TIDMFRES
RNS Number : 3562Q
Fresnillo PLC
27 October 2021
Fresnillo plc
21 Upper Brook Street
London W1K 7PY
United Kingdom
www.fresnilloplc.com
27 October 2021
THIRD QUARTER PRODUCTION REPORT
FOR THE THREE MONTHSED 30 SEPTEMBER 2021
Octavio Alvídrez, Chief Executive Officer, said:
"Silver production has remained in line with the first nine
months of last year with gold production over the same period ahead
of expectations as our Herradura gold mine continues to deliver
strong results. We have made good progress with our next flagship
mining project Juanicipio in the quarter and we are well set to
commission the plant before the end of the year subject to the
timely power connection by the national grid. We have seen some
limited short term disruption as a result of the new labour reforms
in Mexico which has impacted the performance of our Fresnillo and
Saucito mines in particular, due to the higher proportion of
contractors at those underground mines. However, the combination of
continued efficiency measures, the higher volume of ore processed
at Herradura, the ongoing contribution of development ore from our
Juanicipio project and an increase in silver ore grades at San
Julián Disseminated Ore Body, give us confidence in our full year
guidance."
HIGHLIGHTS
Silver
Year-to-date attributable silver production of 40.2 moz
(including Silverstream), in line with YTD20 due to a higher ore
grade at San Julián DOB and, to a lesser extent, the contribution
of development ore from Juanicipio, offset by a lower ore grade and
volume of ore processed at Saucito.
Quarterly attributable silver production of 12.7 moz (including
Silverstream), down 15.1% vs. 2Q21 mainly driven by the anticipated
lower ore grade at San Julián Disseminated Ore Body (DOB) following
the exceptional high grades in the previous quarter. The lower ore
grade and volume of ore processed at Fresnillo and Saucito also
contributed to the decrease in quarterly attributable silver
production.
Quarterly attributable silver production (including
Silverstream) decreased 4.7% vs. 3Q20 due to a lower volume of ore
processed and a lower ore grade at Saucito, mitigated by a higher
ore grade at San Julián DOB.
Gold
Year-to-date attributable gold production of 600.9 koz, up 8.5%
vs. YTD20, primarily due to the higher volume of ore processed at
Herradura following the lifting of Covid-19 restrictions which
resulted in lower volumes of ore deposited last year, partly offset
by a lower ore grade at Ciénega.
Quarterly attributable gold production of 172.5 koz, down 13.8%
vs. 2Q21, primarily due to lower volumes of ore processed and
recovery rates at Herradura and Noche Buena as well as a lower
volume of ore processed and ore grade at Saucito.
Quarterly attributable gold production in line with 3Q20 as a
result of a lower ore grade at Ciénega and San Julián Veins, offset
by the good performance at Herradura and Noche Buena.
By-Products
-- Year-to-date attributable by-product lead production remained
flat vs. YTD20 primarily due to lower ore grades at both Fresnillo
and Ciénega, compensated by higher ore grades at both Saucito and
San Julián DOB.
-- Year-to-date attributable by-product zinc production remained
flat vs. YTD20 due to a higher ore grade at Saucito, offset by a
lower ore grade at Ciénega.
-- Quarterly attributable by-product lead and zinc production
decreased 20.6% and 17.2% vs. 2Q21 respectively, driven primarily
by lower ore grades and decreased volumes of ore processed at
Saucito.
-- Quarterly attributable by-product lead production decreased
14.1% vs. 3Q20 due to a lower ore grade and volume of ore processed
at Saucito.
-- Quarterly attributable by-product zinc production decreased
12.9% vs. 3Q20 due to a lower ore grade and volume of ore processed
at Saucito, mitigated by a higher ore grade at Fresnillo.
