Mexico's top silver miners on track for 2018 output growth

Wednesday, March 7, 2018

The Mexican output of the biggest silver producers in the country is forecast to rise in 2018 following strong growth last year.

The country's top 10 silver miners will produce 159Moz of the metal this year, according to midpoint guidance and BNamericas estimates.

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The figure is up from 154Moz produced by the companies in 2017, when output jumped from 144Moz the previous year.

Production by the top 10 was 148Moz in 2015, 147Moz in 2014 and 139Moz the previous year, according to BNamericas calculations. Mexico is the world's biggest silver producer.


Production in 2017 was a shade higher than the 153Moz forecast for the year, based on midpoint guidance and BNamericas estimates.

The figure mainly reflects higher than expected silver output at Goldcorp's Peñasquito mine (21.5Moz compared to BNamericas' 2017 estimate of 16.3Moz). The company does not issue silver guidance by mine.

Miners that missed their original 2017 guidance include Endeavour SilverFirst Majestic Silver and Primero Mining.


TOP 10

1. Industrias Peñoles, 2017 silver production: 66.4Moz

Silver production was up from 58.1Moz, mainly due to rising output at precious metals subsidiary Fresnillo (2017 output: 58.7Moz).

Growth is forecast to accelerate in 2018 assuming Fresnillo meets midpoint guidance of 68.5Moz and flat output from Peñoles' own mines.

2. Goldcorp: 21.5Moz

Production at Peñasquito (pictured) broadly reflects a changing grade profile. Sharp growth in silver output in 2017 will be followed by a steep decline in 2018, when BNamericas forecasts output of 16.6Moz (assuming a similar percentage decline for silver as Goldcorp has guided for gold at the mine).

3. Southern Copper: 12.8Moz

The US-based copper miner reported silver sales from Mexican operations of 12.8Moz for 2017, down from 13.9Moz the previous year.

In the absence of silver guidance from the company, BNamericas estimates flat silver production for 2018.

4. Pan American Silver: 11.9Moz

Silver output at the company's silver operations crept up from 11.5Moz in 2016 helped by the Dolores and La Colorada expansions. A further increase is forecast for 2018.

5. First Majestic Silver: 9.75Moz

Production fell below original guidance of 10.0-10.6Moz silver, due to challenges at a number of mines.

Improvements at the La Encantada, La Parrilla, La Guitarra and Del Toro mines are expected to lift output to 10.6-11.8Moz in 2018. This does not include additional output from First Majestic's planned acquisition of Primero and its San Dimas mine.

6. Minera Frisco: 8.41Moz

Frisco's nine Mexican mines saw output slip from 9.04Moz in 2016. BNamericas estimates flat 2018 output. The Mexico City-based miner does not issue guidance.

7. Fortuna Silver: 7.53Moz

Silver output at Fortuna's San José mine increased from 6.12Moz following an earlier expansion. The company issued guidance for 2018 of 7.5Moz at the mine.

8. Coeur Mining: 7.24Moz

Coeur climbed two places in the 2017 rankings as output at the Palmarejo operation jumped from 4.44Moz on the ramp-up of Independencia and Guadalupe underground deposits. A slight dip is forecast for 2018 due to lower grades.

9. Endeavour Silver: 4.92Moz

Output was below original midpoint guidance of 5.45Moz, largely due to a series of technical challenges at the Guanaceví mine.

Improvements at the company's three operating mines and the start-up of production from the El Compás gold-silver project are expected to boost output in 2018 to 5.8-6.4Moz.

10. Primero Mining: 3.69Moz (estimate)

Primero's 2017 production results have not yet been released. The 3.69Moz figure is an estimate based on Q1-Q3 output and assuming flat quarter-on-quarter production for Q4.

Silver production fell from 5.3Moz in 2016 due to a strike at San Dimas followed by ramp-up troubles after the stoppage was lifted in April. BNamericas' 2018 estimate assumes flat production.