Earnings release
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1 For further information: Investor_Relations@penoles.com.mx Luis Carlos Navarro: (52) 55 52 79 32 19 Celia Ortega: (52) 55 52 79 32 94 INDUSTRIAS PEÑOLES, S.A.B. DE C.V. REPORT OF EARNINGS FOR THE SECOND QUARTER OF 2025. . Mexico City, August 5, 2025 – Industrias Peñoles, S.A.B. de C.V. (“Peñoles” or the “Company”) (BMV: PE&OLES), a mining group with integrated operations for the smelting and refining of non-ferrous metals and the manufacture of chemical products, reports its consolidated results for the second quarter of 2025 (2Q25 ) and the main changes compared to the same period in 2024 (2Q24). EXECUTIVE SUMMARY In the second quarter of 2025, prices for the metals produced and sold by the Company showed mixed performance compared to the same period in 2024. Gold recorded a notable increase of 40.3% in its average price, while silver increased by 16.6%. In contrast, industrial metals declined: lead fell by 10.1%, zinc by 6.8% and cop per, to a lesser extent, by 2.3%. This performance was a response to growing global uncertainty stemming from the tariff policies implemented by the United States and their potential impact on international trade and economic growth, which, combined with prevailing geopolitical conflicts , drove demand for precious metals as safe -haven assets, while putting pressure on industrial metal prices due to the uncertainty about the global economy generated by these situations. In mining operations, the volume of ore deposited in leaching yards by Herradura and Milpillas was lower (-13.4%). Selective mining was implemented at Herradura, resulting in a reduction in the volume mined but with higher grades, while at Milpillas, mining was affected by low equipment availability. The volume of ore milled and processed was lower (-13.8%), mainly due to the cessation of mining activities at the San Julián Disseminated Ore Body (DOB) DOB in November 2024 due to depletion, and the lack of production at Tizapa due to the strike since August 30, 2024, which ended on June 19, 2025, with activities resuming on June 30, as the Company announced. In addition, the volume of ore processed at the Herradura dynamic leaching plants decreased due to the reasons mentioned above. To a lesser extent, the Fresnillo, Sabinas, and Saucito mining units processed lower volumes of ore at their beneficiation plants. The above reductions were mitigated by Velardeña, Capela, and San Julián ( Veins), with an increase in their ore milling and beneficiation volumes, while Ciénega and Juanicipio recorded marginal variations. Quarterly gold production grew 11.5%, mainly due to improved recovery rates and grade of ore deposited in Herradura's leach pads, as well as the contribution of San Julián (Veins) due to higher processed volume with better ore grade. Other elements recorded declines in mining production: silver (-19.3%), lead (-15.1%) and zinc (-15.8%), largely due to the lack of ore processing at San Julián ( DOB) and Tizapa, as well as copper (-10.4%) due to the lack of production at the latter and the lower volume of ore processed with lower grades at Sabinas. Silver was also affected by lower ore grades and recoveries at Juanicipio and Ciénega, and lower volumes processed at Fresnillo and Sabinas, together with lower ore grades at Sabinas; lead, due to lower ore grades,
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2 volumes processed and recoveries at Fresnillo and Ciénega, in addition to lower grades obtained at Velardeña; and zinc, due to lower ore grades at Velardeña and Sabinas, as well as lower milling and recovery at the latter and lower volume processed at Fresnillo. In metallurgical operations, refined gold production increased by 11.1%, mainly due to higher production at Herradura. Silver and lead production decreased by 3.7% and 12.3%, respectively , due to lower treated volume in the silver circuit, caused by variations in concentrate quality that hindered processing at the smelter . Refined zinc production was 14.8% lower due to lower volumes of concentrates processed as a result of various failures in the roasting and leaching areas of the zinc plant. The chemical business recorded an increase in sodium sulfate production (+4.4%) thanks