México D.F., October 28th, 2009 – Industrias Peñoles S.A.B de C.V. (“Peñoles” or the “Company”) (BMV ticker symbol: PE&OLES), a mining group with integrated operations in the smelting and refining of non-ferrous metals and the production of chemicals, reports its consolidated results for the third quarter of 2009 (3Q09).

§         In the first full quarter of normal operations following the end of the 66-day strike at the lead-silver refinery in the Met-Mex Peñoles metallurgical complex in Torreón, production of all refined metals rebounded strongly compared to 2Q09: silver +36.2%, lead +30.7%, zinc +12.0% and gold +11.7%.

§         Prices of all the metals produced and sold by Peñoles were significantly higher during the quarter and continued to recover compared to 4Q08, a period in which prices touched record lows not seen in several years due to worldwide economic instability.

§         As a result of the foregoing, the Company’s gross sales rose by +36.0% compared to the previous period. Gross Profit, however, remained flat at $3,019.4 million due to increases in opportunity costs related to hedging (+$210.5 million) and in the cost of sales (+$3,215.2 million).

EXECUTIVE SUMMARY

Although Net Sales – including the results of metals and exchange rates hedging – rose by +34.3% over the figure reported in 2Q09, Gross Profit, EBITDA and Operating Profit showed declines of -3.7%, -6.6% and -8.0%, respectively.

Among the operating and market factors that had a favorable impact on the Company’s results the following stood out:

a)     Average prices were higher in 3Q09 than in 2Q09 for all the metals produced and sold by Peñoles: lead (+28.6%), copper (+25.7%), zinc (+19.6%), silver (+7.3%) and gold (+4.2%).

b)     In the Mining Operations, the production of lead and silver contents recorded a slight increase to 16,280 tons and 388.9 tons, respectively. Our subsidiary Fresnillo plc reached a new production record for silver contents during the quarter.

c)     In the Metallurgical Operations, production and sales volumes of all refined metals during the quarter was considerably higher than the level registered in 2Q09, a period that still reflected the effects of the strike that ended on April 14th. Sales of silver and gold rose by +30.8% and +12.6%, respectively. Strength was evident in demand for investment purposes as well as for jewelry fabrication in both domestic and export markets, even though it was summer, a season that is typically slow for these metals. Sales of lead and zinc grew by +30.6% and +8.1%, respectively. Domestic demand in both these markets continued to recover and, in the case of zinc, there was an increase in the premium on sales to both the United States and Europe . Demand for lead continued to be strong in the main South American countries to which Peñoles exports its products ( Peru , Chile and Brazil ) in part because operations remained suspended at the La Oroya refinery owned by Doe Run.

d)     In the Chemical Operations, the production and sale of magnesium oxide rose by +8.1% and +79.9%, respectively, thanks to an improvement in the performance of the industries that use this product, among which the steel and cement industries stand out. Magnesium oxide can also be used as a fertilizer, animal feed and flame retardant depending upon the grade.

e)     The average peso-dollar exchange rate in 3Q09 remained practically unchanged in comparison with 2Q09 at 13.26 pesos per dollar (-0.7%). Approximately 95.0% of Peñoles’ sales are denominated in dollars or linked to this currency.

Among the factors that had an unfavorable impact on the Company’s results, the following stood out:

a)     In the Mining Operations, the production of copper contents and copper cathodes was lower than that registered in the previous period (-10.4% and -6.8%, respectively).

b)     In the Chemical Operations, there were lower production and sales volumes in the quarter of ammonium sulfate (-14.4% and -41.3%, respectively) and lower sales of sodium sulfate (-5.6%). In the case of ammonium sulfate which is used mainly as a fertilizer, lower sales were attributable to an unusual rainy season in the country that impacted the agricultural cycle. In the case of sodium sulfate, lower sales were due to persistent weakness in demand from detergent producers and glass manufacturers.

