TIDMFRES
RNS Number : 6507V
Fresnillo PLC
25 July 2018
Fresnillo plc
21 Upper Brook Street
London W1K 7PY
United Kingdom
www.fresnilloplc.com
25 July 2018
Production Report
for the three months ended 30 June 2018
Overview
-- Quarterly and first half silver production (including
Silverstream), up 5.7% and 9.7% respectively over the corresponding
periods in 2017 primarily due to the start up of operations at San
Julián JM (Phase II) in July 2017.
-- Quarterly gold production of 234 koz, up 4.6% vs. 2Q17 due to
the higher ore grade, throughput and recovery rate at Saucito and
the higher ore grades at Noche Buena, Herradura and Fresnillo.
-- First half gold production of 465 koz up 4.4% vs. 1H17, due
to the ongoing decrease in gold inventories and higher ore grade at
Herradura and higher volume of ore processed and ore grade at
Saucito.
-- Ongoing tests at the Herradura leaching pads have resulted in
an increase of 98.9 koz of gold in the inventory as of 1 January
2018.
-- Full year consolidated production guidance has been revised
marginally: total gold production to 900 - 930 koz (previously 870
- 900 koz) and total silver production to 64.5 - 67.5 moz
(previously 67 - 70 moz) including Silverstream.
Octavio Alvídrez, Chief Executive Officer, said:
"I am pleased to report a robust production performance in the
first half. In line with our strategy, we continue to actively
manage and strengthen our asset portfolio. In particular during the
period we have successfully ramped up our new San Julián JM mine to
full capacity which has made a significant contribution to overall
production. We have also made good progress with our development
pipeline, with our two main projects now complete. The Pyrites
Plant has been commissioned and final testing at the Second Dynamic
Leaching Plant is on track. Both projects will make a meaningful
contribution to overall 2018 production.
We have adjusted our full year production guidance to reflect a
better than anticipated gold performance due mainly to the ongoing
reduction of inventories at Herradura and slightly lower than
expected silver production due mainly to issues associated with
less availability of process water at San Julián. Overall however,
our full year consolidated guidance in silver equivalent ounces
remains unchanged".
Total Production
2Q 18 2Q 17 % change 1Q 18 1H 18 1H 17 % change
Silver (koz) 14,459 13,328 8.5 14,235 28,694 25,752 11.4
-------- -------- --------- -------- -------- -------- ---------
Silverstream
(koz) 884 1,188 -25.6 1,186 2,070 2,292 -9.7
-------------- -------- -------- --------- -------- -------- -------- ---------
Total Silver
(koz) 15,343 14,515 5.7 15,421 30,764 28,044 9.7
-------------- -------- -------- --------- -------- -------- -------- ---------
Gold (oz) 233,841 223,479 4.6 231,458 465,299 445,769 4.4
-------------- -------- -------- --------- -------- -------- -------- ---------
Lead (t) 13,223 11,385 16.1 11,629 24,853 22,846 8.8
-------------- -------- -------- --------- -------- -------- -------- ---------
Zinc (t) 22,014 14,919 47.6 19,040 41,054 28,725 42.9
-------------- -------- -------- --------- -------- -------- -------- ---------
Silver
Quarterly and first half silver production (including
Silverstream) increased 5.7% and 9.7% vs. the corresponding periods
in 2017 mainly as a result of the start of operations at San Julián
JM (Phase II) in July 2017. This was partially offset by lower ore
grades at Fresnillo and Saucito and the expected lower ore grade at
the San Julián Veins (Phase I).
The Silverstream contribution decreased as expected due to the
lower silver ore grade at the Sabinas mine.
Quarterly silver production increased 1.6% vs. 1Q18 as a result
of the higher volume of ore processed at Saucito and the higher
grades at Ciénega and San Julián JM (Phase II). These factors
compensated for the lower ore grades at the San Julián Veins (Phase
I) and at Fresnillo.
Gold
Quarterly gold production increased 4.6% vs. 2Q17 as a result of
the higher ore grade, volume of ore processed and recovery rate at
Saucito and the higher ore grades at Noche Buena, Herradura and
Fresnillo. These were partially offset by the lower ore grade at
Ciénega.