Attributable 3Q21 2Q21 % Change 3Q20 % Change YTD 21 YTD 20 % Change
Silver (koz) 11,800 14,092 (16.3) 12,572 (6.1) 37,730 38,063 (0.9)
-------- -------- --------- --------------- --------- -------- -------- ---------
Silverstream
(koz) 851 803 6.0 709 20.2 2,451 2,037 20.3
-------- -------- --------- --------------- --------- -------- -------- ---------
Total Silver
(koz) 12,651 14,895 (15.1) 13,281 (4.7) 40,181 40,100 0.2
-------- -------- --------- --------------- --------- -------- -------- ---------
Gold (oz) 172,534 200,163 (13.8) 172,718 (0.1) 600,890 554,037 8.5
-------- -------- --------- --------------- --------- -------- -------- ---------
Lead (t) 13,010 16,386 (20.6) 15,144 (14.1) 44,736 45,229 (1.1)
-------- -------- --------- --------------- --------- -------- -------- ---------
Zinc (t) 22,930 27,687 (17.2) 26,320 (12.9) 76,498 75,701 1.1
-------- -------- --------- --------------- --------- -------- -------- ---------
DEVELOPMENT PROJECTS
The construction of the Juanicipio plant continued to progress.
Pre-commissioning testing has begun for key systems as we approach
mechanical completion. Our focus in the upcoming weeks will be to
progress from construction to no-load and water testing, with full
load commissioning with ore expected by year end.
NEW LABOUR REFORM IN MEXICO
The new labour reform in Mexico restricting the ability to
subcontract labour came into effect from 1st September 2021
resulting in the requirement to internalise a proportion of our
contractor workforce. While Fresnillo took significant steps to
prepare since the reform was announced in April, subsequent
contractor uptake has varied, with underground mines, in particular
in the Fresnillo District and at Cienega, more affected due to a
higher number of contractor workforces on site resulting in an
increased number of staff vacancies and a higher workforce
rotation. This in turn has affected equipment availability and
utilisation rates. We continue to take a series of actions to
mitigate this impact, including new recruitment campaigns, training
and investment in new equipment. These actions will continue in the
following months and we expect volumes to gradually return to a
normalised level during 2022. The transition has been largely
seamless in our open pit mines.
SAFETY PERFORMANCE
We are deeply saddened to confirm a fatal accident at the
Fresnillo mine during the quarter. A full independent investigation
was carried out in conjunction with relevant authorities and we are
providing support to the employee's family and colleagues. We
remain absolutely committed to a strong safety culture in our mines
and we will continue reinforcing our commitment to a safe operation
with stringent monitoring of safety implementation, a focus on
training, and emphasis on the follow up of critical controls as
well as technical key indicators. The importance of building a
healthy and safe working environment for all through our mines is
critical and we will continue encouraging safety procedures. The 'I
Care, We Care' programme continues to be rolled out across the
business and is a central aspect of all new development projects
and operations.
2021 OUTLOOK
We remain on track to meet our 2021 full year guidance of 53.5
to 59.5 moz of silver (including Silverstream) and 675 to 725 koz
of gold. We continue to monitor the possible impact of the labour
reform and general shortage of personnel, as well as potential
headwinds, in particular inflationary pressures and the average
revaluation of the Mexican peso vs US dollar, which may impact
costs.
