Performance

Production Report - 3Q20

Octavio Alvídrez, Chief Executive Officer, said: “The health and safety of our people remains our number one priority, in particular during these challenging times in the face of a global pandemic. I remain both proud and grateful for the efforts our people across all our sites have made and the resilience they have shown in adapting so quickly to the many measures we have put in place to limit the spread of the virus. The progress we have made at our Juanicipio development project in the Fresnillo district is testament to this. In the quarter, the first production stope at Juanicipio was completed on time and, as expected, we are now processing development ore at the Fresnillo plant. We continue to implement the mine improvement initiatives we have previously outlined. Our silver mines are performing in line with the forecasts we set out at the beginning of the year and our silver production outlook is unchanged, despite the disruption of this pandemic. As we set out at our half-year results, we have seen some impact as a result of the additional working restrictions in place at the open-pit mines and this has affected our gold production, so we have marginally reduced our full-year guidance for gold. Our development projects remain on track, with the Pyrites Plant and optimisation of the beneficiation plant, both at Fresnillo, due for completion this year. Overall, Fresnillo has made good progress this year.” Read full release»


3Q20 Highlights

Silver

  • Quarterly attributable silver production of 13.3 moz (incl. Silverstream), down 2.3% vs. 2Q20 driven by lower ore grade and volume of ore processed at Fresnillo, mitigated by a higher ore grade at San Julián Disseminated Ore Body (DOB) and development ore from Juanicipio being processed for the first time.
  • Quarterly attributable silver production (incl. Silverstream) remained flat vs. 3Q19 due to higher ore grade at San Julián (DOB) and development ore from Juanicipio being processed for the first time, offset by the lower volume of ore processed at Fresnillo.
  • Year-to-date attributable silver production of 40.1 moz (incl. Silverstream), down 1.8% vs YTD19 due to expected lower ore grade at Saucito, and to a lesser extent, a decrease in volume of ore processed and lower ore grade at San Julián Veins and a lower contribution from the Silverstream, mitigated by the higher ore grade at San Julián DOB and development ore from Juanicipio being processed for the first time.

Gold

  • Quarterly attributable gold production of 172.7 koz, down 6.3% vs. 2Q20, due to the lower overall speed of recovery and ore grade at both Herradura and Noche Buena. This resulted from the lower volumes of ore deposited in 2Q20 following the COVID-19 operational restrictions, which affected recovery cycle at the leaching pads.
  • Quarterly and year-to-date attributable gold production decreased 17.7% and 13.7% vs. 3Q19 and YTD19 respectively due to a lower volume of ore processed at Herradura and Noche Buena as a result of COVID-19 related restrictions, as described in the previous quarter.

By-products

  • Quarterly attributable by-product lead and zinc production decreased 6.4% and 1.5% respectively vs. 2Q20, driven primarily by lower ore grades at Fresnillo, mitigated by higher ore grades at Saucito.
  • Quarterly attributable by-product lead production decreased 2.7% vs. 3Q19 due to a lower ore grade and volume of ore processed at Fresnillo, mitigated by a higher ore grade at Saucito.
  • Quarterly attributable by-product zinc production increased 3.9% vs. 3Q19 due to a higher ore grade at Saucito, offset by a lower volume of ore processed and ore grade at Fresnillo.
  • Year-to-date attributable by-product lead and zinc production increased 11.1% and 11.7% vs. YTD19 respectively, mainly due to a higher ore grade at Saucito.

Development Projects

  • As expected, Juanicipio concluded the preparation of its first production stope and development ore was processed at the Fresnillo plant during the third quarter. Further progress was achieved on the construction of the Juanicipio processing plant, which is expected to start commissioning by mid-2021.
  • Construction of Pyrites plant (phase II) at Fresnillo district almost concluded. However, as previously announced, possible delay in final inspections by authorities due to COVID-19 restrictions, which could defer start-up to the end of 2020.
  • The Fresnillo flotation plant optimisation to cope with higher content of lead and zinc is progressing according to plan and is expected to be concluded on time during 4Q20.

2020 Outlook

2020 silver production guidance remains in the range of 51 to 56 moz (including Silverstream) while gold production is now expected to be in a range of 745 to 775 koz (previously 785 to 815 koz) as a result of the reduced number of mine operators at Herradura due to COVID-19 preventive measures to protect the vulnerable personnel and lower than expected ore grades at the Dynamic Leaching Plant, together with restricted access to deeper areas at the Noche Buena mine.

1H20 Operational Highlights   1H20 Financial Highlights
 

Total Production

 

3Q20

2Q20

% change

3Q19

% change

YTD20

YTD19

% change

Silver (koz)

12,572

12,944

-2.9

12,624

-0.4

38,063

38,633

-1.5

Silverstream (koz)

709

648

9.4

659

7.6

2,037

2,207

-7.7

Total Silver (koz)

13,281

13,592

-2.3

13,283

-0.0

40,100

40,840

-1.8

Gold (oz)

172,718

184,356

-6.3

209,752

-17.7

554,037

642,169

-13.7

Lead (t)

15,144

16,180

-6.4

15,561

-2.7

45,229

40,725

11.1

Zinc (t)

26,320

26,726

-1.5

25,340

3.9

75,701

67,746

11.7


Financial Performance

 

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

Total attributable silver
production incl. Silverstream (Moz)

54.6

61.8

58.7

53.0

47.0

45.0

43.0

41.0

41.9

42.1

41.3

34.8

Attributable Gold Production (koz)

875.9

922.5

911.1

935.5

761.7

596.0

425.8

473.0

448.9

369.0

276.6

263.6

EBITDA (millions of US$)

674.0

915.1

1,060.1

1,032.0

547.5

567.3

729.8

1,315.3

1,538.5

945.0

496.6

337.4

Cash flow from operating activities
before changes in working capital
(millions of US$)

685.5

930.7

1,073.7

1,023.3

537.3

568.5

750.2

1,356.7

1,612.1

983.6

548.8

405.8


Decade of progress and achievement

Prelims 27FEB17 Decade Of Progress And Achievement

Key Commitments and Targets

1. Explore » Ensure business continuity and growth by replenishing depleted reserves and maintaining a robust growth pipeline
Evaluate early-state acquisitions and maintain reserves for 10 years. Ensure organic growth and assess key acquisition opportunities.
2. Develop » Deliver growth through development projects
Deliver profitable growth by advancing new projects towards commissioning, whist optimising cash flow and returns. Maintain track record of delivery on time and on budget and focus on CAPEX control as well as specialised engineering and construction teams.
3. Operate » Maximise the potential of exisiting operations
Maximise our potential of exisiting operations whilst maintaing our position as leading low cost producer. Operate at 100% capacity and remain a low-cost producer whilst optimising mining methods and metallurgy to maintain high recovery rates.
4. Sustain » Advance and enhance the sustainability of our business and uphold our licence to operate
Strengthen our safety performance with zero tolerance for non-compliance, and increase investment and support for training and oversight. Improve general health and minimise environmental impact whilst maintaining sound relations within our communities.