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% of the Group's total silver in 2018 and generating 16.9% of total adjusted revenue.
| Ownership: |
100% Fresnillo plc |
| Location: |
Zacatecas |
| Commodity: |
Silver |
| Operational since: |
1554 |
| Facilities: |
Underground mine and flotation plant |
| Workforce: |
1,122 employees, 2,159 contractors |
| Milling Capacity: |
8,000 tpd / 2,640,000 tpy |
| Average ore grade in reserves: |
240 Silver g/t, 0.79 Gold g/t |
| Total Reserves: |
179.7 moz Silver, 590 oz Gold |
| Mine Life: |
8.6 years (2017: 8.8) |
Quarterly Production
| |
1Q19
|
1Q18
|
% change
|
4Q18
|
|
Ore processed (t)
|
574,347
|
637,410
|
-9.9
|
571,330
|
| |
|
|
|
|
|
Production
|
|
|
|
|
|
Silver (koz)
|
2,952
|
4,336
|
-31.9
|
3,244
|
|
Gold (oz)
|
11,446
|
10,431
|
9.7
|
10,437
|
|
Lead (t)
|
3,537
|
5,783
|
-38.8
|
3,867
|
|
Zinc (t)
|
5,247
|
8.866
|
-40.8
|
6,153
|
| |
|
|
|
|
|
Ore grades
|
|
|
|
|
|
Silver (g/t)
|
181
|
232
|
-21.8
|
199
|
|
Gold (g/t)
|
0.82
|
0.66
|
24.2
|
0.76
|
|
Lead %
|
0.72
|
1.00
|
-28.1
|
0.79
|
|
Zinc %
|
1.31
|
1.90
|
-30.9
|
1.52
|
Annual Production
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)
15,117
(FY18)
% (8.4) Change
Gold
(oz)
42,290
(FY18)
% 9.0 Change
Lead
(t)
19,619
(FY18)
% (4.4) Change
Zinc
(t)
31,094
(FY18)
% 3.6 Change
Financial Highlights
Adjusted Revenue
(US$m, FY18)
378.3
% 10.2 Change
Segment Profit
(US$m, FY18)
211.5
% (16.1) Change
Capital Expenditure
(US$m, FY18)
121.1
% 8.4 Change
Exploration
(US$m, FY18)
18.2
% 1.7 Change
Highlights - 1Q19
-
Quarterly silver production decreased 31.9% vs. 1Q18 due to a lower ore grade resulting from the previously described differences with the geological model, lowerequipment availability and the lower than expected volumes of development ore as a result of the narrower veins.
-
As described in prior quarters, we are taking a number of actions to address the Fresnillo mine performance, including intensifying our infill drilling programmes, controlling dilution, improving coordination amongst operating teams, improving the maintenence programme as well as making further investment in equipment and infrastructure. We are also trialing semi-automatic drilling equipment to limit down time during shift changes, and improving the speed of site access for operational staff to improve equipment utilisation rates.
-
In addition, we have agreed to extend new employees' shifts into Sundays. We expect this will have a positive impact on volumes of ore processed after a period of training.
-
Silver production is down 9.0% vs. Q418 driven by the lower silver ore grade. This is due to the aforementioned differences with the geological model which are being addressed through an intense infill drilling programme.
-
Silver production is expected to gradually increase during the year, albeit with some monthly fluctuations, as the actions described above take effect. As a result, silver production will be weighted to the second half of the year.
-
Expected silver ore grade in 2019 remains between 210-220 g/t.
-
Quarterly by-product gold production increased 9.7% vs. both, 1Q18 and 4Q18, due mainly to the higher ore grade.
-
Quarterly by-product lead and zinc production decreased 38.8% and 40.8% respectively vs. 1Q18 due to a lower ore grade, volume of ore processed and to a lesser extent, lower recovery rate.
-
When compared to the previous quarter, by-product lead and zinc production also decreased 8.5% and 14.7% repectively driven by a lower ore grade.
2018 - Summary
-
Silver grade of 214 g/t
-
Development rates declined
-
New contractor hired during the year
-
70,322 metres of in-fill drilling carried out
-
Deepening the San Carlos shaft continued
Performance Targets - 2019
- Infill drilling programme to continue
- Management control of the development rates to be enhanced
- Tunnel boring machine to commence in 2H19
- Deepening of the San Carlos shaft to continue, expected to be commissioned in 2020
- Construction of the tailings flotation plant to continue
- Install flotation cells at the beneficiation plant, 2nd stage of the expansion
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