San Julián (Phase I and II)

San Julian silver-gold mine contributed 25.1% to total silver production and generated 15.7% of total adjusted revenue (2020).

Ownership: 100% Fresnillo plc
Location: Chihuahua/Durango border
Commodity: Silver/Gold
Operational since: 2H16 (Vein System) / 2Q17 (Disseminated Ore Body)
Facilities: Underground mine, flotation plant and a dynamic leaching plant
Workforce: 382 employees, 1,829 contractors
Life of Mine: 2.8 years VS (2019: 3.4), 3.6 years DOB (2019: 5.4)

The San Julián silver-gold project is a cornerstone of our current and future production goals. 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

 

2Q21

1Q21

% change

2Q20

Ore processed: Phase I - Veins (t)

302,475

288,673

4.8

312,796

Ore processed: Phase II - DoB (t)

555,055

448,674

23.7

559,564

         

Total Production San Julian

       

Gold (oz)

15,546

13,802

12.6

16,361

Silver (koz)

5,219

3,430

52.2

3,104

         

Production: Phase I - Veins

       

Gold (oz)

14,320

12,828

11.6

15,658

Silver (koz)

1,027

966

6.3

1,047

         

Production: Phase II - DoB

       

Gold (g/t)

1,226

974

25.9

703

Silver (g/t)

4,192

2,465

70.1

2,057

Lead (%)

2,813

1,694

66.1

1,576

Zinc (%)

5,751

4,783

20.2

4,581

         

Ore grades: Phase I - Veins

       

Gold (g/t)

1.56

1.47

5.8

1.63

Silver (g/t)

115

115

0.4

113

Ore grades: Phase II - DoB

       

Gold (g/t)

0.12

0.12

(0.4)

0.08

Silver (g/t)

275

197

39.3

133.96

Lead (%)

0.61

0.47

29.5

0.37

Zinc (%)

1.38

1.38

(0.1)

1.08

Annual Production

AR20 San Julian Mine Kpis

12020 reserves as of 31 May 2020.  22020 resources as of 31 May 2020.

AR20 San Julian Mine Financial Performance 

Financial Highlights

Adjusted Revenue (US$m, FY20)

409.3 % 20.5 Change

Segment Profit (US$m, FY20)

211.7 % 65.1 Change

Capital Expenditure (US$m, FY20)

36.3 % (44.4) Change

Exploration (US$m, FY20)

20.6 % 37.3 Change

2Q21

San Julián Veins

  • Quarterly silver production increased 6.3% vs. 1Q21 due to a higher volume of ore processed as a result of efficiency gains in the maintenance programme in 2Q21, though ore throughput in 1Q21 was adversely impacted by the reported electricity outage by the Mexican state-owned electricity utility Comisión Federal de Electricidad (CFE) in February.

  • Gold production increased 11.6% vs. 1Q21 due to a higher volume of ore processed for reasons explained above and a higher ore grade.
  • Quarterly and first half gold production decreased 8.5% and 10.2% vs. 2Q20 and 1H20 respectively due to a lower volume of ore processed and lower ore grade due to the depletion of higher ore grade areas.

  • Quarterly silver production decreased 2.0% vs. 2Q20 due to a lower volume of ore processed, mitigated by a higher ore grade.

  • 1H silver production decreased 6.1% vs. 1H20 due to a lower volume of ore processed for reasons explained above.

  • We continue to expect the 2021 silver and gold ore grades to average 110-120 g/t and 1.30-1.50 g/t, respectively.

San Julián Disseminated Ore Body (DOB)

  • Quarterly silver production increased 70.1% vs. 1Q21, due to a higher than expected ore grade as a result of: i) the positive variation with the geological model in the Central area of the ore body; and ii) access to higher ore grade areas following the mine resequencing in 2019, as mentioned in previous quarters.

  • An increase in the volume of ore processed driven by efficiency gains in the maintenance programme further benefited 2Q21 silver production, though volumes were temporarily impacted in 1Q21 by the damage to the lead circuit housing at the end of 2020 and the electricity outage by the CFE in February, as previously reported.
  • Quarterly silver production increased 103.8% vs. 2Q20 due to a higher than expected ore grade, as explained above.

  • First half silver production increased 60.2% vs. 1H20 due to a higher than expected ore grade as described above, partially offset by a lower volume of ore processed, again, for reasons explained above.

  • We are in the process of reviewing the reconciliation of the actual silver grade with the geological model, in particular in high grade areas. However, if this trend continues, the silver ore grade for 2021 is expected to be between 200-230 g/t.

2021 Objectives

  • Maintain strict safety protocols
  • Convert probable reserves into the proven category
  • Ramp up the use of semi-autonomous drilling machines
  • Advance the process to achieve the International Cyanide Management Code Certification
  • Achieve another year without any geotechnical issues or rock failures at the DOB
  • Continue to implement cost control initiatives, targeting a 5% improvement year on year