Fresnillo : 1Q21 Production Report 160KB (PDF)

Fresnillo plc 21 Upper Brook Street London W1K 7PY United Kingdom www.fresnilloplc.com

28 April 2021

FIRST QUARTER PRODUCTION REPORT

FOR THE THREE MONTHS ENDED 31 MARCH 2021

Octavio Alvídrez, Chief Executive Officer, said:

"The health and well-being of our people remains our first priority and we have maintained a range of measures to ensure their safety, while also continuing to support our local communities.

First quarter silver production was marginally below the previous quarter, with the encouraging contribution of development ore from our new Juanicipio project offsetting lower grades at Saucito. I am also pleased to report continued progress at the Fresnillo mine with development rates showing an improvement. Quarterly gold production was ahead of the last quarter driven by the higher than expected grade at Herradura. Construction of Juanicipio is making good progress and we are on track to commission the plant by the fourth quarter.

Though the pandemic continues to present certain operational challenges, Fresnillo has started 2021 well with Q1 operations in line with expectations and our full year guidance remains unchanged."

TOTAL PRODUCTION

HIGHLIGHTS

Silver

• Quarterly attributable silver production of 12.6 moz (including Silverstream), down 2.4% vs. 4Q20, driven by a lower volume of ore processed at San Julián Disseminated Ore Body (DOB) and a lower ore grade at Saucito and the Pyrites plant, mitigated by a higher development ore grade at Juanicipio.
• Quarterly attributable silver production (including Silverstream) was down 4.5% vs. 1Q20, mainly due to the lower ore grade at Saucito, mitigated by a higher ore grade at San Julián DOB and the contribution from Juanicipio.

Gold

• Quarterly attributable gold production of 228.2 koz, up 5.9% vs. 4Q20, mainly due to the higher ore grade at Herradura and Saucito, partly offset by lower volumes of ore processed at Noche Buena and decreased ore throughput and lower ore grade at San Julián Veins.
• Quarterly attributable gold production increased 15.9% vs. 1Q20 due to an increase in volume of ore processed and higher ore grade at Herradura and, to a lesser extent, a higher ore grade at Saucito. This was partly offset by a lower volume of ore processed and ore grade at Noche Buena as the mine approaches its planned closure.

By-Products

• Quarterly attributable by-product lead and zinc production decreased 14.8% and 16.8% respectively vs. 4Q20, driven primarily by lower ore grades and to a lesser extent, lower volumes of ore processed at both Saucito and Fresnillo.

1

• Quarterly attributable by-product lead and zinc production increased 10.3% and 14.2% vs. 1Q20 respectively, due to higher ore grades at Saucito, partially offset by lower ore grades and recovery rates at Ciénega.

Attributable	1Q21	4Q20	% Change	1Q20	% Change
Silver (koz)		11,839	12,207	(3.0)	12,547	(5.6)
Silverstream	(koz)	796	743	7.1	681	16.9
Total Silver	(koz)	12,635	12,950	(2.4)	13,228	(4.5)
Gold (oz)		228,193	215,581	5.9	196,963	15.9
Lead (t)		15,340	18,013	(14.8)	13,905	10.3
Zinc (t)		25.881	31,092	(16.8)	22,655	14.2

Note: Figures are sometimes more precise than the rounded numbers shown in this Production Report

DEVELOPMENT PROJECTS

• Continued progress was achieved on the construction of the Juanicipio processing plant and civil works during the quarter. Commissioning of the plant by 4Q21 remains on track.
• As previously reported, the Fresnillo flotation plant optimisation to cope with higher content of lead and zinc was concluded in 4Q20. The connection of this new circuit to the beneficiation plant was completed in 1Q21, with programming of the control loop system expected to be finalised in early 2Q21.

2021 OUTLOOK

2021 guidance remains unchanged despite the continued uncertainty presented by Covid-19 in Mexico. Attributable silver production is expected to be in the range of 53.5 to 59.5 moz (including Silverstream) while attributable gold production is expected to be in the range of 675 to 725 koz.

