of measures put in place at the Fresnillo mine
Ø Maintained efficiency at Ciénega
Ø However, regret to report one fatality in 2015
Ø Maintained strong financial position
Ø Healthy year end cash balance; low leverage; no impairments
Ø Higher volumes offset weaker precious metals prices
Ø Solid profit margins and substantial cashflow from operations
Ø Dividend policy unchanged
Ø
Disciplined delivery of growth
Ø Commissioning of San Julián Phase 1 in Q2 2016
Ø Resource base remains sound, despite lower silver price and open pit gold price assumptions
Ø In light of weak precious metals backdrop capex and exploration budgets reduced
Ø Deferring certain investments whilst favouring those which accelerate cashflow as part of our contingency plan
4
Well placed to address cyclical uncertainties
Operations Review
Fresnillo Mine
2015 Summary
Ø Lower silver production
Ø Lower grades
Ø Lower volumes
Ø Improvements in silver grade and production in H2
Ø Lead and zinc production increased 17% and 25% respectively
Ø Expected higher ore grades as we go deeper into the mine
2015 Performance
Looking Forward
2015
2014
%
Ø Increase average development rates to over 4,500 m/month
kt
2,410
2,625
(8.2)
Ø Expect double-digit percentage increase in ore milled in 2016
Silver
m oz
15.6
20.1
(22.3)
Gold
k oz
34.1
35.7
(4.4)
Ore processed
Production
Grade Expectations
450
396
2016E average: 240g/t
LT average: 260 g/t
Ore grade
Silver
g/t
220
258
(14.9)
Gold
g/t
0.57
0.53
7.5
Cash cost
$/ silver oz
5.60
5.29
5.9
AISC
$/ silver oz
11.48
9.84
16.7
Silver (g/t)
400
350
300
250
328
285
258
220
200
5
Turnaround at the Fresnillo Mine
Main issues
Veins narrowing faster
than expected
Natural and expected
lower ore grade
typical of a
mature mine
Delays in
infrastructure
installation
Deeper operations &
increased distances
(longer hauling &
hoisting)
Adverse change in
rock quality
Secondary effects
Required increase in
rate of development
proportional to
decrease in vein width
Higher dilution than
expected
Inconsistency in ore
body led to lower
certainty in geological
model, which caused
difficulties in mine
planning
Measures put in place
Infill drilling with a
closer grid
Improved planning to
ensure necessary
infrastructure in place
on time
Customise planning
process to new mine
conditions
Expected results/
Short-term targets
Increase in stoping
area from 12,000 m2 to
20,000m2
Expect development
rates to reach over
4,500 m / month on
average in 2016
Expect double digit
percentage increase in
ore milled in 2016
Volume processed
stabilised by 2017 and
expansion to 9,000 tpd
by 2018
Reach 22 moz/year by
2019
Fresnillo will continue to be a key asset with 65 million tonnes in resources (747 moz of silver), equivalent to a potential 24 years of mine life
6
Saucito Mine
2015 Summary
Ø Ramp-up of Saucito II by 2Q15
Ø Significantly ahead of plan
Ø On budget
Ø Silver production increased
Ø Start-up of Saucito II & ramp-up
Ø Milling efficiencies, higher grade areas, improved dilution
Ø Increased Saucito I milling capacity by 20% to 3,600TPD
2015 Performance
Looking Forward
2015
2014
%
kt
2,339
1,535
52.4
Silver
m oz
22.0
15.4
42.8
Gold
k oz
84.9
57.2
48.3
Silver
g/t
327
339
(3.3)
Gold
g/t
1.42
1.40
1.8
Cash cost
$/ silver oz
1.15
2.48
(53.4)
AISC
$/ silver oz
7.11
5.43
31.0
Ore processed
Ø Increase capacity of Saucito II using vibrating screens in 1H16
Ø Total nominal capacity up to 7,500TPD
Production
330
350
Silver (g/t)
Ore grade
Grade Expectations
300
250
250
339
327
265
2016E average: 295g/t
LT average: 300 g/t
200
7
Ciénega Mine
2015 Summary
Ø Gold production decreased on expected lower grade
Ø Silver production increased
Ø Richer veins at San Ramón satellite
Ø High grade development ore from Taspana vein
Looking Forward
Ø Continue exploration in areas of influence to extend district’s mine life
(Gms/T)
2015 Performance
kt
9.0
2015
2014
%
1,329
1,341
(0.9)
Production
Gold
k oz
85.7
108.2
(20.8)
Silver
m oz
4.8
4.1
18.5
Gold (g/t)
Ore processed
Grade Expectations
Gold
g/t
2.07
2.59
(20.0)
Silver
g/t
129
108
18.9
Cash cost
$/ gold oz
245
288
(14.8)
AISC
$/ gold oz
710
786
(9.7)
Silver (g/t)
Ore grade
7.0
5.0
3.9
3.6
2.9
3.0
2.6
2016E average: 2.0g/t
LT average: 2.0g/t
2.1
1.0
180
160
140
120
100
80
60
40
20
105
53
122
109
129
2016E average: 120g/t
LT average: 120 g/t
8
Herradura Mine
2015 Summary
Ø Second Merrill Crowe plant commissioned 4Q15 as planned
Ø Reached steady state operations (4Q15)
Ø Gold production increased
Ø Mine & DLP operational for full period
Ø Higher overall speed of recovery
Ø Installation of second Merrill Crowe plant
Ø Increase in ore grade
Ø Stabilised gold inventory levels at 160koz
2015 Performance
2015
2014
%
Ore processed
mt
22.9
22.3
2.6
Total volume
hauled
mt
117.0
129.8
(9.8)
k oz
398.9
265.6
50.2
Gold
g/t
0.73
0.72
1.2
Cash cost
$/ gold oz
473
465
1.5
AISC
$/ gold oz
888
862
3.0
Looking Forward
Ø Continue to optimise productivity now steady state reached
(Gms/T)
Grade Expectations
Gold
Ore grade
Gold (g/t)
Production
1.2
1.1
1.0
0.9
0.8
0.7
0.6
0.5
2016E average: 0.65g/t
LT average: 0.72 g/t
0.65
0.72 0.73
0.57 0.61
9
Noche Buena Mine
2015 Summary
Ø Gold production increased
Ø Higher rate of recovery (full year of leaching pads 4 & 5)
Ø Partly offset by lower ore grade (ore deposited from higher
banks to control haulage costs)
Ø Further efforts to improve efficiency & control costs
Ø Optimisation of tyre consumption
Ø Waste dumps relocated to reduce haulage distances
2015 Performance
Looking Forward
2015
2014
%
Ø Continue efforts to increase efficiency and control costs
Ø Obtain International Cyanide Code certification
Ore processed
mt
17.4
15.6
11.5
Total volume
hauled
mt
82.4
92.6
(11.0)
(Gms/T)
Grade Expectations
Production
k oz
158.2
129.2
22.4
Ore grade
Gold
g/t
0.50
0.51
(3.0)
Cash cost
$/ gold oz
973
946
2.9
AISC
$/ gold oz
1,015
1,051
(3.4)
0.7
Gold (g/t)
Gold
0.6
0.51
0.54
0.51 0.50
0.5
2016E average: 0.47g/t
LT average: 0.52 g/t
0.4
0.3
2012
2013
2014
2015 2016 E 2017 E 2018 E 2019 E 2020 E 2021 E
10
Well placed to address cyclical uncertainties
Development Projects
San Julián
Key metric estimates
Avg. annual silver production
10.3 moz
Avg. annual gold production
43.9 koz
Pre-operative capex
$515 m
Cash cost (average LoM)
$7.77 /oz
All-in sustaining costs (average LoM)
$9.33 /oz
Phase 1 capacity (DLP to treat ore from
veins)
3,000TPD
Phase 2 capacity (flotation plant to process
ore from disseminated ore body)
6,000TPD
Life of mine
13 years
Ø Mining works at vein field concluded & further progress made
on plant infrastructure
Ø However, delays in permitting, weather-related issues,
security concerns and high rotation of contractor personnel due
to remote location together resulted in execution delays
Phase 1 expected to be commissioned 2Q16;
phase 2 on track for 4Q16
11
San Julián:
Phase 1 - 2Q16 , Phase 2 – 4Q16
12
Well placed to address cyclical uncertainties
Financial Review
2015 Financial Highlights
Ø Adjusted revenues up 2.5% on increased sales volumes which more than offset lower silver and gold realised prices (-16.1% and
-10.4%, respectively)
Ø Adjusted production cost decreased 6.4%
Ø Mainly due to efficiencies achieved at Saucito, Noche Buena, Ciénega and the dynamic leaching plant (DLP) at Herradura resulting from economies of
scale, favourable FX effects (19.2% peso devaluation vs. dollar), and lower energy costs due to lower volumes processed at Fresnillo
Ø Partly offset by increased absolute production costs associated with higher ore throughput at Saucito, Noche Buena and Herradura; additional adjusted