I. FINANCIAL RESULTS

In 2008, the Mexican Financial Information Standards B-10, B-2, D-3 and B-15 were all modified.  B-15, entitled “Conversion of Foreign Currencies” establishes that companies must identify their currency of record, their functional currency and their reporting currency. Peñoles chose to define the Mexican peso as the currency of record and reporting currency, and the U.S. dollar as its functional currency. In this section of the report, the 3Q09 results are compared against the 2Q09 figures in millions of pesos (reporting currency), unless otherwise indicated.

(*) Including results of metals and exchange rate hedging.

1.     In 3Q09 Net Sales increased by +$3,099.4 (+34.3%) over the preceding quarter for the following reasons:

1.1.           Without including the results of metals and exchange rate hedging, Gross Sales were $12,502.0, +36.0% above the figure reported in the prior quarter. This considerable increase in gross sales of +$3,309.9 was the result of the following factors: +$2,582.0 from higher sales volumes of refined gold, silver, lead and zinc as well as copper contents and magnesium oxide in a number of specialty forms, and +$1,155.0 from higher prices for all the metals produced and sold by the Company. The foregoing was partially offset by -$87.6 from the lower exchange rate during the period (13.26 vs. 13.36 pesos per dollar) and -$339.5 of other items composed principally of other products.

It is worthwhile mentioning that although sales of gold and silver in particular rebounded with respect to the previous period, they remained at lower levels than those seen last year. This was due mainly to the fact that, in order to reduce working capital requirements this year, the Company has significantly reduced its purchases of materials coming directly into the lead-silver refinery (doré, precipitates, anodic slimes, etc.) which in previous years accounted for a significant portion of sales, but with low margins.

1.2.           The result in hedging operations in metals and exchange rates carried an opportunity cost of -$367.2 that compared unfavorably with the figure of -$156.7 registered in 2Q09. The higher opportunity cost on the expiration of hedging positions was due to the rise of metals prices and the fact that in July the Company raised the percentage of its hedged mining production of silver, gold, zinc, lead and copper through a series of transactions such as forwards and min-max collars (derivatives). These were disclosed to the market on August 7^th 2009 as a relevant event reported to the Mexican Stock Exchange. These transactions encompass the period from August 2009 to June 2010 and are part of the Company’s hedging strategy aimed at reducing variations in EBITDA. It should be noted that the production of precious metals from the Fresnillo plc subsidiary remained un-hedged.

In dollar terms, Net Sales of US$914.5 million were composed of gross sales of US$942.0 million and an opportunity cost from hedging of -US$27.5.

2.     The Cost of Sales increased by +$3,215.2 as the result of the following factors:

2.1.           An increase of +$3,352.9 in the cost of metal contained in concentrates and other materials purchased from third parties as raw materials for the Met-Mex metallurgical complex to complement material from the Company’s mines. The increase was due to the rise in metals prices and higher volumes purchased in the first quarter of normal operations at the refinery following the end of the strike. During this period the Company finished processing/marketing bullion from the lead smelter that had accumulated during the strike.

2.2.           Production costs increased by +$142.7, mainly in the areas of energy, costs of personnel and contractors. These were partially offset by a reduction in the cost of raw materials. Energy represents around 23.3% of the Company’s production costs and electricity accounts for 62.4% of total energy costs. Termoeléctrica Peñoles (TEP), which generated around 93.0% of the total electric energy consumed by the Company in 2008, suspended operations in mid-July due to the failure of its principal generator, which is now being repaired and is expected to resume normal operations in early November. As a result, during certain days in July and August Peñoles purchased energy from the Comisión Federal de Electricidad (CFE) at higher prices. These developments, added to an increase in consumption during the period, contributed to an increase in energy costs. However beginning in the second week of August, Peñoles commenced paying for the energy purchased from CFE as though it were produced by TEP, at a lower price, as stipulated in the supply contract.

2.3.           Inventory changes, consolidation effects and other items: -$280.4.

3.     The increase in Net Sales (+$3,099.4) was not sufficient to offset the increase in the Cost of Sales (+$3,215.2) therefore Gross Profit remained stable at $3,019.4 (-3.7%).

