TIDMFRES
RNS Number : 7113C
Fresnillo PLC
21 October 2020
Fresnillo plc
21 Upper Brook Street
London W1K 7PY
United Kingdom
www.fresnilloplc.com
21 October 2020
THIRD QUARTER PRODUCTION REPORT
FOR THE THREE MONTHSED 30 SEPTEMBER 2020
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."
COVID-19 UPDATE
We continue to closely monitor the spread of the virus and
implement a range of safety measures across our business, following
guidelines in accordance with the World Health Organisation and
Mexican authorities. This includes stringent monitoring &
hygiene, temperature screening, social distancing, and working from
home for all office-based colleagues. Those measures are ongoing
and we remain vigilant to any localised increase in COVID cases.
Testing and contact tracing have proven to be successful measures
to identify potential cases and prevent the spread of the virus. We
continue to support our communities by providing food and personal
protective equipment. Fresnillo maintains an open dialogue with
government officials at both the Federal and local level.
TOTAL PRODUCTION
HIGHLIGHTS
Silver
-- Quarterly attributable silver production of 13.3 moz
(including Silverstream), down 2.3% vs. 2Q20 driven by a 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 (including
Silverstream) remained flat vs. 3Q19 due to the 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
(including Silverstream), down 1.8% vs. YTD19 due to the 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 Juli á n 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 the 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.
Attributable 3Q20 2Q20 % Change 3Q19 % Change YTD 20 YTD 19 % 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
--------------- --------------- --------- -------- --------- -------- -------- ---------
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 the Pyrites plant (phase II) at the Fresnillo
district is almost concluded. However, as previously announced,
there could be a possible delay in final inspections by the
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.
For further information, please visit our website
www.fresnilloplc.com or contact:
FRESNILLO PLC Tel: +44 (0)20 7399 2470
London Office
Gabriela Mayor, Head of Investor
Relations
Patrick Chambers
Mexico City Office Tel: +52 55 52 79 3206
Ana Belem Zárate
POWERSCOURT Tel: +44 (0)7793 858 211
Peter Ogden
MINING OPERATIONS
FRESNILLO MINE PRODUCTION
3Q20 2Q20 % Change 3Q19 % Change YTD 20 YTD 19 % Change
Ore Processed
(t) 551,589 596,115 -7.5 648,646 -15.0 1,746,494 1,842,845 -5.2
-------- -------- --------- -------- --------- ---------- ---------- ---------
Production
-------- -------- --------- -------- --------- ---------- ---------- ---------
Silver (koz) 3,085 3,611 -14.6 3,408 -9.5 9,841 9,815 0.3
-------- -------- --------- -------- --------- ---------- ---------- ---------
Gold (oz) 9,295 10,828 -14.2 15,601 -40.4 28,903 40,535 -28.7
-------- -------- --------- -------- --------- ---------- ---------- ---------
Lead (t) 4.588 6,860 -33.1 7,037 -34.8 16,065 15,806 1.6
-------- -------- --------- -------- --------- ---------- ---------- ---------
Zinc (t) 7,328 10,978 -33.3 10,225 -28.3 25,064 22,182 13.0
-------- -------- --------- -------- --------- ---------- ---------- ---------
Ore Grades
-------- -------- --------- -------- --------- ---------- ---------- ---------
Silver (g/t) 193 209 -7.5 183 5.7 195 186 5.2
-------- -------- --------- -------- --------- ---------- ---------- ---------
Gold (g/t) 0.77 0.79 -2.8 0.99 -22.5 0.73 0.91 -19.1
-------- -------- --------- -------- --------- ---------- ---------- ---------
Lead (%) 0.95 1.33 -28.3 1.24 -23.2 1.08 0.99 9.0
-------- -------- --------- -------- --------- ---------- ---------- ---------
Zinc (%) 1.83 2.55 -28.0 2.14 -14.3 2.03 1.70 19.3
-------- -------- --------- -------- --------- ---------- ---------- ---------
Quarterly silver production was down 14.6% vs. 2Q20 as a result
of a decrease in the volume of ore processed driven by a reduced
number of personnel on site following COVID-19 preventive measures,
which has affected development rates and equipment availability.
