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$515 million |
| Life of Mine: |
3.5 years Veins, 6.3 years Disseminated Ore Body (2017: 9.0) |
The San Julián silver-gold project is a cornerstone of our current and future production goals. In 2018 it contributed 24% to total silver production and generated 16% of total adjusted revenue.. The geological potential identified in the region thus far may be sufficient to establish a new mining district in the future. The San Julián project includes construction of two plants: i) a dynamic leaching plant to treat ore from the veins and ii) a flotation plant with 6,000 tpd capacity to process ore from the disseminated body.
Quarterly Production
| |
2Q19
|
1Q19
|
% change
|
2Q18
|
|
Ore processed: Phase I - Veins (t)
|
338,797
|
322,883
|
4.9
|
289,775
|
|
Ore processed: Phase II - DoB (t)
|
562,534
|
545,341
|
3.2
|
540,261
|
| |
|
|
|
|
|
Total Production San Julian
|
|
|
|
|
|
Gold (oz)
|
18,303
|
18,139
|
0.9
|
20,097
|
|
Silver (koz)
|
3,589
|
2,953
|
21.5
|
3,533
|
| |
|
|
|
|
|
Production: Phase I - Veins
|
|
|
|
|
|
Gold (oz)
|
17,667
|
17,632
|
0.2
|
19,584
|
|
Silver (koz)
|
1,246
|
1,084
|
14.9
|
1,263
|
| |
|
|
|
|
|
Production: Phase II - DoB
|
|
|
|
|
|
Gold (g/t)
|
636
|
508
|
25.2
|
513
|
|
Silver (g/t)
|
2,343
|
1,868
|
25.4
|
2,270
|
|
Lead (%)
|
1,891
|
1,730
|
9.3
|
1,493
|
|
Zinc (%)
|
5,873
|
5,682
|
3.4
|
5,254
|
| |
|
|
|
|
|
Ore grades: Phase I - Veins
|
|
|
|
|
|
Gold (g/t)
|
1.71
|
1.78
|
-3.9
|
2.12
|
|
Silver (g/t)
|
124.34
|
114.81
|
8.3
|
144.58
|
|
Ore grades: Phase II - DoB
|
|
|
|
|
|
Gold (g/t)
|
0.08
|
0.08
|
0.0
|
0.07
|
|
Silver (g/t)
|
149.17
|
124.45
|
19.9
|
156.71
|
|
Lead (%)
|
0.44
|
0.43
|
2.3
|
0.42
|
|
Zinc (%)
|
1.42
|
1.37
|
3.6
|
1.26
|
Financial Highlights
Adjusted Revenue
(US$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
1H19
-
Both processing plants working above nameplate capacity.
-
Geotechnical instability in the disseminated ore body (D.O.B) during 2Q19 led to temporary re-sequencing of the mine plan.
-
Construction of the water reservoir continued – expected conclusion by year end.
2Q19
San Julián Veins
-
Quarterly silver production increased 14.9% vs. 1Q19 due to a temporarily higher ore grade found on the Santa Maria vein and an increased volume of ore processed due to the optimisation of the maintenance programme.
-
Compared to 2Q18, quarterly silver production remained broadly unchanged due to a lower ore grade, mitigated by a higher volume of ore processed. Similarly, first half silver production decreased 13.9% due to a lower than expected ore grade as a result of the different quality of the areas exploited.
-
Quarterly gold production remained flat vs 1Q19 due to a higher volume of ore processed, offset by a lower ore grade. Quarterly and first half gold production decreased 9.8% and 8.8% vs. 2Q18 and 1H18 respectively, driven by lower grades, mitigated by higher volumes of ore processed.
- Expect gold ore grades in the range of 1.6-1.7 g/t and reduce silver grades to average 110-125 g/t, from 130- 140 g/t.
San Julián Disseminated Ore Body
-
Quarterly silver production increased 25.4% vs. 1Q19 mainly due to a higher ore grade, in line with the sequencing of the mine plan, and higher ore processed.
-
Compared to 2Q18, silver production increased 3.2% due to a higher volume of ore processed and increased recovery rates. This was partly offset by a lower ore grade as the sequencing of the mine plan was temporarily changed to maintain the geotechnical stability of some high ore grade stopes.
-
First half silver production decreased 4.1% vs. 1H18 mainly due to lower ore grade resulting from additional safety procedures taken as a result of the instability in areas with higher silver ore grade.
-
These changes to the mine plan have impacted silver ore grade and the guidance for the full year is decreased from 160-170 g/t to 125-140 g/t.
2H19 Priorities
- Re-gain access to the higher grade area of the D.O.B through mitigating actions following the temporary re-sequencing of the mine plan.
- Conclude the construction of the water reservoir by year end.
- Continue preparation of the mine.
- Focus on converting resources to reserves, including exploring the district’s geological potential.
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