For further information, please visit our website
www.fresnilloplc.com 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)7793 858 211
Peter Ogden
MINING OPERATIONS
FRESNILLO MINE PRODUCTION
3Q21 2Q21 % Change 3Q20 % Change YTD 21 YTD 20 % Change
Ore Processed
(t) 547,140 579,863 (5.7) 551,589 (0.8) 1,688,363 1,746,494 (3.3)
-------- -------- --------- -------- --------- ---------- ---------- ---------
Production
-------- -------- --------- -------- --------- ---------- ---------- ---------
Silver (koz) 2,722 3,348 (18.7) 3,085 (11.8) 9,331 9,841 (5.2)
-------- -------- --------- -------- --------- ---------- ---------- ---------
Gold (oz) 7,983 8,736 (8.6) 9,295 (14.1) 25,095 28,903 (13.2)
-------- -------- --------- -------- --------- ---------- ---------- ---------
Lead (t) 4,904 4,875 0.6 4,588 6.9 14,271 16,065 (11.2)
-------- -------- --------- -------- --------- ---------- ---------- ---------
Zinc (t) 8,958 8,404 6.6 7,328 22.2 24,504 25,064 (2.2)
-------- -------- --------- -------- --------- ---------- ---------- ---------
Ore Grades
-------- -------- --------- -------- --------- ---------- ---------- ---------
Silver (g/t) 170 201 (15.3) 193 (12.2) 191 195 (2.1)
-------- -------- --------- -------- --------- ---------- ---------- ---------
Gold (g/t) 0.62 0.69 (9.8) 0.77 (18.5) 0.67 0.73 (9.0)
-------- -------- --------- -------- --------- ---------- ---------- ---------
Lead (%) 1.07 0.99 8.2 0.95 12.6 1.00 1.08 (7.0)
-------- -------- --------- -------- --------- ---------- ---------- ---------
Zinc (%) 2.27 2.07 9.8 1.83 24.0 2.05 2.03 1.0
-------- -------- --------- -------- --------- ---------- ---------- ---------
Quarterly silver production was down 18.7% vs. 2Q21 due to lower
ore grades resulting from the limited access to higher grade stopes
and to a lesser extent, a lower volume of ore processed. This was
caused by two key factors: i) an electrical outage which
temporarily limited the water pumping capacity and affected some
mining areas and haulage levels; and ii) the impact of the labour
reform in Mexico which resulted in a shortage of mining labour,
lower equipment availability and utilisation rates, restricting
operational flexibility and preventing access to higher ore grade
areas. As referred to above, with the deepest regret, we confirm
there was an incident at the Fresnillo mine resulting in an
employee fatality. The suspension of certain parts of the mine to
conduct a full investigation of the causes for the fatal accident
further contributed to the lower volumes processed.
Quarterly silver production was down 11.8% vs. 3Q20 due to a
lower ore grade resulting from the reasons mentioned above.
Year-to-date silver production decreased 5.2% vs. YTD20 due to a
margianlly lower volume of ore processed and ore grade due to the
issues mentioned above and as reported in prior quarters.
Mine development rates decreased quarter-on-quarter to an
average of 2,798 per month in 3Q21 (2Q21: 3,224m per month),
primarily driven by the uncertainty created by the new labour
reform as mentioned above, which impacted contractor performance as
well as a lower contribution from the tunnel boring machine (TBM)
as a result of equipment testing in a production area, which
resulted in fewer TBM development metres recorded. We expect to
regain the rate of 3,100 m per month on average during the final
quarter of the year.
Quarterly by-product gold production decreased 8.6% vs. 2Q21
driven by a lower ore grade and volume of ore processed, mitigated
by a higher recovery rate.
Quarterly and year-to-date by-product gold production decreased
14.1% and 13.2% vs. 3Q20 and YTD20 respectively due to lower ore
grade.
The silver ore grade in 2021 is expected to remain in the range
of 190-210 g/t, while the gold ore grade is expected to remain in
the range of 0.55-0.70 g/t.