For further information, please visit our website www.fresnilloplc.comor contact:

FRESNILLO PLC	Tel: +44	(0)20 7399 2470
London Office
Gabriela Mayor, Head of Investor Relations
Patrick Chambers
Mexico City Office	Tel: +52	55 52 79 3206
Ana Belem Zárate
POWERSCOURT	Tel: +44	(0)7793 858 211
Peter Ogden

2

MINING OPERATIONS

FRESNILLO MINE PRODUCTION

	1Q21	4Q20	% Change	1Q20	% Change
Ore Processed (t)	561,360	590,449	(4.9)	598,790	(6.3)
Production
Silver (koz)	3,260	3,213	1.5	3,145	3.7
Gold (oz)	8,375	9,485	(11.7)	8,781	(4.6)
Lead (t)	4,492	5,254	(14.5)	4,617	(2.7)
Zinc (t)	7,143	9,051	(21.1)	6,758	5.7
Ore Grades
Silver (g/t)	203	190	6.9	183	10.6
Gold (g/t)	0.69	0.71	(3.6)	0.65	5.5
Lead (%)	0.95	1.08	(12.0)	0.95	0.1
Zinc (%)	1.82	2.19	(16.7)	1.69	8.1

Quarterly silver production increased 1.5% and 3.7% vs. 4Q20 and 1Q20 respectively due to the expected increase in ore grade mainly as a result of enhanced dilution control during the quarter (dilution decreased to an average of 29% during 1Q21). This was partly offset by a decrease in volume of ore processed due to additional rehabilitation and maintenance of certain ramps and delayed access to Eastern areas of the mine.

Mine development rates increased quarter on quarter to an average of 3,346m per month in 1Q21 (4Q20: 3,241m per month), driven by improved contractor performance, notwithstanding ongoing absenteeism as a result of our Covid-19 preventive measures. The target remains to develop on average between 3,300 - 3,500m per month in 2021.

Quarterly by-product gold production decreased 11.7% vs. 4Q20 driven by a lower volume of ore processed, ore grade and recovery rate.

Quarterly by-product gold production decreased 4.6% vs. 1Q20 due to a lower volume of ore processed and lower recovery rates, mitigated by a higher ore grade.

The silver ore grade in 2021 is expected to remain in the range of 190-210 g/t, while the gold ore grade is expected to remain in the range of 0.55-0.70 g/t.

SAUCITO MINE PRODUCTION

	1Q21	4Q20	% Change	1Q20	% Change
Ore Processed (t)	650,884	671,429	(3.1)	670,047	(2.9)
Production
Silver (koz)	3,148	3,428	(8.2)	4,043	(22.1)
Gold (oz)	26,819	23,199	15.6	21,176	26.6
Lead (t)	7,841	9,354	(16.2)	5,717	37.2
Zinc (t)	11,848	14,038	(15.6)	8,902	33.1
Ore Grades
Silver (g/t)	177	195	(9.0)	214	(17.3)
Gold (g/t)	1.65	1.40	18.1	1.27	30.4

3

Lead (%)	1.40	1.65	(14.8)	0.99	41.5
Zinc (%)	2.48	2.95	(15.9)	1.86	33.1

Quarterly silver production decreased 8.2% vs. 4Q20 due to a lower ore grade following short term instability issues limiting access to higher ore grade areas. This had the effect of temporarily altering the mine sequence with more material processed from several Western areas of the mine with a lower average silver ore grade.

Quarterly silver production decreased 22.1% vs. 1Q20 principally due to an expected lower ore grade as a result of the gradual depletion of higher ore grade areas at the Jarillas vein, and to a lesser extent, a lower volume of ore processed and recovery rate.

Progress was made on further controlling dilution and it decreased to an average of 40% in 1Q21.

The project to deepen the Jarillas shaft from 630 metres to 1,000 metres continues to advance according to plan. Once commissioned by the end of 2023, this project will provide access to the deeper reserves of the Jarillas vein.

Quarterly by-product gold production increased 15.6% and 26.6% vs. 4Q20 and 1Q20 respectively, due to a higher ore grade.

