TIDMFRES
RNS Number : 8681D
Fresnillo PLC
24 February 2020
MAG Silver Corp. Fresnillo plc
Suite 770 21 Upper Brook Street
800 W. Pender Street London W1K 7PY
Vancouver, BC, V6C 2V6 United Kingdom
www.magsilver.com www.fresnilloplc.com
24 February 2020
Juanicipio Project Update
Fr esnillo plc and MAG Silver Corp. (together, the "JV
Partners") today provide a Juanicipio project update now that
construction is well underway, detailed engineering is nearing
completion and all major process equipment has been purchased and
received on site.
Juanicipio Project Status Update
-- Underground mine will commence production ahead of schedule
in mid-2020, realising commercial and operational de-risking
opportunities for the joint venture.
-- Over 25 km of underground development has been completed to date on the project.
-- Based on detailed engineering, actual equipment purchases and
construction contracts, pre-operative capex, from 1(st) January
2018, has increased by 11.4% from US$395 million to US$440 million
also reflecting expenditure incurred on underground development,
supporting infrastructure, and bringing forward some sustaining
capital to facilitate the early underground start.
-- Mineralised material from development and initial production
stopes to be processed at the Fresnillo beneficiation plant from
June 2020 pending completion of the Juanicipio plant.
-- Juanicipio now expected to reach 85% name plate capacity in
Q4 2021 (previous guidance 65%) and 90-95% in 2022 (in line with
previous guidance). Commissioning of the flotation plant will be
underway mid-2021.
-- Access to the upper portion of the resource has been
achieved. Initial development indicates that the grade and width of
the vein is in line with previous estimates.
-- Exploration is ongoing on the property with the intention to
increase the deeper resources and targeting new veins.
Project Benefits
By bringing forward the start-up of the underground mine to June
2020, the JV Partners are securing a number of positive outcomes
for the project:
-- Improved cash flow by deferring capex spend and accelerating
income from the new production ahead of plan.
-- De-risking the metallurgical process allowing a quicker and
more certain ramp-up to 4,000 tonnes per day.
-- Increased certainty around the geological block model prior to start-up of flotation plant.
Mine development continues to advance, reaching over 25 km by
the end of January 2020. Development activities will continue in
the next few months and we anticipate the first stope being fully
prepared by 3Q20.
The schedule for the construction of the flotation plant has
been adjusted to enable the most efficient use of contractor
labour, and commissioning is now anticipated by mid-2021 (previous
guidance was construction completion by the end of 2020 with
commissioning early 2021).
In the interim, mineralised material from development and
initial production stopes will be processed at the Fresnillo
beneficiation plant from June 2020. The Fresnillo plant is expected
to have spare capacity as the mine continues its operational
recovery.
With detailed engineering almost complete, major equipment
purchases completed, and a number of significant construction
contracts awarded or under review, the JV Partners are also
updating the capex required for the project. The pre-operative
capital cost of US$395 million, from 1(st) January 2018, has been
revised to $440 million (which is within the expected range of
variance as engineering was advanced) to reflect additional actual
expenditure incurred by the JV Partners on the underground project
more recently, and bringing forward the full construction costs for
two large life of mine ventilation shafts, plus some sustaining
capital to facilitate the early underground start.
Octavio Alvídrez, Chief Executive Officer of Fresnillo plc, said
:
"Juanicipio is an outstanding project which will generate strong
returns for our shareholders, and significant benefits to the
region. We continue to de-risk and refine the best construction
plan that will drive the most value and ensure we capitalise on the
opportunity that Juanicipio presents. I am pleased to confirm we
are accelerating development of the underground mine and as a
result, I expect the mine will be producing silver and gold ahead
of schedule in 2020."
George Paspalas, Chief Executive Officer of MAG Silver, said
:
"We are very excited about the decision to bring forward the
underground mine development of the Juanicipio project. Producing
quantities of saleable mineralisation provides a very beneficial
de-risking opportunity that gives confidence to both partners that
the originally envisioned plant production ramp up may be
improved."
Juanicipio Project Highlights
-- Fresnillo plc is the operator of Juanicipio and holds a 56%
majority stake in the Joint Venture, with partner MAG Silver Corp.
owning the remaining 44%.
-- Total average annual anticipated production of 11.7 moz
silver, 43.5 koz gold, with an initial life of mine (based on
Indicated Resources only) of 12 years.
-- Additional years of production expected to be supported by
the current Inferred Resources, which are being converted into the
Indicated category. Further exploration opportunities exist in the
JV license area with potential to scale-up operations in the
future.
-- Juanicipio development expected to create approximately 2,750
jobs during construction and 1,720 jobs once at full
production.
The information contained within this announcement is deemed by
Fresnillo plc to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014. Upon the publication
of this announcement, this inside information is now considered to
be in the public domain. The person making the notification is
Carlos Ortiz Mena, Head of Legal, Fresnillo plc. The time of the
notification is 7:00 am UK time.
