Herradura

One of Mexico’s largest open-pit gold mines; producing 51.4% of the Group’s total gold in 2018 and generated 27.1% of total adjusted revenue.

Ownership: Minera Penmont (100% Fresnillo plc)
Location: Sonora
Commodity: Gold
Operational since: 1997
Facilities: Open-pit, heap leach & Merrill-Crowe plants; DLP
Workforce: 1,500 employees, 516 contractors
Mine Life: 13.2 years (2017: 11.6)

Quarterly Production

 

2Q19

1Q19

% change

2Q18

Ore processed (t)

5,466,791

5,695,073

-4.0

5,605,427

Total vol. hauled (t)

32,100,458

29,132,741

10.2

33,560,118

         

Production

       

Gold (oz)

119,987

116,879

2.7

117,886

Silver (koz)

280

354

-20.9

363

         

Ore grades

       

Gold (g/t)

0.84

0.81

3.7

0.76

Silver (g/t)

2.48

2.90

-14.5

2.60

AR18 Herradura Mine Production

AR18 Herradura Financial Performance

History

1991

Drilling commenced

1997

Construction commenced

1998

Commercial production

Production

Gold (oz)

474,168 (FY18) % 0.1 Change

Silver (koz)

1,523 (FY18) % 176.4 Change

Financial Highlights

Adjusted Revenue (US$m, FY18)

608.2 % 0.2 Change

Segment Profit (US$m, FY18)

323.0 % (9.2) Change

Captial Expenditure (US$m, FY18)

116.0 % (24.3) Change

Exploration (US$m, FY18)

33.0 % 21.8 Change

1H19

  • Construction of the 13th leaching pad concluded and irrigation commenced.

  • Infill drilling in the Centauro pit continued - Pit expansion continues to be reviewed on an on-going basis.

  • Positive results following dual fuel systems pilot for haulage equipment – further rollout on-going.

2Q19

  • Quarterly gold production increased 2.7% vs. 1Q19 due to higher ore grade and higher recovery rate resulting from increased irrigation at the pads; offset by lower volume of ore deposited and processed due to delay in construction of additional leaching pad.

  • Gold production slightly increased driven by higher ore grade vs 2Q18; offset by slower overall speed of recovery as described in prior quarter. Similarly, 1H gold production decreased 2.6% vs. 1H18 due to slower overall speed of recovery resulting from higher level of the leaching pads, which increased residence time of solution in the pads; mitigated by higher ore grade from increased production at 2nd line of the Dynamic Leaching Plant.

  • Construction of the 13th leaching pad delayed by at least 6 months due to longer than anticipated permitting process that in turn affected coordination of the subsequent activities. Leaching pad now expected to be concluded in early 3Q19 and irrigation will commence in late July. However, given the two to three months irrigation cycle, gold production is expected to be affected in 2H19, therefore Group’s gold guidance has been decreased.

  • As previously disclosed, the number of components to which stripping costs are allocated were reduced from two to one in 2H18. This change resulted in recognising the entirety of the stripping cost in the income statement as opposed to partially capitalising it. This will have an adverse effect half on half as the total volume hauled in 1H18 was 67.7 million tonnes but only 39.1 million tonnes were expensed; while the total volume hauled in 1H19 of 61.2 million tonnes will be taken to costs in 1H19. This increase impacted adjusted production costs by an additional US$46 million.

  • Expected gold ore grade in 2019 remains at 0.70-0.75 g/t.

2H19 Priorities

  • Continue infill drilling in the Centauro pit to re-assess pit expansion.
  • Drilling and exploration to continue at Centauro Deep and areas of influence.
  • Continue gradual conversion of haulage equipment to a dual fuel system.
  • Installation of tails thickener at the Dynamic Leaching Plants.