Silver production was also impacted by the expected lower ore
grade, in accordance with the mine plan.
Quarterly silver production decreased 9.5% vs. 3Q19 driven by a
lower volume of ore processed for reasons mentioned above,
mitigated by a higher ore grade resulting from a combination of
incremental improvements achieved following the implementation of
our action plan, as set out at the end of last year and further
described below.
Year-to-date silver production remained flat vs. YTD19 due to
the higher ore grade for reasons mentioned below, offset by a lower
volume of ore processed due to COVID-19 preventive measures.
Our performance improvement plan, as set out on the Capital
Markets Day in December 2019, continues to be implemented, focusing
on controlling dilution and enhancing blasting and drilling
techniques to cope with the narrower veins.
Development rates decreased to an average of 2,878m per month in
3Q20 (2Q20: 3,118m per month), due to absenteeism resulting from
COVID-19 preventive measures. Year to date, development rates
remained at a similar level vs. YTD19 (3,060m per month vs. 3,071m
per month) as the contractor hired at the end of 2019, together
with the start-up of the tunnel boring machine, have mitigated the
negative impact of the higher absenteeism. We expect an increase in
development rates from current levels to approximately 3,300m per
month by the end of 2020 as absenteeism decreases but at a slower
rate than anticipated.
Quarterly by-product gold production decreased 14.2% vs. 2Q20
driven by a lower volume of ore processed and, to a lesser extent,
lower recovery rate.
Quarterly and year-to-date by-product gold production decreased
40.4% and 28.7% vs. 3Q19 and YTD19 respectively due to lower ore
grades, lower volumes of ore processed and lower recovery
rates.
The silver ore grade for 2020 continues to be in the range of
185-200 g/t, while the gold ore grade is estimated to remain around
0.7 g/t.
SAUCITO MINE PRODUCTION
3Q20 2Q20 % Change 3Q19 % Change YTD 20 YTD 19 % Change
Ore Processed (t) 710,618 715,338 -0.7 703,002 1.1 2,096,003 2,030,675 3.2
-------- -------- --------- -------- --------- ---------- ---------- ---------
Production
-------- -------- --------- -------- --------- ---------- ---------- ---------
Silver (koz) 3,963 4,098 -3.3 4,040 -1.9 12,104 12,879 -6.0
-------- -------- --------- -------- --------- ---------- ---------- ---------
Gold (oz) 20,105 20,398 -1.4 21,096 -4.7 61,679 57,812 6.7
-------- -------- --------- -------- --------- ---------- ---------- ---------
Lead (t) 7,267 6,255 16.2 4,906 48.1 19,239 15,345 25.4
-------- -------- --------- -------- --------- ---------- ---------- ---------
Zinc (t) 10,993 8,842 24.3 6,655 65.2 28,736 21,707 32.4
-------- -------- --------- -------- --------- ---------- ---------- ---------
Ore Grades
-------- -------- --------- -------- --------- ---------- ---------- ---------
Silver (g/t) 207 207 0.2 207 0.3 209 230 -9.0
-------- -------- --------- -------- --------- ---------- ---------- ---------
Gold (g/t) 1.14 1.15 -0.7 1.22 -6.0 1.18 1.16 1.7
-------- -------- --------- -------- --------- ---------- ---------- ---------
Lead (%) 1.21 1.04 15.9 0.84 43.9 1.08 0.90 20.5
-------- -------- --------- -------- --------- ---------- ---------- ---------
Zinc (%) 2.24 1.82 23.2 1.38 63.0 1.98 1.55 27.8
-------- -------- --------- -------- --------- ---------- ---------- ---------
Quarterly silver production decreased 3.3% vs. 2Q20 due to a
marginally lower recovery rate.
Quarterly silver production decreased 1.9% vs. 3Q19 as a result
of a slightly lower recovery rate, mitigated by a marginally higher
volume of ore processed.
As seen in previous quarters and in line with our expectations,
year-to-date silver production decreased 6.0% vs. YTD19 as a result
of the gradual depletion of higher ore grade areas at the Jarillas
vein. This decline was mitigated by a higher volume of ore
processed.