to the continued operation of the plants , which were affected in the previous quarter by power outages, and the recovery in demand from the detergent sector . The volume of magnesium oxide decreased by 9.5% due to scheduled maintenance shutdown during the period (not carried out in the same period last year), while magnesium sulfate grew by 4.2% due to higher production during the solar evaporation season. For the by-product ammonium sulfate, volume decreased (-49.4%) due to the continued strategy of reducing production in light of the high cost of ammonia and the drop in price of this fertilizer, which have affected profit margins, channeling the plant's capacity toward more profitable by-products. The financial results for the period were favorable compared to the same quarter of 2024. An increase in sales revenue was derived from higher average prices for gold and silver, as well as higher volumes sold of gold, copper matte , concentrates, and sodium sulfate. Cost of sales increased due to higher metal cost for all metals except lead, which was mitigated by lower production costs due to lower ore volumes processed at the mining units, lower volumes treated by the metallurgical plants, and the benefit of the depreciation of the peso compared to the same quarter of the previous year on production costs incurred in pesos (approximately 57% of such costs). General expenses increased in exploration due to the faster pace of work, and administrative expenses due to higher fees paid. There was also an increase in other expenses and lower financial expenses, while the provision for income taxes for the period was lower due to the favorable adjustment in deferred taxes, due to the appreciation of the exchange rate during the quarter, which offset the increase in taxes incurred. Due to the factors described above, the financial results obtained by the Company during 2Q25 and their variation compared to those of 2Q24 were as follows (figures in millions): Net Sales US$ 2,078.6 (+27.2%), Gross Profit US$ 704.8 (+ 73.4%), EBITDA US$ 680.2 (+ 73.4%), Operating Income US$ 512.3 (+ 129.2%) and Net Income of the Controlling Interest US$ 333.3, favorable compared to the Net Loss of -US$ 23.2 recorded during 2Q24.
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3 I. FINANCIAL RESULTS The Company's consolidated financial statements were prepared in accordance with International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Board ("IASB"). The analysis of the consolidated financial statements is presented in millions of US dollars (US$), which is Peñoles' functional currency, and the figures for 2Q25 are compared with those for 2Q24, except where otherwise indicated. FINANCIAL HIGHLIGHTS: (Millions of dollars) 2Q'25 2Q'24 % Change 1H 2025 1H 2024 % Change Invoiced sales 2,078.6 1,634.4 27 3,876.7 3,030.7 27.9 Net sales (1) 2,078.6 1,634.5 27. 3,876.7 3,030.9 27.9 Gross profit 704.8 406.3 73.4 1,317.7 577.4 128.2 % of Sales 33.9 24.9 34.0 19 UAFIDA (2)(3) 680.2 420.9 61.6 1,309.8 617.6 112.1 % of sales 32.7 25.8 33.8 20.4 Operating profit (3) 512.3 223. 129.2 972.4 229.4 323.9 % of Sales 24.6 13.7 25.1 7.6 Other (Expenses) Income (4) -7.7 11.7 n.a -14. 14 n.a Financial income (expenses), net -26.1 -41. 37 - -82. 29.7 Net income (loss) Controlling interest 333.3 -23.2 n.a 519.2 -62.2 n % of sales 16 -1.4 13.4 -2.1 (1) Includes hedging results. (2) Profit before interest, taxes, depreciation, and amortization. (3) Does not include other income (expenses). (4) Includes impairment of fixed assets. INCOME STATEMENT: The following chart shows the variation in each income statement item and its influence on the change in net income for 2Q25 compared to 2Q24:
