Fresnillo plc

The company said first-half 2026 was a record period since the IPO. Gross profit was 131% above last year, operating profit was 149% above last year, profit for the period was almost tripled, and EBITDA was almost doubled. Adjusted revenues increased by $1.4 billion, with average realized silver at $76.3 per ounce versus $33 in the first half of 2025 and average realized gold at $4,647 per ounce versus $3,169. Cash generated by operations was almost $2.36 billion, and cash balance at June was $2.5 billion versus $2.76 billion at the start of the year. For the first half, dividends paid were almost $800 million to shareholders plus almost $200 million to minority shareholders, and the company spent almost $550 million on Probe Gold and $236 million on PP&E CapEx. Management reaffirmed it remains on track to meet 2026 guidance, said 2027 and 2028 silver-equivalent production guidance is unchanged, and lowered CapEx guidance to $500 million-$550 million. For the next six months, management said it is using conservative price assumptions of $55/oz silver and $4,000/oz gold.

Octavio Alvidrez described the first half as an excellent period with solid operations and record financial results, while emphasizing disciplined cost control and capital allocation. He said the company is advancing a broad pipeline of brownfield, development, and greenfield projects, but is doing so carefully and only after technical, permitting, and community issues are addressed. His tone was confident but measured, repeatedly stressing that the company wants to improve the odds of success before committing major capital.

Mario Arreguín highlighted the financial upside from higher metals prices, especially silver, and said the main revenue driver was the $76.3/oz realized silver price versus $33 last year. He also explained that adjusted production costs were up almost 21% or $138 million, with about 66% of the increase tied to the stronger Mexican peso and cost inflation, plus additional impacts from Saucito, Herradura stripping, and higher maintenance. Cash generation was almost $2.36 billion, cash ended at $2.5 billion, and he said the company used about $2.7 billion across taxes, dividends, Probe Gold, and CapEx. He also reiterated the dividend framework as roughly 50% of net income, with the interim dividend representing an advance on that policy.

Analysts focused on why several projects, especially Novador and Orisyvo, are taking so long to reach production, and management answered that both require more technical work, permitting, and in Orisyvo’s case major infrastructure and metallurgical complexity. There were also questions on the CapEx cut, with management saying the lower spend reflects deferrals or lower needs on items like equipment, tailings facilities, and some sustaining investments, while key operational CapEx still goes ahead. On dividends, Mario said the interim payout simply follows the company’s formulaic policy using conservative price assumptions of $55 silver and $4,000 gold for the next six months. On Saucito, management said lower sales versus production may just reflect timing around settlements and expected to recover some of that in the second half.