Fresnillo Shares Buying Opportunity Opens Up After 40% Peak Pullback

A Fresnillo shares buying opportunity may be forming for investors who missed the FTSE 100 miner’s extraordinary 410% surge across calendar year 2025, as the stock has retreated more than 40% from its January peak. Fresnillo’s preliminary results for the full year ended 31 December 2025, released on 3 March 2026, confirmed the scale of what drove that run — and raise genuine questions about whether the pullback is an entry point or a warning sign.

A year of record numbers across every line

Full-year 2025 revenues rose 27.6% to $4.65bn, while EBITDA jumped 80.7% to $2.80bn. Below the headline, the acceleration was steeper still: gross profit grew 114% year-on-year, operating profit climbed 142%, and profit for the period recorded a rise of nearly 600% from the prior year, according to earnings call highlights. Pre-tax profit came in at $2.08bn, compared with $743.9m in 2024 and just $114m in 2023.

Free cash flow exceeded $2 billion for the year, leaving Fresnillo with a record cash balance of nearly $2.8bn at year-end. The company distributed $950m in dividends — equivalent to 128.92 US cents per share and representing a payout ratio of 69% of earnings, as disclosed in the exchange announcement.

Operational discipline reinforced the metals-price windfall. Adjusted production costs fell by almost 11% from the prior year, partly reflecting $46m of cost savings, primarily in the Eradura district. Capital expenditure was $400m, exploration spending rose 6% to $174m, and income tax expense fell 90% due to exchange-rate effects.

None of that, of course, was primarily a management story. Gold climbed almost 70% last year; silver surged 140%. Federal Reserve rate cuts weakened the dollar, central banks bought aggressively, and geopolitical anxiety directed capital towards traditional safe havens. Fresnillo rode those currents exceptionally well. Rolls-Royce shares, by comparison, rose 95% over the same period.

Assessing the Fresnillo shares buying opportunity after the correction

Gold peaked at $5,500 an ounce in January 2026 before dropping roughly 27% to around $4,000, pressured by Iran-war-related inflation fears, a stronger dollar, reduced central bank buying, and profit-taking. Fresnillo’s share price on the London Stock Exchange peaked at 4,448p on 26 January; it now trades at 2,611p, a peak-to-trough decline of more than 40%. The stock remains up approximately 50% over twelve months.

At the current price, the trailing price-to-earnings ratio stands at 17.8, below the ten-year historical median of 23.8. The trailing dividend yield has moved out to 3.6%. Both figures look materially different from the valuation picture management noted at the time of the March results, when shares were trading at around 23 times earnings.

Management flagged that 2026 is likely to be a transition year: higher capital expenditure and tax-related cash flow pressures are expected to weigh on free cash generation. Investors weighing a position need to hold both thoughts simultaneously — the valuation reset looks genuine, but 2026 cash conversion will not replicate 2025’s.

There is also a strategic development worth tracking. Fresnillo has acquired Canada-based Probe Gold, a move management described as a disciplined expansion into a Tier 1 mining jurisdiction that broadens the company’s long-term resource base. That extends Fresnillo’s operational footprint beyond Mexico and introduces a different regulatory and political risk profile, alongside incremental development capital requirements.

First-half 2026 data available from Fresnillo’s investor relations page shows total revenue of $3,382.6m for the period, up 74.7% year-on-year — a figure that reflects the still-elevated metals environment even after gold’s retreat from its peak.

The setup here is binary rather than comfortable. Gold above $4,000 with any renewed safe-haven demand, dollar weakness, or central bank buying acceleration would reprice Fresnillo quickly. A sustained dollar rally or an inflation-driven rate-hike cycle would work in the opposite direction. The stock jumped 5.25% in a single session on Iran ceasefire hopes in early August; it can give that back just as fast.

Investors who missed 2025 and are now watching the dip face a straightforward question: is the ten-year median P/E gap a sufficient margin to absorb a metals-price cycle that has already peaked once this year? At 17.8 times trailing earnings, the shares are pricing in some deterioration — but not a prolonged gold downturn. The next test is whether $4,000 gold holds as a floor or proves to be a way station.