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

 

3Q20

2Q20

% change

3Q19

% change

YTD20

YTD19

% change

Silver (koz)

12,572

12,944

-2.9

12,624

-0.4

38,063

38,633

-1.5

Silverstream (koz)

709

648

9.4

659

7.6

2,037

2,207

-7.7

Total Silver (koz)

13,281

13,592

-2.3

13,283

-0.0

40,100

40,840

-1.8

Gold (oz)

172,718

184,356

-6.3

209,752

-17.7

554,037

642,169

-13.7

Lead (t)

15,144

16,180

-6.4

15,561

-2.7

45,229

40,725

11.1

Zinc (t)

26,320

26,726

-1.5

25,340

3.9

75,701

67,746

11.7

Operational Highlights - 1H20 vs 1H19

  • Production at underground mines relatively unaffected by COVID-19 in 2Q20; six weeks suspension of mining activities at the Herradura district.
  • Silver production of 26.8 moz (including Silverstream), down 2.7%, and gold production of 381.3 koz, down 11.8%.
  • Ongoing tests at Herradura leaching pads resulted in an increase of 119.3 koz of gold in inventory as of 1 Jan 2020 with a US$65.1M favourable effect on the income statement.
  • Construction of Juanicipio slowed in 2Q20 due to certain COVID-related work restrictions but remains on track to be concluded by mid 2021 as the critical path remained unaffected and mine development continued.
  • Construction of pyrites plant (phase II) at Fresnillo continued to progress, commissioning expected 2H20. Possible delay in final inspections by the authority as a result of C-19, could defer start-up of commercial production from 3Q20 to 4Q20.
  • Optimisation of the Fresnillo flotation plant to cope with higher content of lead and zinc advanced according to plan and is expected to be concluded by 2H20. However commercial production is expected in 2021 as connection of the current and new flotation circuits has been postponed to year end to prioritise operational continuity in 2020.
  • Programme to control costs and further operational measures to increase productivity continued to be implemented.
  • 2020 exploration budget has been revised and reduced to US$120m (US$135m previously), reflecting limited ability to explore certain prospects due to travel restrictions related to COVID-19; while capex has been reduced to US$525m (US$655m previously), reflecting the deferral of some expenditures to 2021, particularly at Juanicipio and San Julián.

Operational Highlights - 3Q20


Silver

  • Quarterly attributable silver production of 13.3 moz (incl. Silverstream), down 2.3% vs. 2Q20 driven by lower ore grade and volume of ore processed at Fresnillo, mitigated by a higher ore grade at San Julián Disseminated Ore Body (DOB) and development ore from Juanicipio being processed for the first time.
  • Quarterly attributable silver production (incl. Silverstream) remained flat vs. 3Q19 due to higher ore grade at San Julián (DOB) and development ore from Juanicipio being processed for the first time, offset by the lower volume of ore processed at Fresnillo.
  • Year-to-date attributable silver production of 40.1 moz (incl. Silverstream), down 1.8% vs YTD19 due to expected lower ore grade at Saucito, and to a lesser extent, a decrease in volume of ore processed and lower ore grade at San Julián Veins and a lower contribution from the Silverstream, mitigated by the higher ore grade at San Julián DOB and development ore from Juanicipio being processed for the first time.

Gold

  • Quarterly attributable gold production of 172.7 koz, down 6.3% vs. 2Q20, due to the lower overall speed of recovery and ore grade at both Herradura and Noche Buena. This resulted from the lower volumes of ore deposited in 2Q20 following the COVID-19 operational restrictions, which affected recovery cycle at the leaching pads.
  • Quarterly and year-to-date attributable gold production decreased 17.7% and 13.7% vs. 3Q19 and YTD19 respectively due to a lower volume of ore processed at Herradura and Noche Buena as a result of COVID-19 related restrictions, as described in the previous quarter.

By-products

  • Quarterly attributable by-product lead and zinc production decreased 6.4% and 1.5% respectively vs. 2Q20, driven primarily by lower ore grades at Fresnillo, mitigated by higher ore grades at Saucito.
  • Quarterly attributable by-product lead production decreased 2.7% vs. 3Q19 due to a lower ore grade and volume of ore processed at Fresnillo, mitigated by a higher ore grade at Saucito.
  • Quarterly attributable by-product zinc production increased 3.9% vs. 3Q19 due to a higher ore grade at Saucito, offset by a lower volume of ore processed and ore grade at Fresnillo.
  • Year-to-date attributable by-product lead and zinc production increased 11.1% and 11.7% vs. YTD19 respectively, mainly due to a higher ore grade at Saucito.

Development Projects

  • As expected, Juanicipio concluded the preparation of its first production stope and development ore was processed at the Fresnillo plant during the third quarter. Further progress was achieved on the construction of the Juanicipio processing plant, which is expected to start commissioning by mid-2021.
  • Construction of Pyrites plant (phase II) at Fresnillo district almost concluded. However, as previously announced, possible delay in final inspections by authorities due to COVID-19 restrictions, which could defer start-up to the end of 2020.
  • The Fresnillo flotation plant optimisation to cope with higher content of lead and zinc is progressing according to plan and is expected to be concluded on time during 4Q20.

2020 Outlook

2020 silver production guidance remains in the range of 51 to 56 moz (including Silverstream) while gold production is now expected to be in a range of 745 to 775 koz (previously 785 to 815 koz) as a result of the reduced number of mine operators at Herradura due to COVID-19 preventive measures to protect the vulnerable personnel and lower than expected ore grades at the Dynamic Leaching Plant, together with restricted access to deeper areas at the Noche Buena mine.