Fresnillo

One of the world’s oldest continuously operated mines; producing 28% of the Group's total silver in 2017 and generated 18.9% of total adjusted revenue.

Ownership: 100% Fresnillo plc
Location: Zacatecas
Commodity: Silver
Operational since: 1554
Facilities: Underground mine and flotation plant
Workforce: 1,056 employees, 1,676 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: 8.8 years (2016: 9.4)

Quarterly Production

 

3Q18

3Q17

% change

2Q18

Ore processed (t)

613,794

596,544

2.9

620,906

         

Production

       

Silver (koz)

3,745

3,516

6.5

3,793

Gold (oz)

10,469

8,819

18.7

10,953

Lead (t)

4,917

4,905

0.2

5,052

Zinc (t)

8,096

7,368

9.9

7,979

         

Ore grades

       

Silver (g/t)

211

202

4.4

211

Gold (g/t)

0.68

0.61

11.5

0.70

Lead %

0.89

0.91

-1.7

0.90

Zinc %

1.81

1.70

6.4

1.74

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)

16,512 (FY17) % 4.1 Change

Gold (oz)

38,784 (FY17) % (8.6) Change

Lead (t)

20,514 (FY17) % (3.8) Change

Zinc (t)

30,021 (FY17) % 15.9 Change

Financial Highlights

Adjusted Revenue (US$m, FY17)

421.3 % 10.1 Change

Segment Profit (US$m, FY17)

252.2 % 12.5 Change

Capital Expenditure (US$m, FY17)

111.7 % 111.6 Change

Exploration (US$m, FY17)

17.9 % 24.3 Change

Perfomance Highlights - 3Q18

  • Quarterly silver production increased 6.5% vs. 3Q17 mainly as a result of the higher ore grade from the San Alberto area and to a lesser extent, higher volume of ore processed due to increased long drilling activities at the Candelaria area.

  • Quarterly silver production remained broadly flat vs. 2Q18 (-1.3%), marginally impacted by a lower volume of ore processed.

  • Year to date silver production decreased 4.6% vs. YTD17 due to the lower ore grade. As initially reported in 2Q18 Production Report, this was due to the limited access to higher ore grade areas resulting from contractor-led ongoing delays in development and preparation.

  • As previously reported, a new contractor has now begun operating, and this is expected to increase future development rates. Following the review of the maintenance programme, further efficiencies to improve equipment availability were identified, making additional equipment purchases unnecessary.

  • Third quarter silver production was lower than previosuly anticipated as a result of the lower than expected ore throughput and ore grade extracted in some areas of the mine. To address this, an infill drilling programme has commenced with the aim of enhancing the accuracy of the geological model, providing greater certainty in short term production estimates.

  • Expected silver ore grade for the full year remains at 215-225 g/t.

  • Quarterly by-product gold production increased 18.7% and 7.8% vs. 3Q17 and YTD17 respectively mainly as a result of the higher ore grades and increased recovery rates. Quarterly gold production decreased 4.4% when compared to 2Q18 due to lower ore grade and ore processed.

  • Quarterly by-product lead production decreased 2.7% vs. 2Q18 as a result of lower ore grade and volume of ore processed.

  • YTD by-product lead and zinc production increased 4.6% and 13.4% respectively vs. YTD17 as a result of higher ore grades. 

  • Quarterly by-product zinc production increased 9.9% vs. 3Q17 as a result of higher ore grade and ore processed.

Performance Highlights - 1H18

  • 1H18 silver grade of 222 g/t. Full year 2018 silver grade expected to be: 215-225 g/t

  • US$44.8 million invested in development, infrastructure and sustaining capex

  • Development rate of 3,130 m/m

  • Continued deepening of the San Carlos shaft

  • Reduced costs as a result of vertical conveyor belt

Performance Targets - 2H18

  • Continue stabilising ore grades and ore throughput
  • Maintain development rates short term, whilst increasing them long term
  • Carry out intensive in-fill deep drilling to increase certainty in operational planning
  • Expand flotation area at the beneficiation plant
  • Continue deepening the San Carlos shaft