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Based on recent production guidance and the 2026 acquisition of Probe Gold, the fair value of Fresnillo (LSE: FRES) is heavily influenced by the extreme leverage of its operational model to record-high metal prices.

2026 Production & Probe Acquisition

Revised 2026 Guidance: Fresnillo recently cut its 2026 production outlook to 42–46.5 million ounces (moz) of silver and 500–550 thousand ounces (koz) of gold. This reflects operational adjustments at the Fresnillo and Herradura mines to prioritise margin over volume.

Probe Gold Acquisition: Completed on 22 January 2026 for US$555 million, this deal adds a 10 moz gold resource base in Canada. While it provides long-term growth (200k+ oz/year from the Novador project), it will not contribute to 2026 production as work to advance the project has only just commenced.

Fair Value Analysis ($65 Silver / $4,000 Gold) for 2026

In the scenario where silver averages $65 and gold $4,000, Fresnillo’s revenue and earnings would far exceed current analyst consensus.

Earnings Sensitivity: For every +$10 in silver, Fresnillo adds approximately $120m in revenue and $0.44 annualised EPS.

Fair Value Estimates:

Market Price: As of early February 2026, shares are trading around 3,694p to 4,140p.

Projected Value: With silver and gold at your specified levels ($65/$4,000), earnings would likely surpass the $1.74–$1.86 EPS projected for lower price cases ($90 silver was modeled for higher valuations).

Analyst Targets: Current analyst highs reach 5,441p, though these often use lower price assumptions (e.g., $4,400 gold).

At $65 silver and $4,000 gold, a fair value exceeding 5,000p is supported by the resulting massive free cash flow.

2025/Early 2026 Context with $65 Silver / $4,000 Gold :

EPS ~$0.62–$1.74 Significant expansion; likely >$2.00

Share Price Target 3,348p (Avg) to 5,441p (High) Valuation likely testing the 5,000p–6,000p range

Strategic Value High liquidity; $1.8B net cash (pre-Probe) Enhanced by entry into Tier-1 Canada

Fresnillo PLC is expected to end FY2025 in a substantial net cash position (negative net debt), a significant shift from previous years. Analyst consensus and current financial reports estimate the year-end net debt at approximately -$1.48 billion.

Key Drivers of the FY25 Debt Position

The transition to a large net cash surplus is driven by record-breaking cash generation despite one-off accounting hits.

Massive Cash Accumulation: As of June 30, 2025, Fresnillo reported cash and liquid funds of $1.823 billion, up from $1.298 billion at the end of 2024. This was fueled by $1.026 billion in free cash flow generated in the first half of 2025 alone, capitalising on record gold and silver prices.

Total Debt Stability: The company's total gross debt has remained relatively stable, reported at $850.5 million in mid-2025. Most of this is long-term debt, which decreased slightly by 0.4% year-over-year.

Net Cash Status: By mid-2025, Fresnillo already held a net cash position of approximately $972.5 million (Cash of $1.823B minus Debt of $0.850B). Analysts expect this to grow toward the $1.48 billion mark by year-end as production at key mines like Juanicipio continues to scale.

Factors Impacting the Final Balance

While the cash position is strong, several major outflows in late 2025 and early 2026 will affect the final net debt/cash figure reported on March 3, 2026:

Acquisitions: In late 2025, Fresnillo announced the acquisition of Probe Gold Inc. for approximately $560 million in cash. This major capital outlay will significantly reduce the cash balance at the end of the year.

Shareholder Returns: The company significantly increased its dividends in 2025, paying an interim dividend of $153.3 million (up from $47.2 million in 1H24).

Silverstream Exit: Although the $133 million loss was primarily a non-cash accounting charge, the $40 million received from Peñoles for the buyback was a minor cash inflow.

Capital Expenditure: Sustaining and project CAPEX for 2025 was budgeted at $530 million, which is being funded entirely through operational cash flow.

Based on the production figures and the record metals prices observed throughout 2025, Fresnillo PLC's financial performance for the full year 2025 (FY25) is characterized by significant revenue and profit growth.

FY 2025 Financial Estimates & Key Metrics

Revenue: Estimated at approximately $4.35 billion. This represents a sharp increase from 2024, driven by record average gold prices of $3,431–$3,435/oz and silver averages of nearly $40/oz.

Free Cash Flow (FCF): Estimated at $1.587 billion for the full year. The company reported a robust $1.026 billion in FCF for the first half of 2025 alone, supported by high margins and disciplined capital expenditure.

Earnings Per Share (EPS): Estimated at $0.71 based on interim outperformance, though some full-year consensus targets sit lower near $0.47. The company significantly beat H1 estimates ($0.71 actual vs. $0.54 forecast).

Price-to-Earnings (P/E) Ratio: Currently trading at a high trailing P/E of approximately 81x to 83x. However, the forward P/E is significantly lower, estimated at 19.65x, reflecting expectations of continued high earnings.

2025 Realised Price Environment

The financial results were underpinned by a historic bull market in precious metals:

Gold: The annual average reached a record $3,431/oz, a 44% increase year-over-year.

Silver: The annual average rose to approximately $40/oz, outperforming analyst consensus by over 20%.

Margins: EBITDA margins improved dramatically, rising from 36.6% in 2024 to 56.9% in 2025.

I'm really surprised that it went up today!

I was about to full offload here but then held back realizing that it is going ex-dividend this month.

GLEN was over £5 before and with all the talk about copper, GLEN can easily be £5+ short term.

Now there is a chance BHP could bid? Hopefully GLEN realized what it needs to do next time when bid arrives!