Quarterly by-product gold production decreased 1.4% and 4.7% vs.
2Q20 and 3Q19 mainly due to a lower ore grade.
Year-to-date gold production increased 6.7% vs. YTD19 due to a
higher volume of ore processed, and to a lesser extent, higher ore
grade and recovery rate.
The silver ore grade is expected to decrease significantly in
4Q20 in accordance with the mine plan as a higher portion of
material will be processed from several Western areas with lower
silver grade. However, the silver ore grade for 2020 continues to
be in the range of 200-220 g/t, while the gold ore grade is now
estimated to be around 1.2 g/t.
PYRITES PLANT (PHASE I)
3Q20 2Q20 % Change 3Q19 % Change YTD 20 YTD 19 % Change
Iron Concentrates
Processed (t) 43,871 39,049 12.6 38,572 13.7 124,373 125,557 -1.0
------- ------- --------- ------- --------- -------- -------- ---------
Production
------- ------- --------- ------- --------- -------- -------- ---------
Silver (koz) 221 249 -11.2 285 -22.3 726 923 -21.3
------- ------- --------- ------- --------- -------- -------- ---------
Gold (oz) 837 924 -9.4 954 -12.3 2,632 3,270 -19.5
------- ------- --------- ------- --------- -------- -------- ---------
Ore Grades
------- ------- --------- ------- --------- -------- -------- ---------
Silver (g/t) 212 261 -18.7 314 -32.4 238 308 -22.6
------- ------- --------- ------- --------- -------- -------- ---------
Gold (g/t) 1.87 2.10 -11.0 2.44 -23.2 2.02 2.35 -13.8
------- ------- --------- ------- --------- -------- -------- ---------
Quarterly silver and gold production decreased 11.2% and 9.4%
vs. 2Q20 respectively due to a lower ore grade of iron concentrates
produced by Saucito and to a lesser extent, lower recovery rate,
mitigated by a higher volume of iron concentrates processed.
Quarterly silver and gold production decreased 22.3% and 12.3%
vs. 3Q19 respectively as expected and as seen in the prior quarter.
This was primarily due to a lower ore grade from Saucito's
flotation plant, as material from the pre-operative high grade
stockpile was depleted following the plant's start-up in mid-2018,
mitigated by a higher volume of iron concentrates processed.
Year-to-date silver production decreased 21.3% vs. YTD19 due to
a lower ore grade of iron concentrates produced by Saucito.
Similarly, year-to-date gold production decreased 19.5% vs.
YTD19 as a result of a lower ore grade and lower recovery rate.
We continue to expect this plant to recover around 1 moz silver
and 3 koz gold from the ongoing Saucito tailings during 2020.
CIENEGA MINE PRODUCTION
YTD
3Q20 2Q20 % Change 3Q19 % Change 20 YTD 19 % Change
Ore Processed (t) 325,392 331,543 -1.9 335,493 -3.0 983,285 985,600 -0.2
-------- -------- --------- -------- --------- -------- -------- ---------
Production
-------- -------- --------- -------- --------- -------- -------- ---------
Gold (oz) 18,122 15,948 13.6 17,858 1.5 50,496 47,615 6.1
-------- -------- --------- -------- --------- -------- -------- ---------
Silver (koz) 1,522 1,573 -3.3 1,384 9.9 4,491 4,304 4.3
-------- -------- --------- -------- --------- -------- -------- ---------
Lead (t) 1,536 1,489 3.1 1,826 -15.9 4,772 4,160 14.7
-------- -------- --------- -------- --------- -------- -------- ---------
Zinc (t) 2,275 2,324 -2.1 2,755 -17.4 7,185 6,597 8.9
-------- -------- --------- -------- --------- -------- -------- ---------
Ore Grades
-------- -------- --------- -------- --------- -------- -------- ---------
Gold (g/t) 1.85 1.61 15.4 1.78 4.2 1.72 1.63 5.5
-------- -------- --------- -------- --------- -------- -------- ---------
Silver (g/t) 169 172 -1.3 151 12.4 165 159 3.9
-------- -------- --------- -------- --------- -------- -------- ---------
Lead (%) 0.71 0.69 4.2 0.81 -11.7 0.74 0.65 13.6
-------- -------- --------- -------- --------- -------- -------- ---------
Zinc (%) 1.18 1.19 -1.1 1.35 -13.2 1.22 1.12 8.8
-------- -------- --------- -------- --------- -------- -------- ---------
Quarterly gold production increased 13.6% vs. 2Q20 as a result
of a higher ore grade. This was driven by the higher proportion of
material extracted from the Eastern zone of the district with
higher gold content but lower silver content.