SAUCITO MINE PRODUCTION
3Q21 2Q21 % Change 3Q20 % Change YTD 21 YTD 20 % Change
Ore Processed (t) 565,425 660,039 (14.3) 710,618 (20.4) 1,876,348 2,096,003 (10.5)
-------- -------- --------- -------- --------- ---------- ---------- ---------
Production
-------- -------- --------- -------- --------- ---------- ---------- ---------
Silver (koz) 2,846 3,454 (17.6) 3,963 (28.2) 9,448 12,104 (21.9)
-------- -------- --------- -------- --------- ---------- ---------- ---------
Gold (oz) 19,143 24,760 (22.7) 20,105 (4.8) 70,721 61,679 14.7
-------- -------- --------- -------- --------- ---------- ---------- ---------
Lead (t) 4,853 7,650 (36.6) 7,267 (33.2) 20,344 19,239 5.7
-------- -------- --------- -------- --------- ---------- ---------- ---------
Zinc (t) 7,226 11,722 (38.3) 10,993 (34.3) 30,797 28,736 7.2
-------- -------- --------- -------- --------- ---------- ---------- ---------
Ore Grades
-------- -------- --------- -------- --------- ---------- ---------- ---------
Silver (g/t) 178 190 (6.1) 207 (14.0) 182 209 (13.1)
-------- -------- --------- -------- --------- ---------- ---------- ---------
Gold (g/t) 1.36 1.51 (9.7) 1.14 19.4 1.51 1.18 27.9
-------- -------- --------- -------- --------- ---------- ---------- ---------
Lead (%) 1.01 1.35 (25.2) 1.21 (16.2) 1.27 1.08 17.2
-------- -------- --------- -------- --------- ---------- ---------- ---------
Zinc (%) 1.69 2.43 (30.3) 2.24 (24.6) 2.22 1.98 12.5
-------- -------- --------- -------- --------- ---------- ---------- ---------
Quarterly silver production decreased 17.6% vs. 2Q21 due to a
lower volume of ore processed following the instability issues as
reported in 1Q21 and 2Q21, limiting access to higher ore grade
areas. To prioritise the safety of our people, during the quarter
we decided to limit mining in the affected area until additional
geomechanical monitoring equipment is installed and a safe mining
sequence is agreed. Production levels were also impacted by the
implementation of the aforementioned labour reforms which had a
particular effect at Saucito due to a less stable and greater
contractor base at this mine compared to our other sites. This has
limited equipment availability and lowered utilisation rates,
impacting volumes of ore hauled and decreasing development rates.
We have conducted additional recruitment campaigns to reach the
necessary staffing to operate the mine at full capacity.
Recruitment and training will continue over the next few months,
which will gradually see volumes return to a normalised level
during 2022.
Quarterly and year-to-date silver production decreased 28.2% and
21.9% vs. 3Q20 and YTD20 respectively due to the lower ore grade at
the Jarillas vein. Further, a lower volume of ore processed for the
reasons described above in addition to the previously mentioned
presence of high temperature water in an underground production
area earlier in the year, also impacted production.
Quarterly by-product gold production decreased 22.7% vs. 2Q21
driven by a lower volume of ore processed and lower ore grade.
Quarterly by-product gold production decreased 4.8% vs. 3Q20
driven by a lower volume of ore processed, mitigated by a higher
ore grade.
Year-to-date by-product gold production increased 14.7% vs.
YTD20, driven by higher ore grades and partially offset by lower
volumes of ore processed.
Full year 2021 silver ore grade is expected to decrease to
between 170-190 g/t, below the original estimate of 200-220 g/t,
while the gold ore grade is estimated to remain around 1.3-1.5
g/t.
PYRITES PLANT (PHASE I)
3Q21 2Q21 % Change 3Q20 % Change YTD 21 YTD 20 % Change
Iron Concentrates
Processed (t) 37,376 48,523 (22.9) 43,871 (14.8) 127,659 124,373 2.7
------- ------- --------- ------- --------- -------- -------- ---------
Production
------- ------- --------- ------- --------- -------- -------- ---------
Silver (koz) 143 167 (14.8) 221 (35.6) 446 726 (38.5)
------- ------- --------- ------- --------- -------- -------- ---------
Gold (oz) 441 721 (38.9) 837 (47.3) 1,840 2,632 (30.1)
------- ------- --------- ------- --------- -------- -------- ---------
Ore Grades
------- ------- --------- ------- --------- -------- -------- ---------
Silver (g/t) 157 147 6.3 212 (26.3) 149 238 (37.7)
------- ------- --------- ------- --------- -------- -------- ---------
Gold (g/t) 1.35 1.56 (13.6) 1.87 (27.8) 1.53 2.02 (24.5)
------- ------- --------- ------- --------- -------- -------- ---------
Quarterly silver production decreased 14.8% vs. 2Q21 due to a
lower volume of ore processed, mitigated by a higher ore grade of
pyrite concentrates processed from the Saucito mine and increased
recovery rate.
Quarterly silver production decreased 35.6% vs. 3Q20 due to a
lower volume of pyrite concentrates processed and a lower ore grade
of pyrite concentrates processed from the Saucito mine.
