TIDMFRES
RNS Number : 7857W
Fresnillo PLC
28 April 2021
Fresnillo plc
21 Upper Brook Street
London W1K 7PY
United Kingdom
www.fresnilloplc.com
28 April 2021
FIRST QUARTER PRODUCTION REPORT
FOR THE THREE MONTHSED 31 MARCH 2021
Octavio Alvídrez, Chief Executive Officer, said:
"The health and well-being of our people remains our first
priority and we have maintained a range of measures to ensure their
safety, while also continuing to support our local communities.
First quarter silver production was marginally below the
previous quarter, with the encouraging contribution of development
ore from our new Juanicipio project offsetting lower grades at
Saucito. I am also pleased to report continued progress at the
Fresnillo mine with development rates showing an improvement.
Quarterly gold production was ahead of the last quarter driven by
the higher than expected grade at Herradura. Construction of
Juanicipio is making good progress and we are on track to
commission the plant by the fourth quarter.
Though the pandemic continues to present certain operational
challenges, Fresnillo has started 2021 well with Q1 operations in
line with expectations and our full year guidance remains
unchanged."
TOTAL PRODUCTION
HIGHLIGHTS
Silver
-- Quarterly attributable silver production of 12.6 moz
(including Silverstream), down 2.4% vs. 4Q20, driven by a lower
volume of ore processed at San Julián Disseminated Ore Body (DOB)
and a lower ore grade at Saucito and the Pyrites plant, mitigated
by a higher development ore grade at Juanicipio.
-- Quarterly attributable silver production (including
Silverstream) was down 4.5% vs. 1Q20, mainly due to the lower ore
grade at Saucito, mitigated by a higher ore grade at San Juli á n
DOB and the contribution from Juanicipio.
Gold
-- Quarterly attributable gold production of 228.2 koz, up 5.9%
vs. 4Q20, mainly due to the higher ore grade at Herradura and
Saucito, partly offset by lower volumes of ore processed at Noche
Buena and decreased ore throughput and lower ore grade at San
Julián Veins.
-- Quarterly attributable gold production increased 15.9% vs.
1Q20 due to an increase in volume of ore processed and higher ore
grade at Herradura and, to a lesser extent, a higher ore grade at
Saucito. This was partly offset by a lower volume of ore processed
and ore grade at Noche Buena as the mine approaches its planned
closure.
By-Products
-- Quarterly attributable by-product lead and zinc production
decreased 14.8% and 16.8% respectively vs. 4Q20, driven primarily
by lower ore grades and to a lesser extent, lower volumes of ore
processed at both Saucito and Fresnillo.
-- Quarterly attributable by-product lead and zinc production
increased 10.3% and 14.2% vs. 1Q20 respectively, due to higher ore
grades at Saucito, partially offset by lower ore grades and
recovery rates at Ciénega.
Attributable 1Q21 4Q20 % Change 1Q20 % Change
Silver (koz) 11,839 12,207 (3.0) 12,547 (5.6)
-------- ---------------- --------- ------------------ ---------
Silverstream (koz) 796 743 7.1 681 16.9
-------- ---------------- --------- ------------------ ---------
Total Silver (koz) 12,635 12,950 (2.4) 13,228 (4.5)
-------- ---------------- --------- ------------------ ---------
Gold (oz) 228,193 215,581 5.9 196,963 15.9
-------- ---------------- --------- ------------------ ---------
Lead (t) 15,340 18,013 (14.8) 13,905 10.3
-------- ---------------- --------- ------------------ ---------
Zinc (t) 25.881 31,092 (16.8) 22,655 14.2
-------- ---------------- --------- ------------------ ---------
Note: Figures are sometimes more precise than the rounded
numbers shown in this Production Report
DEVELOPMENT PROJECTS
-- Continued progress was achieved on the construction of the
Juanicipio processing plant and civil works during the quarter.
Commissioning of the plant by 4Q21 remains on track.
-- As previously reported, the Fresnillo flotation plant
optimisation to cope with higher content of lead and zinc was
concluded in 4Q20. The connection of this new circuit to the
beneficiation plant was completed in 1Q21, with programming of the
control loop system expected to be finalised in early 2Q21.