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4 (1) Includes variation in hedging results. (2) Includes variation from sales of other products and services. (3) Includes financial income and expenses and foreign exchange gains and losses. (4) Cost of metal is presented net of the treatment charges, inventory gains, and other items. The variations are explained below: Net sales for 2Q25 totaled US$ 2,078.6, representing an increase of 27.2% compared to US$ 1,634.5 in 2Q24. The variation of +US$ 444.2 is explained as follows: • Higher prices for gold and silver, and higher realization prices for the sale of copper matte, copper, concentrates, and sodium sulfate , which offset lower realization prices for zinc, lead, and magnesium oxide (+US$ 403.1). • Higher sales volumes of gold, copper matte, sodium sulfate, and magnesium oxide, which offset lower volumes of concentrates, zinc, copper, lead, and to a lesser extent silver (+ US$39.0). • Higher revenues from the sale of other products and services (+ US$ 2.1). Cost of sales amounted to US$ 1,373.9, 11.9% higher than in 2Q24. The increase of US$ 145.7 was due to the following: • Higher Cost of Metal (+US$ 207.3), mainly due to higher sales volumes of by- products (copper matte) and lower treatment revenues ( recorded as a credit to the cost of metal). • Lower production cost of US$ 115.4, due to the following reasons: (i) lower volume of ore processed in mining operations, mainly due to the cessation of activities in San Julián ( DOB) due to depletion, the lack of production in Tizapa as a result of the strike , and the optimization of mining in Herradura; (ii) lower electricity consumption, mainly due to lower volume processed at the zinc plant, in addition to lower electricity prices in the Wholesale Electricity Market and improved operation of Termoeléctrica Peñoles (TEP) this year; (iii) the favorable
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5 effect of the depreciation of the peso against the US dollar on costs denominated in pesos (approximately 57% of production costs are denominated in the local currency); and (iv) lower maintenance costs. The variations by cost item are detailed below: o Energy ( -US$ 33.6, -24.9%), in electricity due to lower prices and consumption in operations, and diesel due to lower consumption in Herradura. o Depreciation and amortization (-US$ 28.1, -14.5%) because during 2Q24 a higher charge was made for San Julián ( DOB) since its closure process began in the third quarter of 2024 due to the end of its productive life. o Contractors ( -US$ 14.6, -11.6%) due to lower development work, ore hauling, and construction support. o Low-value leases (-US$11.9, -54.7%), mainly in Herradura, due to lower mining, deposit, and processing of ore. o Other items (-US$ 11.7, -27.0%) in machinery and equipment rentals and ammonia, offsetting higher charges for the transfer of by-products. o Maintenance and repairs (-US$ 11.4, -8.6%), mainly at the Herradura, Tizapa, and San Julián mines. o Operating materials ( -US$ 3.6 , -3.2%), mainly in reagents, anchors , cement, explosives, and detonators. o Human capital (-US$ 0.6, -0.5%), due to lower personnel retirement and benefit costs, which were offset by higher salaries and bonuses. • Inventory movement showed a variation of +US$ 53.9, as the period recorded a credit of -US$ 29.8, lower than the credit of -US$ 83.6 in 2Q24, mainly because refined metal and gold inventories increased in the Herradura leaching yards during that quarter, while in 2Q25 there was consumption of gold inventories in Herradura and Noche Buena, and of refined metal inventories. As a result, Gross Profit increased by 73.4% (+US$ 298.4) from US$ 406.3 in 2Q24 to US$ 704.8 in 2Q25, reporting an improvement in the margin on net sales from 24.9% to 33.9%. Operating expenses (general expenses) totaled US$192.4, an increase of US$9.6 (+ 5.3%) from the following items: • Higher exploration and geological expenses (+US$ 7.9, +14.2%), due to the increased pace of exploration work focused on priority projects and the conversion of resources to reserves at operating mines. • Higher administrative expenses (+ US$ 4.4, +5.6%), mainly in fees, human capital, and IT, which were offset by a decrease in fees and associations, as well as amortization of assets for right of use and travel expenses. • Lower selling expenses (-US$ 2.7, -5.7%) mainly due to lower freight and transportation costs, royalties and other items, offset by higher extraordinary mining royalties. Quarterly EBITDA of US$ 680.2 was favorable at +US$ 259.3 (61.6%) compared to US$ 420.9 in 2Q24, while Operating Income of US$ 512.3 grew by US$ 288.8 (129.2%) compared to US$ 223.5 in the same quarter of the previous year. Margins on net sales improved from 25.8% to 32.7% for EBITDA and from 13.7% to 24.6% for the operating margin.