Despite a lower silver ore grade in 1Q21, the expected full year 2021 silver ore grade is expected to remain in the range of 200-220 g/t, while the gold grade is estimated to continue to be around 1.10 g/t.

PYRITES PLANT (PHASE I)

	1Q21	4Q20	% Change	1Q20	% Change
Iron Concentrates Processed (t)	41,760	47,860	(12.7)	41,453	0.7
Production
Silver (koz)	137	194	(29.5)	256	(46.6)
Gold (oz)	678	820	(17.3)	871	(22.2)
Ore Grades
Silver (g/t)	143	172	(17.3)	244	(41.6)
Gold (g/t)	1.64	1.64	(0.1)	2.11	(22.5)

Quarterly silver production decreased 29.5% vs. 4Q20 due to a lower ore grade of iron concentrates produced by Saucito and a lower volume of iron concentrates processed.

Quarterly gold production decreased 17.3% vs. 4Q20 mainly due to a lower volume of iron concentrates processed, and to a lesser extent, lower recovery rate.

Quarterly silver production decreased 46.6% vs. 1Q20 mainly due to a lower ore grade of iron concentrates produced by Saucito and to a lesser extent, lower recovery rate.

Quarterly gold production decreased 22.2% vs. 1Q20 due to a lower ore grade of iron concentrates produced by Saucito.

In 2021, we continue to expect production from this plant at Saucito to remain unchanged year-on-year.

4

As noted in previous reports, the Pyrites Plant (phase II) was completed on time in 4Q20 but the inspection that is required to be carried out by the authorities in order to grant the energy permit has been delayed due to Covid-19 restrictions on travel and other regulatory delays. We anticipate that the inspection will take place in 3Q21.

CIENEGA MINE PRODUCTION

	1Q21	4Q20	% Change	1Q20	% Change
Ore Processed (t)	326,163	334,977	(2.6)	326,350	(0.0)
Production
Gold (oz)	14,289	13,605	5.0	16,426	(13.0)
Silver (koz)	1,299	1,272	2.1	1,396	(7.0)
Lead (t)	1,227	1,339	(8.4)	1,747	(29.8)
Zinc (t)	1,973	2,078	(5.1)	2,585	(23.7)
Ore Grades
Gold (g/t)	1.45	1.36	7.1	1.69	(14.1)
Silver (g/t)	145	139	4.5	154	(5.9)
Lead (%)	0.59	0.61	(2.6)	0.81	(26.4)
Zinc (%)	1.07	1.06	0.6	1.29	(17.2)

Quarterly gold and silver production increased 5.0% and 2.1% vs. 4Q20 respectively, as a result of a higher ore grade driven by improved dilution control, partially offset by a lower volume of ore processed.

Quarterly gold and silver production decreased 13.0% and 7.0% vs. 1Q20 respectively, due to the expected lower ore grades year on year.

The gold and silver ore grades for 2021 are expected to remain in the range of 1.30-1.40 g/t and 150-160 g/t respectively.

SAN JULIÁN MINE PRODUCTION

	1Q21	4Q20	% Change	1Q20	% Change
Ore Processed Veins (t)	288,673	315,863	(8.6)	309,177	(6.6)
Ore Processed DOB (t)	448,674	572,962	(21.7)	541,925	(17.2)
Total production at San Julián
Gold (oz)	13,802	16,048	(14.0)	15,173	(9.0)
Silver (koz)	3,430	3,730	(8.0)	3,174	8.1
Production Veins
Gold (oz)	12,828	15,123	(15.2)	14,584	(12.0)
Silver (koz)	966	965	0.1	1,074	(10.1)
Production DOB
Gold (oz)	974	925	5.3	589	65.2
Silver (koz)	2,465	2,765	(10.9)	2,100	17.4
Lead (t)	1,694	2,036	(16.8)	1,824	(7.1)
Zinc (t)	4,783	5,874	(18.6)	4,410	8.4
Ore Grades Veins
Gold (g/t)	1.47	1.58	(6.9)	1.53	(4.1)

5