2021 OUTLOOK
2021 guidance remains unchanged despite the continued
uncertainty presented by Covid-19 in Mexico. Attributable silver
production is expected to be in the range of 53.5 to 59.5 moz
(including Silverstream) while attributable gold production is
expected to be in the range of 675 to 725 koz.
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
1Q21 4Q20 % Change 1Q20 % Change
Ore Processed (t) 561,360 590,449 (4.9) 598,790 (6.3)
-------- -------- --------- -------- ---------
Production
-------- -------- --------- -------- ---------
Silver (koz) 3,260 3,213 1.5 3,145 3.7
-------- -------- --------- -------- ---------
Gold (oz) 8,375 9,485 (11.7) 8,781 (4.6)
-------- -------- --------- -------- ---------
Lead (t) 4,492 5,254 (14.5) 4,617 (2.7)
-------- -------- --------- -------- ---------
Zinc (t) 7,143 9,051 (21.1) 6,758 5.7
-------- -------- --------- -------- ---------
Ore Grades
-------- -------- --------- -------- ---------
Silver (g/t) 203 190 6.9 183 10.6
-------- -------- --------- -------- ---------
Gold (g/t) 0.69 0.71 (3.6) 0.65 5.5
-------- -------- --------- -------- ---------
Lead (%) 0.95 1.08 (12.0) 0.95 0.1
-------- -------- --------- -------- ---------
Zinc (%) 1.82 2.19 (16.7) 1.69 8.1
-------- -------- --------- -------- ---------
Quarterly silver production increased 1.5% and 3.7% vs. 4Q20 and
1Q20 respectively due to the expected increase in ore grade mainly
as a result of enhanced dilution control during the quarter
(dilution decreased to an average of 29% during 1Q21). This was
partly offset by a decrease in volume of ore processed due to
additional rehabilitation and maintenance of certain ramps and
delayed access to Eastern areas of the mine.
Mine development rates increased quarter on quarter to an
average of 3,346m per month in 1Q21 (4Q20: 3,241m per month),
driven by improved contractor performance, notwithstanding ongoing
absenteeism as a result of our Covid-19 preventive measures. The
target remains to develop on average between 3,300 - 3,500m per
month in 2021.
Quarterly by-product gold production decreased 11.7% vs. 4Q20
driven by a lower volume of ore processed, ore grade and recovery
rate.
Quarterly by-product gold production decreased 4.6% vs. 1Q20 due
to a lower volume of ore processed and lower recovery rates,
mitigated by a higher 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
1Q21 4Q20 % Change 1Q20 % Change
Ore Processed (t) 650,884 671,429 (3.1) 670,047 (2.9)
-------- -------- --------- ----------------- ---------
Production
-------- -------- --------- ----------------- ---------
Silver (koz) 3,148 3,428 (8.2) 4,043 (22.1)
-------- -------- --------- ----------------- ---------
Gold (oz) 26,819 23,199 15.6 21,176 26.6
-------- -------- --------- ----------------- ---------
Lead (t) 7,841 9,354 (16.2) 5,717 37.2
-------- -------- --------- ----------------- ---------
Zinc (t) 11,848 14,038 (15.6) 8,902 33.1
-------- -------- --------- ----------------- ---------
Ore Grades
-------- -------- --------- ----------------- ---------
Silver (g/t) 177 195 (9.0) 214 (17.3)
-------- -------- --------- ----------------- ---------
Gold (g/t) 1.65 1.40 18.1 1.27 30.4
-------- -------- --------- ----------------- ---------
Lead (%) 1.40 1.65 (14.8) 0.99 41.5
-------- -------- --------- ----------------- ---------
Zinc (%) 2.48 2.95 (15.9) 1.86 33.1
-------- -------- --------- ----------------- ---------
Quarterly silver production decreased 8.2% vs. 4Q20 due to a
lower ore grade following short term instability issues limiting
access to higher ore grade areas. This had the effect of
temporarily altering the mine sequence with more material processed
from several Western areas of the mine with a lower average silver
ore grade.
Quarterly silver production decreased 22.1% vs. 1Q20 principally
due to an expected lower ore grade as a result of the gradual
depletion of higher ore grade areas at the Jarillas vein, and to a
lesser extent, a lower volume of ore processed and recovery
rate.