production costs resulting from a full year of operations at the DLP; higher contractor costs (including operating materials, depreciation and labour)
Ø Increase in cost of sales driven by variation of change in work in progress (-US$111.0m) mainly explained by the small reduction in
ore inventories on the leaching pads at Herradura compared to the large increase in 2014
Ø Higher depreciation (+11.8%) following start-up of Saucito II and increased depletion factors mainly at Herradura and Noche Buena
Ø MXP/USD exchange rate hedging generated a loss of US$28.6m due to the peso devaluation. Additionally, an FX loss of US$36.2m
was recorded
Ø Lower exploration expenses (-16.9%) given reduction in exploration investment in light of weak precious metals prices
Ø Finance income of US$59.7m recognising market value of gold hedging position, which more than offset finance expense of
US$39.4m due to bond interest payments
Ø Total effective tax rate including the special mining right for the year was 67.3%, above statutory rate (37.5% including special mining
right)
Ø Mainly due to deferred taxes (US$77.5m), resulting from adverse effect of peso devaluation which generated higher differences between the carrying
amount of assets denominated in US dollars and their tax bases denominated in Mexican pesos
13
Income Statement (IFRS)
CONCEP T
(Million USD)
ACCUM DECEMBER
2015
%
2014
ADJUSTED REVENUES
HEDGING (METALS)
TREATMENT AND REFINING CHARGES
REVENUES
1,583.3
3.9
(142.8)
1,444.4
ADJUSTED PRODUCTION COST
PROFIT SHARING
DEPRECIATION
HEDGING (MXP/USD EXCHANGE RATE)
CHANGE IN INVENTORIES
OTHERS
COST OF SALES
(634.5)
(12.8)
(331.2)
(28.6)
(6.3)
2.1
(1,011.3)
GROSS PROFIT
ADMINISTRATIVE EXPENSES
CORPORATE EXPENSES
EXPLORATION EXPENSES
OTHER INCOME (EXPENSE)
SELLING EXPENSES
PROFIT FROM CONTINUING OPERATIONS
GOLD HEDGING INCOME / (EXPENSE)
SILVERSTREAM AMORTIZATION EFFECTS FOR THE PERIOD
SILVERSTREAM REVALUATION
FINANCE INCOME / (EXPENSE)
FOREIGN EXCHANGE GAIN / (LOSS)
PROFIT BEFORE INCOME TAX
INCOME TAX EXPENSE
MINING RIGHT
PROFIT FOR THE PERIOD
433.1
(34.1)
(28.7)
(140.2)
(15.9)
(13.7)
100.0
1,545.0
0.1
(131.4)
1,413.7
100.0
(43.9)
(0.9)
(22.9)
(2.0)
(0.4)
0.1
(70.0)
(678.0)
(12.6)
(296.2)
(1.1)
104.7
(9.5)
(892.6)
(48.0)
(0.9)
(21.0)
(0.1)
7.4
(0.7)
(63.1)
30.0
521.1
(2.4)
(2.0)
(9.7)
(1.1)
(0.9)
$
%
38.3
3.8
(11.4)
30.7
2.5
3,732.1
8.7
2.2
43.5
(0.2)
(35.0)
(27.5)
(111.0)
11.5
(118.7)
(6.4)
1.4
11.8
2,457.9
(106.0)
(121.8)
13.3
36.9
(88.0)
(16.9)
(34.7)
(32.9)
(168.8)
(25.5)
(13.6)
(2.5)
(2.3)
(11.9)
(1.8)
(1.0)
0.5
4.2
28.5
9.7
(0.1)
(1.5)
(12.7)
(16.9)
(37.9)
0.6
17.4
(45.1)
(18.4)
59.7
(15.3)
(34.0)
7.8
(11.8)
N/A
(41.4)
(84.8)
(16.5)
48.2
(38.7)
(15.4)
200.4
13.9
245.6
59.7
21.6
6.1
(39.4)
(36.2)
4.1
1.5
0.4
(2.7)
(2.5)
0.0
36.9
40.1
(47.2)
(24.4)
212.4
14.7
251.1
(129.0)
(14.0)
CHANGE
%
0.0
2.6
2.8
(3.3)
(1.7)
17.8
(8.9)
(1.0)
(118.3)
(15.7)
(8.4)
(1.1)
(10.7)
1.7
9.1
(11.1)
69.4
4.8
117.1
8.3
(47.7)
(40.7)
70.5
4.9
108.4
7.7
(37.9)
(35.0)
ATTRIBUTABLE TO:
EQUITY SHAREHOLDERS OF THE GROUP
MINORITY INTEREST
(1.1)
69.4
EBITDA
547.5
(0.1)
8.6
0.6
(9.8)
4.8
117.1
8.3
(47.7)
(40.7)
N/A
37.9
567.3
40.1
(19.8)
(3.5)
14
Income Statement (IFRS)
Non-recurring Effects
CONCEP T
ACCUM DECEMBER
2015
%
2014
(Million USD)
ADJUSTED REVENUES
HEDGING (METALS)
TREATMENT AND REFINING CHARGES
REVENUES
ADJUSTED PRODUCTION COST
PROFIT SHARING
DEPRECIATION
HEDGING (MXP/USD EXCHANGE RATE)
CHANGE IN INVENTORIES
OTHERS
COST OF SALES
MXP / USD hedging
loss (Note 6 to FS)
GROSS PROFIT
ADMINISTRATIVE EXPENSES
CORPORATE EXPENSES
EXPLORATION EXPENSES
OTHER INCOME (EXPENSE)
SELLING EXPENSES
PROFIT FROM CONTINUING OPERATIONS
INCOME TAX EXPENSE
MINING RIGHT
PROFIT FOR THE PERIOD
ATTRIBUTABLE TO:
EQUITY SHAREHOLDERS OF THE GROUP
MINORITY INTEREST
(634.5)
(12.8)
(331.2)
(28.6)
(6.3)
2.1
(1,011.3)
433.1
(678.0)
(12.6)
(296.2)
(1.1)
104.7
(9.5)
(892.6)
(48.0)
(0.9)
(21.0)
(0.1)
7.4
(0.7)
(63.1)
30.0
521.1
38.3
3.8
(11.4)
30.7
2.5
3,732.1
8.7
2.2
36.9
(88.0)
(16.9)
(34.7)
(32.9)
(168.8)
(25.5)
(13.6)
(2.5)
(2.3)
(11.9)
(1.8)
(1.0)
0.5
4.2
28.5
9.7
(0.1)
(1.5)
(12.7)
(16.9)
(37.9)
0.6
17.4
(45.1)
(18.4)
59.7
(15.3)
(34.0)
7.8
(11.8)
N/A
(41.4)
(84.8)
(16.5)
48.2
(38.7)
(15.4)
245.6
59.7
21.6
6.1
(39.4)
(36.2)
4.1
1.5
0.4
(2.7)
(2.5)
0.0
36.9
40.1
(47.2)
(24.4)
212.4
14.7
251.1
(129.0)
(14.0)
%
(6.4)
1.4
11.8
2,457.9
(106.0)
(121.8)
13.3
13.9
MXP/USD devaluation
effect on tax value of
assets and liabilities
(deferred tax) US$77.5
million. (Note 11 to FS)
$
43.5
(0.2)
(35.0)
(27.5)
(111.0)
11.5
(118.7)
purchase of Newmont’s
minority interest in
200.4
Penmont (Note 10 to FS)
(accounts receivable in pesos)
100.0
(43.9)
(0.9)
(22.9)
(2.0)
(0.4)
0.1
(70.0)
(2.4)
(2.0)
(9.7)
(1.1)
(0.9)
0.0
2.6
2.8
(3.3)
(1.7)
17.8
(8.9)
(1.0)
(118.3)
(15.7)
(8.4)
(1.1)
(10.7)
1.7
9.1
(11.1)
69.4
4.8
117.1
8.3
(47.7)
(40.7)
70.5
4.9
108.4
7.7
(37.9)
(35.0)
(1.1)
69.4
EBITDA
100.0
1,545.0
0.1
(131.4)
1,413.7
(34.1)
(28.7)
(140.2)
Gold hedge to protect the (15.9)
investment in the
(13.7)
GOLD HEDGING INCOME / (EXPENSE)
Silverstream effects
SILVERSTREAM AMORTIZATION EFFECTS FOR THE PERIOD
(Note 15 to FS)
SILVERSTREAM REVALUATION
FINANCE INCOME / (EXPENSE)
MXP/USD devaluation effect
FOREIGN EXCHANGE GAIN / (LOSS)
in net current assets position
PROFIT BEFORE INCOME TAX
1,583.3
3.9
(142.8)
1,444.4
CHANGE
%
547.5
(0.1)
8.6
0.6
(9.8)
4.8
117.1
8.3
(47.7)
(40.7)
N/A
37.9
567.3
40.1
(19.8)
(3.5)
15
Adjusted Production Cost Analysis
(Consolidated)
CHANGE
Adjusted Production Cost *
Change in inventories
Unproductive Costs and others
Depreciation
PTU
Hedging (mxp/usd exchange rate)
Cost of Sales
USD MILLION
9.72
5.19
4.77
( 10.19 )
17.88
$
-43.5*
111.0
-11.5
35.0
0.2
27.5
+118.7
%
-6.4
-106.0
-121.8
11.8
1.4
N/A
+13.3%
( 12.60 )
( 48.01 )
47.58
(53.23)
15.0
0.0
(15.0)
(30.0)
(45.0)
(60.0)
* Net of unproductive costs
( 4.63 )
2014
678.0
-104.7
9.5
296.2
12.6
1.1 (Loss)
892.6
Lower energy cost
5
6
7
8
9
10
Decr. in Adj.Prod.Cost
Decreased Prod. at Fres
4
Efficiencies (Sauc,NB,Cien)
Others
3
Increased Prod. at Herr
2
Increased Prod. at PLD
Increased Prod. at NB
1
Higher cost of contractors
Increased Prod. at Saucito
(43.50) *
MXP/USD Devaluation effect
105.0
90.0
75.0
60.0
45.0
30.0
2015
634.5
6.3
-2.1
331.2
12.8
28.6 (Loss)
1,011.3
11
16
Adjusted Production Cost Analysis
(Consolidated)
2015
Adjusted Production Cost *
634.5
Volume Processed
Change in inventories
6.3
Volume Processed
(Mton) Unproductive Costs and others
-2.1
(Mton)
2015 2014 Chg
Depreciation
2015 2014 Chg 331.2
12.8
17.40 15.61 PTU
+11.5%
20.10 20.09 +0.1%28.6 (Loss)
USD MILLION
Hedging (mxp/usd exchange rate)
Volume Processed
Cost of Sales
1,011.3
105.0
(Mton)
2015 90.0
2014 Chg
2.34
1.53 +52.4%
* Net of unproductive costs
9.72
5.19
( 4.63 )
Volume Processed
(Mton)
(53.23)
2014 Chg
2.63 -8.2%
Lower energy cost
5
6
7
8
9
10
Decr. in Adj.Prod.Cost
Decreased Prod. at Fres
4
MXP/USD Devaluation effect
Others
(43.50) *
Increased Prod. at Herr
3
2015
2.41
Increased Prod. at PLD
Higher cost of contractors
Increased Prod. at NB
2015 2014 Chg
2.77
2.21 +25.3%
Efficiencies (Sauc,NB,Cien)
Volume Processed
(Mton)
2
( 12.60 )
( 48.01 )
47.58
1
CHANGE
$
%
-43.5*
-6.4
111.0
-106.0
-11.5
-121.8
35.0
11.8
Average
spot
MXP/USD
1.4
0.2
2015 2014 N/A
Chg
27.5
15.85 13.30 +19.2%
+118.7
+13.3%
-20.0%
( 10.19 )
17.88
Increased Prod. at Saucito
75.0
60.0
45.0
30.0
15.0
0.0
(15.0)
(30.0)
(45.0)
(60.0)
4.77
2014
678.0
-104.7
9.5
296.2
12.6
1.1 (Loss)
892.6
11
17
Cost Per Tonne (IFRS)
ACCUM DEC
2015
CHANGE
2014
% CHG.