Quarterly silver production decreased 3.3% vs. 2Q20 due to lower
volumes of ore processed and lower ore grade.
Quarterly gold production increased 1.5% vs. 3Q19 due to a
higher ore grade, offset by a lower volume of ore processed.
Quarterly silver production increased 9.9% vs. 3Q19 as a result
of a higher ore grade in line with the mine plan.
Year-to-date gold and silver production increased 6.1% and 4.3%
vs. YTD19 respectively primarily due to the higher ore grades.
The gold and silver ore grades for 2020 are expected to remain
at around 1.65-1.75 g/t and 155-165 g/t respectively.
SAN JULIÁN MINE PRODUCTION
3Q20 2Q20 % Change 3Q19 % Change YTD 20 YTD 19 % Change
Ore Processed Veins
(t) 317,134 312,796 1.4 321,798 -1.5 939,107 983,478 -4.5
-------- -------- --------- -------- --------- ---------- ---------- ---------
Ore Processed DOB
(t) 555,161 559,564 -0.8 559,693 -0.8 1,656,650 1,667,567 -0.7
-------- -------- --------- -------- --------- ---------- ---------- ---------
Total production
at San Julián
-------- -------- --------- -------- --------- ---------- ---------- ---------
Gold (oz) 17,342 16,361 6.0 14,234 21.8 48,877 50,677 -3.6
-------- -------- --------- -------- --------- ---------- ---------- ---------
Silver (koz) 3,298 3,104 6.3 3,080 7.1 9,576 9,622 -0.5
-------- -------- --------- -------- --------- ---------- ---------- ---------
Production Veins
-------- -------- --------- -------- --------- ---------- ---------- ---------
Gold (oz) 16,426 15,658 4.9 13,711 19.8 46,667 49,010 -4.8
-------- -------- --------- -------- --------- ---------- ---------- ---------
Silver (koz) 944 1,047 -9.9 1,035 -8.8 3,065 3,365 -8.9
-------- -------- --------- -------- --------- ---------- ---------- ---------
Production DOB
-------- -------- --------- -------- --------- ---------- ---------- ---------
Gold (oz) 917 703 30.3 523 75.2 2,209 1,666 32.6
-------- -------- --------- -------- --------- ---------- ---------- ---------
Silver (koz) 2,355 2,057 14.5 2,045 15.1 6,511 6,257 4.1
-------- -------- --------- -------- --------- ---------- ---------- ---------
Lead (t) 1,676 1,576 6.3 1,792 -6.5 5,076 5,413 -6.2
-------- -------- --------- -------- --------- ---------- ---------- ---------
Zinc (t) 5,627 4,581 22.8 5,705 -1.4 14,618 17,261 -15.3
-------- -------- --------- -------- --------- ---------- ---------- ---------
Ore Grades Veins
-------- -------- --------- -------- --------- ---------- ---------- ---------
Gold (g/t) 1.71 1.63 5.1 1.39 23.2 1.62 1.62 -0.1
-------- -------- --------- -------- --------- ---------- ---------- ---------
Silver (g/t) 100 113 -11.1 108 -7.0 110 116 -4.8
-------- -------- --------- -------- --------- ---------- ---------- ---------
Ore Grades DOB
-------- -------- --------- -------- --------- ---------- ---------- ---------
Gold (g/t) 0.10 0.08 20.1 0.07 45.2 0.09 0.08 14.7
-------- -------- --------- -------- --------- ---------- ---------- ---------
Silver (g/t) 154 134 15.3 130 18.7 143 135 6.0
-------- -------- --------- -------- --------- ---------- ---------- ---------
Lead (%) 0.39 0.37 5.4 0.41 -4.1 0.39 0.43 -7.9
-------- -------- --------- -------- --------- ---------- ---------- ---------
Zinc (%) 1.27 1.08 18.0 1.35 -6.1 1.16 1.38 -16.1
-------- -------- --------- -------- --------- ---------- ---------- ---------
SAN JULIÁN VEINS
Quarterly silver production decreased 9.9% and 8.8% vs. 2Q20 and
3Q19 respectively, primarily due to a lower ore grade resulting
from the depletion of high ore grade areas at San Julián and
Shalom.
