Source - RNS
RNS Number : 1083I
Fresnillo PLC
14 June 2017
 



                                                                                                        Fresnillo plc

21 Upper Brook Street

London W1K 7PY

United Kingdom

 

www.fresnilloplc.com

 

14 June 2017 

Fresnillo plc

Report on Payments to Governments for the Year 2016

 

Background

This Report provides an overview of the payments to governments made by Fresnillo plc and its subsidiaries for the year ended 31 December 2016 as required under the UK Reports on Payments to Governments Regulation 2014 and its amendment in December 2015 (the UK Regulations). This Report is also intended to satisfy the requirements of the Disclosure and Transparency Rules of the Financial Conduct Authority in the United Kingdom.

This Report is available for download from http://www.fresnilloplc.com/investor-relations/regulatory-announcements/

The 'Basis of Preparation' section below contains information about the content of the Report, the types of payments included and the principles that have been applied in preparing the Report.

 

Basis for preparation - Report on Payments to Governments for the year 2016

Reporting entities

In accordance with the UK Regulations, this Report includes payments to government made by Fresnillo plc and its subsidiary undertakings (Fresnillo).

Activities

Payments made by Fresnillo to governments arising from activities involving the exploration, prospection, discovery, development and extraction of minerals (extractive activities) are disclosed in this Report. When payments cover both extractive and processing activities and cannot be split, the payment has been disclosed in full. 

Government

Government includes any national, regional or local authority of a country to which Fresnillo has made a payment related to these regulations, and includes any department, agency or entity that is controlled by such authority.

Project

Payments are reported at project level, except for payments that are not attributable to a specific project which are reported at entity level. Within the UK Regulations, a project is defined as being the operational activities which are governed by a single contract, licence, lease, concession or a similar legal agreement, and form the basis for payment liabilities with a government. If agreements of this kind are substantially interconnected (i.e. forming a set of operationally and geographically integrated contracts, licenses, leases or concessions) these are treated for the purposes of these Regulations as a single project. Indicators of integration include geographic proximity and common operational management. For some payments that cannot be attributable to a specific project, they were indicated at an entity level.

Materiality

In line with the UK Regulations, where a payment or a series or related payments have not exceeded £86,000 (US$116,5531) they have not been disclosed.

Reporting currency

Payments disclosed in this report have been disclosed in US Dollars. Where actual payments have been made in a currency other than US Dollars, i.e. Mexican pesos (MXN), they have been translated using the annual average exchange rate MXN / USD issued by The Central Bank of Mexico2.

Type of payments

a)    Taxes. There are taxes paid by Fresnillo on its income, including special mining rights. Payments are reported net of refunds. In accordance with the UK Regulations payments made in relation to consumption, sales or employee taxes were excluded.

b)    License fees, rental fees, entry fees and other considerations for licenses or concessions. These are fees paid as consideration for acquiring a license for gaining access to an area where extractive activities are performed.

Payments reported are on a cash flow basis and refunds are included in the year received (i.e. 2016).

Other types of payments that are required to be disclosed in accordance with the UK Regulations are the following; however, for the year ended 31 December 2016, there were no such reportable payments made by Fresnillo to a government:

-      Production entitlements

-      Royalties

-      Dividends

-      Signature, discovery and production bonuses

_________________ 

1 Bloomberg 2016 average exchange rate 1.3554 USD / GBP
2 Banco de Mexico 2016 average exchange rate 18.6567 MXN / USD

 

 

SUMMARY REPORT PER COUNTRY (in USD)

 


Production entitlements

Taxes (1)

Royalties

Dividends

Bonuses

Licenses & concessions fees

Infrastructure improvements

Total

MEXICO

0

68,009,406

0

0

0

22,613,314

0

90,622,720

PERU

0

0

0

0

0

2,471,926

0

2,471,926

Total

0

68,009,406

0

0

0

25,085,240

0

93,094,646

 

 

MEXICO

Government Report (in USD)


