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 22.6% of the Group's total silver in 2021 and generating 16.1% of total adjusted revenue.

Ownership: 100% Fresnillo plc
Location: Zacatecas
Commodity: Silver
Operational since: 1554
Facilities: Underground mine and flotation plant
Workforce: 1,453 employees, 2,310 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: 99.5 Silver (moz), 305 Gold (oz)
Mine Life: 6.0 at 6,616 tpd (2020: 6.6), (2,216k tpy)


Mine Production

 

1Q22

4Q21

% change

1Q21

FY21

FY20

% change

Ore processed (t)

575,499

528,103

9.0

561,360

2,216,467

2,336,943

(5.2)

Production

Silver (koz)



3,015



2,655



13.5



3,260



11,986



13,055



(8.2)

Gold (oz)

8,480

8,648

(1.9)

8,375

33,743

38,388

(12.1)

Lead (t)

4,787

4,525

5.8

4,492

18,796

21,319

(11.8) 

Zinc (t)

9,381

10,025

(6.4)

7,143

34,530

34,116

1.2 

Ore grades

Silver (g/t)



179



170



5.6



203



186



194



(4.0)

Gold (g/t)

0.64

0.71

(9.5)

0.69

0.68

0.73

(6.9)

Lead %

0.99

1.03

(3.6)

0.95

1.01

1.08

(6.5)

Zinc %

2.24

2.65

(15.5)

1.82

2.20

2.07

6.1

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)

11,986 (FY21) % (8.2) Change

Gold (oz)

33.743 (FY21) % (12.1) Change

Lead (t)

18,796 (FY21) % (11.8) Change

Zinc (t)

34,530 (FY21) % (1.2) Change

Financial Highlights

Adjusted Revenue (US$m, FY21)

459.5 % 12.8 Change

Segment Profit (US$m, FY21)

224.6 % 17.6 Change

Capital Expenditure (US$m, FY21)

108.3 % 17.0 Change

Exploration (US$m, FY21)

9.3 % 1.1 Change

1Q22

  • Quarterly silver production increased 13.5% vs. 4Q21 due to a higher volume of ore processed as a result of regaining access to some mining areas following the commissioning of the pumping station during the quarter. We also saw the positive impact of improved labour resource allocation and the expected higher ore grade.

  • Quarterly silver production decreased 7.5% vs 1Q21 primarily due to a lower ore grade resulting from the impact of the labour reform in Mexico and operational challenges, as set out in prior quarters, restricted operational flexibility.

  • Mine development rates remained flat quarter-on-quarter at an average of 2,866m per month in 1Q22 (4Q21: 2,832m per month), primarily due to the covid-related absenteeism experienced in January. February and March saw development rates above 2,900m which gives us confidence that we can regain a rate of 2,900 to 3,100 m per month on average during 1H22, as previously targeted.

  • Following a field trial in a production zone, the tunnel boring machine (TBM) is being relocated back to a development area which has more advantageous geomechanical characteristics than those found in production areas. This relocation will occur over the course of the following quarter, and therefore we do not expect to see any contribution from the TBM towards the mine’s development rate until the second half of the year.

  • Actions to address the impact of the labour reforms (in particular recruitment campaigns and training) are ongoing and we expect to complete that process in the third quarter.

  • Quarterly by-product gold production decreased 1.9% vs. 4Q21 driven by a lower ore grade, mitigated by a higher volume of ore processed.
  • Quarterly by-product gold production increased 1.3% vs. 1Q21 due to a higher recovery rate, offset by a lower ore grade.
  • The silver ore grade in 2022 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.