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6 Other expenses, net, obtained during 2Q25 of -US$ 7.7, were unfavorable compared to other income, net of US$ 11.7 in 2Q24 (-US$ 19.4), which is explained as follows: • Other income of US$ 1.9, lower than US$ 20.9 in 2Q24 (-US$ 19.0), mainly because during 2Q24 there was income from the sale of other products and services (US$ 15.3), while in 2Q24 there was an expense for this item. Likewise, there was lower income from claims (-US$ 3.1) and a higher loss on the sale of fixed assets (-US$ 1.3). • Other expenses of US$ 9.6, slightly higher than other expenses of US$ 9.2 (US$ 0.4), mainly due to the loss on sale of other products and services ( + US$ 5.5) recorded in 2Q25, offset by the decrease in other expenses (US$ 4. 6) and remediation in closed mining units (US$ 0.9). Net financial and exchange income varied favorably (+US$ 15.6), which derives from the following items: • Financial income of US$ 35.1, up from US$ 17.5 (+ US$ 17.5), mainly due to higher interest accrued on investments ( + US$ 12.0) and the fair value of derivative financial instruments, which represented income in 2Q25 (+US$ 5.1) while in 2Q24 it was an expense, and higher income from other items (+US$ 0.4). • Financial expenses of US$ 56.7 vs. US$ 52.3 (+ US$ 4.4); whose variation comes from higher interest expense on financial debt ( +US$ 2.9) and higher discount on provisions for the ecological reserve ( +US$ 2.5), offset by the decrease in other items ( -US$ 1.0), which include bank fees, fair value of derivative financial instruments, and finance costs on lease liabilities. • Exchange rate fluctuation. In terms of conversion, the result was favorable at US$+ $2.6, since in 2Q25, an exchange loss of US$4.5 was recorded, lower than the loss of US$7.0 in 2Q24. This item comes from the conversion at the balance sheet date exchange rate of monetary assets and liabilities in currencies other than the US dollar, including the Mexican peso. The Provision for income taxes was lower by US$ 96.8. In 2Q25, the provision of US$ 73.0 consists of taxes incurred (both income tax and special mining right) of US$ 272.9 and deferred taxes of -US$ 199.9. In comparison, in 2Q24, these same items amounted to US$67.7 and US$102.1, respectively. The increase in taxes payable is explained by the better financial results obtained in the quarter. About deferred taxes, a favorable adjustment was recorded due to the exchange rate effect, as a result of the appreciation of the exchange rate during the quarter, and inflation on the tax value of the Company's assets and liabilities. In contrast, during 2Q24, the depreciation of the peso against the dollar had a negative impact on deferred taxes, although this effect was mitigated by lower inflation. The Non-controlling Interest in quarterly results was an income of US$ 71.4, up US$ 22.9 from the income of US$ 48.6 obtained in 2Q24, due to the better results of Fresnillo plc. On the other hand, the share in the results of associated companies and joint ventures decreased by US$ 2.6. Due to the factors described above, in 2Q25, Net Income from Controlling Interest amounted to US$ 333.3, an increase of +US$ 356.4 compared to the loss of -US$ 23.2 obtained during 2Q24. Net margin on Sales was 16.0% compared to -1.4%.
