Peru , Mexico and Argentina
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Grades, suspension weigh on LatAm silver output

Bnamericas Published: Thursday, August 18, 2022
Grades, suspension weigh on LatAm silver output

Total Latin American production of the region’s largest silver-focused mining companies declined in Q2, as lower grades and a mine suspension weighed on output.

Aggregate output of 10 of the region’s key silver players was 35.3Moz, down 7.4% from 38.1Moz in the same quarter last year, according to industry data compiled by BNamericas.

Five of the firms saw production slip, while output of three increased, with the other two remaining stable.

But combined output by the 10 was up from 33.4Moz in Q1, and was in line with total midpoint guidance of around 140Moz for the year.

The 10 are primary silver producers or gold miners with significant silver components, or firms with large primary silver mines in Latin America.

Mexico and Peru are the world’s first and third biggest silver producers globally, with Chile, Bolivia and Argentina all in the top 10, according to latest US Geological Survey data.

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TOP 10 SILVER MINERS - Q2

1. Fresnillo: 14.4Moz

Trend: FALL

Mexico’s biggest precious metals producer saw output slip by 3.6% from 14.9Moz in 2Q21, with results impacted by expected lower grades and lower volumes of ore processed at the San Julián disseminated orebody (DOB).

The drop was mitigated by higher contributions of ore from the Juanicipio project, which is being processed at the Fresnillo and Saucito mines.

Fresnillo reiterated silver guidance of 50.5-56.5Moz for the year.

2. Pan American Silver: 4.5Moz

Trend: FLAT

Pan American produced 4.5Moz silver in Q2, unchanged on the same quarter last year, in part reflecting improvements at the La Colorada mine in Mexico and a weak performance at the Dolores gold-silver asset in the country, which was affected by lower than expected grades and inflationary pressures, which led to the company suspending underground operations in the quarter.

Pan American Silver now expects production to come in toward the lower end of 2022 guidance of 19.0-20.5Moz.

3. First Majestic Silver: 2.8Moz

Trend: FALL

Vancouver-based First Majestic saw silver output decline around 15% from 3.3Moz, due to lower grades and ore processed at the San Dimas mine, partially offset by increases at Santa Elena and La Encantada (in picture), all located in Mexico.

First Majestic lowered 2022 silver guidance in July to 11.2-11.9Moz from 12.2-13.5Moz.

4. Hochschild: 2.6Moz

Trend: FALL

UK-listed Hochschild produced 2.6Moz silver, down from 3.1Moz, mainly due to lower output at the Pallancata mine in Peru.

Production was broadly flat at Inmaculada in Peru and up slightly at San José in Argentina.

The company said it is on track to deliver original guidance in 2022 of 26.0-27.0Moz silver equivalent, or 360,000-375,000oz gold equivalent.

5. Gatos Silver: 2.3Moz

Trend: RISE

Gatos Silver was one of the few silver miners to post higher output in Q2, up from 2.1Moz on improved grades and recoveries, partly offset by lower volumes of ore milled.

Based on H1 results, the company expects 2022 production at its Cerro Los Gatos mine in Mexico to be near the high end of current guidance of 8.5-9.0Moz.

6. SSR Mining (Puna mine): 2.0Moz

Trend: FLAT

Output at SSR’s Puna mine in Argentina was flat from 2Q21, as grades increased and volumes of ore fell.

Guidance for the asset is unchanged at 8.0-9.0Moz silver.

7. Buenaventura: 1.8Moz (sold)

Trend: FALL

Peruvian miner Buenaventura saw silver volumes sold fall by around half from 3.5Moz, after results were impacted by the suspension of the Uchucchacua mine, following a strike and pandemic-related exploration and mine development delays.

Silver production was also lower due to a change of mine plan sequence at El Brocal.

The company did not provide updated 2022 guidance in its Q2 results release. Original guidance was 8.2-9.7Moz.

8. Coeur Mining (Palmarejo mine): 1.8Moz

Trend: RISE

Production at Coeur’s Palmarejo mine in Mexico rose slightly from 1.7Moz, on higher volumes milled and steady grades, with guidance unchanged at 6.0-7.0Moz.

9. Fortuna Silver: 1.7Moz

Trend: FALL

Fortuna’s silver output slipped from 1.9Moz, mainly due to lower grades at the San José mine in Mexico.

The company reiterated 2022 silver guidance of 6.2-6.9Moz.

10. Endeavour Silver: 1.4Moz

Trend: RISE

Endeavour saw output rise from 1.1Moz, mainly due to an improved performance at the Guanaceví mine in Mexico.

The company also increased silver guidance to 4.9-5.1Moz from 4.2-4.8Moz originally.

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