4.     Operating expenses, excluding depreciation, increased by +$44.7 to $742.7 compared with the previous period due to the following:

a)     General and administrative expenses were virtually unchanged with respect to the prior period (-$0.3).

b)     Exploration expenses were higher (+$45.0), particularly for industrial metals projects such as Rey de Plata and Velardeña (see section IV Projects) as well as various projects from the Fresnillo plc subsidiary.

5.     As the result of the lower Gross Profit (-$115.8) and higher operating expenses (+$44.7), EBITDA of $2,276.8 was -$160.4 (-6.6%) lower.

6.     As a consequence of the lower EBITDA (-$160.4) and lower depreciation charges (-$10.8), Operating Income declined -$149.6.

7.     Integral cost of financing was $334.4 and included:

7.1.           A net financial expense of $231.3 that compares unfavorably with a result of $33.4 registered in the previous period and that was largely due to the recognition of the valuation of a portion of the position in derivative financial instruments involving interest rates and exchange rates and is related to the pre-payment of US$150.0 in debt that the Company did on September 30th (see section V Highlights).

7.2.           An exchange loss of $103.1 that compares unfavorably with the exchange gain of $528.1 registered in 2Q09. Both were the result of the adoption of the dollar as functional currency and the Mexican peso as accounting and reporting currency, in accordance with Mexican Financial Information Standard B-15; and are produced by our assets in British pounds and the net balance of assets and liabilities in Mexican pesos.

7.3.           Economic conditions in 3Q09 and 2Q09 did not meet the necessary criteria to register a monetary result which is part of the integral cost of financing, according to the changes in Mexican Financial Information Standard B-10 “Effects of Inflation”.

8.     Other Expense (Income) shows an expense of $12.6 in comparison with $106.2 in 2Q09 that represented a drop of -$93.6 million due to the fact that in 2Q09 the Company incurred in non-recurrent expenses. Provisions for employee profit sharing resulted in a charge of $124.9 million that was -$104.9 lower than the figure registered in 2Q09 due to the Company’s lower results during this period.

9.     The Equity Interest in Net Income of Associates Companies of -$5.6 million compares unfavorably with the profit of +$2.5 registered in 2Q09 and it reflects the results of the companies in which Peñoles has a minority interest.

10.  The Provision for Income Taxes increased by +1,565.7 despite of lower pre-tax profits due to the fact that in 2Q09 the Company recorded a fiscal stimulus for having brought funds into the country to be used for investments and the payment of obligations in accordance with the decree and applicable regulations. This was not the case in 3Q09.

11.  Minority Interest fell by -$173.8. Among the subsidiaries in which there are minority investors Fresnillo plc, Minera Tizapa and TECSA are included.

12.  As a result of the factors mentioned above, Net Income registered a decrease of -$2,180.2 with respect to the previous period.

CASH FLOW :

At the close of September 2009, the Company had cash and short term investments of $11,114.7 that represented a decline from -$3,123.5 at the end of 2Q09.

The more important changes are commented on below:

1.     Net cash flow from operating activities of +$3,245.6 in 3Q09 and compared favorably with the result of +$2,508.6 reported in 2Q09 and consisted of items directly related to operations, working capital, as well as income taxes and employee profit sharing.

2.     Net cash flow from investment activities totaled -$1,262.7 in 3Q09 compared with -$1,274.2 reported in the prior period and consisted mainly of investments in property, plant and equipment of -$1,162.6, mainly for operations and projects at Fresnillo plc, a wind energy generation plant, and projects at the Met-Mex Peñoles metallurgical complex and at the Milpillas mine.

3.     Net cash flow from financing activities raised to -$5,106.4 compared with -$365.5 registered in the previous period and consisted of -$2,448.3 in amortization of bank loans, including the prepayment of debt (see section V Highlights) and -$2,607.4 of dividends paid during the period.

