TIDMFRES
RNS Number : 6774G
Fresnillo PLC
28 July 2021
Fresnillo plc
21 Upper Brook Street
London W1K 7PY
United Kingdom
www.fresnilloplc.com
28 July 2021
SECOND QUARTER PRODUCTION REPORT
FOR THE THREE MONTHSED 30 JUNE 2021
Octavio Alvídrez, Chief Executive Officer, said:
"I am pleased to report a solid operational performance in the
period, with quarterly silver production up on the first quarter,
driven mainly by a sharp improvement in ore grades at San Julián.
We continue to see a consistent contribution of development ore
from our Juanicipio project, where construction of the processing
plant remains on track for commissioning by the end of the year.
The easing of Covid-19 related working restrictions also resulted
in gold production increasing over the first half last year. We
remain on track to meet our full year targets and our production
guidance for 2021 is unchanged, though we remain vigilant around
the continued evolution of the pandemic and its potential future
effect on our operations, in particular the implementation of any
future new work restrictions.
"Our priority remains the safety and welfare of our people and
our local communities. Our various community health programmes are
on-going, as are the safety measures we put in place last year. We
are completing the roll-out of the 'I Care, We Care' programme
across all our operations, which has provided an excellent focal
point for us all in the Group to ensure that safety remains our key
focus."
TOTAL PRODUCTION
HIGHLIGHTS
Silver
-- Quarterly attributable silver production of 14.9 moz
(including Silverstream), up 17.9% vs. 1Q21 driven by the higher
than expected ore grade at San Julián Disseminated Ore Body (DOB)
as a result of the positive variation with the geological model. To
a lesser extent, the increased tonnage milled at San Julián DOB and
a higher ore grade at Saucito also contributed to the increase in
quarterly attributable silver production.
-- Quarterly attributable silver production (including
Silverstream) increased 9.6% vs. 2Q20 due to a higher ore grade at
San Julián DOB, partly offset by a lower ore grade and a volume of
ore processed at Saucito.
-- First half attributable silver production of 27.5 moz
(including Silverstream), up 2.7% vs. 1H20 due to a higher ore
grade at San Julián DOB and, to a lesser extent, the contribution
of development ore from Juanicipio, partially offset by a lower ore
grade and volume of ore processed at Saucito.
Gold
-- Quarterly attributable gold production of 200.2 koz down
12.3% vs. 1Q21, primarily due to a lower ore grade and volume of
ore processed at the Dynamic Leaching Plant at Herradura, mitigated
by the higher volume of ore processed and higher ore grade at Noche
Buena.
-- Quarterly attributable gold production increased 8.6% vs.
2Q20 due to a higher volume of ore processed at Herradura following
Covid-19 related working restrictions last year which resulted in
lower volumes of ore deposited at our open pits during 2Q20 and to
a lesser extent, a higher ore grade at Saucito and increased volume
of ore processed at Noche Buena. This was partially offset by a
lower ore grade at Ciénega.
-- First half attributable gold production of 428.4 koz, up
12.3% vs. 1H20 primarily due to the higher volume of ore processed
at Herradura and, to a lesser extent, a higher ore grade at
Saucito. This was partially offset by a lower ore grade at Ciénega
and a lower ore grade and recovery rate at Noche Buena.
By-Products
-- Quarterly attributable by-product lead production increased
6.8% vs. 1Q21, driven primarily by a higher ore grade and volume of
ore processed at San Julián DOB.
-- Quarterly attributable by-product zinc production increased
7.0% vs. 1Q21 due to a higher ore grade at Fresnillo and a higher
volume of ore processed at San Julián DOB.
-- Quarterly attributable by-product lead and zinc production
increased 1.3% and 3.6% vs. 2Q20 respectively primarily due to
higher ore grades at both Saucito and San Julián DOB, partially
offset by lower ore grades at Fresnillo.
-- First half attributable by-product lead and zinc production
increased 5.5% and 8.5% vs. 1H20 respectively primarily due to
higher ore grades at both Saucito and San Julián DOB, partly offset
by lower ore grades at both Fresnillo and Ciénega.
