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Production Report - 4Q22

Silver

• Quarterly year attributable silver production of 53.7 moz (including Silverstream), in line with guidance, slightly above FY21 with production from Juanicipio and increased volumes of ore processed at Fresnillo, offset by the lower ore grade at San Julián (DOB).
• Quarterly attributable silver production of 12.5 moz (including Silverstream), down 7.8% vs. 3Q22 with stronger performances at the Fresnillo mine and San Julián (veins) offset by lower production at other mines, and a decrease in production from the Silverstream.
• Quarterly attributable silver production (including Silverstream) decreased 3.0% vs. 4Q21 due to a decrease in ore throughput and lower ore grade at San Julián (DOB) and Ciénega, mitigated by increased volumes of ore processed and higher ore grades at Fresnillo.

Gold

• Full year attributable gold production of 635.9 koz, in line with guidance, down 15.3% vs. FY21, primarily due to a lower recovery rate as higher volumes of sulphide ore are processed and lower ore grade at Herradura, and a decrease in the volume of ore processed and lower ore grades at Noche Buena, Saucito and Ciénega.
• Quarterly attributable gold production of 168.0 koz, up 5.5% vs. 3Q22, mainly due to an increase in volumes of ore deposited at Herradura, partly offset by decreased volumes of ore processed and a lower recovery rate at Noche Buena and lower ore grade and a decrease in ore throughput at Saucito.
• Quarterly attributable gold production increased 11.7% vs. 4Q21 driven by increased volumes of ore deposited and higher ore grades at Herradura, partly offset by decreased volumes of ore deposited and lower ore grade at Noche Buena.

By-Products

• Full year attributable by-product lead production decreased 6.4% vs. FY21 due to a decrease in the volume of ore processed and lower ore grade at Saucito and decreased ore grade at San Julián (DOB), mitigated by increased ore throughput and higher ore grade at Fresnillo and increased contribution from Juanicipio.
• Quarterly attributable by-product lead production decreased 4.9% vs. 3Q22 due to decreased ore throughput and lower ore grade at Saucito and a lower volume of ore processed from Juanicipio.
• Quarterly attributable by-product zinc production decreased 9.8% vs. 3Q22 due to a decreased volume of ore processed and lower ore grades at Saucito and Fresnillo, and lower contribution from Juanicipio.
• Quarterly attributable by-product lead production increased 7.8% vs. 4Q21 driven primarily by increased volumes of ore processed and higher ore grades at Fresnillo and increased contribution from Juanicipio, partly offset by lower ore throughput at Saucito.

Development Projects

Commissioning of the Juanicipio plant is ongoing. We continue to expect a gradual ramp up with the objective of reaching full nameplate capacity in the third quarter of 2023. As reported, ore will be processed at the Juanicipio plant but can also continue to be processed at our nearby Saucito and Fresnillo operations if required. Having achieved Juanicipio’s tie-in to the national grid, the focus is to get the pyrites plant connected by the end of 1Q23, with commissioning and ramp up starting immediately afterwards.

Safety Performance

We continue with our ‘I Care, We Care’ programme and will continue working towards identifying preventive measures to provide a safer environment for our workforce. We remain committed to meeting our Zero Fatalities target and continue encouraging adherence to stringent safety policies and implementing controls and training to guarantee a strong safety culture.

Operating Environment

As communicated in previous reports, the labour reform in Mexico which restricts subcontracting of labour came into effect from September 2021. This resulted in the requirement to internalise a proportion of our contractor workforce. Contractor uptake varied across the Group, resulting in staff vacancies and lower equipment availability at our underground mines. The labour market remains very tight in common with other sectors and indeed geographies. However, our recruitment and training campaigns are now complete and the mines are well staffed for 2023.

2023 outlook

Our 2023 guidance issued today is in line with previous expectations in terms of silver equivalent ounces. We expect increased production of gold due to an updated mine plan at Herradura and a slight increase in volumes at Noche Buena following condemnation drilling, alongside moderated production of silver due to the later than expected ramp up at Juanicipio (from mid 2022 to early 2023) and tie in of the pyrites plant at Fresnillo. 
Attributable silver production expected to be in the range of 57.0 to 64.0 moz (including Silverstream).
Attributable gold production expected to be in the range of 590 to 640 koz.
Taking the above ranges and expressed in silver equivalent ounces1, production is expected to be 104 -115 million ounces.