FRESNILLO PLC (FRES) SHARES: 2025 PERFORMANCE IN UK, KEY DRIVERS, MILESTONES AND RISKS —'26 OUTLOOK

How did Fresnillo plc perform in 2025?

In 2025, Fresnillo plc (LON: FRES), the world’s largest primary silver producer and a major Mexican gold miner, experienced a year shaped by both fluctuating commodity prices and geopolitical concerns. Against the backdrop of volatile silver and gold markets, environmental scrutiny, and significant operational developments, FRES shares underwent noticeable movement on the London Stock Exchange.

The share performance broadly mirrored the trajectory of global precious metals. Silver prices rose in early 2025 amidst sustained inflation expectations and weakening global growth forecasts. This initial tailwind boosted investor interest in mining equities like Fresnillo. In Q1 and Q2, FRES shares climbed nearly 15%, in tandem with silver prices breaching the $30/oz threshold. However, by the latter half of the year, tightening monetary policy and a stronger US dollar dampened metals as safe-haven assets, reversing earlier gains.

By year’s end, FRES shares closed marginally up by 3.8% from January, underperforming against the FTSE 100 index but outperforming several mining peers with heavier base metal exposure. Investor caution reflected ongoing scrutiny of Fresnillo’s cost discipline, capital expenditures, and permitting progress across Mexican operations.

Operational implications for share price

The company delivered steady production, in line with guidance estimates of 56–59 Moz of silver and 580–600 Koz of gold. Notably, the Juanicipio joint venture — Fresnillo’s flagship project — hit commercial production targets earlier than forecasted. This milestone provided a cushion against cost inflation due to labour dynamics and supply chain disruptions in some Mexican regions.

Fresnillo’s forward-looking investment strategy, which included capex allocation for exploration and ESG compliance enhancements, reassured long-term investors. Nonetheless, the shares remained sensitive to concerns over Mexico’s regulatory environment, water usage restrictions, and mine licensing framework.

Currency and macroeconomic impact

Being a UK-listed firm with operations and revenues denominated in US dollars and Mexican pesos, FRES shares were subject to considerable currency translation effects. The weakening of the British pound mid-year (due to rising UK fiscal concerns) provided a portfolio translation benefit that shielded earnings per share and supported relative total shareholder return.

The continued divergence between Bank of England and US Federal Reserve monetary paths added a layer of uncertainty. UK-based investors remained cautious about exposure to Latin American operational risk juxtaposed with currency volatility affecting dividend returns.

In summary, Fresnillo’s 2025 performance was stable but unspectacular. Market participants recognised strong operational delivery but remained watchful of macroeconomic headwinds and execution risk. As of December 2025, the consensus analyst rating for FRES was "Hold" with several institutions flagging valuation concerns after the early-year rally lost steam.

What factors influenced Fresnillo plc’s share movement in 2025?

A host of internal and external factors shaped FRES share price performance across 2025. Investors analysed global metal prices, operational milestones, regulatory risks, and sentiment drivers linked to emerging markets. Each of these elements contributed to Fresnillo’s positioning within both the precious metals sector and broader equity markets.

1. Silver and gold price trajectories

Precious metal price dynamics were paramount in influencing Fresnillo’s valuation. With 2025 characterised by global macroeconomic uncertainty — particularly in relation to softening Chinese demand and fears of stagflation in the West — silver prices enjoyed early upside momentum before stabilising. Gold experienced a parallel trend, with prices oscillating between $1,950 and $2,100 per ounce.

This supported Fresnillo’s revenue per ounce sold and underpinned stable margins, despite production cost pressures. However, as the year progressed, the US Federal Reserve signalled prolonged interest rate elevations, which tempered gold’s safe-haven appeal and weakened investor appetite for mining equities overall.

2. Regulatory landscape in Mexico

Mexico’s mining policies remained a recurring theme. Fresnillo faced ongoing scrutiny surrounding its compliance with water usage limits, environmental sustainability mandates, and local community relations. The López Obrador administration introduced stricter licensing penalties and placed pressure on mining companies operating in ecologically sensitive zones.

Despite these regulatory headwinds, Fresnillo maintained its production commitments and advanced ongoing environmental projects. Investor confidence was buoyed by progress in social governance metrics and ISR (Instituto para el Seguro del Retiro) stakeholder engagement transparency.

3. Operational and project execution

Juanicipio’s early achievement of commercial output was a critical milestone in 2025. The mine added strong throughput volumes and higher-grade ore, which helped elevate Fresnillo’s average earnings-per-ounce metrics. Furthermore, the company resolved supply issues at the Saucito and Ciénega complexes, further stabilising output estimates.