Progress was made on further controlling dilution and it
decreased to an average of 40% in 1Q21.
The project to deepen the Jarillas shaft from 630 metres to
1,000 metres continues to advance according to plan. Once
commissioned by the end of 2023, this project will provide access
to the deeper reserves of the Jarillas vein.
Quarterly by-product gold production increased 15.6% and 26.6%
vs. 4Q20 and 1Q20 respectively, due to a higher ore grade.
Despite a lower silver ore grade in 1Q21, the expected full year
2021 silver ore grade is expected to remain in the range of 200-220
g/t, while the gold grade is estimated to continue to be around
1.10 g/t.
PYRITES PLANT (PHASE I)
1Q21 4Q20 % Change 1Q20 % Change
Iron Concentrates Processed
(t) 41,760 47,860 (12.7) 41,453 0.7
------- ------- --------- ------------------ ---------
Production
------- ------- --------- ------------------ ---------
Silver (koz) 137 194 (29.5) 256 (46.6)
------- ------- --------- ------------------ ---------
Gold (oz) 678 820 (17.3) 871 (22.2)
------- ------- --------- ------------------ ---------
Ore Grades
------- ------- --------- ------------------ ---------
Silver (g/t) 143 172 (17.3) 244 (41.6)
------- ------- --------- ------------------ ---------
Gold (g/t) 1.64 1.64 (0.1) 2.11 (22.5)
------- ------- --------- ------------------ ---------
Quarterly silver production decreased 29.5% vs. 4Q20 due to a
lower ore grade of iron concentrates produced by Saucito and a
lower volume of iron concentrates processed.
Quarterly gold production decreased 17.3% vs. 4Q20 mainly due to
a lower volume of iron concentrates processed, and to a lesser
extent, lower recovery rate.
Quarterly silver production decreased 46.6% vs. 1Q20 mainly due
to a lower ore grade of iron concentrates produced by Saucito and
to a lesser extent, lower recovery rate.
Quarterly gold production decreased 22.2% vs. 1Q20 due to a
lower ore grade of iron concentrates produced by Saucito.
In 2021, we continue to expect production from this plant at
Saucito to remain unchanged year-on-year.
As noted in previous reports, the Pyrites Plant (phase II) was
completed on time in 4Q20 but the inspection that is required to be
carried out by the authorities in order to grant the energy permit
has been delayed due to Covid-19 restrictions on travel and other
regulatory delays. We anticipate that the inspection will take
place in 3Q21.
CIENEGA MINE PRODUCTION
1Q21 4Q20 % Change 1Q20 % Change
Ore Processed (t) 326,163 334,977 (2.6) 326,350 (0.0)
-------- -------- --------- ----------------- ---------
Production
-------- -------- --------- ----------------- ---------
Gold (oz) 14,289 13,605 5.0 16,426 (13.0)
-------- -------- --------- ----------------- ---------
Silver (koz) 1,299 1,272 2.1 1,396 (7.0)
-------- -------- --------- ----------------- ---------
Lead (t) 1,227 1,339 (8.4) 1,747 (29.8)
-------- -------- --------- ----------------- ---------
Zinc (t) 1,973 2,078 (5.1) 2,585 (23.7)
-------- -------- --------- ----------------- ---------
Ore Grades
-------- -------- --------- ----------------- ---------
Gold (g/t) 1.45 1.36 7.1 1.69 (14.1)
-------- -------- --------- ----------------- ---------
Silver (g/t) 145 139 4.5 154 (5.9)
-------- -------- --------- ----------------- ---------
Lead (%) 0.59 0.61 (2.6) 0.81 (26.4)
-------- -------- --------- ----------------- ---------
Zinc (%) 1.07 1.06 0.6 1.29 (17.2)
-------- -------- --------- ----------------- ---------
Quarterly gold and silver production increased 5.0% and 2.1% vs.
4Q20 respectively, as a result of a higher ore grade driven by
improved dilution control, partially offset by a lower volume of
ore processed.
Quarterly gold and silver production decreased 13.0% and 7.0%
vs. 1Q20 respectively, due to the expected lower ore grades year on
year.