COST PER TONNE *
MINE
UNIT
Fresnillo
US$/TON
48.20
47.29
1.9%
Saucito
US$/TON
42.49
59.14
-28.2%
Ciénega
US$/TON
62.99
70.84
-11.1%
Herradura
US$/TON
8.68 **
9.29 **
-6.6%
Noche Buena
US$/TON
7.93 **
9.98 **
-20.5%
* Cost per tonne is calculated as total production costs less depreciation, profit sharing and the exchange rate hedging effects.
** Cost per tonne excluding unproductive costs
18
Cash Cost (IFRS)
ACCUM DEC
2015
CHANGE
2014
% CHG.
CASH COST *
MINE
UNIT
Fresnillo
PER OZ. SILVER
5.60
5.29
5.9%
Saucito
PER OZ. SILVER
1.15
2.48
-53.4%
Ciénega
PER OZ. GOLD (By-prod.)
245.49
288.00
-14.8%
Herradura
PER OZ. GOLD
472.53
465.42
1.5%
Noche Buena
PER OZ. GOLD
972.74
945.63
2.9%
* Cash cost per ounce is calculated as total cash cost (cost of sales plus treatment and refining charges less depreciation)
less revenues from by-products divided by the silver or gold ounces sold.
19
All In Sustaining Cost (US$/Oz)*
2015
2014
% CHG.
CASH COST *
MINE
UNIT
Fresnillo
PER OZ. SILVER
11.48
9.84
16.7%
Saucito
PER OZ. SILVER
7.11
5.43
31.0%
Ciénega
PER OZ. GOLD
710.37
786.40
-9.7%
Herradura
PER OZ. GOLD
888.04
862.19
3.0%
Noche Buena
PER OZ. GOLD
1,015.40
1,051.00
-3.4%
* All in sustaining cost is calculated as traditional cash cost plus on-site general, corporate and administrative costs, community costs related to
current operations, capitalised stripping & underground mine development, sustaining capital expenditures and remediation expenses
20
0.0
1
2
3
4
2014
$
%
433.1*
521.1
-88.0
-16.9%
117.24
5
6
7
8
9
10
11
12
YTD15 Gross Profit
2015
Lower Ag and Au prices
( 3.31 ) ( 7.20 )
Lower ore vol.processed
and lower ore grade at
Fresnillo
13.43
Higher Depreciation
23.79
Higher treatment and
refining charges
26.57
Decr. ore grade at NB
810.0
Lower ore grade at Ciénega
Gross Profit
Others
USD MILLION
Ramp-up of Dynamic
Leaching Plant
Normalised operations at
Herradura
48.01
Efficiencies & Others
729.0
MXP/USD Devaluation
effect
648.0
Incr. ore vol. Processed
and higher ore grade at
Saucito
567.0
YTD14 Gross Profit
Consolidated Gross Profit Analysis
CHANGE
( 8.86 ) ( 11.37 ) ( 35.02 )
( 64.28 )
( 186.97 )
486.0
521.05
433.07
*
405.0
324.0
243.0
162.0
81.0
13
21
Consolidated Gross Profit Analysis
USD MILLION
Volume Processed (Mton)
2015 2014 Chg
20.10
20.09 +0.1%
Gross Profit
2015
433.1*
810.0
729.0
48.01
521.05
13.43
521.1
( 3.31 ) ( 7.20 )
Volume Processed (Mton)
2015 2014 Chg
2.77 2.21 +25.3%
Average spot MXP/USD
2015 2014
Chg
15.85
13.30 +19.2%
486.0
%
-88.0
( 8.86 ) ( 11.37 ) ( 35.02 )
( 186.97 )
Noche Buena Ore Grade:
2015 2014 Chg
Au g/t
0.47
0.51 -7.3%
*
•
405.0
Volume Processed (Mton)
2015 2014 Chg
2.34 1.53
+52.4%
324.0
Silver and Gold average realised prices
(USc/Lb)
2015
2014
Chg
Ag
-16.9%
15.6
18.6
(16.5%)
Au 1,126.5
1,257.7
(10.4%)
$
Chg
-20.0%
( 64.28 )
117.24
648.0
567.0
23.79
26.57
CHANGE
Ciénega Ore Grade:
2015
2014
YTD14
Au g/t 2.07
2.59
433.07
Higher depreciation recorded due
to the start of operations of
important projects incl. Saucito II
Volume Processed (Mton)
and DLP
2015 2014 Chg
2.41
2.63 -8.2%
243.0
Fresnillo Ore Grade:
2015 2014
Chg
Ag g/t 220.04 258.47 -14.9%
162.0
7
10
11
12
YTD15 Gross Profit
Lower Ag and Au prices
9
Lower ore vol.processed
and lower ore grade at
Fresnillo
8
Higher Depreciation
6
Higher treatment and
refining charges
5
Decr. ore grade at NB
4
Lower ore grade at Ciénega
Normalised operations at
Herradura
Efficiencies & Others
3
Others
2
Ramp-up of Dynamic
Leaching Plant
1
MXP/USD Devaluation
effect
Incr. ore vol. Processed
and higher ore grade at
Saucito
0.0
YTD14 Gross Profit
81.0
13
22
Margins by mine (Metal price – Cash Cost)
(2015 vs. 2014)
(USD/Oz)
Fresnillo
19.5Moz.
14.6Moz.
Chg. + -25.0%
Ciénega
Saucito
14.7Moz.
20.3Moz.
Chg. +38.5%
97.0Koz.
76.6Koz.
Chg. -21.0%
Herradura
263.6Koz.
409.0Koz.
Chg. +55.2%
Noche Buena
127.9Koz.
143.2Koz.