First half gold production increased 4.4% vs. 1H17 as a result
of the ongoing decrease of inventories and higher ore grade at
Herradura in addition to higher ore grade and volume of ore
processed at Saucito. These factors more than compensated for the
lower ore grade at Ciénega and San Julián Veins (Phase I).
Quarterly gold production remained broadly flat vs. 1Q18 (+1.0%)
as a result of the higher ore grade, volume of ore processed and
recovery at Saucito and the marginally higher volume of ore
processed and ore grade at Noche Buena which compensated for the
lower volume of ore processed and speed of recovery at
Herradura.
Outlook
2018 full year consolidated production guidance has been revised
marginally: total gold production guidance is now 900-930 thousand
ounces compared to our original guidance of 870-900 thousand ounces
and total silver production guidance (including Silverstream) is
64.5-67.5 million ounces compared to our original guidance of 67-70
million ounces. In the case of gold production, we are slightly
increasing our guidance to align production rates to the ongoing
reduction of inventories at Herradura's leaching pads. In the case
of silver production, we are marginally decreasing guidance to
reflect the now expected lower production from San Julián resulting
from a temporary re-sequencing of the production plan and higher
input of stockpile ore to deal with issues associated with less
availability of process water. The construction of the water
reservoir, aimed at providing a consistent source of water to
reduce this risk, has been delayed as a result of a longer than
expected permitting process. Full year consolidated production
guidance, in equivalent silver ounces, remains broadly the same as
our original guidance.
By-products
Quarterly by-product lead production increased 16.1% vs. 2Q17 as
a result of the start up of operations at San Julián JM (Phase II)
in July 2017 and the higher volume of ore processed and ore grade
at Saucito which compensated for the lower ore grade and recovery
rate at Ciénega.
Year to date by-product lead production increased 8.8% vs. 1H17
as a result of the start up of San Julián JM (Phase II) and the
higher ore grade at Fresnillo. These factors more than offset the
lower ore grade and recovery rate at Ciénega and the lower ore
grade at Saucito.
Quarterly by-product lead production increased 13.7% vs. 1Q18 as
a result of the higher volume of ore processed, ore grade and
recovery rate at Saucito which partially offset the lower ore grade
at Fresnillo.
Quarterly by-product zinc production increased 47.6% vs. 2Q17 as
a result of San Julián JM (phase II) commencing operations in July
2017, and a higher ore grade, recovery rate and volume of ore
processed at Saucito. These were partially offset by the lower ore
grade and recovery rate at Ciénega.
Half year by-product zinc production increased vs. 1H17 as a
result of the start up of operations at San Julián JM (Phase II),
the higher ore grade at Fresnillo and higher ore grade, recovery
rate and volume of ore processed at Saucito. These factors more
than compensated for the lower ore grade and recovery rate at
Ciénega.
Quarterly by-product zinc production increased 15.6% vs. 1Q18 as
a result of higher ore grade, volume of ore processed and recovery
rate at Saucito which more than compensated for the lower ore grade
at Fresnillo.
Fresnillo mine production
2Q 18 2Q 17 % change 1Q 18 1H 18 1H 17 % change
Ore Processed
(t) 620,906 645,479 -3.8 637,410 1,258,316 1,258,492 -0.0
-------- -------- --------- -------- ---------- ---------- ---------
Production
-------- -------- --------- -------- ---------- ---------- ---------
Silver (koz) 3,793 4,491 -15.5 4,336 8,129 8,930 -9.0
-------- -------- --------- -------- ---------- ---------- ---------
Gold (oz) 10,953 9,403 16.5 10,431 21,384 20,728 3.2
--------------- -------- -------- --------- -------- ---------- ---------- ---------
Lead (t) 5,052 4,982 1.4 5,783 10,835 10,153 6.7
--------------- -------- -------- --------- -------- ---------- ---------- ---------
Zinc (t) 7,979 7,927 0.7 8,866 16,846 14,634 15.1
-------- -------- --------- -------- ---------- ---------- ---------
Ore Grades
-------- -------- --------- -------- ---------- ---------- ---------
Silver (g/t) 211 235 -10.1 232 222 240 -7.5
-------- -------- --------- -------- ---------- ---------- ---------
Gold (g/t) 0.70 0.59 19.3 0.66 0.68 0.66 2.6
-------- -------- --------- -------- ---------- ---------- ---------
Lead (%) 0.90 0.86 4.9 1.00 0.95 0.89 7.1
-------- -------- --------- -------- ---------- ---------- ---------
Zinc (%) 1.74 1.69 3.1 1.90 1.82 1.63 11.7
--------------- -------- -------- --------- -------- ---------- ---------- ---------
Quarterly silver production decreased 15.5% and 12.5% vs. 2Q17
and 1Q18 respectively mainly due to the lower than expected ore
grades in certain areas and the temporary limited access to higher
ore grade areas at San Alberto, Candelaria and Santa Elena.
