Fresnillo

One of the world’s oldest continuously operated mines, the Fresnillo mine has been producing silver for more than five centuries; and recently producing 24.6% of the Group's total silver in 2020 and generating 16.3% of total adjusted revenue.

Ownership: 100% Fresnillo plc
Location: Zacatecas
Commodity: Silver
Operational since: 1554
Facilities: Underground mine and flotation plant
Workforce: 1,253 employees, 2,315 contractors
Milling Capacity: 8,000 tpd / 2,640,000 tpy
Average ore grade in reserves: 265 Silver (g/t), 0.76 Gold (g/t)
Total Reserves: 131.0 Silver (moz), 378 Gold (oz)
Mine Life: 6.6 years (2019: 8.1)


Mine Production

 

2Q21

1Q20

% change

2Q20

1H21

1H20

% change

Ore processed (t)

579,863

561,360

3.3

596,115

1,141,233

1,194,905

(4.5)

Production

Silver (koz)



3,348



3,260



2.7



3,611



6,608



6,756



(2.2)

Gold (oz)

8,736

8,375

4.3

10,828

17,112

19,609

(12.7)

Lead (t)

4,875

4,492

8.5

6,860

9,367

11,477 

(18.4) 

Zinc (t)

8,404

7,143

17.7

10,978

15,546 

17,737 

(12.3) 

Ore grades

Silver (koz)



201



203



(1.1)



209



202



196



2.7

Gold (oz)

0.69

0.69

0.8

0.79

0.69

0.72

(4.2)

Lead (t)

0.99

0.95

4.4

1.33

0.97

1.14

(14.7)

Zinc (t)

2.07

1.82

13.4

2.55

1.95

2.12

(7.9)


Annual Production

AR20 Fresnillo Mine Kpis1Fresnillo mine production excludes ore processed and production from the Juanicipio development project. 22020 reserves as of 31 May 2020. 32020 resources as of 31 May 2020.

AR20 Fresnillo Mine Financial Performance4Financial figures for Fresnillo exclude ore sales from Juanicipio. 5Margin defined as average realised price less cash cost per ounce.

History

1961

Peñoles acquires 60% interest in Cia Fresnillo

1996

Peñoles acquires remaining 40% interest in Cia Fresnillo

2004

Mill capacity is increased from 4,500 to 7,000 tpd

Production

Silver (koz)

13,055 (FY20) % 0.4 Change

Gold (oz)

38,388 (FY20) % (26.5) Change

Lead (t)

21,319 (FY20) % (0.7) Change

Zinc (t)

34,116 (FY20) % 8.2 Change

Financial Highlights

Adjusted Revenue (US$m, FY20)

407.2 % 12.6 Change

Segment Profit (US$m, FY20)

191.0 % 16.0 Change

Capital Expenditure (US$m, FY20)

92.6 % (46.4) Change

Exploration (US$m, FY20)

9.2 % (30.8) Change

2Q21

  • Quarterly silver production was up 2.7% vs. 1Q21 due to a higher volume of ore processed resulting from a decrease in Covid-19 related absenteeism

  • Quarterly silver production decreased 7.3% vs. 2Q20 driven by a lower ore grade, in line with expectations, and to a lesser extent, lower volume of ore processed as a result of a temporary ventilation system failure and an increased presence of water in the San Alberto area in June, which adversely impacted development and mining activities.

  • First half silver production decreased 2.2% vs. 1H20 due to a lower volume of ore processed resulting from the issues mentioned above and the additional rehabilitation and maintenance of certain ramps as reported in 1Q21. This was mitigated by a higher ore grade partly as a result of the enhanced dilution control during the year.

  • Mine development rates decreased slightly quarter on quarter to an average of 3,224m per month in 2Q21 (1Q21: 3,346m per month), driven by the reasons mentioned above and the performance of the tunnel boring machine. The target remains to develop on average between 3,300 – 3,500m per month in 2021.

  • Quarterly by-product gold production increased 4.3% vs. 1Q21 driven by a higher volume of ore processed.

  • Quarterly and first half by-product gold production decreased 19.3% and 12.7% vs. 2Q20 and 1H20 respectively due to lower ore grades and a decrease in volumes of ore processed.

  • The silver ore grade in 2021 is expected to remain in the range of 190-210 g/t, while the gold ore grade is expected to remain in the range of 0.55-0.70 g/t.

2021 Priorities

  • Maintain strict safety protocols.
  • Our target remains to develop on average between 3,300 – 3,500m per month in 2021.
  • Continue to monitor progress against the various action plans.
  • Continue to focus on dilution control.
  • Receive electrical permit approval for the Pyrites plant.
  • Ramp up Pyrites Plant.