Chg. +11.9%
Ounces Sold
Stoppage of operations continued at Soledad-Dipolos
23
Cash Flow (IFRS)
C O N C E P T (Million USD)
CASH GENERATED BY OPERATIONS BEFORE CHANGES IN WORKING CAPITAL
YTD 2015
YTD 2014
CHANGE
$
%
537.3
575.4
(38.0)
51.3
(260.3)
311.6
(119.7)
INCOME TAX AND PROFIT SHARING PAID
(45.8)
(183.2)
137.4
(75.0)
NET CASH FROM OPERATING ACTIVITIES
542.9
131.9
411.0
311.5
39.4
58.8
(19.3)
(32.9)
PROCEEDS FROM THE SALE OF PROPERTY, PLANT AND EQUIPMENT
6.1
14.2
(8.1)
(57.2)
CAPITAL CONTRIBUTION
4.8
4.4
0.4
9.5
OTHERS
1.6
(6.1)
7.7
N/A
51.9
71.3
(19.4)
(27.2)
WORKING CAPITAL
(6.6)
OTHER PROCEEDS
SILVERSTREAM CONTRACT
TOTAL OTHER PROCEEDS
(474.7)
(425.6)
(49.1)
11.5
DIVIDENDS PAID
(37.5)
(87.0)
49.4
(56.8)
NET INTEREST RECEIVED (PAID)
(30.5)
(38.3)
7.8
(20.3)
0.0
(450.5)
450.5
N/A
(542.8)
(1,001.4)
458.6
(45.8)
(798.2)
850.2
(106.5)
(4.0)
2.8
(70.0)
PURCHASE OF PROPERTY, PLANT AND EQUIPMENT
PURCHASE OF MINORITY SHARES
USES OF CASH
NET INCREASE / (DECREASE) IN CASH DURING THE PERIOD
52.0
EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS
(1.2)
CASH AND CASH EQUIVALENTS AT 01 JANUARY
CASH AND CASH EQUIVALENTS AND SHORT TERM INVESTMENTS AT 31 DECEMBER
449.3
500.1
-
1,251.7
449.5
-
(802.4)
(64.1)
50.7
11.3
24
Cash Flow (IFRS)
CONCEPT
(Million USD)
YTD 2015
CASH GENERATED BY OPERATIONS BEFORE CHANGES IN WORKING CAPITAL
537.3
WORKING CAPITAL
51.3
INCOME TAX AND PROFIT SHARING PAID
(45.8)
NET CASH FROM OPERATING ACTIVITIES
542.9
OTHER PROCEEDS
39.4
SILVERSTREAM CONTRACT
PROCEEDS FROM THE SALE OF PROPERTY, PLANT AND EQUIPMENT
6.1
CAPITAL CONTRIBUTION
4.8
OTHERS
1.6
TOTAL OTHER PROCEEDS
51.9
(474.7)
PURCHASE OF PROPERTY, PLANT AND EQUIPMENT
DIVIDENDS PAID
(37.5)
NET INTEREST RECEIVED (PAID)
(30.5)
PURCHASE OF MINORITY SHARES
USES OF CASH
NET INCREASE / (DECREASE) IN CASH DURING THE PERIOD
• 2014 Final Dividend of 3.0 US
• cents paid on 22 May 2015
• 2015 Interim Dividend of 2.1 US
• cents paid on 10 Sep 2015
EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS
0.0
(542.8)
52.0
(1.2)
CASH AND CASH EQUIVALENTS AT 01 JANUARY
449.3
CASH AND CASH EQUIVALENTS AND SHORT TERM INVESTMENTS AT 31 DECEMBER
500.1
-
• Decrease in trade and other receivables
• due to lower metal prices: $USD 58.2m
• Decrease in gold ore inventories at
• Herradura and Noche Buena $USD 5.0m
• Decrease in payable accounts $USD 12.8
million
• Increase of prepayments
and other assets
CHANGE
• $USD
0.9
million
YTD 2014
$
%
575.4
(38.0)
(6.6)
(260.3)
311.6
(119.7)
• Provisional tax payment
(183.2)
(75.0)
• 3.7 moz
proceeds 137.4
from
131.9
411.0which
311.5
• Silverstream
contract,
• do not go through the
• Income Statement
58.8 US$150.3
(19.3)
Ø San Julián
million(32.9)
• Acquisition
14.2 of land (8.1)
(57.2)
Ø Saucito US$108.3 million
4.4 and purchase
0.4 of in-mine
9.5
• Mining works
• equipment
(6.1)
7.7
N/A
Ø Herradura US$119.7 million
71.3
(19.4)
(27.2)
• Stripping
activities, construction
of leaching pad,
sustaining
capex
and
construction
of the second
(425.6)
(49.1)
11.5
Merrill Crowe plant
(87.0)US$55.3 million
49.4
(56.8)
Ø Fresnillo
• Mine(38.3)
development and7.8purchase
of in-mine
(20.3)
equipment such as pumps, jumbos and a
(450.5)
N/A
raiseboring
machine 450.5
• Construction of ramps and mining works and
(1,001.4)
458.6
(45.8)
purchase of equipment for the leaching plant
Ø Ciénega US$24.6 million
(798.2)
850.2
(106.5)
• Development, replacement of in-mine equipment,
purchase (4.0)
of equipment to2.8
optimise
the milling
(70.0)
process and employees’ facilities
1,251.7
(802.4)
Ø Noche
Buena US$2.6
million(64.1)
• Expansion
of smelting 50.7
capacity at
the beneficiation
449.5
11.3
plant, construction of leaching pads
Ø Orisyvo US$1.3 million
• Acquisition of land
25
Balance Sheet (IFRS)
Change
Concept (Million USD)
31-DIC-15
31-DIC-14
%
Assets
Cash and Investments
Trade and Other Receivables
Inventories
Prepaid Expenses
Silverstream
Derivative Financial Instruments
Property, Plant and Equipment
Other Assets (Long term)
500.1
305.7
300.6
3.0
384.8
117.1
2,138.6
107.9
449.3
456.2
305.6
3.4
392.3
14.6
1,969.4
151.5
Total Assets
3,857.7
3,742.2
12.3
91.1
14.5
373.0
797.0
195.5
11.6
128.2
13.8
336.8
796.2
153.8
Total Liabilities
1,483.4
1,440.3
Share Capital and Share Premium
Share Capital Subscribed
Retained earnings
Other Accounts
Stockholder's Equity
Minority Interest
1,153.8
368.5
1,296.2
(474.4)
2,344.1
30.2
1,522.4
0.0
1,265.8
(512.9)
2,275.3
26.5
Total Stockholder´s Equity
2,374.3
2,301.8
3.1
Total Liabilities and Stockholder's Equity
3,857.7
3,742.1
3.1
11.3
(33.0)
(1.6)
(11.6)
(1.9)
704.6
8.6
(28.8)
3.1
Liabilities
Profit Sharing
Other Liabilities (Short term)
Retirement and Pension Plan Reserves
Deferred Taxes
Senior Notes
Other Liabilities ( Long term)
6.0
(29.0)
5.1
10.8
N/A
27.1
3.0
(24.2)
N/A
2.4
(7.5)
3.0
13.8
26
Well placed to address cyclical uncertainties
Exploration
Exploration Highlights
Ø Continued investment to maintain medium and long-term growth pipeline
Ø
Total risk capital of US$151m in 2015
Ø
Exploration mainly focused on areas of influence at current operating mines and key exploration sites
Ø Sound resource base maintained despite revised price assumptions
Ø
Gold resources increased 4.2%; silver resources relatively stable (down 1.9%)
Ø
Gold reserves relatively stable (down 1.5%); silver reserves decreased 6.0%
Ø
Positive results at Juanicipio with silver resources up 10.1%; additional good results achieved at
Guanajuato, Rodeo, San Julián Sur and Huizache
Ø 2016 drilling to be focused on our mining districts, advanced projects and key prospects
Ø
2016 exploration budget of around US$135-140m (including capitalised exploration expenses)
27
Reserves 2015
CONTAINED METAL
GRADE
(g/t)
GOLD
(koz)
SILVER
(koz)
LEAD
(kt)
INCREASE VS. 2014 RESERVES
ZINC
(kt)
GOLD
(koz)
SILVER
(koz)
LEAD
(kt)
ZINC
(kt)
FRESNILLO
296 (+11%) *
525
201,643
371
747
-27
-27,605
-21
-46
SAUCITO
313 (-20%) *
732
130,704
194
381
228
15,132
36
94
CIÉNEGA
162 (+6%) *
808
69,198
76
129
-87
-6,121
-10
-8
SAN JULIÁN
180 (+16%) *
420
146,024
96
228
-113
-16,157
-17
-53
HERRADURA
SOLEDAD-DIPOLOS
0.8 **
NOCHE BUENA
-144
-34,751
-12
-12
-1.5%
-6.0%
0.56 **
5,344
708
-76
0.56 **
1,010
-96
TOTAL RESERVES Fresnillo plc
* Silver
9,547
26
547,568
736
1,484
** Gold
28
Reserves 2015
Silver Reserves: ↓35 Moz, -6%
Silver (moz)
Cut-offs increased 21% for veins and disseminated
Tonnes: - 23% veins and -25% disseminated
Ag Grade increased to 180 g/t veins and 211 g/t
disseminated
Au grade stable (2.11 g/t veins)
700
582
600
Gold Reserves: ↓144 koz, -1.5%
Cut-off increased from 165
to 231 g/t AgEq
Tonnes: -21%
Ag grade: +11% (296 g/t)
Gold (koz)
Open pit design
12,000
15
9,691
6
548
16
500
Lower silver price assumption
affected gold reserves
Tonnes: - 23% veins and -25%
disseminated
228
10,000
26
27
76
9,547
87
28
96
113
8,000
Reserve depletion
400
6,000
Cut-off decreased from 224 g/t to 216 g/t AgEq
Tonnes: + 41%
Ag grade: 313 g/t (-20%)
300
4,000
Lower silver price assumption
affected silver reserves at all mines
200
2,000
100
0
0
Total 2014
2014
59% Fresnillo+Saucito
28% San Julián
13% Ciénega
100% Total Silver Reserve
Saucito
Cienega
San Julian
Fresnillo
Total 2015
2015
60% Fresnillo+Saucito
27% San Julián
13% Ciénega
100% Total Silver Reserve
2014
74% Herradura District
11% Fresnillo+Saucito
9% Ciénega
6% San Julián
100% Total Gold Reserve
2015
74% Herradura District
13% Fresnillo+Saucito
8% Ciénega
5% San Julián
100% Total Gold Reserve
Metal prices used for 2015 reserve estimation: Gold 1,150 US$/oz, Silver 15.0 US$/oz, 0.75 Uscts/pound Lead and 0.78 Uscts/pound Zinc. These prices are lower vs 2014 metal prices except for gold (0% Gold, -17%
Silver, -21% Lead, and -18% Zinc).