The temporary restricted access to higher grade areas of the
mine was a result of the delays in development and mine preparation
following lower than expected productivity from contractors. This
was due to a high turnover of contractor personnel which has a
knock-on effect of delaying the maintanance programme thereby
resulting in lower equipment availability. To mitigate this, the
Company is looking to: i) add a new contractor; ii) review, adapt
and improve the maintanance programme; and iii) purchase additional
equipment, to be operated by our own team alongside our
contractors, in order to provide us with higher degree of control
to increase development rates and mine preparation.
Silver production at the Fresnillo mine has shown a positive
trend increasing from 7,579 koz in the 2H16 to 8,129 in the 1H18, a
+7.2% increase. However, we have been below our production targets
which we are confident will be achieved in the near future once we
overcome the contractors productivity shortcomings.
The silver grade for the full year is expected to be 215-225 g/t
(previously 235 g/t) whilst going forward, the long term grade is
expected to remain approximately 260 g/t.
First half silver production decreased vs. 1H17 as a result of
the lower ore grade and, to a lesser extent, lower recovery
rate.
Quarterly by product gold production increased vs. 2Q17 and 1Q18
due to the higher ore grades which compensated for the lower
volumes of ore processed. Similarly, year to date by-product gold
production increased 3.2% vs. 1H17 mainly due to higher ore
grade.
Quarterly and first half by-product lead production increased
vs. 2Q17 and 1H17 as a result of higher ore grades.
Quarterly by-product lead and zinc production decreased 12.6%
and 10.0% vs. 1Q18 respectively, due to the lower ore grade and
volume of ore processed.
Quarterly by-product zinc production remained at a similar level
vs. 2Q17. First half by-product zinc production increased 15.1% vs.
1H17 as a result of higher ore grade and to a lesser extent,
improved recovery rate.
Saucito mine production
2Q 18 2Q 17 % change 1Q 18 1H 18 1H 17 % change
Ore Processed
(t) 723,208 667,456 8.3 673,545 1,396,753 1,338,370 4.4
-------- -------- --------- -------- ---------- ---------- ---------
Production
-------- -------- --------- -------- ---------- ---------- ---------
Silver (koz) 5,235 5,674 -7.7 4,832 10,067 10,821 -7.0
-------- -------- --------- -------- ---------- ---------- ---------
Gold (oz) 22,908 15,896 44.1 16,880 39,788 33,859 17.5
--------------- -------- -------- --------- -------- ---------- ---------- ---------
Lead (t) 5,327 4,688 13.6 3,183 8,510 9,442 -9.9
--------------- -------- -------- --------- -------- ---------- ---------- ---------
Zinc (t) 7,549 4,923 53.3 3,916 11,465 10,062 13.9
-------- -------- --------- -------- ---------- ---------- ---------
Ore Grades
-------- -------- --------- -------- ---------- ---------- ---------
Silver (g/t) 263 306 -14.1 260 262 293 -10.6
-------- -------- --------- -------- ---------- ---------- ---------
Gold (g/t) 1.28 1.05 22.7 1.12 1.20 1.08 11.2
-------- -------- --------- -------- ---------- ---------- ---------
Lead (%) 0.86 0.81 6.2 0.57 0.72 0.84 -14.6
--------------- -------- -------- --------- -------- ---------- ---------- ---------
Zinc (%) 1.64 1.26 30.1 0.96 1.31 1.26 4.0
--------------- -------- -------- --------- -------- ---------- ---------- ---------
Quarterly and year to date silver production decreased 7.7% and
7.0% vs. 2Q17 and 1H17 respectively as a result of lower than
expected ore grades and increased dilution. We are now using
smaller sized equipment for the narrower veins in order to decrease
dilution in these areas.
Quarterly silver production however increased 8.3% vs. 1Q18 as a
result of the higher volume of ore processed.
