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
| |
2Q19
|
1Q19
|
% change
|
2Q18
|
|
Ore processed (t)
|
619,852
|
574,347
|
7.9
|
620,906
|
| |
|
|
|
|
|
Production
|
|
|
|
|
|
Silver (koz)
|
3,455
|
2,952
|
17.0
|
3,793
|
|
Gold (oz)
|
13,489
|
11,446
|
17.8
|
10,953
|
|
Lead (t)
|
5,233
|
3,537
|
48.0
|
5,052
|
|
Zinc (t)
|
6,710
|
5,247
|
27.9
|
7,979
|
| |
|
|
|
|
|
Ore grades
|
|
|
|
|
|
Silver (g/t)
|
192
|
181
|
6.1
|
211
|
|
Gold (g/t)
|
0.90
|
0.82
|
9.8
|
0.70
|
|
Lead %
|
0.97
|
0.72
|
34.7
|
0.90
|
|
Zinc %
|
1.60
|
1.31
|
22.1
|
1.74
|
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
1H19
-
Silver grade of 187 g/t.
-
Infill drilling programme advanced – update with full year results.
-
Development rate improved in 2Q19, further improvements expected by year end.
-
Efficiencies targeted in mining process.
-
Shift optimisation.
-
Deepening the San Carlos shaft continued.
2Q19
-
Quarterly silver production increased 17.0% vs. 1Q19 due to an increase in ore throughput resulting from the improved mine coordination and operational control achieved following the investment in technology and systems together with other productivity initiatives. The increase in ore processed, together with some early stage improvements in dilution control, had a positive effect on the silver ore grade.
-
Quarterly and 1H silver production decreased 8.9% and 21.2% vs. 2Q18 and 1H18 respectively, primarily driven by lower ore grades resulting from the differences with the geological model and the delays in development as previously identified.
-
Mine performance improvement remains a key priority and a number of iniativies are on-going. The infill drilling programme has progresed well, which will result in an updated and more accurate geological model. We anticipate the lower dilution rate to continue following the introduction of operational measures and controls and the more effcient and accurate topographic scanner. With these new measurements, blasting, operational controls and mine design will be adjusted and further improvements in dilution control are expected towards the last quarter of the year.
-
Development rates averaged 3,100 mts per month in 2Q19 as more preparation and infrastructure (electricity, ventilation, waste haulage) of the mine was needed to ensure continuous improvement. Training of new personnel and improvements to maintenance programme to increase equipment availability are still underway.
-
Despite improvements achieved in 2Q19, the pace at which these initiatives are progressing is not expected to compensate for low production in 1H19. As a result, Group’s total silver production will be impacted and guidance has been adjusted.
-
Silver ore grade in 2019 is expected to be between 190-200 g/t, while gold, lead and zinc ore grades are estimated to remain around current levels of 0.85 g/t, 0.85% and 1.45 respectively.
-
Quarterly by-product gold production increased against all comparable periods as a result of higher grades.
2H19 Priorities
- Continue infill drilling programme to increase the geological certainty in the short term.
- Lower the dilution rate through operational measures & controls.
- Development rates target of 3,500m a month by year end.
- Begin operating the Tunnel Boring Machine.
- Install flotation cells at the beneficiation plant, 2nd stage of the expansion.
- Deepening of the San Carlos shaft to continue, expected to be commissioned in 2020.
- Construction of the tailings flotation plant to continue, expected in 2H20.
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