2Q21 1Q21 % Change 2Q20 % Change 1H21 1H20 % Change
Silver (koz) 14,092 11,839 19.0 12,944 8.9 25,931 25,491 1.7
-------- -------- --------- -------- --------- -------- -------- ---------
Silverstream
(koz) 803 796 1.0 648 23.9 1,599 1,328 20.4
-------- -------- --------- -------- --------- -------- -------- ---------
Total Silver
(koz) 14,895 12,635 17.9 13,592 9.6 27,530 26,819 2.7
-------- -------- --------- -------- --------- -------- -------- ---------
Gold (oz) 200,163 228,193 (12.3) 184,356 8.6 428,356 381,319 12.3
-------- -------- --------- -------- --------- -------- -------- ---------
Lead (t) 16,386 15,340 6.8 16,180 1.3 31,726 30,085 5.5
-------- -------- --------- -------- --------- -------- -------- ---------
Zinc (t) 27,687 25,881 7.0 26,726 3.6 53,568 49,381 8.5
-------- -------- --------- -------- --------- -------- -------- ---------
DEVELOPMENT PROJECTS
-- Continued progress was achieved on the construction of the
Juanicipio flotation plant, with the assembly of flotation cells
and filters concluded during the quarter. Commissioning of the
plant by 4Q21 remains on track.
-- As previously reported, the connection of the new circuit to
the Fresnillo flotation plant was completed in 1Q21, and the
programming of the control loop system was concluded in 2Q21.
2021 OUTLOOK
We remain on track to meet our 2021 full year guidance of 53.5
to 59.5 moz of silver (including Silverstream) and 675 to 725 koz
of gold. We are assessing any potential impact that might result
from the implementation of the new law restricting the ability to
subcontract labour in Mexico. However, these new measures are not
expected to impact second half production.
INTERIM RESULTS
Fresnillo will announce its 2021 Interim Results on 3(rd) of
August 2021.
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
2Q21 1Q21 % Change 2Q20 % Change 1H21 1H20 % Change
Ore Processed
(t) 579,863 561,360 3.3 596,115 (2.7) 1,141,223 1,194,905 (4.5)
-------- -------- --------- -------- --------- ---------- ---------- ---------
Production
-------- -------- --------- -------- --------- ---------- ---------- ---------
Silver (koz) 3,348 3,260 2.7 3,611 (7.3) 6,608 6,756 (2.2)
-------- -------- --------- -------- --------- ---------- ---------- ---------
Gold (oz) 8,736 8,375 4.3 10,828 (19.3) 17,112 19,609 (12.7)
-------- -------- --------- -------- --------- ---------- ---------- ---------
Lead (t) 4,875 4,492 8.5 6,860 (28.9) 9,367 11,477 (18.4)
-------- -------- --------- -------- --------- ---------- ---------- ---------
Zinc (t) 8,404 7,143 17.7 10,978 (23.5) 15,546 17,737 (12.3)
-------- -------- --------- -------- --------- ---------- ---------- ---------
Ore Grades
-------- -------- --------- -------- --------- ---------- ---------- ---------
Silver (g/t) 201 203 (1.1) 209 (4.1) 202 196 2.7
-------- -------- --------- -------- --------- ---------- ---------- ---------
Gold (g/t) 0.69 0.69 0.8 0.79 (12.2) 0.69 0.72 (4.2)
-------- -------- --------- -------- --------- ---------- ---------- ---------
Lead (%) 0.99 0.95 4.4 1.33 (25.4) 0.97 1.14 (14.7)
-------- -------- --------- -------- --------- ---------- ---------- ---------
Zinc (%) 2.07 1.82 13.4 2.55 (18.7) 1.95 2.12 (7.9)
-------- -------- --------- -------- --------- ---------- ---------- ---------
Quarterly silver production was up 2.7% vs. 1Q21 due to a higher
volume of ore processed resulting from a decrease in Covid-19
related absenteeism.
Quarterly silver production decreased 7.3% vs. 2Q20 driven by a
lower ore grade, in line with expectations, and to a lesser extent,
lower volume of ore processed as a result of a temporary
ventilation system failure and an increased presence of water in
the San Alberto area in June, which adversely impacted development
and mining activities.