-Ends-
For further information, please visit Fresnillo's website
www.fresnilloplc.com or MAG Silver's website www.magsilver.com or
contact:
Fresnillo plc Tel: +44 (0)20 7399 2470
London Office
Gabriela Mayor, Head of Investor Relations
Patrick Chambers
México City Office Tel: +52 55 52 79 3206
Ana Belem Zárate
Powerscourt Tel: +44 (0)20 7250 1446
Peter Ogden
or
MAG Silver Corp . Tel: +1 (604) 630-1399
Michael J. Curlook, VP Investor Relations
and Communications
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 at
Fresnillo and Juanicipio, and three advanced exploration projects -
Orisyvo, 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 and 700 thousand
hectares in Peru.
Fresnillo plc has a strong and long tradition of exploring,
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 and Mexico's largest gold
producer.
(1) Operations at Soledad-Dipolos are currently suspended.
About MAG Silver Corp.
MAG Silver Corp. is a Canadian exploration and development
company focused on becoming a top-tier primary silver mining
company by exploring and advancing high-grade, district scale,
silver-dominant projects in the Americas. Our principal focus and
asset is the Juanicipio Property (44%), being developed in a Joint
Venture partnership with Fresnillo Plc (56%). Juanicipio is located
in the Fresnillo Silver Trend in Mexico, the world's premier silver
mining camp and we are currently developing the surface and
underground infrastructure on the property to support a 4,000
tonnes per day mining operation with the operational expertise of
our JV partner, Fresnillo plc. As well, we have an aggressive
exploration program in place targeting multiple highly prospective
targets across the property.
Qualified Person:
The scientific and technical information contained in this press
release for the Juanicipio Project has been approved by Gary
Methven, P. Eng. an employee of AMC Mining Consultants (Canada)
Ltd. who is independent of both Fresnillo plc and MAG Silver Corp.
By virtue of his education and relevant experience Mr. Methven is a
"Qualified Person" for the purpose of National Instrument 43-101.
Mr. Methven, has read and approved the content of this press
release.
Cautionary Note to Investors Concerning Estimates of Indicated
Resources
This press release uses the term "Indicated Resources".
Investors are advised that although this term is recognized and
required by Canadian regulations (under National Instrument 43-101
- Standards of Disclosure for Mineral Projects), the U.S.
Securities and Exchange Commission does not recognize this term.
Investors are cautioned not to assume that any part or all of
mineral deposits in this category will ever be converted into
reserves.
Cautionary Note to Investors Concerning Estimates of Inferred
Resources
This press release uses the term "Inferred Resources". Investors
are advised that although this term is recognized and required by
Canadian regulations (under National Instrument 43-101 Standards of
Disclosure for Mineral Projects), the U.S. Securities and Exchange
Commission does not recognize this term. Investors are cautioned
not to assume that any part or all of the mineral deposits in this
category will ever be converted into reserves. In addition,
"Inferred Resources" have a great amount of uncertainty as to their
existence, and economic and legal feasibility. It cannot be assumed
that all or any part of an Inferred Mineral Resource will ever be
upgraded to a higher category. Under Canadian rules, estimates of
Inferred Mineral Resources may not form the basis of feasibility or
pre-feasibility studies, or economic studies except for Preliminary
Assessment as defined under Canadian National Instrument 43-101.
Investors are cautioned not to assume that part or all of an
Inferred Resource exists, or is economically or legally
mineable.
Fresnillo plc 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
MAG Silver Corp. Forward Looking Statements
Neither the Toronto Stock Exchange nor the NYSE American have
reviewed or accepted responsibility for the accuracy or adequacy of
this press release, which has been prepared by management.
This release includes certain statements that may be deemed to
be "forward-looking statements" within the meaning of the US
Private Securities Litigation Reform Act of 1995. All statements in
this release, other than statements of historical facts are forward
looking statements, including statements that address future
mineral production, reserve potential, exploration drilling,
exploitation activities and events or developments. Forward-looking
statements are often, but not always, identified by the use of
words such as "seek", "anticipate", "plan", "continue", "estimate",
"expect", "may", "will", "project", "predict", "potential",
"targeting", "intend", "could", "might", "should", "believe" and
similar expressions. These statements involve known and unknown
risks, uncertainties and other factors that may cause actual
results or events to differ materially from those anticipated in
such forward-looking statements. Although MAG believes the
expectations expressed in such forward-looking statements are based
on reasonable assumptions, such statements are not guarantees of
future performance and actual results or developments may differ
materially from those in the forward-looking statements. Factors
that could cause actual results to differ materially from those in
forward-looking statements include, but are not limited to, changes
in commodities prices, changes in mineral production performance,
exploitation and exploration successes, continued availability of
capital and financing, and general economic, market or business
conditions, political risk, currency risk and capital cost
inflation. In addition, forward-looking statements are subject to
various risks, including that data is incomplete and considerable
additional work will be required to complete further evaluation,
including but not limited to drilling, engineering and
socio-economic studies and investment. The reader is referred to
the Company's filings with the SEC and Canadian securities
regulators for disclosure regarding these and other risk factors.
There is no certainty that any forward-looking statement will come
to pass and investors should not place undue reliance upon
forward-looking statements.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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