First Quarter Production Report - 1Q18

Octavio Alvídrez, Chief Executive Officer, said: “Fresnillo has started the year well and delivered a solid operating performance during the period. In particular, first quarter silver production rose to 14.2 moz, driven by the positive contribution from the new San Julián JM (phase II) mine. I am also pleased to report a positive quarter at the Fresnillo mine driven by better access to the Candelaria and San Alberto areas as planned which improved throughput at the mine. We achieved a solid gold production performance during the quarter, up 4.1% versus 1Q17, driven by strong results at the Herradura mine. We continue to make good progress with our key development projects. Both the Pyrites plant and the second Dynamic Leaching Plant projects have advanced on time and on budget. We expect to commission both projects during the second quarter and for them to make a positive contribution to full year production in 2018. Overall, we remain confident in the outlook and today reiterate our full year production guidance. 2 Sadly, in the first quarter 2018, a fatal accident of one of our contractors occurred at the Saucito mine due to the lack of adherence to our safety policies. We continue to reinforce our safety measures for all our workforce in order to fulfill our zero fatalities commitment".

  • Quarterly silver production of 15.4 moz (incl. Silverstream), up 14.0% vs. 1Q17 mainly due to contribution from San Julián JM (phase II) 
  • Quarterly silver production decreased 3.7% vs. 4Q17 mainly due to lower volume of ore processed and ore grade at Saucito 
  • Quarterly gold production of 231.5 koz, up 4.1% vs. 1Q17 mainly due to higher contribution from Herradura
  • Construction of Pyrites plant in the Fresnillo district remains on track with the leaching plant at Saucito due to be commissioned in 2Q18
  • Second line Dynamic Leaching Plant (DLP) at Herradura commissioning is expected at the end of 2Q18
  • Outlook unchanged: on track to achieve 2018 production guidance of 67-70 moz silver, (incl. Silverstream) and 870-900 koz gold

Total Quarterly Production

  1Q18 1Q17 % change 4Q17 YTD17 YTD16 % change
Silver (koz) 14,235 12,424 14.6 14,957 54,238 45,677 18.7
Silverstream (koz) 1,186 1,105 7.3 1,059 4,435 4,625 -4.1
Total Silver (koz) 15,421 13,529 14.0 16,015 58,673 50,303 16.6
Gold (oz) 231,458 222,290 4.1 232,051 911,132 935,513 -2.6
Lead (t) 11,629 11,461 1.5 12,836 48,153 48,144 0.0
Zinc (t) 19,040 13,806 37.9 18,852 65,266 56,845 14.8

Financial Performance

Total attributable silver production incl. Silverstream (Moz) 58.7 53.0 47.0 45.0 43.0 41.0 41.9 42.1 41.3 34.8
Attributable Gold Production (koz) 911.1 935.5 761.7 596.0 425.8 473.0 448.9 369.0 276.6 263.6
EBITDA (millions of US$) 1,060.1 1,032.0 547.5 567.3 729.8 1,315.3 1,538.5 945.0 496.6 337.4
Cash flow from operating activities before changes in working capital (millions of US$) 1,073.7 1,023.3 537.3 568.5 750.2 1,356.7 1,612.1 983.6  548.8 405.8

Key Commitments and Targets

    1. Operations » Maximise the potential of existing operations
      Operate at 100% capacity and remain a low-cost producer whilst optimising mining methods and metallurgy to maintain high recovery rates.
    2. Development » Deliver growth through development projects
      Maintain track record of delivery on time and on budget and focus on CAPEX control as well as specialised engineering and construction teams.
    3. Exploration » Extend the growth pipeline
      Deploy US$200 million in exploration investment; evaluate early-state acquisitions and maintain reserves for 10 years. Ensure organic growth and assess key acquisition opportunities.
    4. Sustainability » Advance and enhance the sustainability of our business
      Strengthen our safety performance with zero tolerance for non-compliance, and increased investment and support for training and oversight. Improve general health and minimise our environmental impact whilst maintaining sound relations within our communities.