FRES Fresnillo

                                                                                                                                               Fresnillo plc

21 Upper Brook Street

London W1K 7PY

United Kingdom

www.fresnilloplc.com

21 May 2024

Fresnillo plc - AGM Statement

Fresnillo plc will hold its Annual General Meeting today. Chairman Mr Alejandro Baillères will make the following statement:

"It is, as always, a privilege to present to you as your Chairman. We remain proud to represent Mexico on the London Stock Exchange, and we are deeply committed to our listing and to engaging with all our investors.

I would like to start by focusing on our purpose - to contribute to the wellbeing of people through the sustainable mining of silver and gold. This goes to the heart of how we operate as a business, and it influences everything we do.  

My comments today will focus on how we have performed in 2023 against this commitment to our purpose.

In terms of our operating performance, silver production was up on last year, although marginally below initial expectations, while gold production was in line with guidance, down slightly on last year as our Noche Buena mine approaches its end of life.

We achieved a number of operational milestones in 2023, including the ramp up of our new Juanicipio silver mine and the tie-in of the Pyrites Plant to the electricity grid at Fresnillo. The safe development of Juanicipio, which was completed during Covid, is something we can all be particularly proud of.

We delivered a solid financial performance with an adjusted revenue of US$2,869.1 million, up 10.5% on last year. Once again, gross profit was impacted by factors outside of our control including continued inflation and the adverse effect of the revaluation of the Mexican peso against the US dollar.

Our dividend policy remains unchanged. We declared an interim dividend of 1.40 US cents per share, with a final dividend of 4.20 US cents per share, resulting in US$41.2 million returned to our shareholders.

We continue to operate in a challenging environment. Though the final effects of the pandemic have now largely dissipated, global geopolitical events have created strains in the supply chain and driven higher costs. We have also been affected by changing government policies in Mexico, which have impacted the permitting process, as well as the stronger peso.

We are proactively addressing these difficulties. We are working with our suppliers to mitigate the effects of inflation and the strong peso by identifying opportunities to improve supply chain logistics, reduce costs and speed up deliveries of key equipment. We have a long track record of successfully operating in Mexico, with different governments and shifting regulations, and we are committed to continue doing so.

These challenges serve to underline the value of the close working relationships we have forged over many years with all our stakeholders which not only help us navigate short-term operational challenges, but also build a sustainable future that will provide long-term benefits for all. The Labour Reforms in Mexico are a case in point. Though there was some initial disruption following the implementation of the reforms, I am pleased to say that it ultimately helped us build closer relationships with our people and the unions. Through initiatives such as greater automation, we are working closely with them to increase productivity, and support our efforts to address inflationary pressures. Meanwhile, maximising the potential of all our existing operations is key to mitigating the impact of the lengthier permitting process.  Local communities are the foundation stones that sustain our existing operations and facilitate future projects. We generated a positive economic impact of nearly US$2.5 billion in 2023 through wages, taxes and payments to suppliers, while our community health programmes, in collaboration with the UNAM Foundation, have been a fantastic development.

We remain fully committed to engaging with local people and working together to ensure we maximise the considerable social and economic benefits we bring.

We were proud to promote the first Women in Mining Survey in Mexico - with 1,230 participants - to improve our understanding of how to develop opportunities for women in mining. We remain determined to increase the number of women in our workforce and are committed to our target of 12% by 2025.

The Board was very disappointed with our safety performance in 2023. We have stressed the need for our management team to improve safety culture across all our sites, and fully support the HSECR Committee's insistence on the implementation of stricter disciplinary measures.

The safety of our people is paramount, and it will never be compromised. We are determined to restore our safety record to its previous path, eliminate fatal incidents and achieve our target of reaching the International Council on Mining and Metals (ICMM) benchmark ranges.  

Looking ahead, we are mindful of global macro issues that impact our business. 2024 and the following three years are about stable production and managing our costs while developing projects that will form the basis of future growth.

We will also redouble our efforts to protect the health and safety of our people, as well as strive to mitigate the impact of inflation and fluctuating exchange rates on our costs.

Though market conditions may be challenging, we remain committed to our purpose and confident in the outlook for our business. We benefit from a proven strategy, a strong management team, great assets, an exciting development pipeline and a very strong balance sheet. This means we are able to seize opportunities - whether for M&A or to develop new growth projects - as they arise. In Juanicipio we have, once again, clearly demonstrated our ability to bring new projects on stream, despite challenges that have presented themselves. This is a source of huge optimism for the Board.

2024 has started as expected and our full year guidance is unchanged.

I would like to finish by thanking my fellow board members, the management team and all our people at Fresnillo for their continued support, passion and hard work."

-Ends-

For further information, please visit our website www.fresnilloplc.com or contact:

ABOUT FRESNILLO PLC

Fresnillo plc is the world's largest primary silver producer and Mexico's largest gold producer, listed on the London and Mexican Stock Exchanges under the symbol FRES.

Fresnillo plc has eight operating mines, all of them in Mexico - Fresnillo, Saucito, Juanicipio, Ciénega, Herradura, Soledad-Dipolos¹, Noche Buena and San Julián (Veins and Disseminated Ore Body) and four advanced exploration projects - Orisyvo, Rodeo, Guanajuato and Tajitos as well as a number of other long term exploration prospects.

Fresnillo plc has mining concessions and exploration projects in Mexico, Peru and Chile.

Fresnillo plc's goal is to maintain the Group's position as the world's largest primary silver company and Mexico's largest gold producer.

¹ Operations at Soledad-Dipolos are currently suspended.

FORWARD-LOOKING STATEMENTS

Information contained in this announcement may include 'forward-looking statements'. All statements other than statements of historical facts included herein, including, without limitation, those regarding the Fresnillo Group's intentions, beliefs or current expectations concerning, amongst other things, the Fresnillo Group's results of operations, financial position, liquidity, prospects, growth, strategies and the silver and gold industries are forward-looking statements. Such 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 forward-looking 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 exchanges 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 and political and economic uncertainty.