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7 CASH FLOW: At the end of 2Q25, the Company had cash and cash equivalents of US$ 2,338.1, an increase of +US$ 230.1 compared to the balance of US$ 2,108.0 at the end of 1Q25 (net of exchange rate fluctuations and conversion effects of -US$ 3.8). The most relevant items are discussed below: 1) +Net cash flows from operating activities of US$ 807.5. This item consists of items directly related to operations, excluding those that do not have an impact on cash (such as depreciation) , and includes working capital, income taxes, employee profit sharing, and share of results of associates and joint ventures. 2) Net cash flows from investing activities of -US$ 166.6, comprising: a) Short-term investments -US$ 217.6 b) Proceeds from the sale of shares+ $ 158.0. c) Investments in property, plant, and equipment of -US$ 112.4, highlighting the development of amortizable mining works, the construction of tailings deposits and leaching yards, as well as the purchase of equipment for operating units. d) Interest received +US$ 2.6. e) Dividends received +US$ 1.8. f) Income from the sale of fixed assets +US$ 1.0. 3) Net cash flows from financing activities of -US$ 414.6, derived from: a) Obtaining and settling short -term loans used to finance working capital requirements, and amortization of the current portion of long -term loans -US$ 192.5 b) Dividends paid to non-controlling interests -US$ 186.3 c) Interest paid on financial debt -US$ 30.9. d) Payment of lease liabilities -US$ 7.9. e) Other items+ US$ 2.9. II. ECONOMIC ENVIRONMENT AND METAL PRICES Among the main economic variables that had a significant impact on the Company's results, the following stand out. 2Q'25 2Q'24 % Change 1H 2025 1H 2024 % Change Period inflation (%):* 0.89 0.39 1.7 1.68 Exchange rate (peso-dollar): Closing 18.8928 18.3773 2.8 Average 19.5453 17.2106 13.6 19.9844 17.1034 16.8 *Domestic Inflation of the National Consumer Price Index
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8 Period Gold (US$/oz) Silver (US$/oz) Lead (UScts/lb) Zinc (UScts/lb) Copper (UScts/lb) 1Q'24 2,069.80 23.3 94.2 111.15 382.76 2Q'24 2,338.18 28.80 98.27 128.52 442.38 1H 2024 average 2,202.91 26.09 96.22 119.76 412.3 1Q'25 2,859.62 32.30 89.35 128.73 423.67 2Q'25 3,280.35 33.58 88.32 119.79 431.99 1H 2025 average 3,066.59 32.94 88.84 124.33 427.76 % change 2Q'25 vs 2Q'24 40.3 16 -10.1 -6.8 - % change 1Q25 vs 2Q25 14.7 4 -1.1 -6.9 2 % change 2025 vs 2024 39.2 26. -7.7 3. 3.7 Precious metals consolidated their strength in the second quarter of 2025, due to growing global uncertainty over the US government's tariff policies and geopolitical conflicts. Gold set successive records, reaching an all-time high of US$3,500 per ounce on April 22, while silver hit its highest level in 13 years , surpassing US$37 per ounce toward the end of the quarter. Demand for gold strengthened significantly, driven by sustained purchases by central banks, record inflows into physically backed funds, and robust retail investment in coins and bars. China led the accumulation of official reserves, while the weak dollar and perceptions of systemic risk favored greater capital allocation to gold from Europe and Asia. On the supply side, mini ng production grew marginally, and recycling offered limited relief, maintaining a structural gap between demand and inventories. In silver, physical retail investment performed well in Asia and Latin America, while industrial demand remained robust, espec ially in the solar and automotive sectors. Despite a slight recovery in silver ETFs, the market continued to face structural supply constraints. New US tariff threats were a determining factor in the performance of base metals. Volatility, driven by unilateral measures and expectations of effective sanctions in August, made the second quarter of 2025 a key period for strategic repositioning, both for speculative positions and industrial demand. Although copper remained resilient in spot prices, the widening COMEX-LME spread reflected a deeply distorted market. Trade uncertainty resulted in record premiums on US contracts, while China increased its physical imports. In co ntrast, zinc experienced corrections due to signs of slowing demand for the metal. In the lead market, demand remained relatively stable, supported by the automotive sector. However, the lack of secondary supply and the reluctance of primary smelters to increase production put pressure in the supply-demand balance. This was compounded by volatility in cross -border trade in lead-acid batteries, particularly due to tariff uncertainty with the United States. III. OPERATING RESULTS The main factors affecting the changes in operating results for 2Q25 compared to 2Q24 are discussed below.
