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

 

3Q19

2Q19

% change

3Q18

Ore processed (t)

648,646

619,852

4.6

613,794

         

Production

       

Silver (koz)

3,408

3,455

-1.3

3,745

Gold (oz)

15,601

13,489

15.7

10,469

Lead (t)

7,037

5,233

34.5

4,917

Zinc (t)

10,225

6,710

52.4

8,096

         

Ore grades

       

Silver (g/t)

183

192

-4.8

211

Gold (g/t)

0.99

0.90

9.4

0.68

Lead %

1.24

0.97

27.2

0.89

Zinc %

2.14

1.60

33.9

1.81

Annual Production

AR18 FRES Mine Production

AR18 FRES Mine Financial Performance

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.

3Q19

  • Silver production was broadly stable vs. 2Q19. The investments in technology and systems made during the year are starting to have a positive impact on the volumes of ore processed, while as expected, ore grade continues to be variable as the other initatives, including the infill drilling programme, sampling, actions to reduce dilution and actions to increase development rates, start to have a positive impact.

  • Quarterly and YTD silver production decreased 9.0% and 17.3% vs. 3Q18 and YTD18 due to the lower silver ore grade resulting from the differences with the geological model, higher dilution in narrower veins and limited access to higher grade areas caused by delays in development.

  • MIne performance improvement remains a key priority. The infill drilling programme continues to progress well and is expected to result in an updated and more accurate geological model. We expect better dilution control with the use of a more efficient and accurate topographic scanner and improved blasting patterns and drilling techniques to adjust for the narrower vein widths.

  • Development rates averaged 3,200 metres per month in 3Q19 with the tunnel boring machine due to begin operating in 4Q19.

  • Quarterly by-product gold production increased against all comparable periods as a result of higher ore grades.

  • Silver ore grade in 2019 is expected to remain between 190-200 g/t, while gold, lead and zinc ore grades are estimated to marginally increase to levels of 0.90 g/t, 0.95% and 1.60% respectively.

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.