Saucito

Including the Saucito II expansion, Saucito is one of the Group’s most important assets, critical to achieving our 2018 production target of 65 moz silver. Saucito contributed 36% to total Silver production in 2017 and generated 22.6% of total adjusted revenue.

Ownership: 100% Fresnillo plc
Location: Zacatecas 8km SW of the Fresnillo mine
Commodity: Silver, Gold
Operational since: 2011
Facilities: Underground mine and flotation plant
Workforce: 763 employees, 1,824 contractors
Milling Capacity : 7,800 tpd/2,600,000 tpy
Average ore grade in reserves: 261 g/t Silver, 1.39 g/t Gold
Mine Life: 5.8 (2016: 5.9)

Quarterly Production

  2Q18 2Q18 % change 1Q18
Ore processed (t) 723,208 667,456 8.3 673,545
         
Production        
Silver (koz) 5,235
5,674 -7.7 4,832
Gold (oz) 22,908 15,896 44.1 16,880
Lead (t) 5,327 4,688 13.6 3,183
Zinc (t) 7,549 4,923 53.3 3,916
         
Ore grades        
Silver (g/t) 263 306 -14.1 260
Gold (g/t) 1.28 1.05 22.7 1.12
Lead %

0.86

0.81

6.2

0.57
Zinc % 1.64 1.26 30.1 0.96

Annual Silver Production

1H18 Saucito Annual Silver Production

History

2004

Drilling commenced

2009

Construction commenced

2011

Commercial production 1H11

Production

Silver (koz)

21,215 (FY17) % (3.3) Change

Gold (oz)

69,948 (FY17) % (18.9) Change

Lead (t)

17,714 (FY17) % (15.4) Change

Zinc (t)

20,348 (FY17) % (13.4) Change

Financial Highlights

Adjusted Revenue (US$m, FY17)

504.2 % (4.5) Change

Segment Profit (US$m, FY17)

315.2 % (13.4) Change

Captial Expenditure (US$m, FY17)

133.7 % 30.6 Change

Exploration (US$m, FY17)

26.1 % 59.1 Change

Perfomance Highlights - 2Q18

  • Quarterly and year to date silver production decreased 7.7% and 7.0% vs. 2Q17 and 1H17 respectively as a result of lower than expected ore grades and increased dilution. We are now using smaller sized equipment for the narrower veins in order to decrease dilution.
  • Quarterly silver production increased 8.3% vs. 1Q18 as a result of higher volume of ore processed.
  • The silver ore grade for the full year 2018 is now expected to be 255-265 g/t (285 g/t previously guided) whilst going forward, the long term silver grade is expected to be approximately 280 g/t.
  • Quarterly and first half by-product gold production increased 44.1%, 35.7% and 17.5% vs. 2Q17, 1Q18 and 1H17 respectively as a result of higher ore grades, recovery rates and volumes of ore processed.
  • Quarterly by-product lead production increased 13.6% vs. 2Q17 as a result of higher volume of ore processed and a higher ore grade. However, year to date by-product lead production decreased 9.9% vs. 1H17 as a result of a lower ore grade. Quarterly by-product lead production increased 67.3% vs. 1Q18 as a result of a higher ore grade, volume of ore processed and recovery rate.
  • Quarterly and year to date by-product zinc production increased over the corresponding periods of 2017 and vs. the previous quarter as a result of higher ore grades, recovery rates and volumes of ore processed.

Perfomance Highlights - 1H18

  • 1H18 silver grade of 262 g/t. Full year 2018 silver grade expected to be: 255-265 g/t
  • US$59.2 million invested in development, infrastructure and sustaining capex
  • Additional contractor to increase development rates successfully hired
  • Purchase of smaller equipment to better control dilution
  • Production from Natalias veins continued to ramp up

Performance Targets - 2H18

  • Further reduce dilution
  • Development of the Huizache veins
  • Ramp up Pyrites plant
  • Initiate the deepening of the Jarillas shaft