These successes were partially offset by inflationary pressures on input costs — particularly reagents, mobile equipment parts, and labour costs. Fresnillo management guided to capex stabilisation in 2025 and promised productivity improvements in 2026 via digitisation and better fleet utilisation.

4. Stakeholder perception and ESG progress

Fresnillo advanced several ESG initiatives, including greenhouse gas reduction efforts, biodiversity impact reviews, and community development partnerships. These efforts helped secure ESG investment credentials among several leading institutional shareholders in the UK. However, select activist shareholders pressed for faster decarbonisation planning and clearer Scope 3 metric targets.

5. Institutional sentiment and analyst coverage

Major brokerages including JP Morgan, UBS, and RBC Capital Markets maintained a cautious outlook through 2025. Ratings ranged between “Neutral” and “Underperform”, driven by concerns over regulatory tightening, asset concentration risk in Mexico, and limited near-term exploration upside.

The average 12-month price target for FRES stood at £7.20 by year-end 2025, compared to a trading level of approximately £6.90 — reflecting only modest anticipated upside.

In conclusion, Fresnillo’s share movement in 2025 was shaped by familiar themes: metal prices, operational reliability, ESG adherence, and market sentiment around emerging-markets exposure. Balanced perceptions prevailed, with market participants seeking clearer strategic delivery going into 2026.

What are the key Fresnillo plc watchpoints for 2026?

Looking into 2026, investors assessing Fresnillo plc (FRES) must weigh a mixture of operational continuity, macroeconomic challenges, and company-specific catalysts. With environmental legislation in flux in Mexico and questions lingering around silver price sustainability, the investment case remains complex yet intriguing in a climate favouring hard-asset exposure.

1. Commodity price outlook

Precious metal price outlook remains central to Fresnillo’s 2026 performance. Analysts predict silver volatility, with prices likely swinging between $26 and $31 per ounce depending on macro trajectories, industrial demand (particularly from solar and electronics sectors), and inflation expectations. Gold is projected to remain above $2,000/oz provided inflation expectations remain sticky and central banks take a dovish turn mid-2026.

For Fresnillo, even modest upside in price scenarios could meaningfully lift margin potential — but only if cost base containment is maintained amid wage inflation in Mexico.

2. Exploration and development updates

Eyes are on the advancement of Fresnillo’s pipeline assets. Exploration results at Rodeo, Guanajuato, and other sites are anticipated in Q3 2026. Fresnillo’s success at incrementally replenishing reserves and adding new inferred resources will be key to reinforcing long-term NAV expectations and driving possible re-ratings by equity analysts.

Additionally, the company has guided for feasibility studies for two new satellite projects before year-end — progress here could catalyse fresh interest in FRES shares if CAPEX returns exceed market expectations.

3. ESG and stakeholder engagement evolution

In 2026, changes to Mexico’s mining law enforcement could directly impact Fresnillo’s ESG roadmap. The onus will be on the company to accelerate risk disclosures and update carbon intensity projections per asset. Ratings agencies like MSCI and Sustainalytics are expected to reassess Fresnillo’s ESG profile mid-year with likely implications for institutional positioning.

The firm continues partnering with Mexican NGOs and government groups to improve its social licence to operate — vital for de-risking future permit frameworks. Material labour actions are not anticipated due to improved union engagement efforts in 2025, but flashpoints remain if legislative enforcement intensifies.

4. Dividend policy and cash flow generation

Fresnillo’s 2025 dividend yield stood at approximately 2.1%, slightly below the FTSE All-Share mining sector average. Investors will monitor whether free cash flows in 2026 support improved distributions or continued retention for growth investments. A potential capital allocation shift in H2 2026 could unlock share buybacks or pipeline acceleration spend — depending on silver price trajectories.

A shift towards consistent progressive dividends, if communicated clearly, could bolster attractiveness among UK income-focused funds cautious about emerging-market risk.

5. Market sentiment and political backdrop

Investor confidence in FRES’s 2026 strategy will remain susceptible to political developments in both the UK (ahead of general elections) and Mexico. China's industrial outlook and the evolution of global energy demand will also colour metal demand assumptions.

Most institutional reports maintain a "Hold" rating with optionality on the upside depending on exploration success and cash flow delivery. UK retail investors could remain sidelined unless clearer visibility on capital return and operational leverage emerges.

In summary, Fresnillo enters 2026 in steady operating condition but faces an inflection year. High-impact catalysts — such as exploration results, new project announcements, and macro re-alignments — will dictate whether the shares break out of their defensive holding pattern or offer renewed upward mobility.