Gold production increased 4.9% vs. 2Q20 driven by a higher ore
grade.
Quarterly gold production increased 19.8% vs. 3Q19 mainly due to
access to new areas with higher gold ore grades.
Year-to-date silver and gold production decreased 8.9% and 4.8%,
respectively vs. YTD19 as a result of a lower volume of ore
processed following the depletion of the stockpile, as described in
prior quarters and lower ore grades driven by the depletion of high
ore grade areas at San Julián and Shalom.
We continue to expect the 2020 silver and gold ore grades to
remain flat year on year, averaging 110-120 g/t and 1.6-1.7 g/t,
respectively.
SAN JULIÁN DISSEMINATED ORE BODY (DOB)
Quarterly and year-to-date silver production increased against
all comparable periods due to a higher ore grade. As previously
mentioned, the mine sequencing was changed in 2019 to maintain the
geotechnical stability of some high ore grade stopes. During 3Q20,
we regained access to these higher quality areas, resulting in the
higher ore grades.
The silver ore grade for 2020 is expected to remain within a
range of 140-150 g/t.
HERRADURA TOTAL MINE PRODUCTION
3Q20 2Q20 % Change 3Q19 % Change YTD 20 YTD 19 % Change
Ore Processed
(t) 4,791,585 3,283,104 45.9 5,591,746 -14.3 12,921,867 16,753,610 -22.9
----------- ----------- --------- ----------- --------- ----------- ----------- ---------
Total Volume
Hauled (t) 28,017,785 18,942,659 47.9 33,396,651 -16.1 80,801,385 94,629,850 -14.6
----------- ----------- --------- ----------- --------- ----------- ----------- ---------
Production
----------- ----------- --------- ----------- --------- ----------- ----------- ---------
Gold (oz) 85,102 95,253 -10.7 102,439 -16.9 290,848 339,305 -14.3
----------- ----------- --------- ----------- --------- ----------- ----------- ---------
Silver (koz) 251 300 -16.3 412 -39.1 1,075 1,045 2.8
----------- ----------- --------- ----------- --------- ----------- ----------- ---------
Ore Grades
----------- ----------- --------- ----------- --------- ----------- ----------- ---------
Gold (g/t) 0.72 0.90 -20.1 0.71 1.9 0.78 0.79 -0.5
----------- ----------- --------- ----------- --------- ----------- ----------- ---------
Silver (g/t) 2.18 3.28 -33.3 3.27 -33.1 3.21 2.89 11.3
----------- ----------- --------- ----------- --------- ----------- ----------- ---------
Quarterly gold production decreased 10.7% vs. 2Q20 mainly due to
a lower overall speed of recovery. This resulted mainly from the
lower volumes of ore deposited in 2Q20 following the COVID-19
operational restrictions, which affected the recovery cycle at the
leaching pads. Additionally, the measures put in place to maintain
social distancing have resulted in a decreased number of personnel
on site, thus affecting the preparation of the mine. This has
limited access to deeper areas of the pit, thus impacting the mine
plan. The lower ore grade and a slowdown in the leaching kinetic
due to the presence of more sulphides in the areas mined further
impacted quarterly gold production. These negative factors were
mitigated by the higher volume of ore processed as operations
ramped up in 3Q20 following the COVID-19 operational restrictions
in 2Q20.
Quarterly gold production decreased 16.9% vs. 3Q19 as a result
of a lower volume of ore deposited during the COVID-19 operational
restrictions. Additionally, the previously described effect on the
recovery cycle also affected quarterly gold production.
