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FRESNILLO PLC (GB:FRES)
LSE:FRES
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FRESNILLO (FRES) AI Stock Analysis

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GB

FRESNILLO

(LSE:FRES)

Rating:76Outperform
Price Target:
1,742.00p
▲(20.55%Upside)
Fresnillo's financial stability and cash flow strength are major positives, supported by effective cost control and strategic initiatives. Technical indicators suggest strong momentum, though valuation concerns may limit upside. Earnings call insights add a positive dimension, highlighting production stability and shareholder returns.

FRESNILLO (FRES) vs. iShares MSCI United Kingdom ETF (EWC)

FRESNILLO Business Overview & Revenue Model

Company DescriptionFresnillo plc is a leading precious metals mining company headquartered in Mexico. The company is primarily involved in the exploration, development, and production of silver and gold, operating through its various mines across Mexico. As one of the largest primary silver producers in the world and a significant player in the gold mining industry, Fresnillo focuses on efficient and sustainable mining practices, aiming to deliver long-term value to its stakeholders.
How the Company Makes MoneyFresnillo makes money through the extraction and sale of precious metals, primarily silver and gold. The company's revenue model is centered around mining operations where these metals are extracted from its owned and operated mines. Once extracted, the metals are processed and sold to a variety of customers, including industrial users and investors. The company's earnings are significantly influenced by global market prices for silver and gold, as well as its operational efficiency in extracting and processing these metals. Additionally, Fresnillo may enter into strategic partnerships or joint ventures to expand its mining capabilities and reserves, further contributing to its revenue streams.

FRESNILLO Earnings Call Summary

Earnings Call Date:Mar 04, 2025
(Q4-2024)
|
% Change Since: 101.16%|
Next Earnings Date:Aug 05, 2025
Earnings Call Sentiment Neutral
Fresnillo demonstrated strong production and financial performance with significant achievements in cost control and environmental initiatives. However, operational challenges, particularly in Herradura and the valuation of the Silverstream agreement, present notable risks and setbacks.
Q4-2024 Updates
Positive Updates
Record Silver and Gold Production
Fresnillo achieved 56.3 million ounces of silver production, maintaining its status as the world’s number one silver producer. Additionally, it is the leading gold producer in Mexico with close to 39 million ounces of gold.
Financial Performance and Special Dividend
Strong cash flows and a robust balance sheet allowed Fresnillo to declare a one-off special dividend. The company reported a 147% increase in gross profit and a 563% increase in operating profit.
Operational Stability Achieved
After years of operational challenges, Fresnillo has stabilized production across all operations, hitting production guidance for the past couple of years.
Positive Trends in Cost Control
The company achieved $40 million in cost-cutting and efficiency improvements, resulting in reduced production costs.
Renewable Energy and Environmental Achievements
Fresnillo surpassed its objective of sourcing 75% of its energy demand from wind sources by 2030, achieving over 80% in 2024.
Negative Updates
Operational Challenges at Herradura and Ciénega
Challenges at Herradura included transitioning from oxides to sulphides, impacting recoveries and costs. Ciénega faced issues with mine life and ore mix, shifting from gold to silver.
Silverstream Valuation Loss
The Silverstream agreement faced valuation challenges with a reported loss due to operational and financial issues at the Sabinas mine, leading to a higher discount rate of 20% being applied.
Production and Grades at Fresnillo Mine
Despite efforts to improve operational discipline and dilution control, Fresnillo did not achieve the expected silver grades for 2024.
Mexican Labor Reform Impact
The labor reform in Mexico required Fresnillo to integrate contractor workers into its headcount, impacting its business model and operational efficiency.
Exploration and Reserve Challenges
While resources showed slight growth, reserves decreased by 7% due to a more conservative approach in resource and reserve calculations.
Company Guidance
During the call, Fresnillo plc provided comprehensive guidance on their fiscal performance, revealing several key metrics and strategies. The company reported achieving 56.3 million ounces of silver production, maintaining its position as the world's leading silver producer, and highlighted a resource base of 2.2 billion ounces of silver and nearly 39 million ounces of gold. Financially, Fresnillo achieved a gross profit increase of 147% and an operating profit growth of 563%, supported by a 140% rise in cash generated from operations, totaling $1.55 billion. The company declared a one-off special dividend, contributing to a total shareholder return of around $550 million for 2024. Operationally, they implemented cost-saving initiatives that resulted in $40 million in efficiencies, and expect continued cost reductions facilitated by infrastructure improvements such as the completion of the San Carlos shaft at the Fresnillo mine. Additionally, Fresnillo has plans to deepen the Jarillas shaft at Saucito by 2027, and is conducting exploration efforts to sustain and expand their resource base, with a particular focus on promising results in Guanajuato. The company emphasized their strategic focus on stabilizing production, controlling costs, and ensuring strong cash flows to provide significant shareholder returns, while also addressing external challenges like inflation and regulatory changes in Mexico.

