Operations
Ciénega
Ciénega mine production
| 4th Q 2009 | Full year 2009 | |
|---|---|---|
| Silver (kOz) | 446 | 1,589 |
| Gold (Oz) | 29,710 | 116,903 |
| Lead (t) | 1,448 | 6,118 |
| Zinc (t) | 1,900 | 7,950 |
The Ciénega gold mine, which is 100% owned by Fresnillo, is located in the northwest corner of the State of Durango, approximately 325 kilometres from Durango, the Capital of the State. The unit consists of an underground mining operation and a concentrator plant.
Annual gold production decreased by an expected 11.5% as a result of the decline in ore grade in the early part of the year. The average gold grade in 2009 decreased from 5.1g/t in 2008 to 4.3g/t where it has currently stabilised with the ongoing investment in efficiency projects and preparation of new stopes; no further declines are expected in 2010.
An expansion of the milling capacity at the Ciénega mine from 755,000tpy to 930,000tpy was approved in October and is currently in the engineering phase. This expansion will further compensate for the lower ore grade and help stabilise gold production at around 110,000 ounces per year, while maintaining the mine life at over 10 years. The project will become operational in 1H 2011, with an initial cost of US$24.9 million plus further sustaining capital expenditure of US$0.5 million per annum from 2012 to 2019.
Silver production for the full year increased due to the higher ore grade and ore milled. Lead and zinc production decreased as a result of lower ore grades.
Surface and in-mine diamond drilling totalled 56,712 metres in 2009. Based on proven and probable reserves, the expected life of the mine at current milling capacity is 13.5 years, compared to 13.2 years in 2008. Exploration was also conducted at areas of influence around Ciénega, in Las Casas and San Raman .
Productivity and cost reduction initiatives
The optimisation of the leaching circuit at Ciénega was concluded and tests of the equipment, tanks and pumps began in the fourth quarter. This project will increase the flow from 220 m3 to 390 m3 per hour and is expected to achieve a 2.2% and 0.8% increase in gold and silver recovery rates, respectively, once final adjustments are made and the project becomes fully operational in the first quarter of 2010. Total investment was US$4.2 million, coming in below budget. An additional 0.3% gold recovery is expected to be achieved with the new Knelson gravimetric concentrator that became operational in September, following a US$1.2 million investment.
The project to sink the shaft a further 300 metres to gain access to deeper ore reserves remains on track, with the US$13.3 million project scheduled for completion in the second half of 2011. In 2009, the sinking advanced 117 metres.
In 2009 we initiated implementation of Six Sigma quality control methology at the beneficiation plant to increase milling capacity and recoveries.
San Ramon brownfield exploration
This new ore deposit is located 10km West of the Ciénega mine. This new discovery has inferred resources of 66Moz of silver and 397,000oz of gold. In 2010 it will continue to be developed and further explored.