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: 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

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.


Quarterly Production

 

4Q18

4Q17

% change

3Q18

Ore processed - Phase I(t)

337,428

325,032

3.8

332,836

Ore processed - Phase II (t)

587,905

496,907

18.3

561,808

         

Production - Phase I

       

Gold (oz)

22,065

19,248

14.6

18,458

Silver (koz)

1,380

1,462

-5.7

1,347

         

Production - Phase II

       

Gold (g/t)

938

784

19.7

994

Silver (g/t)

2,524

2,595

-2.7

2,279

Lead (%)

2,017

1,937

4.2

1,263

Zinc (%)

6,479

4,567

41.9

5,041

         

Ore grades - Phase I

       

Gold (g/t)

2.11

1.92

9.9

1.84

Silver (g/t)

137.22

153.43

-10.6

137.19

Ore grades - Phase II

       

Gold (g/t)

0.10

0.11

-3.7

0.11

Silver (g/t)

158.09

190.32

-16.9

155.54

Lead (%)

0.51

0.51

-0.6

0.40

Zinc (%)

1.48

1.23

19.7

1.33

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

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