First half silver production decreased 2.2% vs. 1H20 due to a
lower volume of ore processed resulting from the issues mentioned
above and the additional rehabilitation and maintenance of certain
ramps as reported in 1Q21. This was mitigated by a higher ore grade
partly as a result of the enhanced dilution control during the
year.
Mine development rates decreased slightly quarter on quarter to
an average of 3,224m per month in 2Q21 (1Q21: 3,346m per month),
driven by the reasons mentioned above and the performance of the
tunnel boring machine. The target remains to develop on average
between 3,300 - 3,500m per month in 2021.
Quarterly by-product gold production increased 4.3% vs. 1Q21
driven by a higher volume of ore processed.
Quarterly and first half by-product gold production decreased
19.3% and 12.7% vs. 2Q20 and 1H20 respectively due to lower ore
grades and a decrease in volumes of ore processed.
The silver ore grade in 2021 is expected to remain in the range
of 190-210 g/t, while the gold ore grade is expected to remain in
the range of 0.55-0.70 g/t.
SAUCITO MINE PRODUCTION
2Q21 1Q21 % Change 2Q20 % Change 1H21 1H20 % Change
Ore Processed (t) 660,039 650,884 1.4 715,338 (7.7) 1,310,923 1,385,385 (5.4)
-------- -------- --------- -------- --------- ---------- ---------- ---------
Production
-------- -------- --------- -------- --------- ---------- ---------- ---------
Silver (koz) 3,454 3,148 9.7 4,098 (15.7) 6,602 8,141 (18.9)
-------- -------- --------- -------- --------- ---------- ---------- ---------
Gold (oz) 24,760 26,819 (7.7) 20,398 21.4 51,578 41,574 24.1
-------- -------- --------- -------- --------- ---------- ---------- ---------
Lead (t) 7,650 7,841 (2.4) 6,255 22.3 15,490 11,972 29.4
-------- -------- --------- -------- --------- ---------- ---------- ---------
Zinc (t) 11,722 11,848 (1.1) 8,842 32.6 23,570 17,744 32.8
-------- -------- --------- -------- --------- ---------- ---------- ---------
Ore Grades
-------- -------- --------- -------- --------- ---------- ---------- ---------
Silver (g/t) 190 177 7.1 207 (8.3) 184 210 (12.8)
-------- -------- --------- -------- --------- ---------- ---------- ---------
Gold (g/t) 1.51 1.65 (8.5) 1.15 31.3 1.58 1.21 31.0
-------- -------- --------- -------- --------- ---------- ---------- ---------
Lead (%) 1.35 1.40 (3.7) 1.04 29.8 1.38 1.02 35.4
-------- -------- --------- -------- --------- ---------- ---------- ---------
Zinc (%) 2.43 2.48 (2.0) 1.82 33.4 2.45 1.84 33.3
-------- -------- --------- -------- --------- ---------- ---------- ---------
Quarterly silver production increased 9.7% vs. 1Q21 due to a
higher ore grade following the short term instability issues
reported in 1Q21 limiting access to higher ore grade areas.
As seen in previous quarters, quarterly and first half silver
production decreased 15.7% and 18.9% vs. 2Q20 and 1H20 respectively
as a result of the gradual decrease of ore grade at the Jarillas
vein. The lower volume of ore processed was primarily driven by the
presence of high temperature water in an underground production
area, which temporarily limited access to that zone and a section
of the ramps, also resulting in the need for additional
ventilation.
Quarterly by-product gold production decreased 7.7% vs. 1Q21
driven by a lower ore grade.
Quarterly and first half by-product gold production increased
21.4% and 24.1% vs. 2Q20 and 1H20 respectively, driven by higher
ore grades, partially offset by lower volumes of ore processed.
Given the lower silver grade in 1H21, full year 2021 silver ore
grade is expected to be at the lower end of the original estimate
of 200-220 g/t, while the gold ore grade is estimated to be around
1.3-1.5 g/t.