II ECONOMIC ENVIRONMENT AND METALS PRICES:

Among the main variables that had a significant impact on the results of the company, the following are noteworthy:

Gold: In this period gold registered a rise of +4.2% compared to the prior quarter, easily topping the 1,000 Usd/Oz level and reaching historical highs. One of the main factors driving the price was the weakness of the dollar. Normally, this metal maintains a close inverse relationship with this currency: gold moves higher when the dollar loses ground. In recent months the dollar weakened due to reduced risk aversion among investors in the face of mixed economic news reported in the last few months who some consider clear signals of an economic recovery. Another key factor in the rise in the price of this metal has been demand from investment funds that continue to show great interest in instruments such as the denominated Exchange Traded Funds (ETFs).

Silver: Similar to prior periods, silver was carried along by the strength in other industrial metals such as lead, copper, zinc and also benefited from the rise of the gold price. It registered an increase of +7.3% with respect to the previous quarter.

Lead: Like other metals, lead benefited from the weakness of the dollar that made it cheaper for holders of other currencies and generated an increase in demand. Lead was the metal that gained the most ground during the quarter (+28.6%) and even reached levels not seen in more than 13 months. Among other factors, lead benefited from the closing of a number of smelting operations in China for environmental reasons and from the suspended operations of Doe Run in Peru . Future prospects for this metal are for moderate optimism in spite of the fact that operations resumed at the Magellan mine, an important primary lead mine that had been closed for two years. Among other positive factors, it is believed that the economic stimulus programs implemented by such countries as the United States , Germany , Japan and China could result in increased sales of automobiles and of lead indirectly because automobile batteries represent around 80% of the market for this metal.

Zinc: Zinc posted a rise of +19.6% with respect to the previous quarter thanks to the influence of other industrial metals such as copper and lead despite the fact that its fundamentals are weaker than those of these other metals. For example, total zinc inventories oscillate around 4.5 weeks of consumption in contrast with lead inventories that range around 2 weeks and copper inventories that are at a level of 3 weeks of consumption.

Copper: Throughout 3Q09, copper registered an increase of +25.7%. It is the metal that has shown the greatest recovery following the sharp declines that metals in general registered in the final quarter of last year. The weakness of the dollar aided this metal because it made it cheaper for holders of other currencies and thereby increased demand. Nevertheless, the key factor behind the rise in copper and other industrial metals has been the increase in demand from China , which is the largest consumer of industrial metals in the world. This factor, added to the reduction in mining production and the scarcity of scrap (metal for recycling) leads analysts to believe that the surplus in this and other markets will be reduced substantially in the short term.

III OPERATING RESULTS:

Here are the main factors that drove operating results in 3Q09:

MINING OPERATIONS:

(*) Herradura (open pit mine) and Milpillas.

Gold: (-10.1%): Due to lower grades and/or recoveries in certain operations of the Fresnillo plc subsidiary.

Silver: (+0.2%): Due to a higher ore milled and recoveries in certain operations in Fresnillo plc as well as higher ore grades in Tizapa and a higher ore milled and grades in Sabinas. Our subsidiary Fresnillo plc reached a new record in silver contents production during the quarter.

Lead: (+1.5%): Due to higher ore milled and recoveries in Naica and higher recoveries in Francisco I. Madero as well as higher ore milled and recoveries in some of the operations of Fresnillo plc.

Zinc: (-3.6%): Due to lower ore milled, grades and recoveries in Francisco I. Madero as well as lower grades and recoveries in Bismark.

Copper: (-10.4%): Due to lower grades at Sabinas and lower grades and recoveries at Bismark.

Copper Cathodes: (-6.8%): Due to lower grades and recoveries at Milpillas, as well as some technical difficulties at this mine which have already been solved.

METALLURGICAL OPERATIONS:

In the first quarter of normal operations in the Met-Mex Peñoles metallurgical complex following the end of the strike there was a rebound in the production of all refined metals: silver (+36.2%), lead (+30.7%), gold (+11.7%) y zinc (+12.0%). During this period the Company finished processing/marketing bullion from the lead smelter that accumulated during the strike. The rebound in zinc production – that was not affected by the strike – was due to the fact that a scheduled annual maintenance shutdown was carried out in 2Q09 in the zinc refinery and good operating continuity was achieved in 3Q09.

