Herradura

One of Mexico’s largest open-pit gold mines, producing 52.0% of the Group's total gold in 2017 and generating 27.2% of total adj. revenue.

Ownership: Minera Penmont (100% Fresnillo plc)
Location: Sonora
Commodity: Gold
Operational since: 1997
Facilities: Open-pit, heap leach & Merrill-Crowe plants; DLP
Workforce: 1,335 employees, 458 contractors
Average ore grade in reserves: 0.79 Gold (g/t)
Total Reserves: 7.7 Gold (moz)
Mine Life: 11.6 (2016: 8.6)

Quarterly Production

  2Q18 2Q17 % change 1Q18
Ore processed (t) 5,605,427 6,551,791 -14.4 5,984,641
Total vol. hauled (t) 33,560,118 31,063,542 8.0 34,153,768
         
Production        
Gold (oz) 117,886 116,267 1.4 125,243
Silver (koz) 363 104 249.0 241
         
Ore grades        
Gold (g/t) 0.76 0.66 15.7 0.68
Silver (g/t) 2.60 0.87 198.5 1.86

History

1991

Drilling commenced

1997

Construction commenced

1998

Commercial production

Production

Gold (oz)

473,638 (FY17) % (9.0) Change

Silver (koz)

551 (FY17) % (13.6) Change

Financial Highlights

Adjusted Revenue (US$m, FY17)

606.8 % (7.5) Change

Segment Profit (US$m, FY17)

355.6 % (3.9) Change

Captial Expenditure (US$m, FY17)

153.2 % 94.4 Change

Exploration (US$m, FY17)

27.1 % (11.7) Change

Perfomance Highlights - 2Q18

  • Quarterly and first half gold production increased vs. the corresponding periods of 2017 as a result of: i) the ongoing inventory reduction at the leaching pads; ii) an increase in the ore grade at the Dynamic Leaching Plant as a higher volume of ore was being processed from the higher grade Valles area; and iii) a higher speed of recovery due to an intensive targeted irrigation programme and better dilution. These factors more than compensated for the lower volume of ore processed.
  • Quarterly gold production decreased 5.9% vs. 1Q18 as a result of a decrease in the inventory reduction at the leaching pads and a lower volume of ore processed. However, the previously mentioned factors were mitigated by the higher ore grade in the mined areas.
  • In 2017, as part of the future mine plan, Fresnillo decided to construct a new leaching pad in a separate area of the Herradura mine. To reduce the hauling distance from the pit to the new pad, the Group constructed an access route through certain existing leaching pads, removing and redepositing the ore in the process. These works allowed the Group to perform assays and verify certain characteristics of the ore, including the humidity of the ore deposited and the grade of gold in solution. The testing of those assays commenced in 2018 and is ongoing.
  • As a result of the information obtained to date, the Group updated its estimate of the recoverable remaining gold content in the inventories at the leaching pads resulting in an increase of 98.9 thousand ounces of gold as at 1 January 2018. This represents 1.7% of the total gold content deposited from the inception of the mine to 31 December 2017.
  • Management expects to finalise the remaining testing by the year end. The additional results may further increase management’s estimates.

Performance Highlights - 1H18

  • Consistently higher observed resources on the leaching pads lead to inventory re-statement due to higher recovery rates
  • Higher speed of recovery due to an intensive targeted irrigation programme and better dilution

Performance Targets - 2H18

  • Continue inventory analysis with an aim to conclude the process by year end
  • Complete the installation of vibrating screens to increase gold recovery by 3-4%
  • Drilling and exploration to continue at Centauro Deep and areas of influence