PYRITES PLANT (PHASE I)
2Q21 1Q21 % Change 2Q20 % Change 1H21 1H20 % Change
Pyrite Concentrates
Processed (t) 48,523 41,760 16.0 39,049 24.4 90,283 80,502 12.2
------- ------- --------- ------- --------- ------- ------- ---------
Production
------- ------- --------- ------- --------- ------- ------- ---------
Silver (koz) 167 137 22.3 249 (32.9) 304 505 (39.8)
------- ------- --------- ------- --------- ------- ------- ---------
Gold (oz) 721 678 6.4 924 (22.0) 1,399 1,795 (22.1)
------- ------- --------- ------- --------- ------- ------- ---------
Ore Grades
------- ------- --------- ------- --------- ------- ------- ---------
Silver (g/t) 147 143 3.3 261 (43.6) 145 252 (42.5)
------- ------- --------- ------- --------- ------- ------- ---------
Gold (g/t) 1.56 1.64 (4.5) 2.10 (25.6) 1.60 2.11 (24.2)
------- ------- --------- ------- --------- ------- ------- ---------
Quarterly silver production increased 22.3% vs. 1Q21 due to an
increased volume and higher ore grade of pyrite concentrates
processed from the Saucito mine.
Quarterly gold production increased 6.4% vs. 1Q21 due to a
higher volume of pyrite concentrates processed, partially offset by
a lower ore grade and recovery rate.
Quarterly and first half silver and gold production decreased
vs. 2Q20 and 1H20 due to lower ore grades from Saucito's flotation
plant and lower recovery rates, mitigated by a higher volume of
pyrite concentrates processed.
In 2021, we continue to expect production from this plant at
Saucito to remain unchanged year-on-year.
As noted in previous reports, the Pyrites Plant (phase II) was
completed on time in 4Q20 but due to Covid-19 related delays, the
plant start-up was pushed backed as a result of certain technical
permitting issues. We continue to anticipate that the plant will
start operating in 3Q21.
CIENEGA MINE PRODUCTION
2Q21 1Q21 % Change 2Q20 % Change 1H21 1H20 % Change
Ore Processed (t) 333,959 326,163 2.4 331,543 0.8 660,123 657,893 0.3
-------- -------- --------- -------- --------- -------- -------- ---------
Production
-------- -------- --------- -------- --------- -------- -------- ---------
Gold (oz) 12,406 14,289 (13.2) 15,948 (22.2) 26,696 32,374 (17.5)
-------- -------- --------- -------- --------- -------- -------- ---------
Silver (koz) 1,425 1,299 9.7 1,573 (9.4) 2,723 2,969 (8.3)
-------- -------- --------- -------- --------- -------- -------- ---------
Lead (t) 964 1,227 (21.4) 1,489 (35.3) 2,191 3,237 (32.3)
-------- -------- --------- -------- --------- -------- -------- ---------
Zinc (t) 1,669 1,973 (15.4) 2,324 (28.2) 3,642 4,909 (25.8)
-------- -------- --------- -------- --------- -------- -------- ---------
Ore Grades
-------- -------- --------- -------- --------- -------- -------- ---------
Gold (g/t) 1.24 1.45 (14.6) 1.61 (22.8) 1.34 1.65 (18.4)
-------- -------- --------- -------- --------- -------- -------- ---------
Silver (g/t) 154 145 6.0 172 (10.3) 150 163 (8.2)
-------- -------- --------- -------- --------- -------- -------- ---------
Lead (%) 0.49 0.59 (18.1) 0.69 (29.1) 0.54 0.75 (27.7)
-------- -------- --------- -------- --------- -------- -------- ---------
Zinc (%) 0.91 1.07 (14.3) 1.19 (23.2) 0.99 1.24 (20.1)
-------- -------- --------- -------- --------- -------- -------- ---------
Quarterly gold production decreased 13.2% vs. 1Q21 due to a
lower ore grade as higher volumes of ore were extracted from the
Western area of the Ciénega mine, which has a higher silver
content.
Quarterly silver production increased 9.7% vs. 1Q21 due to a
higher ore grade as mentioned above and, to a lesser extent, an
increase in the volume of ore processed resulting from efficiency
gains in the maintenance programme.
