Shares of Fresnillo plc (BMV:FRES) surged over 3% on Tuesday after the Mexican precious metals miner delivered stronger-than-expected full-year results and updated its outlook on capital expenditures and major projects.
Fresnillo reported 2024 EBITDA of $1.55 billion, exceeding consensus estimates of $1.5 billion. The company also outperformed expectations on free cash flow, generating $929 million—15% above RBC Capital Markets’ projection. In addition, Fresnillo announced a full-year dividend of $0.74 per share, boosted by a special payout of $0.41 per share, reinforcing its commitment to rewarding shareholders.
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Fresnillo is ramping up its spending plans for the coming years. The company has increased its capital expenditure forecast for 2025 to $530 million, representing a 15% jump above RBC’s previous estimate. This surge is driven by delayed 2024 projects and a new expansion initiative in the Herradura area. Furthermore, Fresnillo plans higher spending in 2026-2027 to bolster exploration and development efforts.
Analysts at RBC maintain an ‘outperform’ rating on the stock, with a price target of 810 pence. They highlighted that Fresnillo has outperformed its silver mining peers by 10% year-to-date and trades at a discount—with a forward enterprise value-to-EBITDA multiple of 4.3x compared to a peer average of 5.3x.
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Despite the positive financial performance, Fresnillo continues to face operational hurdles. Two key projects, Rodeo and Orysivo, have experienced delays. The timeline for the Rodeo project has been pushed back from 2026 to 2029, while Orysivo is now expected to commence production in 2031 instead of 2029. These delays underscore the challenges in scaling up operations in a competitive mining sector.
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Fresnillo’s strong full-year performance, coupled with its increased capex forecasts, positions the company well for future growth despite the setbacks in project timelines. As the company continues to invest in expansion and development, investors will be watching closely to see how these strategic initiatives translate into long-term value creation.
With its attractive valuation metrics and consistent outperformance against peers, Fresnillo remains a compelling opportunity in the precious metals mining sector.
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