Fresnillo FRES share performance reverses sharply after 410% surge

Fresnillo FRES share performance has swung from one extreme to the other: after delivering a 410% gain across 2025, the stock has fallen 27% since the start of this year, leaving a hypothetical £5,000 January investment worth £3,650 today.

The 2025 rally had a clear engine. Gold hit repeated record highs as central banks continued accumulating the metal, investors sought safe-haven assets, and expectations of lower interest rates built across major economies. Silver compounded the effect, benefiting both from its precious-metal status and from industrial demand tied to renewable energy and electronics. As the world’s largest primary silver producer and a substantial gold miner, Fresnillo captured both tailwinds directly in its margins.

Full-year 2025 results show the scale of last year’s windfall

The numbers reported in the company’s Fresnillo plc FY2025 preliminary results on 3 March 2026 confirm how unusual the year was. Adjusted revenues rose 27.6% to US$4.6 billion, while EBITDA surged 80.7% to US$2,796.2 million, lifting the EBITDA margin from 44.3% in 2024 to 61.3%. Gross profit more than doubled to US$2,664.1 million, according to the company’s full preliminary results report.

Cost discipline played a part: administrative and corporate expenses rose only 8.0%, from US$109.5 million in 2024 to US$118.2 million in 2025, even as performance bonuses linked to the exceptional results increased. Net cash at 31 December 2025 stood at US$1,916.6 million, up from US$458.3 million a year earlier. Cash and other liquid funds were US$2,756.5 million, against US$839.9 million in outstanding senior notes.

The board proposed total shareholder distributions of US$950.0 million for 2025, equivalent to 128.92 US cents per share, including a final ordinary dividend. That scale of return reflects a treasury that was effectively rebuilt in a single year.

Fresnillo FRES share performance in 2026: guidance cuts and production headwinds

The current weakness has a specific cause. Management has reduced its full-year 2026 production guidance, citing mine plan changes, lower ore throughput at key operations, and the effect of production pulled forward into 2025. Full-year 2026 guidance, reaffirmed in the Q2 2026 production report dated 22 July 2026, sets attributable silver output at 42.0 to 46.5 million ounces and attributable gold at 500.0 to 550,000 ounces, both below the 2025 ranges.

The Q2 data illustrates the pressure. Attributable silver production in the quarter was 10.9 million ounces, down 1.7% quarter-on-quarter and 11.4% lower in the first half on a year-on-year basis, according to the Fresnillo Q2 2026 production RNS. The year-on-year silver reduction reflects the planned end of the Silverstream agreement and grade variability at Saucito and Juanicipio. Gold production recovered sequentially, rising 13.8% to 154,812 ounces in Q2, though first-half gold output was still 7.3% below the same period in 2025 owing to lower volumes at Herradura.

As BNamericas noted, the 2027 outlook was left unchanged: silver output is expected to recover as higher-grade areas are developed at the Fresnillo mine and Saucito grades improve following completion of the Jarillas shaft deepening. Gold in 2027 should also benefit once the Valles brownfield project at the Herradura district becomes operational.

Valuation after the reset

A comparative analysis in a Coeur Mining SEC 8-K filing places Fresnillo at 1.5x Price/NAV, 6.9x EV/2026E EBITDA and 12.2x Price/2026E Cash Flow among selected precious metals peers.

Those multiples reflect a stock that has de-rated meaningfully from its 2025 peak but still prices in a degree of commodity optimism. The question for the second half is whether precious metals prices stabilise or recover, and whether Q3 production data (the interim results are scheduled for 4 August 2026) confirms the sequential improvement seen in gold output. If silver grades at Saucito recover in line with guidance, the setup for 2027 is considerably cleaner than the current share price implies.