Mines in Operation

Fresnillo B Model Operate Small

Strategic focus:
Maximise the potential of existing operations

Operational focus and criteria

Our operating mines are located within prime gold and silver mining districts in Mexico, supported by extensive investment in technology, that enhances productivity and efficiency, teamed with high-quality assets selectively added in exploration and development phase, we remain competitively positioned in cash cost performance.

Key assets

Asset

Type

Commodity

Year

» Fresnillo

Underground

Silver primary

1554

» Saucito

Underground

Silver primary

2011

» Ciénega

Underground

Gold/Silver

1992

» Herradura

Open pit

Gold

1997

» Soledad-Dipolos

Open pit

Gold

2010

» Noche Buena

Open pit

Gold

2012

» San Julián

Underground

Silver primary

2016

*Operations at Soledad-Dipolos currently suspended.

Total Production

 

3Q22

2Q22

% change

3Q21

% change

YTD22

YTD21

% change

Silver (koz)

12,787

13,664

(6.4)

11,800

8.4

38,980

37,730

3.3

Silverstream (koz)

799

692

15.5

851

(6.1)

2,238

2,451

(8.7)

Total Silver (koz)

13,586

14,356

(5.4)

12,651

7.4

41,218

40,181

2.6

Gold (oz)

159,205

158,960

0.2

172,534

(7.7)

467,957

600,890

(22.1)

Lead (t)

13,415

14,535

(7.7)

13,010

3.1

40,194

44,736

(10.2)

Zinc (t)

25,560

26,808

(4.7)

22,930

11.5

76,093

76,498

(0.5)

Production Report - 3Q22


Silver

  • Quarterly attributable silver production of 13.6 moz (including Silverstream), decreased 5.4% vs. 2Q22 mainly driven by the expected lower ore grade and decreased volume of ore processed at San Julián Disseminated Ore Body (DOB).
  • Quarterly attributable silver production (including Silverstream) increased 7.4% vs. 3Q21 due to the higher contribution from Juanicipio, higher ore processed and ore grade at Fresnillo and higher ore grade at Saucito. This was partly offset by the expected lower ore grade and decreased volume of ore processed at San Julián DOB.
  • Year to date attributable silver production of 41.2 moz (including Silverstream) increased 2.6% vs YTD 21 mainly driven by the increased contribution of ore from Juanicipio, partially offset by the lower ore grade at San Julián DOB.

Gold

  • Quarterly attributable gold production of 159.2 koz remained flat vs. 2Q22, as a result of the expected lower ore grade and decrease in ore processed at Noche Buena and lower ore grade at Fresnillo, offset by a higher ore grade and increased ore processed at Saucito and Herradura.
  • Quarterly attributable gold production decreased 7.7% vs. 3Q21mainly due to a lower recovery rate as higher volumes of sulphide ore are processed and lower ore grade at Herradura, and a decrease in volume of ore processed and lower ore grade at Noche Buena and Ciénega. These factors were partly mitigated by the higher ore grade at Saucito.
  • Year to date attributable gold production of 468.0 koz, down 22.1% vs. YTD 21 primarily due to a decrease in the recovery rate, lower ore grade and decreased ore processed at Herradura, and a lower volume of ore processed and ore grade at Saucito and Ciénega.

By-Products

  • Quarterly attributable by-product lead and zinc production decreased 7.7% and 4.7% vs. 2Q22 respectively, mainly driven by a decreased ore processed, lower ore grade and recovery rate at San Julián DOB and lower ore grade at Saucito.
  • Quarterly attributable by-product lead and zinc production increased 3.1% and 11.5% vs. 3Q21 respectively, mainly due to a higher volume of ore processed at Fresnillo and the increased contribution at Juanicipio, partly offset by decreased volumes of ore processed and lower ore grades at San Julián DOB and lower ore grades at Saucito.
  • Year to date attributable by-product lead production decreased 10.2% vs. YTD 21 primarily due to a decreased volume of ore processed and lower ore grade at Saucito and a lower ore grade at San Julián DOB, partially mitigated by the contribution from Juanicipio.

Development Projects

As reported in September, all construction activities related to final tie-in to the electrical grid at Juanicipio and Pyrites Plant at Fresnillo were completed. However, the state-owned electricity regulator, CFE (Comisión Federal de Electricidad), requested additional testing to verify compatibility between new and updated substation equipment installed by Juanicipio and existing older CFE infrastructure before the final tie-in to the electrical grid. The additional testing is on track, and we expect to complete this process and achieve tie-in by the end of October, with commissioning and ramp up thereafter. We now expect to reach c.60% capacity by the end of the year, lower than our earlier guidance, given this unexpected delay to final tie-in. However, our 2023 expectations for Juanicipio are unchanged. As we have been prioritising the process at Juanicipio, the timetable for the tie in of the Pyrites plant to the national electricity grid has been extended by a few weeks. We will update the market in due course on achieving this milestone.

Safety Performance

We continue to roll out our ‘I Care, We Care’ programme across the business and to focus on reporting, investigating and learning from our high potential incidents. Safety performance in the period was excellent, but we are determined to continually improve our health and safety measures. We will continue working toward identifying preventive and mitigating controls and training our workforce to achieve this goal.

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. Recruitment and training campaigns continue, albeit at a slightly slower pace than initially anticipated as a result of the tight labour market in Mexico. We expect to complete the staffing process in the Fresnillo District, San Julián and Ciénega by year end, though we do not expect this to have any material impact on our guidance.

2022 outlook

We remain on track to meet our 2022 full year guidance of 50.5 to 56.5 moz of attributable silver (including Silverstream) and 600 to 650 koz of attributable gold production.