Last checked at 17 May 2011 11:00
| Fresnillo Plc
28 Grosvenor Street
London W1K 4QR
United Kingdom
www.fresnilloplc.com
17 May 2011
Annual General Meeting Statement
Fresnillo PLC will hold its Annual General Meeting today at 12noon in London, and Mr Alberto Baillères, Chairman, will make the following statement:
"I am pleased to report a year of solid performance for Fresnillo plc, mainly due to higher silver and gold prices. Also, record silver and gold production, the start-up of a new mine, and substantial progress at development and exploration projects confirm the Group's operational and project execution capabilities and its large inventory of mineral resources and reserves.
This performance comes in the context of a complex global economic recovery, ongoing market volatility, large fiscal deficits in several developed countries and the continued ascendancy of China, factors that contributed to the exceptional rise in precious metal prices.
Fresnillo plc's production and cost profile, growth platform and mining expertise contributed to the positive performance. Silver production rose 1.7 per cent to a record 38.6 million ounces, while attributable gold production increased 33 per cent to 369,000 ounces.
The result was a 56 per cent increase in adjusted revenues to $1. 47 billion, while pre-tax profits rose 123 per cent to just over $1 billion.
Fresnillo plc has the know-how and resources to identify high potential mineral deposits and to develop them economically, establishing a strong pipeline for organic growth. The Board has authorised a 151 per cent budget increase to US$ 251 million in 2011 for exploration of early and advanced projects.
Underlying our strategy are two fundamental pillars: prudent financial discipline and an unwavering commitment to long-term sustainable development.
Our focus remains squarely on prioritising the health and safety of employees, minimising the Group's environmental impact, and engaging constructively with communities to create lasting economic and social value.
We are fully committed to best practices in corporate governance and to adherence to the principles and provisions of the new UK Code on Corporate Governance.
Shareholders will be aware, from the business of today's meeting, that we have adopted the Code requirements concerning the annual re-election of directors. In addition to our internal evaluations, in 2011 we will carry out an external evaluation of the Board. We will continue to consider future appointments to the Board based on qualifications and merits with due regard for the benefits of diversity, including gender.
Furthermore we have appointed Independent Audit Ltd, to assist the Board in reviewing the Group's risk management framework and the Board's appetite and tolerance for risk. This work is in progress and will be completed by the end of the year.
As an ethical company, Fresnillo plc conducts its business in line with its internal code of business principles. We will, however, adapt as necessary our existing policies and procedures in order to ensure that they are in line with the UK Bribery Act including applicable guidance and have already begun this process.
Despite the uncertain outlook for economic and metal prices, we expect that the high quality resource base and low-cost production profile will enable Fresnillo plc to deliver further production growth in 2011.
Silver and gold production will reflect the start-up of commercial operations at Saucito, an important new mine with resources of 361.5 million ounces of silver. Gold production will benefit from the expanded milling capacity at Ciénega and the expansion of Soledad-Dipolos.
I would like to thank my fellow Board members for their service and contributions in the year. It is a pleasure to work together towards a common mission. Fresnillo plc benefits greatly from the wealth of experience and perspectives of its Board as well as its outstanding management and employees. I would like to commend all Company personnel for delivering another great performance that ensures Fresnillo plc's continued leadership in primary silver production and growing profile in gold. Thank you."
For further information on Fresnillo, please visit our website: www.fresnilloplc.com or contact:
Fresnillo plc
London Office
Arturo Espinola
Head of Investor Relations Tel: +44(0)20 7339 2470
Mexico City Office
Gabriela Mayor Tel: +52 55 52 79 3203
Brunswick Group
Carole Cable Tel: +44(0)20 7404 5959
David Litterick
About Fresnillo plc
Fresnillo plc is the world's largest primary silver producer and Mexico's second largest gold producer, listed on the London and Mexican Stock Exchanges under the symbol FRES.
Fresnillo has five producing mines, all of them in Mexico - Fresnillo, Ciénega, Herradura, Soledad-Dipolos and Saucito; one development project - Noche Buena; and six advanced exploration prospects - San Ramon, San Julián, Orysivo, Centauro Deep, Las Casas and Juanicipio, as well as a number of other long term exploration prospects and, in total, has mining concessions covering approximately 1.91 million hectares in Mexico.
Fresnillo has a strong and long tradition of mining, a proven track record of mining development and reserves replacement, and a low cost of production, being in the lowest quartile of the cost curve for both silver and gold.
Fresnillo's goal is to maintain the Group's position as the world's largest primary silver company, producing 65 million ounces of silver and over 400,000 ounces of gold by 2018.