Quarterly and first half gold and silver production decreased
vs. 2Q20 and 1H20, due to the lower ore grades year on-year, in
line with the mine sequence.
The gold and silver ore grades for 2021 are expected to remain
in the range of 1.30-1.40 g/t and 150-160 g/t respectively.
SAN JULIÁN MINE PRODUCTION
2Q21 1Q21 % Change 2Q20 % Change 1H21 1H20 % Change
Ore Processed Veins
(t) 302,475 288,673 4.8 312,796 (3.3) 591,148 621,973 (5.0)
-------- -------- --------- -------- --------- ---------- ---------- ---------
Ore Processed DOB
(t) 555,055 448,674 23.7 559,564 (0.8) 1,003,728 1,101,489 (8.9)
-------- -------- --------- -------- --------- ---------- ---------- ---------
Total production
at San Julián
-------- -------- --------- -------- --------- ---------- ---------- ---------
Gold (oz) 15,546 13,802 12.6 16,361 (5.0) 29,346 31,535 (6.9)
-------- -------- --------- -------- --------- ---------- ---------- ---------
Silver (koz) 5,219 3,430 52.2 3,104 68.1 8,649 6,277 37.8
-------- -------- --------- -------- --------- ---------- ---------- ---------
Production Veins
-------- -------- --------- -------- --------- ---------- ---------- ---------
Gold (oz) 14,320 12,828 11.6 15,658 (8.5) 27,147 30,242 (10.2)
-------- -------- --------- -------- --------- ---------- ---------- ---------
Silver (koz) 1,027 966 6.3 1,047 (2.0) 1,992 2,121 (6.1)
-------- -------- --------- -------- --------- ---------- ---------- ---------
Production DOB
-------- -------- --------- -------- --------- ---------- ---------- ---------
Gold (oz) 1,226 974 25.9 703 74.2 2,199 1,293 70.1
-------- -------- --------- -------- --------- ---------- ---------- ---------
Silver (koz) 4,192 2,465 70.1 2,057 103.8 6,657 4,156 60.2
-------- -------- --------- -------- --------- ---------- ---------- ---------
Lead (t) 2,813 1,694 66.1 1,576 78.4 4,507 3,400 32.6
-------- -------- --------- -------- --------- ---------- ---------- ---------
Zinc (t) 5,751 4,783 20.2 4,581 25.5 10,533 8,991 17.1
-------- -------- --------- -------- --------- ---------- ---------- ---------
Ore Grades Veins
-------- -------- --------- -------- --------- ---------- ---------- ---------
Gold (g/t) 1.56 1.47 5.8 1.63 (4.2) 1.52 1.58 (4.1)
-------- -------- --------- -------- --------- ---------- ---------- ---------
Silver (g/t) 115 115 0.4 113 1.9 115 115 (0.3)
-------- -------- --------- -------- --------- ---------- ---------- ---------
Ore Grades DOB
-------- -------- --------- -------- --------- ---------- ---------- ---------
Gold (g/t) 0.12 0.12 (0.4) 0.08 41.5 0.12 0.08 45.0
-------- -------- --------- -------- --------- ---------- ---------- ---------
Silver (g/t) 275 197 39.3 133.96 105.2 240 136.93 75.5
-------- -------- --------- -------- --------- ---------- ---------- ---------
Lead (%) 0.61 0.47 29.5 0.37 63.4 0.55 0.39 38.4
-------- -------- --------- -------- --------- ---------- ---------- ---------
Zinc (%) 1.38 1.38 (0.1) 1.08 27.9 1.38 1.10 24.9
-------- -------- --------- -------- --------- ---------- ---------- ---------
SAN JULIÁN VEINS
Quarterly silver production increased 6.3% vs. 1Q21 due to a
higher volume of ore processed as a result of efficiency gains in
the maintenance programme in 2Q21, though ore throughput in 1Q21
was adversely impacted by the reported electricity outage by the
Mexican state-owned electricity utility Comisión Federal de
Electricidad (CFE) in February.