29
Resources at Mines 2015
CONTAINED METAL
GOLD
(koz)
SILVER
(koz)
LEAD
(kt)
INCREASE VS. 2014 RESOURCES
ZINC
(kt)
GOLD
(koz)
SILVER
(koz)
LEAD
(kt)
ZINC
(kt)
FRESNILLO
1,617
747,023
945
1,881
55
-5,956
15
30
SAUCITO
1,802
373,726
480
893
159
-73,456
-16
-6
CIÉNEGA
1,517
152,286
172
304
-66
9,882
2
20
719
176,589
100
246
-141
-14,314
-15
-52
-280
-83,844
-14
-7
-1.9%
-5.5%
SAN JULIÁN
HERRADURA
SOLEDAD-DIPOLOS
6,657
953
-130
NOCHE BUENA
1,053
-239
TOTAL OPERATING MINES
14,318
81
1,449,625
1,698
3,324
30
Total Resources 2015
Total Silver Resources: ↓38 Moz, -1.9%
- 5 Moz, lower metal prices
- 25 Moz, reserve depletion
- 43 Moz, model & exploration
= - 73 Moz
Silver (moz)
2,200
46
1,800
1,971
6
Silver grades increased
10% to 163 g/t
1,600
14
73
Gold (koz)
Resource depletion
37,000
1,697
36,000
159
81
55
66
34,000
239
Lower silver price
assumptions affected
gold resources
Tonnes: - 16% veins
and -23%
disseminated
33,000
32,000
Lower silver price assumption affected silver
resources at all mines
141
Gold grades increased
5% to 1.36 g/t
34,105
Tonnes: - 16% veins and -23%
disseminated
Ag Grade increased to 164 g/t
veins and 231 g/t disseminated
Au grade stable (1.87 g/t veins)
1,400
1,200
35,522
130
35,000
31,000
1,000
2014
65% Fresnillo District
10% San Julián
7% Ciénega
7% Lucerito
2% Guanajuato
9% Other
100% Total Silver Resources
2015
64% Fresnillo District
9% San Julián
8% Ciénega
7% Lucerito
2% Guanajuato
10% Other
100% Total Silver Resources
M&I silver resources represented 53% of total
silver resources.
Most of the M&I silver resources (80%) were
located in the operating units and San Julian.
M&I silver resources represents 55% of total
silver resources.
Most of the M&I silver resources (80%) are
located in the operating units and San Julian.
Total 2015
Noche
Buena
San Julian
Total 2015
Herradura
Saucito
Cienega
San Julian
Fresnillo
Fresnillo
S&D
Cienega
Saucito
Explor.
Projects
Explor.
Projects
30,000
Total 2014
Total 2014
2,000
10
2,008
Total Gold Resources: ↑1.4 Moz, +4.2%
2014
39% Herradura District
26% Orisyvo
11% Fresnillo
6% Lucerito
5% Ciénega District
3% Candameña
10% Other
100% Total Gold Resources
2015
37% Herradura District
25% Orisyvo
11% Fresnillo District
6% Lucerito
4% Ciénega District
3% Candameña
14% Other
100% Total Gold Resources
M&I gold resources represented 68% of the total
gold resources. 51% of the M&I gold resources were
located in the operating units and San Julian.
M&I gold resources represents 69% of total
gold resources. 50% of the M&I gold resources
are in the operating units and San Julian.
Metal prices used for 2015 resource estimation: Gold 1,150 US$/oz, Silver 15.0 US$/oz, 0.75 Uscts/pound Lead and 0.78 Uscts/pound Zinc. These prices are lower vs 2014 metal prices except for gold (0% Gold, -17%
Silver, -21% Lead, and -18% Zinc). For open pit deposits a gold price of 1,300 US$/oz was used in 2015 (1,350 US$/oz in 2014)
31
Project Resources 2015
Silver Resources - Projects: ↑ 46 Moz, +10%
Silver (moz)
Gold Resources - Projects: ↑ 1.7 Moz, +9%
Gold (koz)
21,500
530
5
1
7
520
Tonnes: + 20% (Deep
Exploration at Valdecañas)
180
10
12
20,500
325
Tonnes: + 27% (Exploration)
Ag grade decreased 4% to 178 g/t
461
12
First resource
estimation in these
new veins at San
Julián District.
2015 Resource: 152
koz Au (3.4 Mt @
1.41 gpt Au).
20,000
490
First resource estimation.
3.4 Mt @ 91 gpt Ag (9.8 Moz Ag)
475
19,507
19,500
470
460
152
192
500
480
264
124
Tonnes, +16%
(Exploration)
21,000
510
21,204
Tonnes: + 27% (Exploration)
Au grade increased 8% to 2.8 g/t
521
First resource estimation.
75 kt @ 494 gpt Ag
19,000
Tonnes: + 20%
Au grade
increased 7% to
1.83 g/t
Deep exploration
at Valdecañas vein
Tonnes: +24% (Higher gold
price used for pit configuration,
1,300 US$/oz in 2015 vs 1,150
US$/oz in 2014)
Tonnes: +75% (Exploration)
450
18,500
Metal prices used for 2015 resource estimation: Gold 1,150 US$/oz, Silver 15.0 US$/oz, 0.75 Uscts/pound Lead and 0.78 Uscts/pound Zinc. These prices are lower vs 2014 metal prices except for gold (0% Gold, -17%
Silver, -21% Lead, and -18% Zinc). For open pit deposits a gold Price of 1,300 US$/oz was used in 2015 (1,350 US$/oz in 2014)
32
Strong Organic Growth Pipeline
2016 Budget:
c.US$135-140m
Mine Operations
Fresnillo
Saucito
27%
Herradura
Nochebuena
Ciénega - San Ramón
Soledad &Dipolos*
Development Projects
San Julián
Advanced Exploration
Orisyvo
Cluster Cebollitas
Fresnillo District
Prospects in drilling
Pyrites Plant
2%
Juanicipio
Centauro Deep
25%
Rodeo
Guanajuato
Guachichil Pilarica (Perú)
Tajitos
Candameña
San Nicolás
Guazapares
Coneto
Lucerito
Cebadillas
La Yesca
Cairo
Dátil
Norias
Sonora and Sinaloa :
Early stage
Pipeline
allows us to focus on
projects that have the
potential to be developed
into low cost,
world-class mines
46%
Nudo Carina Cerritos
Dorado Olivos
Exploration Chihuahua: S. Brígida Rosetillas SJPinal Lucero Tempisque Uruachic
Durango: Pereñita
La Huerta
El Carmen
Zacatecas: Urite Atotonilco Corredor Concha-Nieves Argentum Villa García
Perú: Huacravilca Sto. Domingo La Pampa Supaypacha
Projects in blue are being prioritised
* Operations at Soledad & Dipolos are currently suspended.
San Javier
Systematic Project Generation
33
Well placed to address cyclical uncertainties
Strategy & Outlook
Expected Delivery of Growth
(1)
Investm ent
(US$ m )
515
30
155
(4)
305
(2)
Expected
Avg. Annual
Production
YEAR
(155)
SAN JULIÁN
3 moz Ag
FRESNILLO 9,000 TPD
(Optimisation project)
55
200
350
2018
2019
2020
2021
PRODUCTION
MINE DEVELOPMENT
PRODUCTION
DETAILED ENGINEERING
PLANT ADEQUATION
LEACHING PLANT
CONSTRUCTION
(3)
PYRITES PLANT
(Optimisation project)
10 m oz Ag &
30 koz Au
JUANICIPIO
extended
LoM of 390
koz Au
CENTAURO
EXTENSION
15 koz Au &
1.3 m oz Ag
CIENEGA 5,000 TPD
(Optimisation project)
125 koz Au
CENTAURO DEEP
(365)
2017
CONSTRUCTION FLOTATION PLANT
3.5 m oz Ag &
13 koz Au
(200)
2016
CONSTRUCTION LEACHING PLANT
10.3 m oz Ag
& 44 koz Au
DETAILED ENGINEERING
PRODUCTION
CONSTRUCTION TAILINGS FLOTATION
MINE DEVELOPMENT
BASIC ENGINEERING
(300)
120
2015
PROJECT
PRODUCTION
DETAILED
ENGINEERING
PLANT CONSTRUCTION
DEVELOPMENT
2ND DYNAMIC LEACHING PLANT
CONSTRUCTION
PRODUCTION
MINE DEVELOPMENT
PRODUCTION
DETAILED ENGINEERING
PLANT CONSTRUCTION
DEVELOPMENT
PRODUCTION
(225)
136 koz Au
MINE DEVELOPMENT
(5)
ORISYVO
BASIC ENGINEERING
DETAILED ENGINEERING
PRODUCTION
PLANT CONSTRUCTION
(1) Estimated
(2) Total average annual production
(3) On hold post detailed engineering
(4) Total investment (of which 56% Fresnillo plc; 44% MAG Silver)
(5) On hold
34
Potential Brownfield Projects
Pyrites Plant
Ciénega
Optimisation
Fresnillo
Optimisation
Centauro
Extension
Centauro Deep
Description
Tailings
processing from
Fresnillo &
Saucito
Optimisation
project to increase
capacity
Optimisation
project to increase
capacity
Natural evolution
of the Centauro pit
at Herradura
Potential
underground mine
beneath the
Centauro pit at
Herradura
Expected avg.
annual
production
3.5 moz silver
12.8 koz gold
15 koz gold
1.3 moz silver*
3 moz silver
Extended LoM of
390 koz gold
125 koz gold
Estimated preoperative
capex
$155 m
$55 m*
$30 m
$120 m
$200 m
Status
On hold post
detailed
engineering, as
part of
contingency plan
Continue to
evaluate district’s
capacity
requirements as
exploration
continues
Deliver
optimisation once
development rates
and ore grades
warrant
Optimal pit
evaluation
concluded;
conduct economic
evaluation
Additional
exploration
activities ongoing
to accurately delineate the ore
bodies
Expected
commissioning
<2 years from
reinstatement
2019
2018
2019
2020
* Assuming a 5,000TPD expansion
35
Advanced Exploration Projects
Juanicipio (JV with MAG Silver. Fresnillo: 56%)
Orisyvo
8km from the Fresnillo mine; Juanicipio’s mineral zones are
located in silver-gold rich sulphide shoots of the veins.
