San Julián (Phase I and II)
| Ownership: |
100% Fresnillo plc |
| Location: |
Chihuahua/Durango border |
| Commodity: |
Silver/Gold |
| Facilities: |
Underground mine, flotation plant and a dynamic leaching plant |
| Workforce: |
143 employees, 1,717 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$515 million |
| Life of Mine: |
3.5 years Veins, 6.3 years Disseminated Ore Body (2017: 9.0) |
The San Julián silver-gold project is a cornerstone of our current and future production goals. In 2018 it contributed 24% to total silver production and generated 16% of total adjusted revenue.. The geological potential identified in the region thus far may be sufficient to establish a new mining district in the future. The San Julián project includes construction of two plants: i) a dynamic leaching plant to treat ore from the veins and ii) a flotation plant with 6,000 tpd capacity to process ore from the disseminated body.
Quarterly Production
| |
1Q19
|
1Q18
|
% change
|
4Q18
|
|
Ore processed - Phase I (t)
|
322,883
|
310,742
|
3.9
|
337,428
|
|
Ore processed - Phase II (t)
|
545,341
|
531,459
|
2.6
|
587,905
|
| |
|
|
|
|
|
Production - Phase I
|
|
|
|
|
|
Gold (oz)
|
17,632
|
19,791
|
-8.3
|
23,003
|
|
Silver (koz)
|
1,084
|
3,568
|
-17.2
|
3,903
|
| |
|
|
|
|
|
Production - Phase II
|
|
|
|
|
|
Gold (g/t)
|
508
|
680
|
-25.3
|
938
|
|
Silver (g/t)
|
1,868
|
2,123
|
-12.0
|
2,524
|
|
Lead (%)
|
1,730
|
1,328
|
30.3
|
2,017
|
|
Zinc (%)
|
5,682
|
5,252
|
8.2
|
6,479
|
| |
|
|
|
|
|
Ore grades - Phase I
|
|
|
|
|
|
Gold (g/t)
|
1.78
|
1.97
|
-9.8
|
2.11
|
|
Silver (g/t)
|
114.81
|
158.35
|
-27.5
|
137.22
|
|
Ore grades - Phase II
|
|
|
|
|
|
Gold (g/t)
|
0.08
|
0.09
|
-16.5
|
0.1
|
|
Silver (g/t)
|
124.45
|
146.64
|
-15.1
|
158.09
|
|
Lead (%)
|
0.43
|
0.40
|
8.0
|
0.51
|
|
Zinc (%)
|
1.37
|
1.31
|
4.6
|
1.48
|
Financial Highlights
Adjusted Revenue
(US$m, FY18)
366.5
% 27.6 Change
Segment Profit
(US$m, FY18)
176.5
% 1.0 Change
Capital Expenditure
(US$m, FY18)
83.1
% 5.1 Change
Exploration
(US$m, FY18)
14.3
% 472.0 Change
Highlights - 1Q19
San Julián Veins
-
Quarterly silver and gold production decreased 25.0% and 7.7% respectively vs. 1Q18 due to a lower than expected ore grade, which is temporary, mitigated by a higher volume of mineral processed.
-
Similarly, quarterly silver and gold production decreased 21.4% and 20.1% respectively vs. 4Q18, due to the lower ore grade and to a lesser extent, a lower volume of ore processed resulting from mechanical difficulties with the mill.
-
Gold ore grades expected to be in range of 1.6-1.7 g/t and silver grades to average between 130-140 g/t.
San Julián Disseminated Ore Body
-
Quarterly silver production decreased 12.0% vs. 1Q18 due to a lower ore grade, mitigated by a higher volume of ore processed. Compared to the previous quarter, silver production decreased 26.0% resulting from a lower ore grade and volume of ore processed.
-
Quarterly gold production decreased 25.3% vs. 1Q18 due to a lower ore grade and a lower recovery rate. Gold production decreased 45.8% due to a lower ore grade, recovery rate and volume of ore processed.
-
Decrease in silver ore grade expected to be temporary and guidance for the full year remains between 160-170 g/t.
-
Quarterly by-product lead production increased 30.3% vs. 1Q18 due to a higher ore grade and higher recovery rate. Compared to 4Q18, by-product lead production decreased 14.2% due to a lower ore grade and lower volume of ore processed, mitigated by a higher recovery rate.
-
Quarterly by-product zinc production increased 8.2% vs. 1Q18 due to a higher ore grade. When compared to 4Q18, by-product zinc production decreased 12.3% driven by a lower ore grade and volume of ore processed.
2018 - Summary
-
Sustainably operating both phases above their nameplate capacities, despite low water availability restricting processing capacity in 1H18
-
Indigenous consultation concluded, construction of the water reservoir began
-
Resources within the San Julián area of influence increased following an intensive exploration programme
-
Completed second stage of the expansion of tailings dam, a downstream structure
-
Full capacity achieved in 2H18 following low water availability in 1H18 – Initiatives taken to reduce risk going forward
Performance Targets - 2019
- Conclude the construction of the water reservoir by year end
- Ensure sufficient water is available to run the mine at full capacity while water reservoir is under construction
- Continue preparation of the mine
- Focus on converting resources to reserves, including exploring the district geological potential
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