Quarterly gold production decreased 38.9% and 47.3% vs. 2Q21 and
3Q20 respectively due to a decreased volume of pyrite concentrates
processed, a lower ore grade and recovery rate.
Year-to-date silver and gold production decreased 38.5% and
30.1% vs. YTD20 respectively due to lower ore grades from Saucito's
flotation plant, and to a lesser extent, lower recovery rates.
As a result of the lower volumes processed at Saucito, and the
lower tailings processed at the pyrites plant, we expect silver
production to be in the range of 550 to 600 koz for the year while
gold production is expected to be in the range of 2 to 2.5 koz.
As noted in previous reports, the Pyrites Plant (phase II) was
completed in 4Q20 but due to Covid-19 related delays and certain
additional technical requirements by the authorities, permits have
been delayed. Conversations with Comisión Federal de Electricidad
(CFE) and the regulatory authorities have now resumed and we expect
inspections to occur in 4Q21 followed by a six week period for
commissioning and testing before ramping up the plant.
CIENEGA MINE PRODUCTION
YTD
3Q21 2Q21 % Change 3Q20 % Change 21 YTD 20 % Change
Ore Processed (t) 320,277 333,959 (4.1) 325,392 (1.6) 980,399 983,285 (0.3)
-------- -------- --------- -------- --------- -------- -------- ---------
Production
-------- -------- --------- -------- --------- -------- -------- ---------
Gold (oz) 11,528 12,406 (7.1) 18,122 (36.4) 38,223 50,496 (24.3)
-------- -------- --------- -------- --------- -------- -------- ---------
Silver (koz) 1,323 1,425 (7.1) 1,522 (13.1) 4,046 4,491 (9.9)
-------- -------- --------- -------- --------- -------- -------- ---------
Lead (t) 985 964 2.1 1,536 (35.9) 3,175 4,772 (33.5)
-------- -------- --------- -------- --------- -------- -------- ---------
Zinc (t) 1,491 1,669 (10.7) 2,275 (34.5) 5,133 7,185 (28.6)
-------- -------- --------- -------- --------- -------- -------- ---------
Ore Grades
-------- -------- --------- -------- --------- -------- -------- ---------
Gold (g/t) 1.21 1.24 (2.3) 1.85 (34.7) 1.30 1.72 (24.2)
-------- -------- --------- -------- --------- -------- -------- ---------
Silver (g/t) 150 154 (2.9) 169 (11.7) 150 165 (9.4)
-------- -------- --------- -------- --------- -------- -------- ---------
Lead (%) 0.51 0.49 4.1 0.71 (29.2) 0.53 0.74 (28.2)
-------- -------- --------- -------- --------- -------- -------- ---------
Zinc (%) 0.85 0.91 (6.8) 1.18 (27.6) 0.94 1.22 (22.5)
-------- -------- --------- -------- --------- -------- -------- ---------
Quarterly gold and silver production both decreased 7.1% vs.
2Q21 due to a lower volume of ore processed given the impact of the
labour reform in Mexico leading to lower utilisation rates though
we expect this to be a temporary factor.
Quarterly and year-to-date gold and silver production decreased
vs. 3Q20 and YTD20 respectively due to the lower ore grades
year-on-year, in line with the mine sequence.
The gold and silver ore grades for 2021 are expected to remain
at the lower end of the given ranges of 1.30-1.40 g/t and 150-160
g/t respectively.