This project will be developed on a stand-alone basis
Assessing a 8,000TPD mine with a DLP processing facility;
focusing on higher grade zones of the gold resource base
Key metric estimates (100% basis)
Key metric estimates
Avg. annual production
10moz silver
30koz gold
Avg. annual production
136koz gold
Pre-operative capex
$305m
Pre-operative capex
$350m
Indicated & inferred resources
126moz silver
578koz gold
Indicated & inferred resources
9moz gold
13moz silver
First production
2018
First production
2021
10% increase in silver resources
Conduct detailed engineering
PEA complete; however development
deferred as part of contingency plan
36
Expected Silver Production Profile
Million Oz
Attributable
90.0
80.0
Juanicipio - 56%
70.0
Pyrites Plant
San Julián
60.0
Noche Buena
Centauro extension
50.0
Dynamic Leaching Plant
S&D
40.0
Herradura
30.0
Ciénega optimisation
Ciénega
20.0
Saucito
Fresnillo optimisation
10.0
Fresnillo
2016
2017
2018
2019
2020
2021
Yr
Target of 65 moz silver by 2018
37
Expected Gold Production Profile
Thousand Oz
Attributable
1,000
Centauro Deep
900
Orisyvo
800
Juanicipio - 56%
Pyrites Plant
700
San Julián
600
Saucito
Ciénega optimisation
500
Ciénega
400
Fresnillo optimisation
Fresnillo
300
S&D
200
Noche Buena
Centauro extension
100
Dynamic Leaching
0
2016
2017
2018
2019
2020
2021
Yr
Herradura
Target of 750 koz gold by 2018
38
CAPEX Spend Expectations
Capital expenditure
US$ Million
Million Usd
2016
800
Sustaining(operations)
•
Fresnillo
102m
•
Saucito
101m
•
Herradura
96m
•
Ciénega
50m
•
Noche Buena
13m
•
Others
3m
Sustaining (projects
approved)
700
600
500
400
300
35m
ProjectsApproved
•
San Julián
127m
•
Pyrites Plant
27m*
200
100
0
2016
ProjectsforApproval
•
Juanicipio
26m
•
Fresnillo Optimisation
10m
•
Others
6m
* Subject to market conditions
2017
2018
2019
2020
2021
Sustaining CAPEX
New Projects Approved - Sustaining CAPEX
New Projects for Approval - Sustaining CAPEX
New Projects Approved - Preoperative CAPEX
New Projects for Approval - Preoperative CAPEX
39
Conclusions and Outlook
Ø
Precious metal prices continue to be challenging
Ø
However, we are well-placed to withstand volatility and lower precious metals prices and to reap the benefits of an
eventual upturn, supported by our strong foundations:
Ø
Ø
Strong balance sheet
Ø
High quality assets
Ø
Low-cost and flexible operations
Ø
Disciplined approach to development
Ø
Commitment to sustainable business practices
Near-term priorities
Ø
Turnaround at Fresnillo
Ø
Renewed focus on safety
Ø
Strategy unchanged; value creation driven by sustainable growth through disciplined development of new projects
and ongoing investment in exploration across price cycles
Ø
Focus remains on turnaround at Fresnillo mine, and controlling expenditures, optimising performance and
delivering returns across our mines and projects
Remain on track to reach our 2016 production targets:
49-51 moz of silver (incl. 4 moz from Silverstream) and 775-790 koz of gold
and our long-term strategic goal of 65 moz of silver in 2018
40
Well placed to address cyclical uncertainties
Appendix
Adjusted Revenues
ACCUM DECEMBER
PRODUCT
2015
2014
VOLUME
CHANGE BY:
PRICE
TOTAL
GOLD
827.4
720.5
176.7
(69.8)
106.9
SILVER
617.4
714.9
22.1
(119.6)
(97.5)
LEAD
67.1
51.4
24.4
(8.7)
15.7
ZINC
71.3
58.1
24.0
(10.8)
13.2
1,583.3
1,545.0
247.2
(208.9)
38.3
ADJUSTED REVENUES
41
Contribution by Mine and by Metal
to the Adjusted Revenues 2015
1
2015 Adjusted Revenues : US$1,583.3m
By mine
11%
By metal
20%
5%
4%
28%
52%
39%
30%
11%
Fresnillo
Herradura
Fresnillo
Gold
Silver
Lead
Zinc
TOTAL
35.04
228.08
26.27
29.25
318.64
1
Saucito
Noche Buena
Ciénega
11.0%
71.6%
8.2%
9.2%
100%
Silver
Ciénega
88.35
63.57
7.62
9.96
169.50
Lead
Herradura
52.1%
37.5%
4.5%
5.9%
100%
Gold
436.93
8.13
445.06
Saucito
98.2%
1.8%
100%
86.53
316.53
33.23
32.13
468.41
Zinc
Noche Buena
18.5%
67.6%
7.1%
6.9%
100%
180.56
1.12
181.68
Consol
99.4%
0.6%
100%
827.41
617.43
67.12
71.33
1,583.29
52.3%
39.0%
4.2%
4.5%
100%
Adjusted Revenue is revenue as disclosed in the income statement adjusted to exclude treatment and refining charges and gold, lead and zinc hendging.
42
Breakdown of Adjusted Production Costs
Adj Prod Cost: US$634.5m
Contractors
Personnel
1
Operating Materials
Others
Freights
Energy & Diesel
Maintenance
Charge for use of contractor’s equipment
1 Contractors
are hired to execute specific tasks. Fees paid include labour, operating materials, equipment, diesel and any other items
required to fulfill such tasks.
43
Breakdown of Adjusted Production Costs
Adj Prod Cost: US$634.5m
Contractors
Personnel
Operating Materials
Others
Freights
Energy & Diesel
Maintenance
Charge for use of contractor’s equipment
44
Breakdown of Adjusted Production Costs
5.23%
1.55%
Adj Prod Cost: US$634.5m
10.68%
27.72%
14.95%
Contrac
1
Op Mat
Energy & Diesel
Mainten
Person
Others
Freights
1
Contractors are hired to execute specific tasks. Fees
paid include labour, operating materials, equipment,
diesel and any other items required to fulfill such tasks.
17.12 %
22.75%
Fresnillo
Personnel
Maintenance and repairs
Operating materials
Diesel
Electricity
Total Energy
Contractors
Freight
Others
Production Costs
23.36
16.39
23.83
2.88
14.61
17.49
28.06
1.26
5.78
Ciénega
20.1%
14.1%
20.5%
2.5%
12.6%
15.1%
24.2%
1.1%
5.0%
116.16 100.0%
11.63
7.95
18.61
1.05
5.86
6.92
31.70
1.95
4.98
Herradura
13.9%
9.5%
22.2%
1.3%
7.0%
8.3%
37.9%
2.3%
5.9%
83.73 100.0%
18.96
39.78
52.31
39.44
8.66
48.09
24.72
3.93
10.67
Sol & Dip
Saucito
Noche Buena
0.0%
5.4%
0.00
0.00
-0.03
0.00
0.00
0.00
-0.05
0.00
(5.01)
0.0%
7.06
13.12
18.07
0.76
12.02
12.78
38.10
0.89
9.38
198.47 100.0%
(5.09)
0.0%
99.39 100.0%
9.6%
20.0%
26.4%
19.9%
4.4%
24.2%
12.5%
2.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
7.1%
13.2%
18.2%
0.8%
12.1%
12.9%
38.3%
0.9%
9.4%
6.70
17.33
31.02
21.59
1.38
22.97
53.71
1.79
4.52
Other
4.9%
12.6%
22.5%
15.6%
1.0%
16.6%
38.9%
1.3%
3.3%
138.04 100.0%
Consol
0.06
0.27
0.51
(0.27)
0.66
0.39
(0.34)
0.00
2.85
67.78
94.84
144.33
65.45
43.19
108.64
175.90
9.82
33.17
3.76
634.47 100.0%
10.7%
14.9%
22.7%
10.3%
6.8%
17.1%
27.7%
1.5%
5.2%
45
Consolidated Cost Inflation 2015
(USD Based)
46
Cash Cost (IFRS)
ACCUM DEC
2015
CHANGE
2014
% CHG.
CASH COST *
MINE
UNIT
Fresnillo
PER OZ. SILVER
5.60
5.29
5.9%
Saucito
PER OZ. SILVER
1.15
2.48
-53.4%
Ciénega
PER OZ. GOLD (By-prod.)
245.49
288.00
-14.8%
PER OZ. GOLD (Co-prod.)**
625.42
623.98
0.2%
8.35
9.27
-9.9%
PER OZ. GOLD (Equiv.) **
680.18
683.47
-0.5%
Herradura
PER OZ. GOLD
472.53
465.42
1.5%
Noche Buena
PER OZ. GOLD
972.74
945.63
2.9%
PER OZ. SILVER (Co-prod.) **
* Cash cost per ounce is calculated as total cash cost (cost of sales plus treatment and refining charges less depreciation)
less revenues from by-products divided by the silver or gold ounces sold.
** For Ciénega we have also shown the calculation on a co-product basis, and an equivalent ounces basis. The two coproduct lines should be considered together.
