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

  3Q21 2Q21 % change 3Q20
Ore processed: Phase I - Veins (t) 302,987 302,475 0.2 317,134
Ore processed: Phase II - DoB (t) 533,204 555,055 (3.9) 555,161
         
Total Production San Julian        
Gold (oz) 13,612 15,546 (12.4) 17,342
Silver (koz) 4,156 5,219 (20.4) 3,298
         
Production: Phase I - Veins
       
Gold (g/t) 12,550 14,320 (12.4) 16,426
Silver (g/t) 1,033 1,027 0.6 944
Production: Phase II - DOB
           
Gold (g/t) 1,062 1,226 (13.4) 917
Silver (g/t) 3,123 4,192 (25.5) 2,355
Lead (t) 2,122 2,813 (24.6) 1,676
Zinc (t) 5,039 5,751 (12.4) 5,627
Ore grades: Phase I - Veins        
Gold (g/t) 1.36 1.56 (12.7) 1.71
Silver (g/t) 116 115 0.4 100
Ore grades: Phase II - DOB            
Gold (g/t) 0.11 0.12 (5.1) 0.10
Silver (g/t) 217 275 (20.9) 154
Lead (%) 0.50 0.61 (17.9) 0.39
Zinc (%) 1.24 1.38 (10.4) 1.27

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

3Q21

San Julián Veins

  • Quarterly gold production decreased 12.4% vs. 2Q21 due to a lower ore grade due and depletion of high grade stopes at the Santa Maria, Shalom and San Julián veins.

  • Quarterly silver production was flat vs. 2Q21 with all metrics in line with the prior quarter, in spite of another electricity outage by the Mexican state-owned utility Comisión Federal de Electricidad (CFE) impacting volumes of ore processed during the quarter.
  • Quarterly and year-to-date gold production decreased 23.6% and 14.9% vs. 3Q20 and YTD20 respectively due to a lower ore grade as a result of the depletion of higher ore grade areas and, to a lesser extent, lower volume of ore processed due to the electricity outage as mentioned above.

  • Quarterly silver production increased 9.4% vs. 3Q20 due to a higher ore grade, offset by a lower volume of ore processed.

  • Year-to-date silver production was flat vs. YTD20 due to a lower volume of ore processed compensated for by a higher ore grade.

  • 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 decreased 25.5% vs. 2Q21 due to the anticipated lower ore grade. Despite the quarteron-quarter drop, the grade remains higher than originally expected 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.

  • Quarterly silver production increased 32.6% vs. 3Q20 due to a higher than expected ore grade, as explained above.
  • Year-to-date silver production increased 50.2% vs. YTD20 due to a higher than expected ore grade as described above, partially offset by a lower volume of ore processed driven by the temporary impact in 1Q21 from the damage to the lead circuit housing at the end of 2020 and the electricity outage by the CFE in February, as reported in previous quarters, and once again in this quarter.

  • The review of the reconciliation of the actual silver grade with the geological model announced last quarter was concluded, following the higher than expected grades in recent months. This review has increased the certainty of the geological model in particular within the higher grade core of the ore body. Following the review, we expect the 2021 silver ore grade to be at the lower end of the revised 200-230 g/t range, as we continue to advance towards the lower grade areas in the periphery of the ore body, in line with the mine sequencing.

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