Fresnillo plc: history, ownership, mission, how it works & makes money

A Brief History of Fresnillo plc

Fresnillo plc, officially founded in 2008, is a leading silver and gold mining company based in Mexico. Its roots can be traced back to the Fresnillo silver mine, which began production in the 16th century. The company operates as a subsidiary of Industrias Peñoles, established in 1887, which has had a significant impact on the mining industry in Mexico.

In 2010, Fresnillo plc was listed on the London Stock Exchange, marking a major milestone in its history. By 2015, it became a constituent of the FTSE 100 Index, reflecting its strong market presence and robust operations. The company primarily focuses on silver and gold production, with operations concentrated in two key regions: the Fresnillo District and the Ciénega District.

As of the first half of 2022, Fresnillo reported revenue of US$ 760.6 million, a decrease compared to the previous year’s US$ 826.6 million. Despite the decline in revenue, the company maintained a net profit of US$ 119 million for the period.

Fresnillo’s production statistics for 2022 included approximately 12.1 million ounces of silver and 205,000 ounces of gold, making it one of the largest silver producers in the world. The company aims to increase production through ongoing exploration and development projects, targeting a 15% increase in overall output by 2023.

The company has also engaged in several expansion projects, including the development of the Juanicipio project, expected to commence production in mid-2022, which is projected to produce approximately 6.0 million ounces of silver per year when fully operational.

Fresnillo’s commitment to sustainability is evident in its environmental, social, and governance (ESG) initiatives, aiming to reduce the carbon footprint and enhance community engagement in areas surrounding its operations. In 2021, Fresnillo invested approximately US$ 22 million in various community development projects.

Looking into the future, Fresnillo aims to leverage its extensive resource base, which includes over 2.6 billion ounces of silver and 7 million ounces of gold in reserves, to enhance its market position and shareholder value.

A Who Owns Fresnillo plc

Fresnillo plc, a leading silver and gold mining company based in Mexico, operates under a significant ownership structure that reflects its standing in the mining sector. As of October 2023, the primary shareholders are institutional investors and company management. The following table illustrates the ownership distribution among the major stakeholders:

Grupo Bal, a significant player in the Mexican business landscape, maintains a controlling stake in Fresnillo plc, providing effective operational direction and strategic oversight. The presence of large institutional investors like BlackRock and HSBC highlights the company’s strong appeal in the financial markets.

In terms of financial performance, Fresnillo plc reported revenues of $1.5 billion for the fiscal year 2022, attributed largely to increased silver production, which reached 58.9 million ounces, representing a year-on-year increase of 5.3%.

The stock performance of Fresnillo plc has shown variability, with the share price reaching a peak of £10.44 in early November 2022 but declining to around £7.25 by October 2023. This fluctuation reflects broader market trends and commodity price changes, particularly in the silver market, which is influenced by both demand and geopolitical factors.

Fresnillo plc's governance structure also indicates significant internal ownership, with several high-ranking executives holding shares. For instance, the CEO and other board members are known to possess a combined total of approximately 1.2% of the company’s outstanding shares, which indicates alignment with shareholder interests.

The following table summarizes key data on Fresnillo plc’s financial performance, including production figures and earnings:

This detailed breakdown showcases Fresnillo plc’s operational efficiency and its capacity to leverage silver demand, thus ensuring robust financial health amidst prevailing market conditions.

Fresnillo plc Mission Statement

Fresnillo plc operates under a strong mission to be the world's leading silver producer and the second-largest gold producer in Mexico. The company emphasizes sustainable mining practices and aims to create value for all stakeholders while upholding principles of safety, social responsibility, and environmental stewardship.

The mission statement intricately aligns with the company’s operational strategy, which is underscored by a commitment to responsible mining and operational excellence. For instance, Fresnillo focuses on operational efficiency, increasing production volumes, and maintaining cost discipline. The company targets a silver production range of 58 to 60 million ounces in 2023, alongside a target of approximately 300,000 ounces of gold production.

To support its mission, Fresnillo invests significantly in exploration and development. In 2022, the company allocated approximately $96 million to exploration, reflecting its commitment to long-term resource development and sustaining its production levels. This investment underscores the importance of innovation and investment in technology to improve productivity and efficiency in its mining operations.

Fresnillo places a strong emphasis on environmental sustainability. The company actively monitors its carbon footprint, aiming for a reduction of 30% in greenhouse gas emissions by 2030. This goal is part of a broader initiative to align corporate practices with global sustainability goals, including the Paris Agreement.