CHEMICAL OPERATIONS:

Production of sodium sulfate was stable and varied by +1.7% while production of magnesium oxide rose by +8.1% and production of ammonium sulfate and magnesium sulfate fell -14.4% and -15.8%, respectively.

IV PROJECTS

Since exploration is the engine for the long-term growth of the Company, during the first nine months of the year Peñoles continued to invest in exploration for new ore bodies in Mexico , Peru and Chile as well as exploration to increase reserves in the areas of influence of mines in operation. Among the main projects in Peñoles’ exploration portfolio, Velardeña, located in Durango , and Rey de Plata in Guerrero, stand out.

Velardeña is a zinc project located less than two hours away from the Met-Mex Peñoles metallurgical complex in which 22,800 meters have been drilled to detect mineralized zones. So far, mineral resources have been detected in three bodies: Antares Norte, Antares Sur and Santa María. Added together, they hold a metallic content of more than 2.4 million tons of zinc. Work is currently progressing to locate new mineralized zones with high grades both in the extensions of the aforementioned ore bodies as well as in the adjacent areas. Pre-feasibility studies of this project are in progress.

Rey de Plata is a poly-metallic zinc-lead-copper-silver-gold project located in the area adjacent to the Rey de Plata mine, property of Peñoles, that suspended operations in 2001 and remains closed. Currently the close-in drilling program is 20.0% complete with a total of 15,800 meters in 35 drill-holes. The drilling is aimed to increase the level of certainty of the mineral bodies already discovered as well as providing support to a new mining project. The results to date confirm and improve upon previous projections. This stage of the drilling program is projected to be completed at the end of the coming year.

In Sonora on the other hand, exploration for copper is focused on the Bacanora and Caborca regions with the Bacanora and Humos projects in which field work is being conducted to detect extensions of mineralization that should be proven next year.

With respect to international exploration in Peru in the Racaycocha copper-gold project, 3,700 meters of drilling was completed in the northern portion of the area. At this moment the results suggest mineral volumes with attractive values and potential. The objective in this project is to identify enough fine copper resources exploitable by open pit mining. Upon the conclusion of the program this year an estimate will be made of the potential mineral resources of the project. Lastly, a series of offers and prospects have been reviewed in Chile and prospecting work conducted, mainly to identify opportunities for copper ore bodies.

Field work was conducted for the purpose of increasing reserves at the operating mines, Francisco I. Madero, Naica and Milpillas.

In addition, through its 77.1% equity position in Fresnillo plc, Peñoles consolidates the results of a number of projects in Mexico : Soledad and Dipolos, Saucito, Juanicipio and San Julián. These projects have great potential as do other projects of the Company’s Fresnillo plc subsidiary.

For additional information about the development of the projects of Fresnillo plc, please visit www.fresnilloplc.com.

V HIGHLIGHTS

§         On July 15th the Company paid a cash dividend to shareholders of $6.29 pesos per share.

§         On July 31st the Standard & Poor’s rating agency confirmed a Corporate Credit Rating of BBB- with a stable outlook for Industrias Peñoles S.A.B de C.V.

§         On September 30th the Company prepaid US$150 million of a syndicated loan with a maturity date of June 30, 2011. The Company got this loan on June 30th, 2008 for US$530.0 million.

§         On October 26th the Company declared a cash dividend to shareholders of $2.38 pesos per share (two pesos 38/100 in domestic currency) on the 397,475,747 outstanding and issued shares. The dividend is payable beginning Thursday, November 5th upon presentation of coupon No. 19 from the 2007 issuance.

ABOUT INDUSTRIAS PEÑOLES S.A.B DE C.V.

Peñoles was founded in 1887. It is a mining group with integrated operations in smelting and refining non-ferrous metals, and producing chemicals. Peñoles is the world’s top producer of refined silver and metallic bismuth. It is among the leading Latin American producers of refined gold, lead and zinc and is one of the main sodium sulfate producers worldwide.

The shares of Peñoles have been listed on the Mexican Stock Exchange since 1968 under the ticker symbol PE&OLES.