The gold and silver ore grades for 2021 are expected to remain
in the range of 1.30-1.40 g/t and 150-160 g/t respectively.
SAN JULIÁN MINE PRODUCTION
1Q21 4Q20 % Change 1Q20 % Change
Ore Processed Veins (t) 288,673 315,863 (8.6) 309,177 (6.6)
-------- -------- --------- ------------------ ---------
Ore Processed DOB (t) 448,674 572,962 (21.7) 541,925 (17.2)
-------- -------- --------- ------------------ ---------
Total production at San
Julián
-------- -------- --------- ------------------ ---------
Gold (oz) 13,802 16,048 (14.0) 15,173 (9.0)
-------- -------- --------- ------------------ ---------
Silver (koz) 3,430 3,730 (8.0) 3,174 8.1
-------- -------- --------- ------------------ ---------
Production Veins
-------- -------- --------- ------------------ ---------
Gold (oz) 12,828 15,123 (15.2) 14,584 (12.0)
-------- -------- --------- ------------------ ---------
Silver (koz) 966 965 0.1 1,074 (10.1)
-------- -------- --------- ------------------ ---------
Production DOB
-------- -------- --------- ------------------ ---------
Gold (oz) 974 925 5.3 589 65.2
-------- -------- --------- ------------------ ---------
Silver (koz) 2,465 2,765 (10.9) 2,100 17.4
-------- -------- --------- ------------------ ---------
Lead (t) 1,694 2,036 (16.8) 1,824 (7.1)
-------- -------- --------- ------------------ ---------
Zinc (t) 4,783 5,874 (18.6) 4,410 8.4
-------- -------- --------- ------------------ ---------
Ore Grades Veins
-------- -------- --------- ------------------ ---------
Gold (g/t) 1.47 1.58 (6.9) 1.53 (4.1)
-------- -------- --------- ------------------ ---------
Silver (g/t) 115 103 11.0 118 (2.6)
-------- -------- --------- ------------------ ---------
Ore Grades DOB
-------- -------- --------- ------------------ ---------
Gold (g/t) 0.12 0.09 27.3 0.08 48.9
-------- -------- --------- ------------------ ---------
Silver (g/t) 197 172 14.7 140 41.0
-------- -------- --------- ------------------ ---------
Lead (%) 0.47 0.46 2.7 0.42 12.4
-------- -------- --------- ------------------ ---------
Zinc (%) 1.38 1.28 7.6 1.13 21.9
-------- -------- --------- ------------------ ---------
SAN JULIÁN VEINS
Quarterly silver production was flat vs. 4Q20, with a higher ore
grade offsetting a lower volume of ore processed as operations were
impacted by an electricity outage by the Mexican Entity CFE
(Comisión Federal de Electricidad) in February.
Quarterly gold production decreased 15.2% vs. 4Q20, due to a
lower volume of ore processed for reasons explained above and an
expected lower ore grade.
Quarterly silver and gold production decreased 10.1% and 12.0
vs. 1Q20, due to a lower volume of ore processed for reasons
explained above, and to a lesser extent, lower ore grade due to the
depletion of higher ore grade areas.
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 10.9% vs. 4Q20, due to a
lower volume of ore processed as a result of the damage to the lead
circuit housing at the end of 2020, as previously reported, and to
a lesser extent the impact on operations from the electricity
outage by the CFE (Comisión Federal de Electricidad) in February as
explained above. This was mitigated by the expected higher ore
grade following the mine resequencing in 2019, as mentioned in
previous quarters.
Several adjustments were made at the lead circuit housing and
production has ramped back up to 6,600 tonnes per day in March. We
expect this rate to be maintained going forward.
Quarterly silver production increased 17.4% vs. 1Q20, due to the
expected higher ore grade as mentioned above, notwithstanding the
lower volume of ore processed.
The silver ore grade for 2021 is expected to remain within a
range of 160-170 g/t.
