TIDMFRES
RNS Number : 8711C
Fresnillo PLC
24 June 2021
Fresnillo plc
21 Upper Brook Street
London W1K 7PY
United Kingdom
www.fresnilloplc.com
24 June 2021
Fresnillo plc - Annual General Meeting Statement
Fresnillo plc (the "Company") will hold its Annual General
Meeting today. The Chairman, Mr. Alejandro Baillères, will make the
following statement:
"This time last year, we were still coming to terms with the
near-term impact of Covid-19. It is tragic that a year later, the
world continues to fight the effects of this pandemic. I would like
to offer my sympathies to all those who have been affected by this
terrible disease and thank all those in the health, social services
and science communities who continue to work so hard to lead us
towards recovery.
Our Purpose is to contribute to the wellbeing of people through
the sustainable mining of silver and gold. By living up to our
Purpose throughout the pandemic, we have been able to protect and
support our people, maintain production close to the expected
levels and continue to contribute to the wellbeing of our
stakeholders.
Despite the disruption caused by Covid-19 and the measures we
introduced to mitigate its effect, production of silver from our
underground mines generally remained within expected ranges. Gold
production was lower than anticipated, largely due to the six
weeks' interruption of mineral extraction at our open pit
operations as initially mandated by the authorities. This is a good
performance under the circumstances.
Fresnillo achieved a strong financial performance in 2020, with
total adjusted revenue of over $2.6 billion, up almost 15% and
gross profit up by 90.5% to US$879.4 million, driven by a
combination of higher prices and lower costs. We took steps to
ensure the stability and financial health of Fresnillo, with
measures including a limited and targeted hedging programme as a
result of the unique market conditions which presented an
opportunity to reduce downside risk while retaining significant
upside exposure to future silver price increases. We also bought
back just over 60% of the outstanding debt that was due to mature
in 2023 in addition to placing US$850 million of new debt due to
mature in 2050. This new debt has an annual interest rate lower
than the original bond set to expire in 2023, reducing our annual
financing costs and lowering the balloon payment due in three
years' time.
Fresnillo is a proud Mexican business and an integral part of
many communities. More than ever, this partnership has been central
to the health and wellbeing of local people. We shared our Covid-19
tests with communities in remote locations and donated medical and
preventive equipment to local health authorities. We also donated
food, masks and anti-bacterial gels to vulnerable people, and
continued to put the needs of local communities first. That
included maintaining our payment terms and providing help to enable
contractors and suppliers to implement health protocols. We have
also run local community awareness programmes and continue to
support the local health authorities wherever we can.
We worked closely with the Mining Ministry of Mexico to develop
national workplace guidance for our industry - that collaboration
was central to the Government's reclassification of mining as an
essential industry, enabling us to reopen our open pit operations
in May 2020.
Throughout the pandemic, we have continued to focus on
operational improvement. I am pleased to say that the Fresnillo
Full Potential plan is starting to have an impact and the new
state-of-the-art Tunnel Boring Machine, designed in conjunction
with the manufacturer specifically for the Fresnillo mine, also
successfully began operations. Though some working restrictions
remain in place, progress to date gives us cause for cautious
optimism.
In terms of future growth, construction of our new Juanicipio
mine has progressed and is on track to be operational by 4Q 2021.
Production will also be increased when the recently-completed
Pyrites Flotation Plant at Fresnillo is operational.
Our exploration teams continue to identify and develop potential
projects for our pipeline, including at Rodeo, which we expect to
become our next open pit gold mine.
Safety remains our core focus. Although our safety record has
improved over the last decade, the need for constant vigilance was
underlined with the tragic death of a colleague after a fatal
accident, the first such incident in 16 months. These incidents
affect us all deeply and serve to make us more determined to ensure
our people stay safe. Our 'I Care, We Care' programme has now been
rolled out across the business, and we continue to target a steady
improvement in all health and safety metrics.
In 2020 we also advanced our broader ESG strategy. We took steps
to review and, where possible, intensify sustainable practices at
all of our operations, becoming a registered supporter of the Task
Force on Climate-related Financial Disclosures (TCFD) during the
year. We were again recognised as one of the World's Most Ethical
Companies by Ethisphere and retained our membership of the
FTSE4Good Index. In Mexico, our team was proud to win the Ethics
and Values Award from the Mexican Council of Industrial Chambers
and to be commended for our standards of corporate integrity by
Integridad Corporativa 500.