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9 MINING OPERATIONS: Production 2Q'25 2Q’24 % Change 1H 2025 1H 2024 % Change Milled Ore (Mton) 4,791 5,581 -14.2 9,582 10,934 -12.4 Mineral Deposited(*) (Mton) 4,095 4,728 -13.4 8,165 8,530 -4.3 Ore processed (Mton) 8,886 10,309 -13.8 17,746 19,464 -8.8 Gold (oz) 164,377 147,381 11.5 326,692 302,198 8.1 Silver (koz) 15,210 18,837 -19.3 30,305 36,151 -16.2 Lead (ton) 19,915 23,453 -15.1 39,399 44,886 -12.2 Zinc (ton) 60,148 71,476 -15.8 117,846 138,458 -14.9 Copper (ton) 2,338 2,608 -10.4 4,744 4,852 -2.2 Copper cathode (ton) 2,973 3,189 -6.8 5,533 6,383 -13 Includes 100% payable production f Fresnillo plcand Juanicipio. *Includes Herradura and Milpillas. Mton: thousand tons; oz: troy ounces; koz: thousand troy ounces; ton: metric tons. During the second quarter of 2025, the mining units processed 8,886 thousand tons of ore, representing a decrease of 13.8% compared to the same period last year. This was mainly due to the Herradura mine reducing the volume of ore deposited in yards and processed in dynamic leaching plants due to an optimization of operating standards (for greater selectivity), but achieving an improvement in gold grade, and the Milpillas unit also deposited less ore in leaching yards due to lower extraction resulting from the low availability of equipment at the mine. The contraction in the volume of ore processed at underground mine plants was mainly due to the lack of extraction and milling at San Julián (DOB), an area where mining activities ended in November 2024 due to depletion, and at Tizapa, due to a strike at the unit. To a lesser extent, the Fresnillo, Sabinas, and Saucito mines also processed lower volumes, while Velardeña and Capela saw an increase in their ore milling and beneficiation volumes. Gold (+ 11.5%): The increase in quarterly gold production came mainly from the Herradura mine, due to the recovery of gold from oxide ore deposited in leaching yards and higher ore grade, which offset lower ore volumes processed. San Julián (Veins) also contributed due to higher processing of higher-grade ore, and Noche Buena, whose mining activities concluded in May 2023, although recovery of contents in leach pads continued. These units offset the lack of production at the Tizapa mine, lower ore grades and decreased processing volume at Fresnillo, as well as lower or grades at Capela and Juanicipio. Silver (-19.3%): The decline in silver production is 68% attributable to lack of production at Tizapa and San Julián (DOB). There was also lower production in Juanicipio and Ciénega due to lower ore grades and recovery rates, in Fresnillo and Sabinas due to lower volumes of ore processed, and in the case of Sabinas also due to lower ore grade as dilution continues to be higher than expected, in addition to lower milling and recovery in Saucito. The above reductions were mitigated by higher milling and improved grade and recovery at Capela, higher milling together with better grade at San Julián Veins, higher volume of ore processed and recovery at Velardeña, as well as silver recovery at the Pyrites I and II plants.