Gold production increased 11.6% vs. 1Q21 due to a higher volume
of ore processed for reasons explained above and a higher ore
grade.
Quarterly and first half gold production decreased 8.5% and
10.2% vs. 2Q20 and 1H20 respectively due to a lower volume of ore
processed and lower ore grade due to the depletion of higher ore
grade areas.
Quarterly silver production decreased 2.0% vs. 2Q20 due to a
lower volume of ore processed, mitigated by a higher ore grade.
First half silver production decreased 6.1% vs. 1H20 due to a
lower volume of ore processed for reasons explained above.
We continue to expect the 2021 silver and gold ore grades to
average 110-120 g/t and 1.30-1.50 g/t, respectively.
SAN JULIÁN DISSEMINATED ORE BODY (DOB)
Quarterly silver production increased 70.1% vs. 1Q21, due to a
higher than expected ore grade as a result of: i) the positive
variation with the geological model in the Central area of the ore
body; and ii) access to higher ore grade areas following the mine
resequencing in 2019, as mentioned in previous quarters.
An increase in the volume of ore processed driven by efficiency
gains in the maintenance programme further benefited 2Q21 silver
production, though volumes were temporarily impacted in 1Q21 by the
damage to the lead circuit housing at the end of 2020 and the
electricity outage by the CFE in February, as previously
reported.
Quarterly silver production increased 103.8% vs. 2Q20 due to a
higher than expected ore grade, as explained above.
First half silver production increased 60.2% vs. 1H20 due to a
higher than expected ore grade as described above, partially offset
by a lower volume of ore processed, again, for reasons explained
above.
We are in the process of reviewing the reconciliation of the
actual silver grade with the geological model, in particular in
high grade areas. However, if this trend continues, the silver ore
grade for 2021 is expected to be between 200-230 g/t.
HERRADURA TOTAL MINE PRODUCTION
2Q21 1Q21 % Change 2Q20 % Change 1H21 1H20 % Change
Ore Processed
(t) 5,482,544 6,011,862 (8.8) 3,283,104 67.0 11,494,407 8,130,282 41.4
----------- ----------- --------- ----------- --------- ----------- ----------- ---------
Total Volume
Hauled (t) 33,153,978 33,501,176 (1.0) 18,942,659 75.0 66,655,154 52,783,600 26.3
----------- ----------- --------- ----------- --------- ----------- ----------- ---------
Production
----------- ----------- --------- ----------- --------- ----------- ----------- ---------
Gold (oz) 108,990 149,175 (26.9) 95,253 14.4 258,165 205,746 25.5
----------- ----------- --------- ----------- --------- ----------- ----------- ---------
Silver (koz) 227 303 (25.0) 300 (24.2) 530 824 (35.7)
----------- ----------- --------- ----------- --------- ----------- ----------- ---------
Ore Grades
----------- ----------- --------- ----------- --------- ----------- ----------- ---------
Gold (g/t) 0.68 0.92 (26.2) 0.90 (24.6) 0.81 0.82 (1.3)
----------- ----------- --------- ----------- --------- ----------- ----------- ---------
Silver (g/t) 1.74 2.30 (24.2) 3.28 (46.9) 2.03 3.82 (46.8)
----------- ----------- --------- ----------- --------- ----------- ----------- ---------
Quarterly gold production decreased 26.9% vs. 1Q21 due to a
lower ore grade processed at the Dynamic Leaching Plant (DLP), in
line with our expectations, and a decrease in the volume of ore
processed as a result of the temporary stoppage of the DLP in April
in order to change screens and grids. This was mitigated by
improved recovery rates.
Quarterly gold production increased 14.4% vs. 2Q20 due to a
higher volume of ore deposited in 2Q21 as Covid-19 operational
restrictions resulted in lower volumes of ore deposited during
2Q20. This was partially offset by a lower ore grade when compared
to 2Q20, when we had access to a higher ore grade area, and a
slower recovery rate.
First half gold production increased 25.5% vs. 1H20 due to a
higher volume of ore processed, partially offset by the lower
recovery rate resulting from a slower speed of recovery on the
leaching pads.