The silver ore grade for the full year 2018 is now expected to
be 255-265 g/t (285 g/t previously guided) whilst going forward,
the long term silver grade is expected to be approximately 280
g/t.
Quarterly and first half by-product gold production increased
44.1%, 35.7% and 17.5% vs. 2Q17, 1Q18 and 1H17 respectively as a
result of higher ore grades, recovery rates and volumes of ore
processed.
Quarterly by-product lead production increased 13.6% vs. 2Q17 as
a result of higher volume of ore processed and a higher ore grade.
However, year to date by-product lead production decreased 9.9% vs.
1H17 as a result of a lower ore grade. Quarterly by-product lead
production increased 67.3% vs. 1Q18 as a result of a higher ore
grade, volume of ore processed and recovery rate.
Quarterly and year to date by-product zinc production increased
over the corresponding periods of 2017 and vs. the previous quarter
as a result of higher ore grades, recovery rates and volumes of ore
processed.
Ciénega mine production
2Q 18 2Q 17 % change 1Q 18 1H 18 1H 17 % change
Ore Processed
(t) 330,879 322,760 2.5 320,006 650,885 636,680 2.2
--------------- -------- -------- --------- -------- -------- -------- ---------
Production
--------------- -------- -------- --------- -------- -------- -------- ---------
Gold (oz) 16,689 18,904 -11.7 16,377 33,066 36,358 -9.1
--------------- -------- -------- --------- -------- -------- -------- ---------
Silver (koz) 1,518 1,458 4.1 1,239 2,757 2,786 -1.0
-------- -------- --------- -------- -------- -------- ---------
Lead (t) 1,352 1,715 -21.2 1,335 2,687 3,251 -17.3
--------------- -------- -------- --------- -------- -------- -------- ---------
Zinc (t) 1,231 2,070 -40.5 1,006 2,237 4,030 -44.5
-------- -------- --------- -------- -------- -------- ---------
Ore Grades
-------- -------- --------- -------- -------- -------- ---------
Gold (g/t) 1.65 1.89 -12.7 1.66 1.66 1.89 -12.5
-------- -------- --------- -------- -------- -------- ---------
Silver (g/t) 166 161 3.5 141 154 161 -4.2
-------- -------- --------- -------- -------- -------- ---------
Lead (%) 0.67 0.78 -14.2 0.67 0.67 0.78 -14.3
-------- -------- --------- -------- -------- -------- ---------
Zinc (%) 0.77 1.10 -29.9 0.72 0.74 1.08 -31.4
--------------- -------- -------- --------- -------- -------- -------- ---------
Quarterly and year to date gold production decreased 11.7% and
9.1% respectively vs. their corresponding periods of 2017 primarily
due to the lower than expected ore grade following the depletion of
higher grade veins at Taspana, Las Casas and San Ramón. This was
mitigated by the higher volume of ore processed due to the
increased availability of equipment following improvements in the
maintenance programme. Quarterly gold production increased 1.9% vs.
1Q18 as a result of the higher volume of ore processed.
The expected gold grade for the full year 2018 is expected to
remain approximately 1.8 g/t.
Quarterly silver production increased 4.1% vs. 2Q17 and 22.4%
vs. 1Q18 due to increased access to higher silver ore grade areas
at Taspana and Rosario and increased volume of ore processed. Year
to date silver production was in line with 1H17.
The expected silver grade for the full year 2018 remains
unchanged at approximately 160 g/t.
Quarterly and first half by-product lead and zinc production
decreased when compared to the same periods of 2017 as a result of
lower ore grades and recovery rates, which were mitigated by the
higher volume of ore processed. Quarterly by-product lead
production was in line with 1Q18.
Quarterly by-product zinc production increased 22.4% vs. 1Q18 as
a result of a higher recovery rate, ore grade and volume of ore
processed.