It was with profound sadness that in November we learned of the
death of Luis Robles, who served as an independent Non-Executive
Director since May 2019. Luis brought a great wealth of knowledge,
experience and energy to our Company and will be sorely missed.
The Board was delighted that Guadalupe de la Vega was elected as
an independent Non-executive Director at the 2020 Annual General
Meeting. Her appointment ensures that Fresnillo complies with the
Hampton-Alexander Review requirement that at least 33% of Board
members should be women. With racial inequality and ethnic
diversity coming into greater focus, it was pleasing to see the
Parker Review report that Fresnillo plc met the ethnicity target
for FTSE 100 companies in 2020.
We have also announced other changes to the Board. Jaime Lomelín
retired as a Director during the year, having served on the Board
since the IPO, initially as our Chief Executive Officer and since
2012 as a Non-executive Director. The Board is grateful to him for
his wise counsel, and I am delighted that he will continue to act
as an adviser, ensuring that we will still benefit from his
valuable experience.
The Nominations Committee has recommended to the Board that Mr
Héctor Rangel be proposed for election as an independent
Non-executive Director and Mr Eduardo Cepeda as a Non-executive
Director at the AGM. Héctor and Eduardo bring with them huge
experience and knowledge and are both highly respected in the
Mexican business community after long track records predominantly
in the banking sectors. I know they will make valuable
contributions to the stewardship of the Company.
We said farewell to two members of our Executive Committee
during the year. Our COO André Sougarret returned to his native
Chile while David Giles retired from his role as Vice President of
Exploration. I thank them both for the expertise and experience
they brought to our Company. I would like to welcome their
successors Tomás Iturriaga and Guillermo Gastélum respectively.
I would like to also pay personal tribute to my father Alberto
Baillères, who stepped down as Chairman in April. He has chaired
Fresnillo with distinction since our listing in London, though his
leadership of the Group extends over half a century. On behalf of
the Board I would like to thank him for his immense contribution,
not just to Fresnillo, but also for the much broader role he has
played in the development of the Mexican economy as well as his
service to the Mexican people both as a businessman and
philanthropist during his extraordinary career. I am delighted he
has accepted the Board's invitation to become Honorary President,
so we can continue to benefit from his considerable experience and
deep knowledge.
It is an honour to be stepping up to become Chairman of your
company. I am privileged to have the support of a fantastic Board
and a committed, expert management team executing a proven
long-term strategy. Under my Chairmanship, we will remain faithful
to our core principles, ensuring we continue to adapt to make sure
we always behave in a way that is faithful to our purpose, while
delivering shareholder value.
Fresnillo is in a strong position, supported by a proven
strategy, a positive culture and an expert executive team.
Production has stabilised as expected and the pipeline of new mines
and projects - together with a series of improvement programmes, as
well as an improving outlook more generally - provides us with
solid grounds for optimism.
On behalf of the Board, I would like to thank all our people who
have worked so hard to deliver satisfactory production results in
the face of extremely challenging conditions.
Thank you.
Mr Alejandro Baillères
Chairman of the Board"
For further information, please visit our website
www.fresnilloplc.com or contact:
FRESNILLO PLC Tel: +44 (0)20 7399 2470
London Office
Gabriela Mayor, Head of Investor
Relations
Patrick Chambers
Mexico City Office Tel: +52 55 52 79 3206
Ana Belem Zárate
POWERSCOURT Tel: +44 (0)7793 858 211
Peter Ogden
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 seven operating mines, all of them in Mexico -
Fresnillo, Saucito, Ciénega (including Las Casas Rosario &
Cluster Cebollitas), Herradura, Soledad-Dipolos(1) , Noche Buena
and San Julián (Veins and Disseminated Ore Body), three development
projects - the Pyrites Plant at Fresnillo, the optimisation of the
beneficiation plant also at Fresnillo, and Juanicipio, and four
advanced exploration projects - Orisyvo, Rodeo, Guanajuato and
Pilarica, 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 has a strong and long tradition of exploring,
mining, a proven track record of mine development, reserve
replacement, and production costs in the lowest quartile of the
cost curve for silver.
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.
LEI: 549300JXWH1UV5J0XV81
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END
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