Operations

Herradura

Location:
Located approximately 80 kilometres north west of the city of Caborca in the state of Sonora.
Products:
Gold-silver dore
Milestones:
2009 - increases production from 10,900,000 tonnes per year to 15,500,000 tonnes per year.
Employees:
During 2009, an average of 762 persons were employed at Herradura.

Herradura Attributable Mine Production

  4th Q 2009 Full year 2009
Silver (kOz) 64 171 (YTD)
Gold (Oz) 43,407 145,510 (YTD)

Herradura is an open pit gold mine located in the State of Sonora and held through Minera Penmont, a joint venture with Newmont Mining Corporation in which Fresnillo has a 56% interest and is the operator of the mine.

Attributable gold production at Herradura achieved new record levels in 2009, rising 18.6% due to the increase of ore deposited in the leaching pads from the Centauro pit, including the new adjacent Valles pit, and better recovery as a result of the expansion of the beneficiation plant. Higher ore grades and a better recovery rate drove silver production up by 38.5%.

The seventh leaching pad was completed in November and the construction of the eighth leaching pad began, with the preparation of filtering material, levelling of land and the receipt of liners completed by the end of 2009. The new eighth leaching pad will be completed in the third quarter of 2010.

We conducted ongoing drilling of 102,877 metres in the year. Based on proven and probable reserves, the expected life of the mine is 11.9 years, compared to 12 years in 2008.

At the Centauro Deep target, which is located below the main pit at the Herradura mine, 16 diamond drill holes totalling 7,530 metres were completed. A potential of three million ounces is under exploration; construction of a ramp to facilitate exploration and metallurgical work will begin in 2010 in order to estimate a resource for defining a possible underground mine.

Productivity and cost reduction initiatives

In November, the expansion of the beneficiation plant was concluded and tests of the new pumps and deoxygenating tower began. This US$6.4 million project is expected to increase the flow from 1,200 m3 to 1,600 m3 per hour once it reaches target capacity in the first quarter of 2010. The laboratory was expanded to receive additional production from Herradura as well as samples from Soledad-Dipolos. An automated sampler system was installed that increases sampling from 400 to 700 samples per day. We also acquired a 50-tonne capacity hydraulic shovel and six 200-tonne trucks in 2009.