47
Margins by mine (Metal price – AISC*)
(2015 vs. 2014)
(USD/Oz)
Cash
Cost
Fresnillo
Saucito
Silver
Price
Ciénega
Cash
Cost
32.0
32.0
1,900
27.4
27.4
1,629
22.9
22.9
18.62
18.62
18.3
15.56
13.7
9.84
15.56
11.48
9.1
7.11
18.3
0.0
2014
2015
19.5Moz.
14.6Moz.
Chg. + -25.0%
2014
2015
Noche Buena
Gold
Price
1,900
1,629
1,257.66
1,257.66
1,150.89
1,257.66
1,150.89
1,150.89
1051.00
1,086
786.40
710.37
862.19
1015.40
888.04
1,357
1,086
13.7
814
9.1
543
543
4.6
271
271
0.0
0
5.43
4.6
1,357
Herradura
14.7Moz.
20.3Moz.
Chg. +38.5%
2014
2015
97.0Koz.
76.6Koz.
Chg. -21.0%
814
2014
2015
263.6Koz.
409.0Koz.
Chg. +55.2%
2014
2015
0
127.9Koz.
143.2Koz.
Chg. +11.9%
Ounces Sold
Stoppage of operations continued at Soledad-Dipolos
*All in sustaining cost
48
Income Statement (IFRS):
Exploration Expenses
CONCEP T
(Million USD)
ACCUM DECEMBER
2015
%
2014
%
Operating
ADJUSTED REVENUES
HEDGING (METALS)
TREATMENT AND REFINING CHARGES
REVENUES
1,583.3
3.9
(142.8)
1,444.4
ADJUSTED PRODUCTION COST
PROFIT SHARING
DEPRECIATION
HEDGING (MXP/USD EXCHANGE RATE)
CHANGE IN INVENTORIES
OTHERS
COST OF SALES
(634.5)
(12.8)
(331.2)
(28.6)
(6.3)
2.1
(1,011.3)
GROSS PROFIT
ADMINISTRATIVE EXPENSES
CORPORATE EXPENSES
EXPLORATION EXPENSES
OTHER INCOME (EXPENSE)
SELLING EXPENSES
PROFIT FROM CONTINUING OPERATIONS
GOLD HEDGING INCOME / (EXPENSE)
SILVERSTREAM AMORTIZATION EFFECTS FOR THE PERIOD
SILVERSTREAM REVALUATION
FINANCE INCOME / (EXPENSE)
FOREIGN EXCHANGE GAIN / (LOSS)
PROFIT BEFORE INCOME TAX
INCOME TAX EXPENSE
MINING RIGHT
PROFIT FOR THE PERIOD
433.1
(34.1)
(28.7)
(140.2)
(15.9)
(13.7)
200.4
59.7
21.6
6.1
(39.4)
(36.2)
212.4
(129.0)
(14.0)
69.4
ATTRIBUTABLE TO:
EQUITY SHAREHOLDERS OF THE GROUP
70.5
MINORITY INTEREST
(1.1)
69.4
EBITDA
547.5
Units
Fresnillo
1,545.0
Ciénega0.1
(131.4)
Ø Saucito
100.0
1,413.7
100.0
Ø Herradura
(43.9)
(678.0)
(48.0)
Ø Noche Buena
(0.9)
(12.6)
(0.9)
Ø San Ramón
(22.9)
(296.2)
(21.0)
(2.0)
(1.1)
(0.1)
Ø Manzanillas
Ø
Ø
(0.4)
104.7
0.1
(9.5)
(70.0)Projects
(892.6)
7.4
(0.7)
(63.1)
Centauro Profundo
521.1
36.9
Valles
(2.4)
(34.7)
(2.5)
Ø San Julián
(2.0)
(32.9)
(2.3)
Ø Orisyvo
(9.7)
(168.8)
(11.9)
Ø Juanicipio
(1.1)
(25.5)
(1.8)
(0.9)
(13.6)
(1.0)
Ø Guanajuato
Ø
30.0
Ø
13.9
245.6
Prospects
4.1
Ø Sonora 0.0
1.5
36.9
Ø Durango
0.4
40.1
Ø Chihuahua
(2.7)
(47.2)
(2.5)
(24.4)
Ø Zacatecas
Ø Guerrero
14.7
251.1
Ø Guanajuato
(8.9)
(118.3)
Ø Nayarit
(1.0)
(15.7)
Ø Perú
4.8
117.1
17.4
$
CHANGE
2015
38.310.1
3.820.5
(11.4)
8.6
30.7
11.9
43.5
3.7
(0.2)
(35.0)4.5
(27.5)0.7
(111.0)
11.560.1
(118.7)
10.0
1.9
0.53.3
4.2
13.3
28.5
9.79.9
(0.1)
3.9
42.2
(45.1)
(88.0)
2014
Ø2.55.6
3,732.1
Ø 27.6
8.7
Ø2.2 3.2
Ø
14.7
(6.4)
Ø1.410.1
11.8
Ø
4.9
2,457.9
Ø
0.9
(106.0)
Ø
67.0
(121.8)
13.3
Chg.
4.5
-7.1
5.4
-2.8
-6.4
-0.4
-0.2
-7.0
34.4 -24.4
0.0
1.9
(1.5) 4.4
Ø
-1.1
(12.7)
Ø 15.2
-1.9
(16.9)
Ø 10.1
-0.2
(37.9)
Ø0.6 4.0
-0.1
Ø
68.1
-25.8
(18.4)
Ø
(16.9)
Ø
Ø
0.0
2.6
2.8
(3.3)
(1.7)
17.8
(8.4)
(1.1)
8.3
59.7
2.0
(15.3)
6.4
(34.0)
1.6
7.8
(11.8)
3.2
0.1
(38.7)
2.4
(10.7)
0.2
1.7
6.3
(47.7)
22.1
Regional Prospecting
Mining 108.4
Rights 7.7
4.9
Total
(0.1)
8.6
0.6
Capitalized Exp.
4.8
117.1
8.3
Exploration
Expenses
10.9
15.6
(37.9)
151.3
(9.8)
-11.0
(47.7)
140.2
37.9
(19.8)
567.3
%
40.1
N/A
Ø
(41.4)
Ø
(84.8)
(16.5)
Ø
48.2
2.7 -0.7
6.7 -0.3
4.9 -3.3
Ø
2.3
0.9
Ø
0.2 -0.1
(15.4)
Ø
2.1
0.3
9.1
Ø
0.3
-0.1
(11.1)
Ø
3.5
2.8
(40.7)
22.7 -0.5
10.8
0.2
14.5
1.1
(35.0)
Ø 184.5 - 33.2
N/A
Ø -15.7 -4.7
(40.7)
Ø 168.8 -28.5
(3.5)
49
Pyrites Plant
Key metric estimates
Avg. annual silver production
3.5 moz
Avg. annual gold production
12.8 koz
Pre-operative capex
$155 m
Cash cost (average LoM)
$2.51 /oz
Saucito I
Fresnillo Plant
Saucito II
Old Tailings
Fe
Plant
Tailings Plant
To be put on hold once detailed engineering complete
Filtration
Plant
Hauling
(Truck)
Leaching Plant
50
Mineral Reserves 2015
Mine / project
Cut-off
Fresnillo
Saucito
Cienega
2015
2014
231 g/t AgEq
165 g/t AgEq
% Incr.
40.0%
2015
2014
224 g/t AgEq
216 g/t Ag Eq
% Incr.
3.7%
2015
2014
197 - 260 gpt AgEq
1.88 - 3.21 gpt AuEq
% Incr.
San Julian - veins
San Julian - disseminated
Herradura
2015
2014
191 g/t AgEq
159 g/t AgEq
% Incr.
20.1%
2015
2014
161 g/t AgEq
132 g/t AgEq
% Incr.
22.0%
2015
2014
Multiples **
Multiples ***
% Incr.
Noche Buena
2015
2014
0.30 g/t Au
0.30 g/t Au
% Incr.
Soledad & Dipolos
2015
2014
% Incr.
0.30 g/t Au
0.30 g/t Au
Tonnes
Mt
21.17
26.79
-21.0%
12.98
9.23
40.7%
13.27
15.24
-12.9%
5.58
7.29
-23.4%
16.72
22.42
-25.4%
211.37
209.57
0.9%
56.51
63.15
-10.5%
33.81
37.73
-10.4%
Tonnes and Grades
Grades
Au gpt
Ag gpt
0.77
0.64
20.5%
1.75
1.70
3.3%
1.89
1.82
3.8%
2.11
2.06
2.2%
0.08
0.07
11.8%
0.79
0.79
-0.4%
0.56
0.55
2.0%
0.65
0.65
0.7%
296
266
11.3%
313
389
-19.6%
162
154
5.5%
180
155
16.1%
211
175
21.1%
% Pb
% Zn
1.75
1.46
19.9%
1.49
1.71
-12.8%
0.57
0.56
1.0%
3.53
2.96
19.2%
2.93
3.10
-5.5%
0.97
0.90
8.5%
0.57
0.50
14.3%
1.36
1.25
8.9%
Au
koz
Metal content
Pb
kt
Ag
Moz
525
552
-4.8%
732
504
45.3%
808
894
-9.7%
378
483
-21.7%
42
50
-16.6%
5,344
5,317
0.5%
1,010
1,107
-8.7%
708
784
-9.7%
9,547
Zn
kt
202
229
-12.0%
131
116
13.1%
69
75
-8.1%
32
36
-11.0%
114
126
-9.7%
371
392
-5.3%
194
158
22.6%
76
86
-12.1%
747
793
-5.8%
381
286
32.9%
129
137
-5.6%
96
112
-14.7%
228
280
-18.7%
548
736
1,484
Ag Eq. *
Moz
368
402
-8.4%
252
199
26.2%
154
158
-2.6%
61
67
-8.7%
154
175
-12.1%
410
340
20.6%
77
71
9.6%
54
50
8.3%
1,531
* Metal pri ces used for 2015: 1,150 USD/oz Au, 15 USD/oz Ag, 0.75 USD/l b Pb and 0.78 USD/l b Zn. For year 2014: 1,150 USD/oz Au, 18 USD/oz Ag, 0.95 USD/l b Pb and 0.95 USD/lb Zn. Assumes 100% metal recoveries.