In terms of financial performance, Fresnillo reported total revenues of approximately $1.8 billion in 2022, primarily driven by the strong demand for silver and gold. The company’s net profit for the same period stood at around $450 million, indicating healthy margins and effective cost management.

The mission statement of Fresnillo plc emphasizes not only operational excellence but also the importance of community engagement and stakeholder relations. Fresnillo contributed approximately $9 million to social development projects in local communities in 2022, supporting education, health, and infrastructure initiatives.

In summary, Fresnillo plc’s mission is deeply intertwined with its operational goals, focusing on sustainable practices, community involvement, and financial performance, all of which serve to strengthen its position as a leading player in the mining industry.

How Fresnillo plc Works

Fresnillo plc is a leading Mexican precious metals mining company, primarily focused on the extraction of silver and gold. The company operates several mines in Mexico, which are situated in regions rich in mineral resources. As of the latest reports, Fresnillo boasts production from the following key operations:

• Fresnillo Mine
• Herradura Mine
• Orisyvo Project
• San Julián Mine

In 2022, Fresnillo's total silver production reached approximately 52.5 million ounces, while gold production was around 839,000 ounces. These figures reflect a strong operational capacity amidst fluctuating market conditions.

Fresnillo operates under a vertically integrated business model that covers various stages, from exploration to production. The company employs advanced mining technologies and sustainable practices to optimize production efficiency and minimize environmental impact.

In terms of financial performance, for the year ending December 31, 2022, Fresnillo reported revenue of approximately $1.67 billion, with an EBITDA of around $700 million. The net profit for the year stood at $210 million, demonstrating a resilient financial structure amidst fluctuating commodity prices.

Fresnillo is also noted for its commitment to sustainability and community engagement. The company allocates a significant portion of its earnings to local community projects, focusing on education, health, and infrastructure. In the last financial year, Fresnillo invested $22 million in social initiatives across the regions where it operates.

The mining company has also been actively involved in exploration efforts to identify new resources. In 2022, Fresnillo spent approximately $102 million on exploration and projects, indicating its aim to expand its operations and enhance production capabilities.

Market trends indicate that silver and gold prices are subject to fluctuations influenced by global economic conditions. As of October 2023, silver is trading at approximately $23.50 per ounce, while gold is priced around $1,900 per ounce, affecting Fresnillo's revenue prospects.

To conclude, Fresnillo plc operates with a robust strategy focused on production efficiency, sustainability, and community engagement, while continuously adapting to market trends and exploring new growth opportunities. This operational structure positions the company well in the competitive mining sector.

How Fresnillo plc Makes Money

Fresnillo plc is a leading silver and gold mining company headquartered in Mexico. It is primarily involved in the exploration, extraction, production, and processing of silver and gold. The company's revenue model is predominantly driven by the sale of precious metals, primarily silver and gold. In 2022, Fresnillo reported revenues of approximately $1.19 billion, showcasing a robust business performance and stable demand for its products.

The principal sources of income for Fresnillo include:

• Silver Production: Fresnillo is one of the world's largest primary silver producers. In 2022, the company produced 12.5 million ounces of silver. The average realized silver price was approximately $23.61 per ounce, contributing significantly to the overall revenue.
• Gold Production: The company also focuses on gold mining. In the same year, Fresnillo produced 365,000 ounces of gold, with an average realized price of around $1,790 per ounce. This production is key to diversifying its income stream away from silver alone.

To better understand the financial performance, consider the following table detailing Fresnillo's production metrics and revenue output for the last fiscal year:

The company’s operational efficiency is underscored by its low all-in sustaining costs (AISC) for both silver and gold. In 2022, Fresnillo's AISC for silver was approximately $15.75 per ounce, and for gold, it was around $1,200 per ounce. These figures highlight the company's ability to maintain profitability even in fluctuating market conditions.

Moreover, Fresnillo's strategic investments in exploration and development projects bolster its future revenue potential. The company allocated around $164 million towards capital expenditures in 2022, focused on advancing both existing and new projects to enhance production capacity and operational lifespan.

Additionally, the company benefits from a favorable geographic location in Mexico, which hosts rich mineral deposits. By leveraging its established operational infrastructure, Fresnillo continues to explore new mining opportunities and improve existing asset productivity, positioning itself for sustainable long-term profitability. The company also takes advantage of hedging strategies to mitigate risks associated with price volatility in silver and gold markets.

In conclusion, Fresnillo plc's revenue generation primarily stems from its silver and gold production, supported by efficient operational management and strategic investment in growth initiatives. The company's financial health is reflected in its ability to produce substantial volumes of precious metals at competitive costs.