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

 

4Q21

3Q21

% change

4Q20

FY21

FY20

% change

Ore processed (t)

528,103

547,140

(3.5)

590,449

2,216,467

2,336,943

(5.2)

Production

Silver (koz)



2,655



2,722



(2.5)



3,213



11,986



13,055



(8.2)

Gold (oz)

8,648

7,983

8.3

9,485

33,743

38,388

(12.1)

Lead (t)

4,525

4,904

(7.7)

5,254

18,796

21,319

(11.8) 

Zinc (t)

10,025

8,958

11.9

9,051

34,530

34,116

1.2 

Ore grades

Silver (g/t)



170



170



0.0



190



186



194



(4.0)

Gold (g/t)

0.71

0.62

13.9

0.71

0.68

0.73

(6.9)

Lead %

1.03

1.07

(4.1)

1.08

1.01

1.08

(6.5)

Zinc %

2.65

2.27

16.4

2.19

2.20

2.07

6.1


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

4Q21

  • Quarterly silver production was down 2.5% and 17.4% vs. 3Q21 and 4Q20 driven by the ongoing staff vacancies related to the new labour reform, higher Covid-19 absenteeism and a higher workforce rotation. This in turn has affected equipment availability and utilisation rates as fewer specialised mechanics or trained machine operators are available. In addition, following the power cut last quarter, as previously reported, which temporarily limited the water pumping capacity and affected some mining areas and haulage, we continued to see some residual impact in the quarter. However, a new pumping station is expected to be finalised in the coming weeks, and no further impact is expected from 2Q22 onwards.

  • Full year silver production was down 8.2% due to a lower volume of ore processed and lower ore grade as a result of the issues mentioned above, along with a number of other factors through the year including additional rehabilitation and maintenance of certain ramps and delayed access to Eastern areas of the mine in 1Q21, a temporary ventilation system failure and an increased presence of water in the San Alberto area during 2Q21.

  • Mine development rates marginally increased quarter-on-quarter to an average of 2,832 per month in 4Q21 (3Q21: 2,798m per month), primarily driven by the issues noted above in addition to the tunnel boring machine (TBM) advancing through an area of poor rock quality. We expect to regain a rate of 2,900 to 3,100 m per month on average during 1H22.

  • Quarterly by-product gold production increased 8.3% vs. 3Q21 driven by a higher ore grade, partially offset by a lower volume of ore processed.

  • Quarterly by-product gold production decreased 8.8% vs. 4Q20 due to a lower volume of ore processed.

  • Full year by-product gold production decreased 12.1% vs. FY20 due to a lower ore grade and volume of ore processed.

  • The silver ore grade in 2022 is estimated be in the range of 190-210 g/t, while the gold ore grade is estimated to remain in the range of 0.50-0.70 g/t.