Fresnillo plc is the world’s largest producer of primary silver (meaning from ore, not as a by-product of other metals). It is based in Mexico and is that country’s second largest gold miner. Its parent company is Industria Peñoles of Mexico City which was founded in 1887. The company takes its name from the city of Fresnillo in the central state of Zacatecas, best known for its mountains rich with silver and other minerals. Fresnillo’s business model focuses on the development of high potential gold and silver deposits into projects that are at once low cost and world class in value creation. They are committed to a silver production target of 65 million ounces in 2018, along with reserves of 650 million ounces. The 2018 target for gold production is 750 thousand ounces; for reserves it is 7.5 million ounces. The company is expanding its exploration activities to South America.
With a national mining history some 500 years old, Mexico has a well-developed and competitive industry. The government grants six-year mining exploration concessions and there are more than 250 companies at work in the field, mostly in the northern states. Fresnillo’s mining concessions alone cover approximately 1.8 million hectares of Mexican soil. It operates seven mines, two of which are primary silver (including the original mine dating back to 1554), three open pit gold mines, and two underground silver/gold mines including the most recent, a two-phase project at San Julián. Its exploration activities are led by 80 geologists out of four offices in Mexico and one office each in Peru and Chile, with a total annual budget of over $150 million USD.
Fresnillo has been recognized for environmental, social, and governance (ESG) performance by the Euronext-Vigeo EM 70 index of the 70 most sustainable companies operating in emerging markets. It still seeks occupational health and safety certification through the OHSAS 18001 system. The company is attempting to achieve safe workplace conditions and behaviors in all operating units with the goal of zero-fatalities status. Likewise on the environmental front, Fresnillo hopes to set carbon emission and water targets, and obtain ISO 14001 certification at its Saucito facility. A pipeline ruptured there late in 2015, spilling 450 tons of tailings but it was deemed non-toxic and production was unaffected. The company implemented additional preventative measures.
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