BREAKING: The FTSE 100 stock Fresnillo has dramatically boosted investor portfolios in 2025, rising an astonishing 425%. Investors now eagerly await whether this momentum can continue into 2026.
Fresnillo’s remarkable performance is primarily driven by its extensive silver production, with annual output expected to reach around 50 million ounces in the coming years. The price of silver has surged to approximately $75 per ounce, marking a staggering 170% increase last year, defying prior predictions. This surge is attributed to a combination of heavy government spending, persistent budget deficits, and a shift in central bank reserves towards tangible assets.
Unlike gold, silver has significant industrial demand, accounting for nearly three-fifths of total consumption. This heightened demand is fueled by trends in solar energy, electrification, and electronics. Meanwhile, silver supply remains constrained—new mines typically take over a decade to begin production. Even slight increases in investment demand can lead to sharp price fluctuations, showcasing a compelling combination of structural demand and limited supply that is expected to persist.
Fresnillo allows investors to gain direct silver exposure without the logistical challenges of physical storage. The company boasts an all-in sustaining cost of around $17 per ounce, meaning the current silver prices translate almost entirely into profits. This operational leverage has contributed to a staggering 67% return in my Self-Invested Personal Pension (SIPP) this year alone.
However, the stock’s volatility should not be overlooked. Silver prices can experience sudden pullbacks, and Fresnillo’s stock moves closely with these fluctuations. The company faces risks inherent to mining operations, including exploration uncertainties and potential regulatory changes in Mexico, where it operates.
Fresnillo’s recent H1 results revealed a 225% increase in its interim dividend, and investors can anticipate another strong payout when the company reports its full-year results. This cash generation not only bolsters the balance sheet but also supports further investments in exploration and returns to shareholders.
What to Watch Next: As the market shifts and the demand for silver remains robust, investors should keep a close eye on Fresnillo’s developments in 2026. With the AI revolution ramping up electricity demand and the global green transition still unfolding, Fresnillo represents a potentially lucrative opportunity in a SIPP designed for long-term growth.
In conclusion, while the volatility of silver can be daunting, the long-term drivers supporting Fresnillo’s growth remain intact. This stock is not for the faint-hearted, but for those willing to ride the waves of market fluctuations, it offers significant potential for compounding growth and income. Investors are advised to approach with patience and a focus on the long-term horizon.