SAN JULIÁN MINE PRODUCTION
3Q21 2Q21 % Change 3Q20 % Change YTD 21 YTD 20 % Change
Ore Processed Veins
(t) 302,987 302,475 0.2 317,134 (4.4) 894,135 939,107 (4.8)
-------- -------- --------- -------- --------- ---------- ---------- ---------
Ore Processed DOB
(t) 533,204 555,055 (3.9) 555,161 (4.0) 1,536,932 1,656,650 (7.2)
-------- -------- --------- -------- --------- ---------- ---------- ---------
Total production
at San Julián
-------- -------- --------- -------- --------- ---------- ---------- ---------
Gold (oz) 13,612 15,546 (12.4) 17,342 (21.5) 42,959 48,877 (12.1)
-------- -------- --------- -------- --------- ---------- ---------- ---------
Silver (koz) 4,156 5,219 (20.4) 3,298 26.0 12,805 9,576 33.7
-------- -------- --------- -------- --------- ---------- ---------- ---------
Production Veins
-------- -------- --------- -------- --------- ---------- ---------- ---------
Gold (oz) 12,550 14,320 (12.4) 16,426 (23.6) 39,698 46,667 (14.9)
-------- -------- --------- -------- --------- ---------- ---------- ---------
Silver (koz) 1,033 1,027 0.6 944 9.4 3,025 3,065 (1.3)
-------- -------- --------- -------- --------- ---------- ---------- ---------
Production DOB
-------- -------- --------- -------- --------- ---------- ---------- ---------
Gold (oz) 1,062 1,226 (13.4) 917 15.8 3,261 2,209 47.6
-------- -------- --------- -------- --------- ---------- ---------- ---------
Silver (koz) 3,123 4,192 (25.5) 2,355 32.6 9,780 6,511 50.2
-------- -------- --------- -------- --------- ---------- ---------- ---------
Lead (t) 2,122 2,813 (24.6) 1,676 26.6 6,629 5,076 30.6
-------- -------- --------- -------- --------- ---------- ---------- ---------
Zinc (t) 5,039 5,751 (12.4) 5,627 (10.5) 15,572 14,618 6.5
-------- -------- --------- -------- --------- ---------- ---------- ---------
Ore Grades Veins
-------- -------- --------- -------- --------- ---------- ---------- ---------
Gold (g/t) 1.36 1.56 (12.7) 1.71 (20.4) 1.46 1.62 (9.9)
-------- -------- --------- -------- --------- ---------- ---------- ---------
Silver (g/t) 116 115 0.4 100 15.1 115 110 4.4
-------- -------- --------- -------- --------- ---------- ---------- ---------
Ore Grades DOB
-------- -------- --------- -------- --------- ---------- ---------- ---------
Gold (g/t) 0.11 0.12 (5.1) 0.10 11.7 0.11 0.09 32.2
-------- -------- --------- -------- --------- ---------- ---------- ---------
Silver (g/t) 217 275 (20.9) 154 40.8 232 143 62.7
-------- -------- --------- -------- --------- ---------- ---------- ---------
Lead (%) 0.50 0.61 (17.9) 0.39 27.4 0.53 0.39 34.6
-------- -------- --------- -------- --------- ---------- ---------- ---------
Zinc (%) 1.24 1.38 (10.4) 1.27 (2.9) 1.33 1.16 14.5
-------- -------- --------- -------- --------- ---------- ---------- ---------
SAN JULIÁN VEINS
Quarterly gold production decreased 12.4% vs. 2Q21 due to a
lower ore grade due and depletion of high grade stopes at the Santa
Maria, Shalom and San Julián veins.
Quarterly silver production was flat vs. 2Q21 with all metrics
in line with the prior quarter, in spite of another electricity
outage by the Mexican state-owned utility Comisión Federal de
Electricidad (CFE) impacting volumes of ore processed during the
quarter.
Quarterly and year-to-date gold production decreased 23.6% and
14.9% vs. 3Q20 and YTD20 respectively due to a lower ore grade as a
result of the depletion of higher ore grade areas and, to a lesser
extent, lower volume of ore processed due to the electricity outage
as mentioned above.
Quarterly silver production increased 9.4% vs. 3Q20 due to a
higher ore grade, offset by a lower volume of ore processed.
Year-to-date silver production was flat vs. YTD20 due to a lower
volume of ore processed compensated for by a higher ore grade.
We continue to expect the 2021 silver and gold ore grades to
average 110-120 g/t and 1.30-1.50 g/t, respectively.
SAN JULIÁN DISSEMINATED ORE BODY (DOB)
Quarterly silver production decreased 25.5% vs. 2Q21 due to the
anticipated lower ore grade. Despite the quarter-on-quarter drop,
the grade remains higher than originally expected as a result of:
i) the positive variation with the geological model in the Central
area of the ore body; and ii) access to higher ore grade areas
following the mine resequencing in 2019, as mentioned in previous
quarters.