** 2015 cut-offs: Herradura ore resources are reported at varied cut-offs dependent on material types and grade. Oxi de material above 0.30 gpt Au reports to the heap l each, transi tional and sulfi de material
from 0.35 to 0.56 gpt Au report to the heap l each, oxi de material above 1.00 gpt Au reports to the mi ll, transitional and sul fide materi al above 0.56 gpt Au reports to the mi ll.
*** 2014 cut-offs: Herradura ore resources are reported at varied cut-offs dependent on material types and grade. Oxi de material above 0.30 gpt Au reports to the heap l each, transi tional and sulfi de material
from 0.35 to 0.60 gpt Au report to the heap l each, oxi de material above 1.14 gpt Au reports to the mi ll, transitional and sul fide materi al above 0.60 gpt Au reports to the mi ll.
51
Mineral Resources 2015:
Mines & San Julián
Tonnes and Grades
Mine / project
Cut-off
Fresnillo
Saucito
Cienega
2015
2014
122 g/t AgEq
103 g/t AgEq
% Incr.
18.4%
2015
2014
134 g/t AgEq
136 g/t AgEq
% Incr.
-1.5%
2015
2014
158 - 214 g/t AgEq
1.35 - 2.64 g/t AuEq
Tonnes
Mt
64.68
66.20
-2.3%
41.10
39.50
4.1%
29.13
29.95
% Incr.
San Julian - veins
San Julian - disseminated
Herradura
2015
2014
147 g/t AgEq
122 g/t AgEq
% Incr.
20.5%
2015
2014
124 g/t AgEq
102 g/t AgEq
% Incr.
21.6%
2015
2014
Multiple **
Multiple ***
% Incr.
Noche Buena
2015
2014
0.3 g/t Au
0.3 g/t Au
% Incr.
Soledad & Dipolos
2015
2014
% Incr.
0.3 g/t Au
0.3 g/t Au
11.26
13.34
-15.6%
15.75
20.41
-22.8%
251.82
265.69
-5.2%
59.29
75.21
-21.2%
47.93
43.59
9.9%
Grades
Au gpt
0.78
0.73
5.9%
1.36
1.29
5.4%
1.62
1.64
-1.5%
1.87
1.89
-1.0%
0.08
0.08
10.2%
0.82
0.79
3.5%
0.55
0.53
3.4%
0.62
0.62
-0.5%
Ag gpt
359
354
1.5%
283
352
-19.7%
163
148
9.9%
164
149
10.5%
231
194
19.4%
% Pb
% Zn
1.46
1.41
4.0%
1.17
1.26
-7.0%
0.59
0.57
4.2%
2.91
2.80
4.0%
2.17
2.28
-4.5%
1.04
0.95
10.2%
0.64
0.56
12.9%
1.56
1.46
7.1%
Au
koz
1,617
1,563
3.5%
1,802
1,643
9.7%
1,517
1,583
-4.2%
676
809
-16.5%
43
50
-14.9%
6,657
6,786
-1.9%
1,053
1,292
-18.5%
953
872
9.3%
Ag
Moz
747
753
-0.8%
374
447
-16.4%
152
142
6.9%
59
64
-6.7%
117
127
-7.9%
Metal content
Pb
kt
Zn
kt
945
931
1.6%
480
496
-3.2%
172
170
1.4%
1,881
1,851
1.6%
893
899
-0.6%
304
284
7.2%
100
115
-12.8%
246
298
-17.4%
Ag Eq. *
Moz
1,191
1,176
1.2%
667
714
-6.6%
322
296
8.8%
111
115
-3.6%
160
178
-10.5%
510
434
17.7%
81
83
-2.2%
73
56
31.2%
* Metal prices used for 2015: 1,150 USD/oz Au UG, 1,300 USD/oz OP, 15 USD/oz Ag, 0.75 USD/lb Pb and 0.78 USD/lb Zn. For year 2014: 1,150 USD/oz Au UG, 1,350 USD/oz OP, 18 USD/oz Ag, 0.95 USD/l b Pb and 0.95 USD/l b Zn. Assumes 100% metal recoveri es.
* Metal prices used for 2014: 1,150 USD/oz Au, 18 USD/oz Ag, 0.95 USD/lb Pb and 0.95 USD/lb Zn. For year 2013: 1,250 USD/oz Au, 19.50 USD/oz Ag, 0.99 USD/lb Pb and 0.88 USD/lb Zn.
** Herradura ore resources are reported at varied cut-offs dependent on material types and grade. Oxide material above 0.30 gpt Au reports to the heap leach, transiti onal and sulfi de materi al
from 0.35 to 0.56 gpt Au report to the heap leach, oxi de materi al above 1.00 gpt Au reports to the mill , transitional and sulfide materi al above 0.56 gpt Au reports to the mill .
*** Herradura ore resources are reported at varied cut-offs dependent on material types and grade. Oxide material above 0.30 gpt Au reports to the heap leach, transiti onal and sulfi de materi al
from 0.35 to 0.60 gpt Au report to the heap leach, oxi de materi al above 1.14 gpt Au reports to the mill , transitional and sulfide materi al above 0.60 gpt Au reports to the mill .
52
Mineral Resources 2015:
Exploration Projects
Tonnes and Grades
Mine / project
Cut-off
Orisyvo
2015
2014
2015
2014
2015
2014
2015
2014
Guanajuato
2015
2014
75 US$/t
3.35
1.41
91
0.3 g/t Au
19.89
15.55
27.9%
10.69
16.17
-33.9%
0.51
0.49
4.2%
0.38 - 0.57 g/t Au
1 g/t AuEq
1 g/t AuEq
0.3 g/t Au
0.3 g/t Au
0.48 g/t AuEq
0.42 g/t AuEq
% Incr.
14.3%
2015
2014
Multiple***
2.1 g/t AuEq
% Incr.
Juanicipio (56%)
2015
2014
70.3 US$/t
70.3 US$/t
% Incr.
Huizache
2015
2014
% Pb
75 US$/t
0.51 - 0.61 g/t Au
% Incr.
Guachichil
Ag gpt
1
1
12.2%
20
20
-0.4%
29
27
9.0%
4
4
5.2%
10.42
9.40
10.9%
178
185
-4.3%
400
434
-7.8%
494
% Incr.
Rodeo
Au gpt
0.99
0.97
2.4%
0.73
0.51
42.3%
0.41
0.38
7.3%
0.50
0.54
-6.8%
0.71
0.61
17.0%
2.82
2.61
8.0%
1.83
1.72
6.6%
2.88
Multiple**
% Incr.
Lucerito
Grades
277.00
279.42
-0.9%
51.81
62.01
-16.4%
150.02
162.27
-7.5%
74.08
42.32
75.1%
46.13
37.30
23.7%
7.32
5.77
27.0%
9.81
8.21
19.5%
0.75
Multiple**
% Incr.
Candameña
Tonnes
Mt
% Zn
0.28
0.25
10.8%
0.46
0.41
12.4%
0.11
0.12
-6.5%
0.18
0.16
0.08
2.30
1.93
19.1%
0.06
4.56
3.51
30.0%
0.13
Au
koz
Metal content
Pb
kt
Ag
Moz
8,851
8,718
1.5%
1,211
1,019
18.9%
1,983
1,999
-0.8%
1,191
730
63.1%
1,051
726
44.8%
664
485
37.1%
578
454
27.3%
70
13
11
11.2%
33
39
-16.8%
141
140
0.8%
11
6
84.1%
15
11
37.1%
42
34
21.6%
126
115
10.1%
12
152
10
Zn
kt
Ag Eq. *
Moz
419
409
2.4%
684
659
3.9%
50
43
15.7%
81
61
33.2%
226
159
42.3%
0
447
288
55.3%
1
691
568
21.6%
125
104
20.3%
418
392
6.6%
102
52
94.4%
111
70
58.9%
93
65
41.9%
247
196
26.1%
17
% Incr.
San Julian Sur - veins
2015
2014
21
% Incr.
Tajitos
2015
2014
0.3 g/t Au
% Incr.
Pilarica
2015
2014
% Incr.
35 g/t AgEq
30 g/t AgEq
328
246
33.2%
106
68
56.0%
0.37
0.30
25.2%
0.48
0.44
11.3%
37
35
40
48
52
70
25
16
59.9%
47
49
-4.8%
* Metal prices used for 2015: 1,150 USD/oz Au UG, 1,300 USD/oz OP, 15 USD/oz Ag, 0.75 USD/lb Pb and 0.78 USD/lb Zn. For year 2014: 1,150 USD/oz Au UG, 18 USD/oz Ag, 0.95 USD/lb Pb and 0.95 USD/lb Zn. Assumes 100% metal recoveries.
** For 2015: 0.35 to 0.36 gpt Au-Eq. For 2014: 0.20 gpt Au-Eq for oxide material and 0.50 gpt Au-Eq for supl hide material
*** For 2015: 2.10 gpt Au-Eq except for La Joya area where a 75 US$/t cut-off was used.
53