TIDMFRES
RNS Number : 7572L
Fresnillo PLC
17 May 2022
Fresnillo plc
21 Upper Brook Street
London W1K 7PY
United Kingdom
www.fresnilloplc.com
17 May 2022
Fresnillo plc - AGM Statement
Fresnillo plc (the "Company") will hold its Annual General
Meeting today. Chairman Mr Alejandro Baillères will make the
following statement:
It is a privilege to be presenting to you today in my first AGM
as Fresnillo, plc's Chairman.
I would like to begin by paying tribute to our former Chairman,
and my father, Alberto Baillères. Don Alberto was a remarkable man
who achieved many milestones in his life, but never forgot what was
most important. He led Fresnillo with distinction for many years.
As a Board, we continue to miss his leadership, and as a son, I
continue to miss my father. I am absolutely committed to building
on his legacy to create a stronger and more resilient company,
while remaining faithful to his values.
Our Purpose is to contribute to the wellbeing of people through
the sustainable mining of silver and gold. I am proud to tell you
that in 2021, we remained committed to this purpose which continues
to be at the heart of how we think and act. Our purpose has
supported our people and their communities through what were, at
times, difficult and demanding days.
As we anticipated, the pandemic again disrupted our activities
in 2021, although not to the same extent as the previous year. The
introduction of new labour legislation added to the challenges we
faced and caused additional disruption, primarily at our
underground mines.
A fourth wave of Covid-19 reached Mexico at the end of the year.
Though we are thankful this variant presented a lesser health risk,
it still impacted us due to higher rates of covid-related staff
absenteeism. The safety and well-being of our people is our
priority and our covid protocols were effective in limiting the
spread. Nonetheless, this did have an impact on production, though
I am pleased to say this has now lessened.
A second major challenge to the business was presented by the
labour reform in Mexico restricting the ability to subcontract
labour, which came into effect from 1st September 2021. This
resulted in the requirement to internalise a high proportion of our
contractor workforce. Historically, a trained and motivated
contractor workforce has been a key aspect of our way of working
and the reform has necessitated significant work. Ultimately, we
believe that although the move away from outsourcing will be a
challenge in the short term, in the medium and long term it will
lead to a more cohesive and resilient workforce.
Despite these, we delivered a creditable performance. Silver
production of 53.1 moz (including Silverstream), was marginally
below guidance, but flat versus 2020. Gold production of 751.2 koz,
was ahead of guidance, down 2.4% versus the previous year. We have
started 2022 in line with our expectations and our guidance is
unchanged.
We reported US$2,847.9 million in adjusted revenue, an increase
of 9.2%, primarily due to better precious metals prices. Gross
profit rose year-on-year by 6.5% to US$936.9 million. Generating
returns for our shareholders is key and a priority - we declared an
interim dividend of 9.90 US cents per share, with a final dividend
of 24.0 US cents per share, bringing the total for the year to 33.9
US cents per share, in line with our consistent dividend
policy.
We made good progress on our development projects in the year.
The new Juanicipio mine was completed at the end of 2021 as
planned. However, approval to complete the tie-in to the national
power grid was not granted by Comisión Federal de Electricidad
(CFE) -a government company- before year end as expected. The mill
commissioning timeline was therefore extended to midyear. Similar
delays also affected the start-up of the new Pyrites Plant at the
Fresnillo mine.
Our long term growth pipeline remains strong. We continue to
invest heavily in our exploration efforts and we are making steady
progress with our next development projects at Rodeo and Orisyvo,
which will contribute to gold production in the following
years.
In April 2021, we announced a number of Board changes that took
effect at the AGM in June, including my appointment as Chairman. We
were delighted to welcome two new Directors to the Board, Héctor
Rangel and Eduardo Cepeda who have already brought valuable
insights to our meetings. Your Board continues to function
extremely well, providing leadership, insight and challenge to the
executive team, not least a focus on our culture and remaining
faithful to our purpose and values. This includes promoting the
participation of women in our workforce, with the total percentage
of women increasing to 11.0% in 2021 from 9.7% in the previous
year. Our Board composition during 2021 meant that we were one of
the most gender progressive companies in Mexico according to both
the 50/50 Women on Boards Gender Diversity Index and the Women
Corporate Directors Foundation.
We are committed to playing our part in fighting climate change
by mitigating our environmental impact wherever possible. We have
completed our project in Herradura to install dual fuel engines
that run on both Liquid Natural Gas (LNG) and diesel as planned and
anticipate seeing the first environmental and cost benefits in
2022, as both our diesel consumption and CO(2) footprint decrease.
We are focused on achieving our target of using wind power to
provide 75% of our electricity by 2030 and continue to analyse our
Energy Strategy in order to pursue a decarbonisation pathway that
will be operationally and technologically viable.
The Board has also continued to monitor management's efforts to
ensure that the working environment is a healthy and safe one; both
through the ongoing Covid-19 related measures in place at our sites
as well as reinforcing the implementation of the 'I Care, We Care'
safety programme throughout our operations.
Though we remain cautious, we face the future with confidence.
Challenges do remain - in common with other industry sectors, the
labour market remains tight, with considerable competition for
talent in addition to increased cost pressures and disruption on
supply chains. However, I am pleased to say we have built up our
resilience in 2021 and equipped Fresnillo with the strength and
attributes to continue delivering long-term value to all our
stakeholders.
As always, I would like to close by thanking all our people for
their commitment and hard work during the year and our shareholders
for their support.
-Ends-
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), two development
projects - the Pyrites Plant at Fresnillo and Juanicipio, both of
which have been completed but approvals to operate are pending, and
three advanced exploration projects - Orisyvo, Rodeo and
Guanajuato, 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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May 17, 2022 03:38 ET (07:38 GMT)
Fresnillo (LSE:FRES)
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