San Julián lifts Fresnillo's silver output

Fresnillo's silver output increased 10.7% in Q1, mainly on account of production from the San Julián mine.

The Mexican company produced 13.5Moz silver in the quarter, up from 12.2Moz in the same period last year.

San Julián contributed 1.39Moz silver and 20,129oz gold. Fresnillo completed commissioning of the first phase of the silver-gold mine in July 2016. Phase 2 commissioning is on track to conclude in Q2.

FRESNILLO, SAUCITO

Saucito was Fresnillo's biggest silver producer in the quarter, at 5.15Moz, down from 5.44Moz on account of lower grades and limited access to a high-grade stope due to safety measures.

The mine also produced 17,964oz gold, down 17%, 4,754t lead, down 1.7%, and 5,139t zinc, down 15.4%.

The Fresnillo mine produced 4.44Moz silver, up from 4.29Moz, due to higher grades. Gold output was 11,325oz, up 10.1%, along with 5,170t lead, up 9.9%, and 6,707t zinc, up 30.5%.

The company also reported 1.10Moz silver output from streaming agreements, down 5.7%.

GOLD

Fresnillo produced 222,300oz gold in the quarter, down 3.3% from the same period last year, when output was lifted by a one-off reduction in inventory levels at the leaching pads at the Herradura mine.

Herradura produced 107,742oz gold, down from 129,114oz, along with 118,000oz silver, down from 143,000oz.

The Ciénega mine produced 17,453oz gold, up 1.2%, along with 1.33Moz silver, up 13.6%, 1,536t lead, down 0.5%, and 1,960t zinc, up 19.9%.

Output at Noche Buena was 47,678oz gold, down from 51,647oz.

PROJECTS, EXPLORATION

Fresnillo advanced agitation tanks assembly and concluded foundations for a reagents warehouse at its US$155mn pyrites plant project, which will increase gold and silver recoveries at the Fresnillo and Saucito mines by processing tailings.

The project is expected to increase output by 3.5Moz/y silver and 13,000oz/y gold at full capacity. Commissioning is planned for 1H18.

The company also advanced construction of a second dynamic leaching plant. The US$110mn project is aimed at extending the mine life at Herradura.

Fresnillo completed 88,000m of drilling at operating mines and 84,000m at projects in Q1.

The company is controlled by Mexican miner Industrias Peñoles, the country's top gold and silver producer.