Name: Fresnillo mine.

Location: The Fresnillo mine is located 60 km north-west of the City of Zacatecas, in Zacatecas state, Mexico.

Controlling Company: Fresnillo.

Brief History: The Fresnillo mine has been in near-continuous operation since 1554 and has a long tradition of silver mining. Fresnillo made its debut on the London Stock Exchange in 2008 following a successful, profitable and decades-long record as a mining company. Owing to its history as part of the Peñoles Group, the Fresnillo Group can trace its origins back to the start of Peñoles’ mining operations in 1887 and its smelting and refining operations at Torreon in 1901. In 1960, a group of Mexican investors acquired control of Peñoles, which created the first Mexican-controlled mining company. In 1961, Peñoles acquired a 60% interest in Cia Fresnillo, a New York Stock Exchange-listed company that owned, among others, the Fresnillo mine. Thirty-five years later, Peñoles acquired the remaining 40% interest in Cia.

Brief Description: Fresnillo is the world’s largest primary silver mine and the second-largest gold producer in Mexico. Underground mining has been conducted at Fresnillo on nearly 150 veins, of which more than 30 have been major ore producers. Several manto and chimney deposits have also contributed to the district production.

Mining Method: Underground mine and flotation.

Products: Silver and gold.

Major Infrastructure and Equipment: The Fresnillo mine uses more Atlas Copco equipment than any other mine in the world. The extensive range of products includes Boomer and Simba drill rigs, Scooptram loaders, Minetruck trucks and Robbins raiseborers.

The mine also hosts a fleet of 11 Scaletec MC-DH scaling rigs and an RB700 XD breaker used in the mine’s underground crusher station.

Geology/Mineralisation: The geology of the Fresnillo district broadly comprises a 1-km-thick suite of Palaeocene to Oligocene (63 to 32 Ma), dominantly andesitic volcanics, which overlie deformed Mesozoic marine sediments and submarine mafic volcanics. The Mesozoic sediments include shales, sandstones, greywackes, carbonatic rocks and limestones. Regionally, this sequence is cut by major Laramide plutons and related stocks and dykes, as well as minor Eocene to Oligocene silicic to intermediate stocks. These are all overlain by a further 1-km-thick sequence composed of Oligocene (32 to 19 Ma) rhyolitic ash flow tuff sheets. Regionally, precious metals are concentrated in the Cretaceous sediments and volcanics, and in the lower and upper volcanic complexes, while the base metals are preferentially concentrated in the Cretaceous sediments and the lower volcanics (Ruvalcaba-Ruiz & Thompson, 1988; Gemmel, et al, 1988).

Three styles of mineralisation are evident at Fresnillo – mantos and chimneys, stockwork vein zones and larger veins.

Reserves: Total proven and probable reserves in 2012 were 308.47- million ounces of silver and 730 000 oz of gold.

Resources: Total measured and indicated resources in 2012 were 798.7-million ounces of silver and 1.68-million ounces of gold. Inferred resources were 316.3-million ounces of silver and 720 000 oz of gold.

Prospects: Fresnillo aims to evaluate new and/or expanded processing capacity in the Fresnillo district, including a 2 000 t/d extension to the mine’s current Fresnillo beneficiation plant and a pyrites plant at Saucito to increase gold recoveries from Fresnillo and Saucito tailings.

It also aims to continue exploration at current investment levels to replace and/or expand the resource base, to continue the development and preparation of new stopes and to continue cost-cutting and efficiency initiatives.

Contact Person: Head of investor relations Gabriela Mayor.

Contact Details:
Fresnillo, tel +52 55 5279 3000, email IR@fresnilloplc.com, and website http://www.fresnilloplc.com.