Nevertheless, the aforementioned factors were partially compensated
by the higher ore grade in 3Q20.
Year-to-date gold production decreased 14.3% vs. YTD19 as a
result of the lower volume of ore processed for reasons explained
above. However, these factors were mitigated by the higher speed of
recovery following the commissioning of leaching pad number 13 in
mid-2019 and an increased irrigation in new areas of the pads.
The gold ore grade is expected to remain around 0.75-0.80 g/t
during 2020.
NOCHE BUENA TOTAL MINE PRODUCTION
3Q20 2Q20 % Change 3Q19 % Change YTD 20 YTD 19 % Change
Ore Processed
(t) 1,714,258 1,366,909 25.4 3,215,167 -46.7 5,044,312 9,790,495 -48.5
---------- ---------- --------- ----------- --------- ----------- ----------- ---------
Total Volume
Hauled (t) 9,937,248 5,612,622 77.1 11,447,273 -13.2 25,654,647 37,562,882 -31.7
---------- ---------- --------- ----------- --------- ----------- ----------- ---------
Production
---------- ---------- --------- ----------- --------- ----------- ----------- ---------
Gold (oz) 21,574 24,643 -12.5 37,570 -42.6 70,261 102,956 -31.8
---------- ---------- --------- ----------- --------- ----------- ----------- ---------
Silver (koz) 11 9 19.4 14 -22.4 30 43 -30.9
---------- ---------- --------- ----------- --------- ----------- ----------- ---------
Ore Grades
---------- ---------- --------- ----------- --------- ----------- ----------- ---------
Gold (g/t) 0.49 0.54 -8.0 0.58 -15.4 0.52 0.55 -4.6
---------- ---------- --------- ----------- --------- ----------- ----------- ---------
Silver (g/t) 1.25 0.54 130.4 0.25 391.8 0.68 0.23 191.9
---------- ---------- --------- ----------- --------- ----------- ----------- ---------
Quarterly gold production decreased 12.5% vs. 2Q20 due to a
lower overall speed of recovery. This resulted from the lower
volumes of ore deposited in 2Q20 following the COVID-19 operational
restrictions, which affected the recovery cycle at the leaching
pads. The increased waste material hauled to solve a stability
problem in the south slope of the pit restricted access to the
deeper areas of the mine and further impacted gold production. This
was mitigated by the higher volume of ore processed as operations
ramped up following the COVID-19 operational restrictions in
2Q20.
Quarterly and year-to-date gold production decreased 42.6% and
31.8% vs. 3Q19 and YTD19 respectively driven by the lower volume of
ore deposited, for reasons explained above, in addition to the
expected depletion of the mine as it approaches closure. These were
mitigated by the higher speed of recovery due to increased
irrigation on the pads and the installation of the carbon columns
in 2019.
The expected gold ore grade is predicted to remain in the range
of 0.50-0.55 g/t in 2020.
SILVERSTREAM
Quarterly Silverstream production increased 9.4% vs. 2Q20 due to
higher ore grades, increased ore throughput and an improved
recovery rate.
Quarterly Silverstream production increased 7.6% vs. 3Q19 due to
a higher recovery rate and higher volume of ore processed.
Year-to-date Silverstream production decreased 7.7% vs. YTD19
due to lower volume of ore processed and the expected lower ore
grade resulting from narrower veins, as described in previous
quarters, which were partially compensated for by a higher recovery
rate.
Expected silver production in 2020 remains in the range of
2.7-3.0 moz.
SAFETY PERFORMANCE
We are deeply saddened to confirm a fatal accident at the
Fresnillo mine during the quarter. A full independent investigation
is being carried out with additional preventive measures put in
place and support offered to family and colleagues. We remain
absolutely committed to instilling a new safety culture across our
mines and the rolling out of the I Care We Care programme.
JUANICIPIO
A s planned, development ore from the Juanicipio project began
to be processed at the Fresnillo beneficiation plant, with 42,476
tonnes processed during the quarter . Total production was 394
thousand silver ounces, 610 gold ounces, 138 tonnes of lead and 174
tonnes of zinc (attributable: 220 thousand ounces of silver, 341
ounces of gold, 77 tonnes of lead and 97 tonnes of zinc).
