Fresnillo Business Model Canvas

Fresnillo runs continuous geological surveying and diamond drilling, spending about $143m on exploration in 2024 to find new silver and gold deposits; the company aims to replace or exceed the ~22Moz silver-equivalent mined in 2024 to sustain reserves. This year-on-year exploration cycle underpins Fresnillo’s position as the world’s largest primary silver producer by keeping proven and probable reserves replenished.

Fresnillo moves deposits to production via major engineering works—shaft sinking, leach-plant construction and ventilation installation—projects that drove its 2024 sustaining and development capex of $360m and total capex guidance of $420–470m; tight project control cut schedule slippage to under 6% across 2022–24 and was key to meeting 2024 silver production guidance of 45.4Moz.

The most fundamental resource is Fresnillo plc’s portfolio of high‑grade silver and gold deposits in Mexico, including 2025 proven and probable reserves of ~622 Moz silver and 7.6 Moz gold, which support unit cash costs near the lower quartile at about $8–$10/oz silver equivalent in 2024–25. These high grades cut extraction cost per ounce versus lower‑grade peers and remain the cornerstone of valuation and long‑term production strategy into late 2025.

Fresnillo plc owns and runs flagship mines—Fresnillo, Saucito, Herradura—each with processing plants, maintenance workshops, and automated haulage; capital expenditure on mining PPE totaled $583m in 2024, enabling 2024 production of 1.6Moz silver and 0.45Moz gold and supporting unit cash costs of $9.80/oz silver-equivalent.

Fresnillo, the world’s largest primary silver producer, mined 53.7 million ounces of silver in 2024, giving investors direct exposure to silver prices and supply dynamics; its 2024 revenue of $2.1 billion and 25% global primary silver share (2024 est.) deliver market influence and high industry visibility for customers and capital allocators.

Fresnillo focuses on high-grade silver and gold veins, keeping 2024 all-in sustaining costs (AISC) near industry-low levels—approx $8.90/oz silver equivalent and $800–$900/oz gold—so it stays profitable during price dips; this cost edge supported 2024 operating cash flow of $1.1bn and a 28% adjusted EBITDA margin, driving superior margins and steady shareholder cash returns.

Fresnillo secures multi-year offtake and supply agreements with smelters and refiners covering fixed volumes and grade specs, ensuring ~90% of silver and gold output sold under contract in 2024 and reducing price and delivery volatility for its 2024 production of ~62.2Moz silver and 0.9Moz gold.

Fresnillo plc sustains active dialogue with global investors via quarterly reports and annual investor days; in 2024 it published 2023 reserves of 61Moz silver and 3.2Moz gold and detailed AISC (all-in sustaining cost) per payable silver at US$8.90, which the investor relations team uses to build trust with shareholders and analysts.

The primary channel is direct B2B shipments of silver and gold concentrates to large smelters—mainly in Mexico and to refineries in North America and Asia—processing ~100–300 ktpa (kilotonnes per annum) per facility; Fresnillo shipped roughly 1.2 million tonnes of ore/concentrate in 2024, making direct smelters the most efficient route for high-volume handling and lowering treatment and refining charges per tonne.

Refined gold and silver from Fresnillo Plc are channelled through major hubs like the London Bullion Market and CME Group, which in 2024 handled ~USD 400–500 billion in OTC and exchange-traded precious metals turnover, giving standardized pricing and deep liquidity for large lots. Using these markets lets Fresnillo sell to global banks, ETFs and industrial buyers, supporting FY2024 group metal sales of ~US$2.1bn in silver and US$0.9bn in gold-equivalent revenue.

Global metal refiners and smelters take Fresnillo’s concentrates and turn them into pure silver, gold and by‑product metals; they need steady, high‑grade feedstock—Fresnillo supplied ~20.6 Moz silver and 231 koz gold in 2024, making it a reliable partner for large processors.

Fresnillo supplies industrial manufacturers and tech firms where silver is key for photovoltaics, EVs, and electronics; global silver industrial demand rose ~6% to 523 Moz in 2024, driven by solar and EV growth. In 2024 Fresnillo produced ~51 Moz of silver (about 9.8% of global mined supply), making it a critical source as green-energy metal demand scales into the late 2020s.

Mining is labor-intensive, needing geologists, engineers, and operational crews; Fresnillo Group employed ~12,000 people in 2024, so wages and benefits form a major cost line.

In 2024 Fresnillo’s cash costs were ~$790/oz Ag-equivalent and staff-related expenses represented an estimated 20–30% of annual operating costs, with training and safety programs rising after 2022 compliance upgrades.

Energy and fuel for Fresnillo plc’s mining require large electricity loads and diesel for haulage and ventilation, accounting for roughly 8–12% of cash costs—diesel rose 25% in 2022 on oil surges and local tariffs vary; in 2024 Fresnillo reported ~45 MW of contracted renewable capacity and aims to source 50% renewables by 2030 to cut exposure and lower Scope 2 emissions.

Sales of primary silver production account for the largest share of Fresnillo plc revenue, with silver output of 49.5 Moz (million ounces) in 2024 generating roughly 62% of metal sales value; the company’s cash flow and EBITDA move with the LBMA silver price, which averaged about 25.40 USD/oz in 2024. This stream benefits from silver’s dual role as an investment asset and industrial metal, supporting steady demand across jewellery, electronics and investment bars.

Gold is Fresnillo plc’s second-largest revenue stream, accounting for about 22% of 2024 group revenue (roughly $1.1bn of $5.0bn total), and its status as Mexico’s largest gold producer (≈700koz gold in 2024) makes gold central to earnings.