Production entitlements

Taxes

Royalties

Dividends

Bonuses

Licenses & concessions fees

Infrastructure improvements

Total

Ministry of Economics

0

10,863,123

0

0

0

15,398,194

0

26,261,317

Ministry of Environment and Natural Resources

0

0

0

0

0

637,830

0

637,830

Ministry of Finance and Public Credit

0

57,146,283

0

0

0

0

0

57,146,283

National Water Commission

0

0

0

0

0

6,577,290

0

6,577,290

Total

0

68,009,406

0

0

0

22,613,314

0

90,622,720

 

Project Report (in USD)


Production entitlements

Taxes


Royalties

Dividends

Bonuses

Licenses & concessions fees

Infrastructure improvements

Total

PROJECT










Ciénega

0

332,244


0

0

0

1,852,043

0

2,184,287

Fresnillo

0

4,209,242


0

0

0

6,065,305

0

10,274,547

Herradura / Nochebuena

0

4,214,150


0

0

0

8,607,302

0

12,821,452

Juanicipio (3)

0

0


0

0

0

118,003

0

118,003

San Julián

0

0


0

0

0

799,358

0

799,358

Saucito

0

53,096,049


0

0

0

5,171,303

0

58,267,352

ENTITY LEVEL










Comercializadora de Metales Fresnillo, S.A. de C.V.

0

-1,725,312

(2)

0

0

0

0

0

(1,725,312)

Compañía Minera Las Torres, S.A. de C.V.

0

523,837


0

0

0

0

0

523,837

Exploraciones Mineras Parreña S.A. De C.V.

0

6,443,833


0

0

0

0

0

6,443,833

Operaciones Fresnillo, S.A. de C.V.

0

510,406


0

0

0

0

0

510,406

Servicios Administrativos Fresnillo, S.A. de C.V.

0

276,610


0

0

0

0

0

276,610

Servicios de Exploración Fresnillo S.A. de C.V.

0

128,347


0

0

0

0

0

128,347











Total

0

68,009,406


0

0

0

22,613,314

0

90,622,720

 

PERU

Government Report (in USD)


Production entitlements

Taxes

Royalties

Dividends

Bonuses

Licenses & concessions fees

Infrastructure improvements

Total

Ministry of Energy and Mining

0

0

0

0

0

2,471,926

0

2,471,926

Total

0

0

0

0

0

2,471,926

0

2,471,926

 

Project Report (in USD)


Production entitlements

Taxes

Royalties

Dividends

Bonuses

Licenses & concessions fees

Infrastructure improvements

Total

ENTITY LEVEL









Fresnillo Perú, S.A.C.

0

0

0

0

0

2,471,926

0

2,471,926

Total

0

0

0

0

0

2,471,926

0

2,471,926

 

Notes

1: All tax payments made in 2016 to the Ministry of Finance and Public Credit (the Mexican Tax authorities) are presented net of refunds received in 2016.

2: Tax payments made in 2016 of USD$ 1,141,114 to the Ministry of Finance and Public Credit net of USD$ 2,866,426 refund received in 2016.

3: Represents 100% of the payments related to Juanicipio (56% Fresnillo plc, 44% MAG Silver)

 

 

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

 

 

Fresnillo plc           

London Office                                  

Gabriela Mayor, Head of Investor Relations

Patrick Chambers

Tel: +44 (0)20 7399 2470

Mexico City Office

Ana Belem Zárate

Tel: +52 55 52 79 3206

 

Bell Pottinger

Liz Morley

Aarti Iyer

Marianna Bowes

 

 

Tel: +44 (0)20 3772 2500

                                                          

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 seven operating mines, all of them in Mexico - Fresnillo, Saucito, Ciénega (including the San Ramón satellite mine), Herradura, Soledad-Dipolos1, Noche Buena and San Julián (phase 1), three development projects - San Julián (phase 2), the Pyrites plant, and second line of DLP at Herradura, and four advanced exploration projects - Orisyvo, Juanicipio, Las Casas Rosario & Cluster Cebollitas and Centauro Deep, as well as a number of other long term exploration prospects. In total, Fresnillo plc has mining concessions covering approximately 1.8 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 silver.

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 per year by 2018, having already surpassed the gold target of 750,000 ounces.

 

1 Operations at Soledad-Dipolos are currently suspended.

 


 

This information is provided by RNS
The company news service from the London Stock Exchange
 
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