HERRADURA TOTAL MINE PRODUCTION
1Q21 4Q20 % Change 1Q20 % Change
Ore Processed (t) 6,011,862 6,875,196 (12.6) 4,847,178 24.0
----------- ----------- --------- ----------------- ---------
Total Volume Hauled
(t) 33,501,176 28,976,190 15.6 33,840,941 (1.0)
----------- ----------- --------- ----------------- ---------
Production
----------- ----------- --------- ----------------- ---------
Gold (oz) 149,175 134,439 11.0 110,493 35.0
----------- ----------- --------- ----------------- ---------
Silver (koz) 303 231 31.0 524 (42.3)
----------- ----------- --------- ----------------- ---------
Ore Grades
----------- ----------- --------- ----------------- ---------
Gold (g/t) 0.92 0.76 21.6 0.76 21.2
----------- ----------- --------- ----------------- ---------
Silver (g/t) 2.30 1.46 57.1 4.19 (45.2)
----------- ----------- --------- ----------------- ---------
Quarterly gold production increased 11.0% vs. 4Q20 due to a
higher ore grade and to a lesser extent, higher recovery rate. This
was partially offset by a lower volume of ore processed following
some corrective maintenance of the milling circuit at the Dynamic
Leaching Plant (DLP), an issue that has since been resolved .
Quarterly gold production increased 35.0% vs. 1Q20 due to a
higher volume of ore processed and higher ore grade, partially
offset by a lower recovery rate as a result of the lower leaching
speed and lower irrigation on the pads.
The gold ore grade in 2021 is expected to remain in the range of
0.70-0.75 g/t, despite the higher 1Q21 ore grade.
NOCHE BUENA TOTAL MINE PRODUCTION
1Q21 4Q20 % Change 1Q20 % Change
Ore Processed (t) 1,173,414 1,638,305 (28.4) 1,963,145 (40.2)
---------- ---------- --------- ---------------- ---------
Total Volume Hauled
(t) 6,663,112 9,259,638 (28.0) 10,104,777 (34.1)
---------- ---------- --------- ---------------- ---------
Production
---------- ---------- --------- ---------------- ---------
Gold (oz) 14,665 17,737 (17.3) 24,043 (39.0)
---------- ---------- --------- ---------------- ---------
Silver (koz) 5 9 (51.6) 9 (51.1)
---------- ---------- --------- ---------------- ---------
Ore Grades
---------- ---------- --------- ---------------- ---------
Gold (g/t) 0.48 0.50 (4.2) 0.54 (10.6)
---------- ---------- --------- ---------------- ---------
Silver (g/t) 0.21 0.84 (74.8) 0.27 (22.0)
---------- ---------- --------- ---------------- ---------
Quarterly gold production decreased 17.3% and 39.0% vs. 4Q20 and
1Q20 respectively, due to the decreased volume of ore deposited and
lower ore grade as a result of expected depletion of the mine as it
approaches closure. This was mitigated by the higher speed of
recovery due to increased irrigation on the pads and the
installation of the carbon columns in 2019.
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
through the Fresnillo mine beneficiation plant during the quarter.
On an attributable basis, 258.9 koz of silver and 390.7 oz of gold
were produced in 1Q21.
Continued progress was achieved on the construction of the
Juanicipio processing plant and civil works during the quarter.
Commissioning of the plant by 4Q21 remains on track.
We expect to process an average of 16,000 tonnes per month
through to 4Q21 on a consolidated basis, at which time we expect to
start commissioning the Juanicipio beneficiation plant.
SILVERSTREAM
Quarterly Silverstream production increased 7.1% vs. 4Q20 and
16.9% vs. 1Q20 driven by higher ore grades, partially offset by a
lower recovery rate.
Expected silver production in 2021 remains in the range of
2.5-3.5 moz.
SAFETY PERFORMANCE
Progress towards improving our safety record continues to
advance with the Total Recordable Injury and Lost Time Injury
frequency rates trending down. A healthy and safe working
environment builds trust with our people and we continue to be
absolutely committed to instilling a strong safety culture across
our mines, targeting zero fatalities through the reinforcement of
our safety training for all employees and contractors. The 'I Care,
We Care' programme has now been rolled out across the business and
is a central aspect of all new development projects and operations,
and we continue to target a steady improvement in all health and
safety metrics.
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 four
advanced exploration projects - Orisyvo, Rodeo, Guanajuato and
Pilarica, 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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