San Julián (Phase I and II)

The San Julián silver-gold project is a cornerstone of our 2018 production goals. Contributing 18% of total silver production and generating 6.9% of total adjusted revenue (2017). The geological potential identified in the region thus far may be sufficient to establish a new mining district in the future. The San Julián project includes construction of two plants:
i) a dynamic leaching plant to treat ore from the veins and ii) a flotation plant with 6,000 tpd capacity to process ore from the disseminated body.

Ownership: 100% Fresnillo plc
Location: Chihuahua/Durango border
Commodity: Silver/Gold
Facilities: Underground mine, flotation plant and a dynamic leaching plant
Workforce: 125 employees, 1,411 contractors
Operational since: 2H16 (Phase I) / 1H17 (Phase II)
Anticipated Production: Avg. annual production of 14.2 moz silver, 49.3 koz gold
Pre-operative Capex: US$515 million
Life of Mine: 9.0 Years

Quarterly Production

  1Q18 1Q17 % change 4Q17
Ore processed - Phase I (t) 310,742 306,082 1.5 325,032
Ore processed - Phase II (t) 531,459 - n/a 496,907
Production - Phase I        
Gold (oz) 19,111 20,129 -5.1 19,248
Silver (koz) 1,445 1,386 4.3 1,462
Production - Phase II        
Gold (g/t) 680 - n/a 784
Silver (g/t) 2,123 - n/a 2,595
Lead (%) 1,328 - n/a 1,937
Zinc (%) 5,252 - n/a 4,567
Ore grades - Phase I        
Gold (g/t) 1.97 2.18 -9.7 1.92
Silver (g/t) 158.35 156.68 1.1 153.43
Ore grades - Phase II        
Gold (g/t) 0.09 - n/a 0.11
Silver (g/t) 146.64 - n/a 190.32
Lead (%) 0.40 - n/a 0.51
Zinc (%) 1.31 - n/a 1.23

Financial Highlights

Adjusted Revenue (US$m, FY17)

287.2 % 326.1 Change

Segment Profit (US$m, FY17)

174.7 % 281.4 Change

Capital Expenditure (US$m, FY17)

79.1 % (41.0) Change

Exploration (US$m, FY17)

2.5 % n/a Change

Production Highlights: 1Q18

San Julián (Phase I – veins):

  • Quarterly silver production increased 4.3% vs. 1Q17 as a result of a higher recovery rate due to the optimisation of the plant process, higher volume of ore processed and a higher ore grade.
  • Quarterly silver production remained at similar levels vs. 4Q17 (-1.2%).
  • Quarterly gold production decreased 5.1% vs. 1Q17 as a result of the expected lower ore grade which was mitigated by the higher recovery rate. Quarterly gold production vs. 4Q17 remained at similar levels (-0.7%).

San Julián (Phase II – JM disseminated ore body):

  • Quarterly silver production decreased 18.2% vs. 4Q17 as a result of a lower ore grade due to ground instability in certain areas temporarily preventing access. This resulted in the extraction of ore from lower grade areas of the mine as well as processing ore from the development stockpile, extracted during the pre-operative period. This factor has the potential to impact Phase II from April to May though we expect production to recover by 3Q18 and for budgeted production to be met by year end.
  • Quarterly gold production decreased 13.2% vs. 4Q17 as a result of lower ore grade which was mitigated by the higher volume of ore processed.
  • Similarly, quarterly lead production decreased 31.4% vs. the previous quarter as a result of the lower ore grade and recovery rate which was mitigated by a higher volume of ore processed.
  • Quarterly zinc production increased 15.0% vs. 4Q17 due to the higher ore grade and volume of ore processed.

Performance Targets - 2018

  • Obtain permits to construct water reservoir
  • Intensify exploration
  • Expand tailings dam