San Julián mine production
2Q 18 2Q 17 % change 1Q 18 1H 18 1H 17 % change
Ore Processed Phase
I Veins (t) 289,775 308,342 -6.0 310,742 600,517 614,423 -2.3
--------------------- -------- -------- --------- -------- ---------- -------- ---------
Ore Processed Phase
II JM (t) 540,261 - N/A 531,459 1,071,720 - N/A
--------------------- -------- -------- --------- -------- ---------- -------- ---------
Total production
at San Julián
--------------------- -------- -------- --------- -------- ---------- -------- ---------
Gold (oz) 20,097 20,912 -3.9 19,791 39,888 41,041 -2.8
--------------------- -------- -------- --------- -------- ---------- -------- ---------
Silver (koz) 3,533 1,592 121.9 3,568 7,100 2,979 138.3
--------------------- -------- -------- --------- -------- ---------- -------- ---------
Production Phase
I Veins
--------------------- -------- -------- --------- -------- ---------- -------- ---------
Gold (oz) 19,584 20,912 -6.4 19,111 38,695 41,041 -5.7
--------------------- -------- -------- --------- -------- ---------- -------- ---------
Silver (koz) 1,263 1,592 -20.7 1,445 2,707 2,979 -9.1
-------- -------- --------- -------- ---------- -------- ---------
Production Phase
II
JM
--------------------- -------- -------- --------- -------- ---------- -------- ---------
Gold (oz) 513 - N/A 680 1,193 - N/A
--------------------- -------- -------- --------- -------- ---------- -------- ---------
Silver (koz) 2,270 - N/A 2,123 4,393 - N/A
-------- -------- --------- -------- ---------- -------- ---------
Lead (t) 1,493 - N/A 1,328 2,821 - N/A
-------- -------- --------- -------- ---------- -------- ---------
Zinc (t) 5,254 - N/A 5,252 10,507 - N/A
-------- -------- --------- -------- ---------- -------- ---------
Ore Grades Phase
I Veins
-------- -------- --------- -------- ---------- -------- ---------
Gold (g/t) 2.12 2.19 -3.2 1.97 2.04 2.18 -6.6
-------- -------- --------- -------- ---------- -------- ---------
Silver (g/t) 144.58 171.58 -15.7 158.35 151.71 164.16 -7.6
-------- -------- --------- -------- ---------- -------- ---------
Ore Grades Phase
II
JM
-------- -------- --------- -------- ---------- -------- ---------
Gold (g/t) 0.07 - N/A 0.09 0.08 - N/A
-------- -------- --------- -------- ---------- -------- ---------
Silver (g/t) 156.71 - N/A 146.64 151.72 - N/A
-------- -------- --------- -------- ---------- -------- ---------
Lead (%) 0.42 - N/A 0.40 0.41 - N/A
-------- -------- --------- -------- ---------- -------- ---------
Zinc (%) 1.26 - N/A 1.31 1.28 - N/A
-------- -------- --------- -------- ---------- -------- ---------
San Julián Veins (Phase I)
Quarterly and first half silver production decreased 20.7%, 9.1%
and 12.6% vs. the same periods in 2017 and the previous quarter
respectively as a result of: i) the expected lower ore grade due to
less availability of the higher silver ore grade areas; and ii) a
lower volume of ore processed as a result of the low water
availability, restricting processing capacity. With the arrival of
the rainy season, full processing capacity has now been
restored.
The construction of the water reservoir, aimed at providing a
consistent source of water, has been delayed as a result of a
longer than expected permitting process delaying the grant of
environmental permits. The company is making efforts to accelerate
this process and is also looking for alternate sources of
water.
The expected silver grade for the full year 2018 is in the range
of 165-175 g/t.
Quarterly and year to date gold production decreased vs. their
corresponding periods in 2017 as a result of lower volumes of ore
processed and lower ore grades due to the previously mentioned
factors, however these were mitigated by the higher recovery
rates.
Quarterly gold production increased 2.5% vs. 1Q18 as a result of
increased access to areas with a higher gold ore grade and a higher
recovery rate which resulted from the appropriate operating
controls and the excellent response of the mineral at the leaching
stage.
The expected gold grade for the full year 2018 is expected to be
in the range of 1.9-2.1 g/t
San Julián (Phase II - JM disseminated ore body)
Quarterly silver production increased 6.9% vs. 1Q18 due to the
extraction from higher ore grade areas in line with the mining
sequence of the ore body. However, silver ore grade of 156.7 g/t
was below the guidance of 185 g/t for the full year.
The silver ore grade for the full year 2018 is expected to be in
the range of 145-155 g/t, lower than the previously guided ore
grade, due to the extraction of ore from lower grade areas of the
mine as well as processing ore from the development stockpile
instead of mining the orebody according to the original plan. This
was done as a temporary alternate production plan as stope
back-filling could not have been done at the normal pace due to
lower availability of water, which has now been restored with the
arrival of the rainy season.
