Record profits, surging cash and a bumper dividend: Fresnillo’s 2025 in plain English
Fresnillo has delivered its strongest year as a listed company. A powerful cocktail of much higher precious metal prices and tighter cost control sent profits and cash flow to new highs, allowing the board to propose a punchy final dividend and take total 2025 shareholder distributions to US$950.0 million.
Under the bonnet, production was mixed – silver in line and gold better than guided – but the real story is margin expansion and a fortress balance sheet.
Headline numbers investors should know
| Metric (2025) | Result |
|---|---|
| Adjusted revenue | US$4,645.3 million (+27.6%) |
| Total revenue | US$4,561.2 million (+30.5%) |
| EBITDA | US$2,796.2 million (+80.7%) |
| EBITDA margin | 61.3% (2024: 44.3%) |
| Gross profit | US$2,664.1 million (+113.8%) |
| Profit before income tax | US$2,082.0 million (+179.9%) |
| Profit for the year | US$1,573.8 million (2024: US$226.7 million) |
| EPS excl. Silverstream effects | US$2.058 per share (2024: US$0.364) |
| Net cash | US$1,916.6 million (31 Dec 2025) |
| Cash and liquid funds | US$2,756.5 million |
| Total 2025 dividend | 128.92 US cents per share (US$950.0 million) |
| Silver production | 48.7 moz (-13.5%, in line with guidance) |
| Gold production | 600.3 koz (-5.0%, above guidance) |
What powered the step-change in earnings
Two big tailwinds did the heavy lifting. First, prices: Fresnillo realised US$43.60/oz for silver (+51.4%) and US$3,532.74/oz for gold (+44.0%) – both extraordinary moves. Second, costs tightened: adjusted production costs fell 11.1% to US$1,406.7 million, helped by lower volumes at several mines, a weaker average Mexican peso against the US dollar, and efficiency gains (a net US$13.8 million, led by Herradura).
Blend the two and margins exploded. EBITDA jumped 80.7% to US$2,796.2 million, with the EBITDA margin rising to 61.3%. This is the sort of operational gearing miners dream of when prices are running.
Dividend: the cheques are getting bigger
Management has leaned into the strong cash generation. The board proposes a final ordinary dividend of 108.12 US cents per share, taking the total 2025 payout to 128.92 US cents per share (US$950.0 million) – above the traditional policy of c.33–50% of adjusted profit. Note the 2025 interim of 20.8 US cents was already paid in September; the final is scheduled for 29 May 2026 to shareholders on the register on 24 April 2026. Under Mexican rules a 10% dividend withholding tax applies.
Crucially, Fresnillo can afford it. Year-end net cash was US$1,916.6 million and cash and liquid funds were US$2,756.5 million, even after capex of US$400.1 million, exploration expense of US$173.5 million and tax/mining right payments of US$369.5 million.
Operations and 2026 guidance: a near-term dip, quality focus
2025 output was mixed: silver 48.7 moz (down 13.5%) and gold 600.3 koz (down 5.0%). Lower grades and throughput at several assets and the cessation of San Julián DOB weighed on volumes, partly offset by better-than-planned performance at Juanicipio and San Julián Veins.
For 2026, Fresnillo guides to lower production while it prioritises margins and mine plans:
- Silver: 42.0–46.5 moz.
- Gold: 500–550 koz.
- Silver-equivalent: 82–91 moz (gold converted at 80:1).
Capex is expected to be about US$765 million in 2026, focused on sustaining works, optimisation at Herradura, deepening the Jarillas shaft at Saucito (connection deferred to 2026; completion targeted 2027), a haulage conveyor at Juanicipio, and tailings dams. Exploration guidance is circa US$260 million, including intensified drilling and the first drilling at newly acquired Probe Gold.
Exploration, reserves and the Probe Gold acquisition
Fresnillo continues to invest through the cycle. Resource/reserve updates reflect both market prices and industry best practice:
- Silver resources fell 8.5% to 2.06 billion ounces, mainly due to implementing RPEEE principles (classifying resources by their realistic economic extraction).
- Gold resources rose 14.3% to 44.0 million ounces, helped by higher gold prices and the Lucerito project.
- Silver reserves increased 9.4% to 362.6 million ounces; gold reserves rose 7.4% to 7.8 million ounces.
Post year-end, Fresnillo completed the all-cash acquisition of Probe Gold (January 2026) for approximately US$555 million, adding 10 million ounces of gold resources and entry to Quebec’s Val d’Or district. Management highlights potential for Novador to produce over 200,000 ounces per annum over 10+ years, with upside from Detour and an active drilling plan this year.
Silverstream contract: why ending it matters
You’ll see a “Silverstream” loss in the accounts. This was a long-standing contract tied to silver from Peñoles’ Sabinas mine. After a 2024 warning and a 2025 reserve downgrade at Sabinas, Fresnillo agreed a US$40 million buyback to terminate the agreement, booking a non-cash net loss of US$132.4 million in 2025. In my view, drawing a line under a structurally challenged asset cleans up the profile, reduces future volatility and removes a distraction from the core Mexican portfolio and new Canadian growth option.
Balance sheet strength and what could go wrong
With US$2,756.5 million in cash and liquid funds and only US$839.9 million of 2050 notes outstanding, Fresnillo is in robust shape. There’s also an undrawn US$350 million revolving credit facility (from January 2024 to January 2029).
Risks to keep in mind, straight from the company’s disclosures:
- Mexico regulatory backdrop – permitting, concessions and taxes remain areas to watch; the special mining right rose from 7.5% to 8.5% in 2025.
- Security in certain regions, union dynamics, and land access complexity.
- Cyber security and systems resilience.
- Safety – two fatalities in 2025 despite improving TRIFR (6.26) and a lower Fatality Frequency Rate. Zero fatalities remains the only acceptable target.
- Commodity prices – the year was supercharged by price strength; a reversal would squeeze margins.
On the sustainability front, 77.8% of electricity consumed came from renewable sources (2024: 80.6%).
My take for investors
This is a standout year driven more by prices and discipline than volumes. The positives are hard to miss: EBITDA up 80.7%, a 61.3% margin, US$1,916.6 million of net cash and a record US$950.0 million payout. The board has also been decisive – exiting Silverstream, investing in optimisation (Herradura, Saucito, Juanicipio) and adding long-life optionality in Canada via Probe Gold.
The near-term rub is 2026 production guidance, which points lower as Fresnillo prioritises “quality ounces” and project work. That’s sensible, but it does leave earnings more dependent on metal prices over the next 12 months. Mexico policy, security and labour remain structural risks, and the safety incidents are a reminder that execution matters as much as geology and prices.
What I’ll watch next:
- Dividend approval and cash progression through 2026 with capex stepping up to c.US$765 million.
- Delivery milestones – Jarillas shaft connection in 2026, full capacity at Herradura’s Carbon in Column facility (expected 2Q26) and Juanicipio’s conveyor.
- Probe Gold workplan and the mid-2026 PEA at Rodeo; cost optimisation options at Orisyvo.
- Any further efficiency gains at Fresnillo district mines after the contractor rationalisation and dilution control efforts.
Net-net, Fresnillo has used a golden price backdrop to reset its balance sheet, reward shareholders and seed future growth. If precious metal prices stay firm and 2026 project delivery is tidy, this could remain a compelling cash machine. If prices roll over, the enlarged net cash cushion and disciplined capex give it useful resilience.
