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It’s no shock that Fresnillo‘s (LSE:FRES) been one of many FTSE 100‘s finest performers over the previous week. The Mexican miner’s risen 17.8% as heightened macroeconomic fears have pushed gold and silver costs via the roof.
Can Fresnillo share costs proceed to take off, nevertheless? Let’s have a look.
Leveraged play
Fresnillo’s most well-known because the world’s largest silver miner, producing 56.3m ounces of the stuff final yr. However its vary of gold property has helped it to ship a greater return than silver to this point in 2025, up 53.2%.
Gold’s hit new peaks of round $3,245 per ounce in current days, one other new excessive. It’s up 23.1% within the yr to this point, whereas silver’s additionally risen a wholesome 11.5%.
You’ll discover, nevertheless, that the Fresnillo share value has risen much more sharply than each these treasured metals in 2025. It’s because miners present leveraged publicity — in different phrases, when commodity costs respect, their revenue margins rise extra quickly as their fastened prices imply any income inceases have an outsized impression on earnings.
Operational power
Fresnillo’s rocketing share value additionally displays the corporate’s sturdy working efficiency in current occasions. Revenue and EBITDA leapt 29.3% and 136% respectively, in its newest yr, outcomes which completely exhibit the ‘leverage’ impact in motion.
The underside line was bolstered too by $40m value of value financial savings, which pulled adjusted manufacturing prices 2.6% decrease. On the manufacturing entrance, each silver and gold output rose, the latter by 3.6% and beating expectations.
Fresnillo additionally continued to exhibit its fame as a formidable money creator, which meant it completed 2024 with web money of $458.3m. It had recorded web debt of $304.4m a yr earlier.
In addition to giving it monetary headroom to speculate for development, that is additionally permitting the enterprise to furnish buyers with some tasty dividends.
Fresnillo raised the odd dividend on its shares to 32.5 US cents per share from 5.6 cents in 2023. It additionally delivered a particular dividend of 41.8 cents.
Threat vs rewards
This isn’t to say every part’s is ideal on the FTSE 100 miner.
Operational points at Peñoles‘ Sabinas mine impacted Fresnillo’s proceeds beneath the ‘Silverstream’ contract final yr. It’s potential that the contract’s ebook worth may very well be considerably decreased later in 2025.
It’s additionally necessary to recollect the complexity and unpredictability of metals mining, and that whereas the corporate is flourishing as we speak, the specter of manufacturing outages, hovering prices, and disappointing exploration outcomes are a continuing menace.
But on stability, I’m optimistic Fresnillo’s earnings (and due to this fact its share value) can maintain hovering. That is thanks mainly to beneficial circumstances that might proceed fuelling treasured metallic costs.
Rigidity over world commerce wars — the first driver for gold and silver extra lately — isn’t more likely to go away any time quickly. Issues over intensifying inflation and their impression on rates of interest might additionally worsen, whereas rising geopolitical instability and escalating army battle additionally looms within the background.
Whereas it’s not with out danger, I really feel Fresnillo may very well be among the best shares to contemplate within the present local weather.