Quarterly by-product gold production decreased 24.6% vs. 1Q18 as
a result of a lower ore grade and lower recovery rate.
Quarterly by-product lead production increased 12.4% vs. 1Q18 as
a result of a higher ore grade and recovery rate. Additionally
quarterly, by-product zinc production remained at similar levels
vs. 1Q18.
Herradura total mine production
2Q 18 2Q 17 % change 1Q 18 1H 18 1H 17 % change
Ore Processed
(t) 5,605,427 6,551,791 -14.4 5,984,641 11,590,068 13,316,161 -13.0
--------------- ----------- ----------- --------- ----------- ----------- ----------- ---------
Total Volume
Hauled (t) 33,560,118 31,063,542 8.0 34,153,768 67,713,885 61,971,696 9.3
--------------- ----------- ----------- --------- ----------- ----------- ----------- ---------
Production
--------------- ----------- ----------- --------- ----------- ----------- ----------- ---------
Gold (oz) 117,886 116,267 1.4 125,243 243,129 224,009 8.5
--------------- ----------- ----------- --------- ----------- ----------- ----------- ---------
Silver (koz) 363 104 249.0 241 604 222 172.1
----------- ----------- --------- ----------- ----------- ----------- ---------
Ore Grades
----------- ----------- --------- ----------- ----------- ----------- ---------
Gold (g/t) 0.76 0.66 15.7 0.68 0.72 0.64 11.2
----------- ----------- --------- ----------- ----------- ----------- ---------
Silver (g/t) 2.60 0.87 198.5 1.86 2.22 0.91 142.8
----------- ----------- --------- ----------- ----------- ----------- ---------
Quarterly and first half gold production increased vs. the
corresponding periods of 2017 as a result of: i) the ongoing
inventory reduction at the leaching pads; ii) an increase in the
ore grade at the Dynamic Leaching Plant as a higher volume of ore
was being processed from the higher grade Valles area; and iii) a
higher speed of recovery due to an intensive targeted irrigation
programme and better dilution. These factors more than compensated
for the lower volume of ore processed.
Quarterly gold production decreased 5.9% vs. 1Q18 as a result of
a decrease in the inventory reduction at the leaching pads and a
lower volume of ore processed. However, the previously mentioned
factors were mitigated by the higher ore grade in the mined
areas.
In 2017, as part of the future mine plan, Fresnillo decided to
construct a new leaching pad in a separate area of the Herradura
mine. To reduce the hauling distance from the pit to the new pad,
the Group constructed an access route through certain existing
leaching pads, removing and redepositing the ore in the process.
These works allowed the Group to perform assays and verify certain
characteristics of the ore, including the humidity of the ore
deposited and the grade of gold in solution. The testing of those
assays commenced in 2018 and is ongoing.
As a result of the information obtained to date, the Group
updated its estimate of the recoverable remaining gold content in
the inventories at the leaching pads resulting in an increase of
98.9 thousand ounces of gold as at 1 January 2018. This represents
1.7% of the total gold content deposited from the inception of the
mine to 31 December 2017.
Management expects to finalise the remaining testing by the year
end. The additional results may further increase management's
estimates.
Noche Buena total mine production
2Q 18 2Q 17 % change 1Q 18 1H 18 1H 17 % change
Ore Processed
(t) 4,550,915 4,399,136 3.5 4,414,790 8,965,705 9,012,820 -0.5
--------------- ----------- ----------- --------- ----------- ----------- ----------- ---------
Total Volume
Hauled (t) 22,073,319 22,436,979 -1.6 20,521,239 42,594,558 43,355,636 -1.8
--------------- ----------- ----------- --------- ----------- ----------- ----------- ---------
Production
--------------- ----------- ----------- --------- ----------- ----------- ----------- ---------
Gold (oz) 45,308 42,097 7.6 42,735 88,043 89,774 -1.9
--------------- ----------- ----------- --------- ----------- ----------- ----------- ---------
Silver (koz) 18 7 157.1 19 37 14 164.3
----------- ----------- --------- ----------- ----------- ----------- ---------
Ore Grades
----------- ----------- --------- ----------- ----------- ----------- ---------
Gold (g/t) 0.54 0.51 5.9 0.52 0.53 0.51 4.3
----------- ----------- --------- ----------- ----------- ----------- ---------
Silver (g/t) 0.18 0.09 93.1 0.22 0.20 0.09 115.6
----------- ----------- --------- ----------- ----------- ----------- ---------
Quarterly gold production increased vs. the same period 2017 as
a result of higher ore grade and volume of ore processed. Year to
date gold production remained at a similar level when compared to
the same period of 2017.