Quarterly silver production increased 32.6% vs. 3Q20 due to a
higher than expected ore grade, as explained above.
Year-to-date silver production increased 50.2% vs. YTD20 due to
a higher than expected ore grade as described above, partially
offset by a lower volume of ore processed driven by the temporary
impact in 1Q21 from the damage to the lead circuit housing at the
end of 2020 and the electricity outage by the CFE in February, as
reported in previous quarters, and once again in this quarter.
The review of the reconciliation of the actual silver grade with
the geological model announced last quarter was concluded,
following the higher than expected grades in recent months. This
review has increased the certainty of the geological model in
particular within the higher grade core of the ore body. Following
the review, we expect the 2021 silver ore grade to be at the lower
end of the revised 200-230 g/t range, as we continue to advance
towards the lower grade areas in the periphery of the ore body, in
line with the mine sequencing.
HERRADURA TOTAL MINE PRODUCTION
3Q21 2Q21 % Change 3Q20 % Change YTD 21 YTD 20 % Change
Ore Processed
(t) 4,546,401 5,482,544 (17.1) 4,791,585 (5.1) 16,040,807 12,921,867 24.1
----------- ----------- --------- ----------- --------- ----------- ----------- ---------
Total Volume
Hauled (t) 33,068,512 33,153,978 (0.3) 28,017,785 18.0 99,723,666 80,801,385 23.4
----------- ----------- --------- ----------- --------- ----------- ----------- ---------
Production
----------- ----------- --------- ----------- --------- ----------- ----------- ---------
Gold (oz) 94,193 108,990 (13.6) 85,102 10.7 352,358 290,848 21.1
----------- ----------- --------- ----------- --------- ----------- ----------- ---------
Silver (koz) 228 227 0.3 251 (9.2) 757 1,075 (29.5)
----------- ----------- --------- ----------- --------- ----------- ----------- ---------
Ore Grades
----------- ----------- --------- ----------- --------- ----------- ----------- ---------
Gold (g/t) 0.76 0.68 11.2 0.72 4.9 0.79 0.78 1.4
----------- ----------- --------- ----------- --------- ----------- ----------- ---------
Silver (g/t) 2.24 1.74 28.7 2.18 2.5 2.09 3.21 (35.0)
----------- ----------- --------- ----------- --------- ----------- ----------- ---------
Quarterly gold production decreased 13.6% vs. 2Q21 due to a
lower volume of ore processed and lower recovery rates at the
leaching pads, caused by heavier than normal rainfall, which
resulted in increased silt restricting the filter capacity at the
plant. This has no impact on full year production as the gold in
the pregnant solution remains in the circuit and will be recovered
in the following months. Further, corrective maintenance to the SAG
mills in one of the dynamic leaching plants impacted the volumes of
ore processed during the quarter. This was mitigated by a higher
ore grade.
Quarterly gold production increased 10.7% vs. 3Q20 due to a
higher recovery rate as the effects of Covid-19 operational
restrictions in 2Q20 last year impacted the recovery cycles at the
leaching pads during 3Q20, and to a lesser extent, a higher ore
grade in the quarter.
Year-to-date gold production increased 21.1% vs. YTD20 due to a
higher volume of ore processed following the Covid-19 operational
restrictions last year, partially offset by a slower speed of
recovery on the leaching pads.
The gold ore grade in 2021 is expected to remain in the range of
0.70-0.75 g/t, despite the ore grade being above this guidance
YTD.