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10 Lead (-15.1%): The volume of lead in concentrates decreased due to the lack of production at Tizapa and San Julián ( DOB), as well as lower ore grades, processed mineral volumes, and recoveries at Fresnillo and Ciénega, in addition to the lower grade obtained at Velardeña. The above reductions were partially offset by higher ore grades obtained at Saucito and Juanicipio and higher volumes of ore processed with better recovery at the latter. Zinc (-15.8%): The decline was mainly due to the lack of production at Tizapa and San Julián (DOB) and, to a lesser extent, to lower ore grades at Velardeña and Sabinas, as well as lower milling and recovery at the latter and lower processing volumes at Fresnillo. This was offset by higher production at Capela, due to an increase in the volume of ore processed and a better recovery rate, at Saucito, thanks to a better ore grade and recovery, and at Juanicipio, which obtained a better ore grade and an increase in the volume of ore processed. Copper (-10.4%): Copper in concentrates was affected by the lack of production at Tizapa, as well as by lower volume, grade, and recovery at Sabinas, which was mitigated by production at Capela, derived from higher processed volume with better grade, and at Velardeña, due to an increase in the volume of ore processed with higher ore grade and recovery. Cathode copper (-6.8%): Lower copper production in cathodes at Milpillas was due to a decrease in the volume of ore deposited and lower ore grade, which was mitigated by higher copper recovery in leach pads. METALLURGICAL OPERATIONS: Production 2Q'25 2Q'24 % Change 1H 2025 1H 2024 % Change Gold (oz) 231,007 207,856 11 469,410 425,140 10.4 Silver (koz) 18,726 19,436 -3.7 37,715 37,380 0 Lead (ton) 26,460 30,165 -12.3 57,247 55,322 3.5 Zinc (ton) 53,729 63,041 -14.8 95,703 121,919 -21 In the lead -silver circuit, the volume of processed feed was lower due to variations in concentrate quality (high copper content and lower silver and lead grades), which made processing at the Smelter more difficult. This, combined with a lower volume of l ead- silver cement produced at the zinc plant and sent for processing at the Smelter, resulted in a lower volume of bullion produced at this facility and treated at the silver refinery. Consequently, refined silver and lead production for the quarter was negatively impacted compared to the same period of the previous year. In contrast, refined gold production benefited from a higher volume of rich materials processed at the silver refinery—mainly doré and carbon from Herradura—as well as from the reduction of in-process inventories. In the zinc circuit, there was a lower volume of concentrates processed due to various failures in the roasting and leaching areas, which resulted in lower inventories of calcine and purified solution, negatively affecting refined zinc production compared to the same quarter last year.
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11 CHEMICAL OPERATIONS: Production 2Q'25 2Q'24 %Change 1H 2025 1H 2024 %Change Sodium sulfate (ton) 182,932 175,198 4.4 355,409 355,374 0 Magnesium oxide (ton) 15,859 17,524 -9.5 31,107 32,094 -3.1 Ammonium sulfate (ton)* 13,514 26,694 -49.4 29,847 52,878 -43.6 Magnesium sulfate (ton) 17,924 17,195 4.2 33,083 31,614 4.6 *Does not include maquila. Quarterly production of sodium sulfate was higher due to greater operational stability at the plants, following power outages in the first quarter of the year. This made it possible to meet the recovery in demand from the detergent sector, which had previously contracted, as well as to have sufficient inventory in advance of the maintenance shutdown in June. In contrast, the output of magnesium oxide contracted due to the maintenance shutdown at the magnesium plant in June, which did not take place in the same quarter of the previous year, as well as a contraction in demand for its main varieties. Similarly, the by-product ammonium sulfate recorded lower quarterly volume due to strategies to reduce its production considering the high cost of ammonia and to focus the use of sulfuric acid on more profitable products. As for magnesium sulfate, volume increased due to stable operations and higher production via dams due to good magnesium concentration during the months of solar evaporation. IV. PROJECTS Peñoles Exploration During the quarter, base-metal exploration continued on five priority projects: three in Mexico, one in Peru, and one in Chile, completing 29,489 meters (m) drilled during the period, for a cumulative total of 55,552 m. Field geology and geophysics work advanced in the areas of influence of these four priority projects and in Tizapa. In addition, geological studies and exploratory work were carried out on 11 company -owned prospects and 9 third -party prospects to evaluate their potential. The