FRESNILLO Financial Statement Overview

Summary
Fresnillo exhibits strong financial health with improvements in revenue and cash flow. The company has managed its debt levels effectively, enhancing its financial stability and operational efficiency. Despite fluctuations in net income, the overall financial performance remains robust.
Income Statement
78
Positive
Fresnillo has shown robust revenue growth with a significant increase from 2023 to 2024, improving its gross and net profit margins. Gross Profit Margin increased to approximately 35.4%, and Net Profit Margin rose to 4.03% in 2024. The EBIT and EBITDA margins also improved, indicating better operational efficiency. However, the company faced a net income decline in 2023, which is a concern.
Balance Sheet
81
Very Positive
The balance sheet is strong with a healthy Debt-to-Equity ratio of about 0.22 and an improved Equity Ratio of 65.6% as of 2024, indicating a stable financial structure. The company's ROE has slightly decreased, reflecting lower profitability relative to shareholder equity. However, the reduction in total debt and increase in cash reserves bolster financial stability.
Cash Flow
85
Very Positive
Fresnillo's cash flow position is notably strong with a substantial increase in operating cash flow and free cash flow in 2024. The Free Cash Flow to Net Income ratio is positive, indicating efficient cash generation relative to profits. The company's ability to generate cash flow suggests good liquidity and potential for reinvestment or debt reduction.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue3.50B2.71B2.43B2.70B2.43B
Gross Profit1.24B503.24M536.02M936.92M879.37M
EBITDA1.35B697.03M829.22M1.20B1.25B
Net Income140.92M233.91M271.90M421.21M374.12M
Balance Sheet
Total Assets5.88B5.74B5.91B5.77B5.67B
Cash, Cash Equivalents and Short-Term Investments1.30B534.58M969.06M1.24B1.07B
Total Debt853.46M948.95M1.28B1.28B1.23B
Total Liabilities1.67B1.67B2.00B1.96B2.06B
Stockholders Equity3.86B3.77B3.69B3.62B3.48B
Cash Flow
Free Cash Flow929.26M-57.49M-89.94M303.09M505.36M
Operating Cash Flow1.30B425.92M502.19M895.14M917.68M
Investing Cash Flow-465.46M-369.53M-514.18M-501.56M-366.10M
Financing Cash Flow-248.28M-495.83M-254.11M-227.32M178.73M

FRESNILLO Technical Analysis

Technical Analysis Sentiment
Positive
Last Price1445.00
Price Trends
50DMA
1316.56
Positive
100DMA
1105.22
Positive
200DMA
880.25
Positive
Market Momentum
MACD
39.34
Positive
RSI
53.01
Neutral
STOCH
16.06
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:FRES, the sentiment is Positive. The current price of 1445 is below the 20-day moving average (MA) of 1464.45, above the 50-day MA of 1316.56, and above the 200-day MA of 880.25, indicating a neutral trend. The MACD of 39.34 indicates Positive momentum. The RSI at 53.01 is Neutral, neither overbought nor oversold. The STOCH value of 16.06 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:FRES.

FRESNILLO Peers Comparison

Overall Rating
UnderperformOutperform
Sector (44)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
76
Outperform
$10.85B97.533.70%1.39%25.76%-41.10%
70
Outperform
£8.84M3.952.04%6.94%
GBSLP
69
Neutral
£189.88M22.124.80%4.11%-5.61%-31.96%
GBEUA
53
Neutral
£134.29M-33.13%220.69%-21.05%
44
Neutral
C$961.63M-6.69-13.73%2.46%17.55%-32.57%
GBPDL
40
Neutral
£23.79M-35.25%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:FRES
FRESNILLO
1,445.00
874.85
153.44%
GB:EUA
Eurasia Mining
4.55
2.25
97.83%
GB:GEMD
Gem Diamonds
6.32
-6.10
-49.11%
GB:SLP
Sylvania Platinum
73.00
13.81
23.33%
GB:PDL
Petra Diamonds
12.25
-22.30
-64.54%

FRESNILLO Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
Fresnillo plc Announces New Board Appointment
Positive
Jul 15, 2025

Fresnillo plc announced that Ms. Guadalupe de la Vega has been appointed as an Independent Non-Executive Director of América Móvil, a company listed on the Mexican Stock Exchange. This appointment reflects Fresnillo’s ongoing strategic engagement with industry leaders and could potentially enhance its influence and operations within the mining sector.

The most recent analyst rating on (GB:FRES) stock is a Hold with a £6.85 price target. To see the full list of analyst forecasts on FRESNILLO stock, see the GB:FRES Stock Forecast page.