The preparation of the first production stope was concluded
during the quarter and further progress was achieved in the
construction of the beneficiation plant with the foundations for
the milling area.
We expect to process an average of 16,000 tonnes per month
through to mid-2021 on a consolidated basis, at which time we
expect to start commissioning the Juanicipio beneficiation
plant.
UPDATE ON EXPLORATION
During 3Q20, 132,000 metres of drilling were completed at our
operating mines, as part of the 456,000 metre programme to convert
resources into reserves. Additionally, 60,000 metres of exploration
drilling were carried out, as part of the 228,000 metre programme
at projects.
Presently, drilling is taking place across ten areas.
Interesting results were obtained at Fresnillo, Guanajuato and
Supaypacha (Peru), on the new mineralised zones identified during
the first half of this year; at the San Julián district, drilling
continues on the southern vein system for resource conversion into
reserves. In Chile, drilling resumed focusing on several targets in
the Antofagasta and Coquimbo regions. Negotiations with communities
to obtain drilling access permits continues across several projects
in Mexico and Peru in a respectful and fair manner.
A fuller update on our exploration programme, together with the
audited reserves and resources statements, will be provided
alongside our preliminary results.
ABOUT FRESNILLO PLC
Fresnillo plc is the world's largest primary silver producer and
Mexico's largest gold producer, listed on the London and Mexican
Stock Exchanges under the symbol FRES.
Fresnillo plc has seven operating mines, all of them in Mexico -
Fresnillo, Saucito, Ciénega (including the San Ramón satellite
mine, Las Casas Rosario & Cluster Cebollitas), Herradura,
Soledad-Dipolos(1) , Noche Buena and San Julián (Veins and
Disseminated Ore Body), three development projects - the Pyrites
Plant at Fresnillo, the optimisation of the beneficiation plant
also at Fresnillo and Juanicipio, and four advanced exploration
projects - Orisyvo, Rodeo, Guanajuato and Pilarica, as well as a
number of other long term exploration prospects.
Fresnillo plc has mining concessions and exploration projects in
Mexico, Peru and Chile.
Fresnillo plc has a strong and long tradition of exploring,
mining, a proven track record of mine development, reserve
replacement, and production costs in the lowest quartile of the
cost curve for silver.
Fresnillo plc's goal is to maintain the Group's position as the
world's largest primary silver company and Mexico's largest gold
producer.
(1) Operations at Soledad-Dipolos are currently suspended.
FORWARD-LOOKING STATEMENTS
Information contained in this announcement may include
'forward-looking statements'. All statements other than statements
of historical facts included herein, including, without limitation,
those regarding the Fresnillo Group's intentions, beliefs or
current expectations concerning, amongst other things, the
Fresnillo Group's results of operations, financial position,
liquidity, prospects, growth, strategies and the silver and gold
industries are forward-looking statements. Such forward-looking
statements involve risk and uncertainty because they relate to
future events and circumstances. Forward-looking statements are not
guarantees of future performance and the actual results of the
Fresnillo Group's operations, financial position and liquidity, and
the development of the markets and the industry in which the
Fresnillo Group operates, may differ materially from those
described in, or suggested by, the forward-looking statements
contained in this document. In addition, even if the results of
operations, financial position and liquidity, and the development
of the markets and the industry in which the Fresnillo Group
operates are consistent with the forward-looking statements
contained in this document, those results or developments may not
be indicative of results or developments in subsequent periods. A
number of factors could cause results and developments to differ
materially from those expressed or implied by the forward-looking
statements including, without limitation, general economic and
business conditions, industry trends, competition, commodity
prices, changes in regulation, currency fluctuations (including the
US dollar and Mexican Peso exchanges rates), the Fresnillo Group's
ability to recover its reserves or develop new reserves, including
its ability to convert its resources into reserves and its mineral
potential into resources or reserves, changes in its business
strategy and political and economic uncertainty.
LEI: 549300JXWH1UV5J0XV81
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END
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