main results are as follows: Flobar (Sonora) Early-stage copper and polymetallic project near La Caridad mine. The drilling program advanced with a cumulative total of 15,699 m in the first half of the year. In the area La Florida (a shallow copper body), the inferred resource continues to increase, while adjacent targets continue to be evaluated. At El Barrigón Norte and Cerro Mina, progress is being made in defining bodies with good copper equivalent grades, as well as in their interconnection zones. Reina del Cobre (Durango) Advanced copper-zinc project located 20 km east of the Velardeña mining unit. Drilling totals 23,036 m, with good results both inside the mine and on the surface. Expansion of the San Joaquín adit continues to complete three new drilling stations . The plan is to increase the 25.2 million tons of inferred resources by more than 30% this year and
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12 convert a portion to indicated resources to update the preliminary economic study. Geological and geophysical exploration is progressing in adjacent areas in the San Lorenzo mountain range to define new nearby targets for drilling. International Projects In Peru, at the advanced Racaycocha Project, drilling has continued at Santa Rosa and Pucapampa, as well as at Pasacancha, with a cumulative total of 8,831 m, with 19 holes completed and 3 in progress, highlighting intersections in two drill holes at Santa Rosa and one at Pucapampa. In Chile, at the early-stage Yastai project, drilling was suspended in June due to winter conditions, having completed 8,486 m, and work is scheduled to resume in September to conduct a preliminary economic study by the end of the year. The quality of the indicated and inferred resources in the main Yastai zone continues to improve. In partial tests of four drill holes, three were of good grade in this zone and one in the Neptuno target. Mining Units At the Tizapa mine, surface exploration work continued in adjacent areas and new targets for drilling were defined. Drilling will resume once the strike at the mining unit has ended. Fresnillo plc Fresnillo plc, a subsidiary that is independently listed on the London Stock Exchange and the Mexican Stock Exchange, in which Peñoles holds a 74.99% equity interest, continued to advance its exploration activities and the development of precious metal projects. For more information on the development of Fresnillo plc's projects, please visit www.fresnilloplc.com. V. ANNOUNCEMENT On June 30, 2025, Peñoles informed the investing public that, in connection with the strike initiated on August 30, 2024, by the National Union of Mine, Metallurgical, Steel, and Similar Workers of the Mexican Republic (hte Union) at its Minera Tizapa, S.A. de C.V. business unit, in which the Company holds a 51% equity stake, the Federal Labor Court for Collective Matters (the Court) issued a final judgment on June 19, 2025. The Court ruled that the strike called by the Union was justified by two violations of the collective agreement and dismissed seven other violations alleged by the Union, including one relating to the distribution of employees profit sharing (PTU) in excess of the amount established by current legislation. The Court ordered the resumption of work and the payment of the corresponding wages . On June 30, 2025, the workplace reopened, ending the strike and allowing for the payment of wages owed to workers. The Company reiterates its commitment to respect the Court's ruling and to comply with all obligations established in the collective bargaining agreement and current labor legislation. On July 31, 2025, the Company announced that Luis Humberto Vázquez San Miguel, VP of Mining, was appointed VP of the Racaycocha Project, located in Peru, effective August 1, 2025. Consequently, Miguel Eduardo Muñoz Pérez, who served as AVP of Mining Operations for the Northern Zone, was promoted to VP of Mining, replacing Vázquez San Miguel as of that same date.
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13 Both appointments are part of the Company's growth strategy , focused on the development of high -potential projects such as Racaycocha, and reflect Peñoles' commitment to strengthening its mining operations. ABOUT INDUSTRIAS PEÑOLES, S.A.B. DE C.V. Peñoles, founded in 1887, is a mining group with integrated operations for the smelting and refining of non -ferrous metals and the manufacture of chemical products. It is currently the world's largest producer of refined silver, the Latin American leader in the production of refined gold and lead, and one of the world's leading producers of refined zinc and sodium sulfate. Peñoles shares have been listed on the Mexican Stock Exchange since 1968 under the symbol PE&OLES and are part of the Price and Quotation Index. Analyst Peñoles is covered by Morgan Stanley, Scotiabank, and BTG Pactual.