Declaration of Extraordinary Dividend and Update

RNS Number : 2804R

Fresnillo PLC

24 October 2013

 



                                                                                                        Fresnillo Plc

28 Grosvenor Street

London W1K 4QR

United Kingdom

www.fresnilloplc.com

24 October 2013

Declaration of Extraordinary Dividend, appointment of Chief Operating Officer and update on Minera Penmont explosives permits.

Fresnillo plc is pleased to announce the payment of an extraordinary dividend of US$165.0 million, equivalent to 22.39 US cents per share. It is also announcing that it has appointed Roberto Diaz as chief operating officer with effect from 1 November 2013, and is providing a further update on the temporary suspension of explosives permit at Minera Penmont.

The extraordinary dividend, payable on 11 November 2013 to shareholders on the register on 1 November 2013, will include dividend payments that shareholders may otherwise have expected to receive from dividends payable in 2014. This has been agreed by the Board of Fresnillo following a comprehensive review of the company's current and future financial requirements. The board believes that the company has a strong balance sheet and is well placed to meet capital expenditure plans for its development and exploration projects. Given the foregoing, it believes that it is appropriate to make an advance of future earnings to shareholders at this time instead of at a future date.

Fresnillo's existing dividend policy remains in place, which takes into account the profitability of the business and underlying growth in earnings of the Fresnillo Group, as well as its capital requirements and cash flows whilst maintaining an appropriate level of dividend cover.

Chief Operating Officer

Roberto Diaz has been appointed Chief Operating Officer following a long career in the mining industry. He first joined Peñoles in 1977 and, following roles with other groups, rejoined Peñoles in 2007. He has previously served as Fresnillo's Vice President of Operations and Vice President of Project Development.  He holds degrees in mining engineering from the University of Guanajuato and the Colorado School of Mines, as well as MBAs from ITAM (Mexico City), and Tulane University (USA).

Explosives permit

On 9 October 2013, Fresnillo plc announced that the temporary explosive permit relating to Minera Penmont's Noche Buena mine had been lifted, but that the Ministry of Defense had sought further clarity from the magistrate in Sonora before lifting the suspended permit at the Soledad and Herradura pits. These pits share the same explosives permit as the Dipolos pit, which is located within the area affected by the Magistrate's ruling relating to the Ejido agrarian community.

Although the boundaries of the area subject of the court's ruling have been clearly delineated by a court-appointed expert, the Ejido has presented legal proceedings to try to impede the lifting of the temporary suspension of the explosives permit covering Dipolos as well as Herradura and Soledad. Fresnillo believes that those proceedings are without merit, as the Herradura and Soledad operations are clearly located outside of the Ejido boundaries. However the Ejido has obtained a temporary stay order in its favour, pending a review by the court of the underlying merits of the case which initial hearing is expected in early November. Minera Penmont remains confident that there are no legal reasons to maintain this suspension of the explosives at Herradura and Soledad and will update the market regarding the results of the hearings scheduled for early November, at which time it will also provide an update regarding its overall gold production guidance for 2013.

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

Fresnillo plc            London Office                                              Gabriela Mayor, Head of Investor Relations	Tel: [phone]
Mexico City Office Ana Belem Zárate García	Tel: [phone]
Brunswick Group Carole Cable David Litterick	Tel: [phone]

About Fresnillo plc

Fresnillo plc is the world's largest primary silver producer and Mexico's second largest gold producer, listed on the London and Mexican Stock Exchanges under the symbol FRES. 

Fresnillo plc has six operating mines, all of them in Mexico - Fresnillo, Saucito, Ciénega (including the San Ramón satellite mine), Herradura, Soledad and Noche Buena; three development projects - a dynamic leaching plant to treat high grade gold ore from the Herradura and Soledad mines; San Julián and Saucito II and four advanced exploration prospects - Centauro Deep, Juanicipio, Orisyvo and Las Casas Rosario as well as a number of other long term exploration prospects. In total, Fresnillo plc has mining concessions covering approximately 2.1 million hectares in Mexico.

Fresnillo plc has a strong and long tradition of mining, a proven track record of mine development, reserve replacement, and production costs in the lowest quartile of the cost curve for both silver and gold.

Fresnillo plc's goal is to maintain the group's position as the world's largest primary silver company, producing 65 million ounces of silver and 500,000 ounces of gold by 2018.

Forward Looking Statements

Information contained in this announcement may include 'forward-looking statements'.  All statements other than statements of historical facts included herein, including, without limitation, those regarding Fresnillo plc's intentions, beliefs or current expectations concerning, amongst other things, Fresnillo plc's results of operations, financial position, liquidity, prospects, growth, strategies and the silver and gold industries are forward-looking statements. Such forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Forward-looking statements are not guarantees of future performance and the actual results of Fresnillo plc's operations, financial position and liquidity, and the development of the markets and the industry in which Fresnillo plc operates, may differ materially from those described in, or suggested by, the forward-looking statements contained in this document. In addition, even if the results of operations, financial position and liquidity, and the development of the markets and the industry in which Fresnillo plc operates are consistent with the forward-looking statements contained in this document, those results or developments may not be indicative of results or developments in subsequent periods. A number of factors could cause results and developments to differ materially from those expressed or implied by the forward looking statements including, without limitation, general economic and business conditions, industry trends, competition, commodity prices, changes in regulation, currency fluctuations (including the US dollar and Mexican Peso exchanges rates), Fresnillo plc's ability to recover its reserves or develop new reserves, including its ability to convert its resources into reserves and its mineral potential into resources or reserves, changes in its business strategy and political and economic uncertainty.

 

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