Also GLEN said RIO pulled out without even mentioning the premium they want to offer! May be GLEN should not have raised about 40% ownership so early in the process?

Because of the volatility in Silver they are moving away from using SIlver to make their products.

CEO says with Silver price 130% higher than last year when it was at $30 their margins took a big hit!

So they are reducing Silver infact totally moving away to Platinum!

Does it mean they believe that Silver is not going to come back to $30 ever gain?

Pleasantly suprised with the rise!

I really don't follow now what moves FRES up and down!

Silver at $76 is good and if it holds up for Monday morning then probably a good week next for FRES and for Silver!

ID78, do you mean only 10% could not be delivered last month so rolled over and the rest delivered?

Sorry but the LSE site doesn't work properly on my phone for some reason. It is acting silly.

Anyways I was saying that Standard Chartered bank are now giving price targets for crypto coins! They have given a price target of 2000 for SOLANA by 2030! I'm thinking to add some crypto now as they are low now or may be IBIT? Buy low sell high right?

I'm surprised to learn that banks

There will be a rns tomorrow to say deadline is extended as that is what most new articles are mentioning. Also FT says it could be 582p which could be pricey for RIO and also says Glen expects at least above 530p which was the Glen IPO price. 580p would be lovely!

Silver is holding up ok. It is the sell off in US tech and Bitcoin is dragging the rest. Hopefully it settles and all indices go back up. Alphabet and Broadcom are reporting after hours. Hopefully those numbers pull the market up. As long as Silver holds up tonight, tomorrow should be good for FRES.

Whenever I visit this page and see RR in blue, I immediately open calculator and divide £20k with 1.27 when I bought it and cry seeing what it is worth today as I bloody sold it after the roller coaster ride from £1.27 to 63p and sold it when it was back to 1.27 :-( and all this could have been in ISA! Life is like that! It was my redundancy pay that I invested so bottled it. Bought some later with avg at 800p but profit is not that big! May be £30 in few years?

I did one for £10k yday at 3814 and yes there will be few bumps till the Mar FY results

FRES could have provided some financial figures too other than production numbers in Q4.

I think EDV provided financial figures and that tremendously helpful.

May be analysts have already calculated on what the numbers could be with those production figures and came up with target of £45 and $47.

Unfortunately FY results are right after Feb end of month when futures expire?

Feb 27th, Friday is the last trading day of Feb and results are on Tuesday, Mar 3rd so most likely it could be down on Friday like last week and bumpy ride on Monday, Mar 2nd and then boom results on Mar 3rd should lift off the price hopefully!

But no doubt there will be many

We need steady rise and another sudden meteoric rise. Looks like by the March results time we could see 45 but until then there could be see-saw in the prices. Below is nice article on CNBC -

Silver’s whipsaw has been more dramatic, reflecting its smaller market, higher volatility and heavier retail participation. However, some analysts still maintain a bullish case for the white metal.

“Speculative positioning has definitely played a role in the short term. Silver has attracted more retail participation than gold and that makes it that much more sensitive to fast-moving sentiment and short-term trading,” said Zavier Wong, market analyst at eToro.

Wong, however, added it may be “too simplistic” to attribute the entire move to speculation. Silver has genuine industrial demand, particularly tied to areas linked to data centers and AI infrastructure.

A study published in January projected that global silver demand will surge this decade, driven largely by solar photovoltaics and the shift to more silver-intensive cell technologies. Total demand is forecast to reach 48,000 tonnes to 54,000 tonnes a year by 2030, while supply is expected to rise only to about 34,000 tonnes, meaning just 62%-70% of demand would be met.

The solar sector alone is seen consuming 10,000-14,000 tonnes annually, or up to 41% of global supply.

“That demand hasn’t gone away. What we’re seeing here is silver running ahead of itself, which is something it has always done during strong phases,” said Wong.

Media says dollar gaining strength is the reason for the Crypto sell off! It was the reason for Gold and Silver sell off

But isn't Bitcoin gone above $100k when Dollar was still strong last year?

Anyways Trump's family has billions worth of Bitcoin! Definitely Trump will be furious seeing Bitcoin dropping!

EZJ was again in the top 10 list for takeover target as per the Bloomberg survey 2026 !

It was in 2024, 2025 and this year!

ITV was listed too and Sky is bidding for part of ITV!

It will be some day an offer will come. EZJ is very undervalued and the big boys are shorting it to keep the price low for someone to make a big offer. This should be at least £7 already IMO

One of the reasons touted for the meteoric rise of Silver price was short squeeze and then the other factors like demand and supply deficit, safe haven metal after gold and increased demand for use in Solar panels, EVs and AI. So all of these are still in play except that silver has been shorted to death since last 2 days. It is being shorted aggressively to bring the price down! How long can they keep their short positions open? Short squeeze has to happen. We just need to seen when that will happen. Just need a day or 2 for the price to be steady and then little bounce for another day or two and then need Trump to start his wars on people and countries and that’s it we will see a short squeeze and Silver back to the highs!

Down to $78 and back up again to $84 now so there are buyers at these low prices and Gold is back to 4927. It went down to 4700 something.

FRES makes money with both Silver and Gold at these prices too. Hope it stays around 4000p till the March FY results and by then hopefully PM prices are higher than today. I may look to buy in small 5k tranches. May be next week it is less volatile. GLA

Well the way the Silver was going up anyone will say nonsense if you say Silver is coming down to $81!

Even Citi Bank forecasted $150 in next 3 months!

UpDownFlat, are you still holding?

Hope you managed to sell at the top!

The drop since yday in your and everyone’s profits and losses are staggering! Just unbelievable!