The gold ore grade in 2021 is expected to remain in the range of
0.70-0.75 g/t, despite the ore grade in 1H21 being above this
guidance.
NOCHE BUENA TOTAL MINE PRODUCTION
2Q21 1Q21 % Change 2Q20 % Change 1H21 1H20 % Change
Ore Processed
(t) 2,530,510 1,173,414 115.7 1,366,909 85.1 3,703,923 3,330,054 11.2
---------- ---------- --------- ---------- --------- ----------- ----------- ---------
Total Volume
Hauled (t) 6,585,098 6,663,112 (1.2) 5,612,622 17.3 13,248,211 15,717,399 (15.7)
---------- ---------- --------- ---------- --------- ----------- ----------- ---------
Production
---------- ---------- --------- ---------- --------- ----------- ----------- ---------
Gold (oz) 28,564 14,665 94.8 24,643 15.9 43,228 48,686 (11.2)
---------- ---------- --------- ---------- --------- ----------- ----------- ---------
Silver (koz) 8 5 67.4 9 (17.2) 12 19 (34.6)
---------- ---------- --------- ---------- --------- ----------- ----------- ---------
Ore Grades
---------- ---------- --------- ---------- --------- ----------- ----------- ---------
Gold (g/t) 0.53 0.48 10.6 0.54 (0.7) 0.52 0.54 (3.9)
---------- ---------- --------- ---------- --------- ----------- ----------- ---------
Silver (g/t) 0.17 0.21 (17.6) 0.54 (67.8) 0.19 0.38 (51.3)
---------- ---------- --------- ---------- --------- ----------- ----------- ---------
Quarterly gold production increased 94.8% vs. 1Q21 due to an
increase in the volume of ore deposited and higher ore grade as
access to deeper areas of the pit is being regained following the
minor landslip in 2H20. This was partially offset by a lower
recovery rate.
Quarterly gold production increased 15.9% vs. 2Q20 due to a
higher volume of ore deposited following the Covid-19 related
operational restrictions last year which resulted in lower volumes
of ore deposited during 2Q20 , partially offset by a lower recovery
rate in 1H21 vs. the one achieved in 1H20 when increased irrigation
on the pads resulted in a higher speed of recovery .
First half gold production decreased 11.2% vs. 1H20 due to a
lower recovery rate and to a lesser extent, lower ore grade as a
result of the expected depletion of the mine as it approaches
closure. This was mitigated by a higher volume of ore
processed.
The expected gold ore grade in 2021 is predicted to remain in
the range of 0.40-0.50 g/t.
JUANICIPIO
Development ore from Juanicipio continued to be processed
through the Fresnillo mine beneficiation plant during the quarter.
On an attributable basis, 243.6 koz of silver and 440.7 oz of gold
were produced in 2Q21.
Continued progress was achieved on the construction of the
Juanicipio processing plant with the assembly of flotation cells
and filters being completed during the quarter. Commissioning of
the plant by 4Q21 remains on track.
We expect to process an average of 16,000 tonnes per month
through to 4Q21 on a consolidated basis, at which time we expect to
start commissioning the Juanicipio beneficiation plant.
SILVERSTREAM
Quarterly Silverstream production remained at similar levels to
the previous quarter (+1.0%) mainly due to a higher volume of ore
processed. Quarterly Silverstream production increased 23.9% vs.
2Q20 due to a higher ore grade and higher volume of ore
processed.
First half Silverstream production increased 20.4% vs. 1H20 due
to an increased ore grade and higher volume of ore processed.
Expected silver production in 2021 remains in the range of
2.5-3.5 moz.
SAFETY PERFORMANCE
A healthy and safe working environment builds trust with our
people and we continue to be absolutely committed to a strong
safety culture in our mines, targeting zero fatalities through the
reinforcement of our safety training for all employees and
contractors. The 'I Care, We Care' programme continues to be rolled
out across the business and is a central aspect of all new
development projects and operations. We continue to target a steady
improvement in all health and safety metrics.
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 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 three
advanced exploration projects - Orisyvo, Rodeo and Guanajuato, 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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July 28, 2021 02:00 ET (06:00 GMT)
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