Financial DisclosuresRegulatory Filings and Compliance
Fresnillo plc Discloses 2024 Government Payments
Positive
Jun 20, 2025

Fresnillo plc has released its Report on Payments to Governments for the year 2024, detailing the financial contributions made to national, regional, and local authorities in countries where it operates. The report, complying with UK Regulations, highlights payments totaling $79.4 million, primarily in Mexico, with significant contributions in taxes, royalties, and fees for licenses and concessions. This disclosure underscores Fresnillo’s commitment to transparency and regulatory compliance, potentially impacting its reputation and stakeholder relations positively.

The most recent analyst rating on (GB:FRES) stock is a Hold with a £685.00 price target. To see the full list of analyst forecasts on FRESNILLO stock, see the GB:FRES Stock Forecast page.

Shareholder MeetingsDividends
Fresnillo plc Announces Successful AGM Resolutions
Positive
May 20, 2025

Fresnillo plc announced the successful passing of all resolutions at its Annual General Meeting, including the re-election of independent directors and approval of dividends. This outcome reflects strong shareholder support and positions the company to continue its strategic objectives in the mining industry.

The most recent analyst rating on (GB:FRES) stock is a Hold with a £685.00 price target. To see the full list of analyst forecasts on FRESNILLO stock, see the GB:FRES Stock Forecast page.

DividendsBusiness Operations and StrategyFinancial Disclosures
Fresnillo Reports Strong 2024 Financial Performance and Optimistic Outlook
Positive
May 20, 2025

Fresnillo plc reported a strong financial performance in 2024, with a significant increase in profitability driven by high silver and gold prices and operational efficiencies. The company achieved a 27% increase in adjusted revenue to $3.6 billion and more than doubled its gross profit to over $1.2 billion. The positive results were supported by effective cost reduction initiatives and favorable currency effects. Fresnillo declared a total dividend of 32.5 US cents per share and a special dividend of 41.8 US cents per share, returning $547.5 million to shareholders. The company is optimistic about future prospects, with a supportive business environment in Mexico and promising exploration projects in Mexico, Chile, and Peru. Fresnillo is committed to sustainability, with improvements in renewable energy use and water management, and continues to focus on safety and corporate responsibility.

The most recent analyst rating on (GB:FRES) stock is a Hold with a £685.00 price target. To see the full list of analyst forecasts on FRESNILLO stock, see the GB:FRES Stock Forecast page.

M&A TransactionsBusiness Operations and Strategy
Fresnillo Sells MAG Silver Shares Amid Strategic Realignment
Neutral
May 16, 2025

Fresnillo plc announced the sale of the majority of its shares in MAG Silver Corp following Pan American Silver Corp’s agreement to acquire MAG Silver. This decision aligns with Fresnillo’s strategic investment objectives, as the conversion of its stake would not meet its goals. The company remains confident in the Juanicipio mine’s performance and plans to use the proceeds from the sale to support its growth pipeline and maintain a strong balance sheet. Fresnillo also looks forward to collaborating with Pan American, maintaining its role as the operator and majority owner of Juanicipio.

The most recent analyst rating on (GB:FRES) stock is a Hold with a £685.00 price target. To see the full list of analyst forecasts on FRESNILLO stock, see the GB:FRES Stock Forecast page.

Dividends
Fresnillo Announces 2024 Dividend Conversion Rates
Neutral
Apr 25, 2025

Fresnillo plc announced the conversion rate for its 2024 final and special dividends, setting the exchange rate at 1.32810 US$/GB£. The final dividend will be 19.6521 pence per share, and the special dividend will be 31.4736 pence per share, payable on 30 May 2025. This announcement reflects the company’s ongoing commitment to providing value to its shareholders and may influence investor perceptions and market positioning.

Dividends
Fresnillo Announces 2024 Dividend Conversion Rates
Neutral
Apr 25, 2025

Fresnillo plc has announced the conversion rate for its 2024 final and special dividends, with the exchange rate set at 1.32810 US$/GB£. The final dividend will be 19.6521 pence per share, and the special dividend will be 31.4736 pence per share, payable on 30 May 2025 to shareholders registered by 22 April 2025. This announcement reflects the company’s ongoing commitment to shareholder returns and may impact its financial operations and stakeholder interests.

Business Operations and StrategyFinancial Disclosures
Fresnillo PLC Reports Stable Start to 2025 with Strong Gold Output
Positive
Apr 23, 2025

Fresnillo PLC reported a stable start to 2025 with silver production down due to the cessation of mining at San Julián DOB, but anticipates a stronger performance in the second half. Gold production increased compared to the previous year, driven by strong performance at Herradura and processing of accumulated inventories. The company remains focused on cost discipline and is well-positioned to benefit from stronger precious metals prices. Despite some decreases in production volumes for lead and zinc, Fresnillo maintains its production guidance for 2025 and continues to prioritize safety and community well-being.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 15, 2025