NOCHE BUENA TOTAL MINE PRODUCTION
3Q21 2Q21 % Change 3Q20 % Change YTD 21 YTD 20 % Change
Ore Processed
(t) 2,389,895 2,530,510 (5.6) 1,714,258 39.4 6,069,819 5,044,312 20.8
---------- ---------- --------- ---------- --------- ----------- ----------- ---------
Total Volume
Hauled (t) 6,222,974 6,585,098 (5.5) 9,937,248 (37.4) 19,471,184 25,654,647 (24.1)
---------- ---------- --------- ---------- --------- ----------- ----------- ---------
Production
---------- ---------- --------- ---------- --------- ----------- ----------- ---------
Gold (oz) 25,015 28,564 (12.4) 21,574 15.9 68,244 70,261 (2.9)
---------- ---------- --------- ---------- --------- ----------- ----------- ---------
Silver (koz) 8 8 0.0 11 (24.3) 21 30 (30.8)
---------- ---------- --------- ---------- --------- ----------- ----------- ---------
Ore Grades
---------- ---------- --------- ---------- --------- ----------- ----------- ---------
Gold (g/t) 0.59 0.53 11.5 0.49 20.4 0.55 0.52 4.6
---------- ---------- --------- ---------- --------- ----------- ----------- ---------
Silver (g/t) 0.19 0.17 6.4 1.25 (85.1) 0.19 0.68 (72.5)
---------- ---------- --------- ---------- --------- ----------- ----------- ---------
Quarterly gold production decreased 12.4% vs. 2Q21 due to a
lower recovery rate as a result of heavy rain storms diluting the
pregnant solution and a lower volume of ore processed due to longer
haulage distances. This was mitigated by a higher ore grade.
Quarterly gold production increased 15.9% vs. 3Q20 due to a
higher volume of ore deposited and higher ore grade following a
stability problem in the pit during 3Q20 as previously reported.
This led to an increase in the waste haulage last year in order to
regain access to the deeper areas of the mine. The higher gold
production in the quarter was partially offset by a lower recovery
rate in the quarter as 3Q20 benefitted from increased levels of
irrigation on the pads.
Year-to-date gold production decreased 2.9% vs. YTD20 due to a
lower recovery rate for the same reasons as described above. This
was mitigated by a higher volume of ore processed following the
Covid-19 operational restrictions last year.
The expected gold ore grade in 2021 is predicted to remain in
the range of 0.40-0.50 g/t.
JUANICIPIO
Development ore from Juanicipio continued to be processed in the
Fresnillo flotation plant. On an attributable basis, 374 koz of
silver and 620 oz of gold were produced in 3Q21.
Year-to-date, development ore from Juanicipio has contributed
876 koz of attributable silver production and 1,451 oz of
attributable gold production.
During the quarter, the Juanicipio plant construction continued
to progress. Pre-commissioning testing has begun for key process
plant systems as we approach mechanical completion. In the coming
weeks, our focus will be to move from construction to
pre-commissioning and commissioning activities. We expect to obtain
the authorisation to connect to the power grid on time, which will
allow us to start no-load testing and progress to water testing
during November and full load commissioning with ore by year end.
We anticipate our ongoing success in mitigating Covid-19 related
impacts will allow us to meet our planned start up schedule. We
continue to process development ore at the Fresnillo plant,
generating cash and simultaneously refining our metallurgy
understanding for a more efficient ramp up of the plant.
SILVERSTREAM
Quarterly Silverstream production increased 6.0% vs. 2Q21 mainly
due to a higher volume of ore processed and to a lesser extent,
higher ore grade.
Quarterly and year-to-date Silverstream production increased
20.2% and 20.3% vs. 3Q20 and YTD20 respectively due to a higher ore
grade and higher volume of ore processed.
Expected silver production in 2021 remains in the range of
2.5-3.5 moz.
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 Las Casas Rosario &
Cluster Cebollitas), Herradura, Soledad-Dipolos(1) , Noche Buena
and San Julián (Veins and Disseminated Ore Body), three development
projects - the Pyrites Plant at Fresnillo, the optimisation of the
beneficiation plant also at Fresnillo, and Juanicipio, and three
advanced exploration projects - Orisyvo, Rodeo and Guanajuato, as
well as a number of other long term exploration prospects.
Fresnillo plc has mining concessions and exploration projects in
Mexico, Peru and Chile.
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.
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
DRLLQLLLFBLBFBK
(END) Dow Jones Newswires
October 27, 2021 02:00 ET (06:00 GMT)
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