Quarterly gold production increased 6.0% vs. 1Q18 as a result of
higher volume of ore processed and to a lesser extent, higher ore
grade.
Update on development projects
An update on our development projects and exploration programme
will be provided alongside our interim results, due to be announced
on 31 July 2018.
Safety Performance
We deeply regret to report that during 2Q18 there was a fatality
at the San Julián mine as a result of an accident that occurred
outside the mine operating areas but within the Company's property
limits. We continue to reinforce our safety measures throughout the
Company, with our management systems and organisational programmes
centered on personnel safety. We remain committed to our zero
fatalities target.
Interim Results
Fresnillo will announce its 2018 Interim Results on 31(st) of
July 2018.
For further information, please visit our website or
contact:
Fresnillo plc Tel: +44 (0)20 7399 2470
London Office
Gabriela Mayor, Head of Investor
Relations
Patrick Chambers
Mexico City Office Tel: +52 55 52 79 3206
Ana Belem Zárate
Powerscourt Tel: +44 (0)20 7250 1446
Peter Ogden
About Fresnillo plc
Fresnillo plc is the world's largest primary silver producer and
Mexico's largest gold producer, listed on the London and Mexican
Stock Exchanges under the symbol FRES.
Fresnillo plc has seven operating mines, all of them in Mexico -
Fresnillo, Saucito, Ciénega (including the San Ramón satellite
mine), Herradura, Soledad-Dipolos(1) , Noche Buena and San Julián
(phase I and II), two development projects - the Pyrites Plant, and
second line of DLP at Herradura, and four advanced exploration
projects - Orisyvo, Juanicipio, Las Casas Rosario & Cluster
Cebollitas and Centauro Deep, as well as a number of other long
term exploration prospects. In total, Fresnillo plc has mining
concessions covering approximately 1.8 million hectares in
Mexico.
Fresnillo plc has a strong and long tradition of mining, a
proven track record of mine development, reserve replacement, and
production costs in the lowest quartile of the cost curve for
silver.
Fresnillo plc's goal is to maintain the Group's position as the
world's largest primary silver company, producing 65 million ounces
of silver per year by 2018, having already surpassed the gold
target of 750,000 ounces.
(1) Operations at Soledad-Dipolos are currently suspended.
Forward Looking Statements
Information contained in this announcement may include
'forward-looking statements'. All statements other than statements
of historical facts included herein, including, without limitation,
those regarding the Fresnillo Group's intentions, beliefs or
current expectations concerning, amongst other things, the
Fresnillo Group's results of operations, financial position,
liquidity, prospects, growth, strategies and the silver and gold
industries are forward-looking statements. Such forward-looking
statements involve risk and uncertainty because they relate to
future events and circumstances. Forward-looking statements are not
guarantees of future performance and the actual results of the
Fresnillo Group's operations, financial position and liquidity, and
the development of the markets and the industry in which the
Fresnillo Group operates, may differ materially from those
described in, or suggested by, the forward-looking statements
contained in this document. In addition, even if the results of
operations, financial position and liquidity, and the development
of the markets and the industry in which the Fresnillo Group
operates are consistent with the forward-looking statements
contained in this document, those results or developments may not
be indicative of results or developments in subsequent periods. A
number of factors could cause results and developments to differ
materially from those expressed or implied by the forward-looking
statements including, without limitation, general economic and
business conditions, industry trends, competition, commodity
prices, changes in regulation, currency fluctuations (including the
US dollar and Mexican Peso exchanges rates), the Fresnillo Group's
ability to recover its reserves or develop new reserves, including
its ability to convert its resources into reserves and its mineral
potential into resources or reserves, changes in its business
strategy and political and economic uncertainty.
LEI: 549300JXWH1UV5J0XV81
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END
DRLKZLFLVDFXBBL
(END) Dow Jones Newswires
July 25, 2018 02:01 ET (06:01 GMT)
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