REG - Fresnillo Plc - 1Q24 Production Report
24/04/2024 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240424:nRSX7920La&default-theme=true
RNS Number : 7920L Fresnillo PLC 24 April 2024
Fresnillo plc
21 Upper Brook Street
London W1K 7PY
United Kingdom
www.fresnilloplc.com (http://www.fresnilloplc.com)
24 April 2024
FIRST QUARTER PRODUCTION REPORT
FOR THE THREE MONTHS ENDED 31 MARCH 2024
Octavio Alvídrez, Chief Executive Officer, said:
"We have started the year with our performance in line with our expectations.
Silver production was slightly up over the same quarter last year, driven by
the contribution of Juanicipio, higher grades at San Julián Veins and a
stronger performance at Saucito. Gold production was slightly lower as
expected, due mainly to the lower output from the Noche Buena mine as it
approaches its end of life and the lower grade at Herradura in line with the
mine plan. We continue to prioritise safety across all our operations in 2024,
while also focusing on reducing costs, improving efficiencies at all mine
sites, and with our newest Juanicipio mine now fully ramped up, on the
advancement of our growth pipeline. Our guidance for the full year is
unchanged."
HIGHLIGHTS
Silver
· Quarterly attributable silver production of 13.5 moz (including
Silverstream) decreased 4.6% vs. 4Q23 due to the lower ore grade and, to a
lesser extent, decreased volume of ore processed at San Julián (DOB), and
lower ore grade at Saucito and Fresnillo, mitigated by the higher ore grade at
San Julián Veins.
· Quarterly attributable silver production (including Silverstream)
increased 2.7% vs. 1Q23, primarily due to the increased contribution from
Juanicipio, the higher ore grade at San Julián Veins and increased volume of
ore processed at Saucito, partly offset by the lower ore grade and volume of
ore processed at Fresnillo and San Julián (DOB).
Gold
· Quarterly attributable gold production of 140.8 koz, down 7.7% vs.
4Q23, mainly driven by the lower ore grade at Herradura in line with the mine
plan, and the mine closure plan at Noche Buena, partly mitigated by the higher
ore grade at Saucito.
· Quarterly attributable gold production down 18.6% vs. 1Q23 primarily
due to the lower volume of ore processed at Herradura and the mine closure
plan at Noche Buena, partly mitigated by the increased contribution from
Juanicipio.
By-Products
• Quarterly attributable by-product lead production down 6.1% vs.
4Q23 primarily due to the lower ore grade at Saucito and lower ore grade,
decreased volume of ore processed and lower recovery rate at San Julián
(DOB), partly mitigated by the higher ore grade and recovery rate at
Fresnillo.
• Quarterly attributable by-product lead production up 11.6% vs.
1Q23 due to the increased contribution from Juanicipio and the higher volume
of ore processed at Saucito, partly offset by the lower ore grade, volume of
ore processed and recovery rate at San Julián (DOB).
• Quarterly attributable by-product zinc production down 9.3% vs.
4Q23 mainly due to the lower ore grade at Saucito, partly mitigated by the
higher ore grade at Fresnillo.
• Quarterly attributable by-product zinc production up 8.5% vs. 1Q23
due to the increased contribution from Juanicipio and the higher volume of ore
processed at Saucito, partly offset by the lower ore grade and volume of ore
processed at San Julián (DOB) and decreased volume of ore processed at
Fresnillo.
1Q24 4Q23 % Change 1Q23 % Change
Silver (koz) 13,117 13,548 (3.2) 12,337 6.3
Silverstream (koz) 397 612 (35.1) 821 (51.6)
Total Silver (koz) 13,513 14,161 (4.6) 13,158 2.7
Gold (oz) 140,847 152,605 (7.7) 173,034 (18.6)
Lead (t) 14,924 15,895 (6.1) 13,368 11.6
Zinc (t) 26,157 28,844 (9.3) 24,118 8.5
SAFETY PERFORMANCE
As already reported in the Preliminary Results, we were deeply saddened to
confirm a fatal accident at the Fresnillo mine in January. A thorough
investigation of the incident was carried out, together with the authorities,
to identify the root cause and implement corrective actions. The safety of our
people, and the installation of a true safety culture across all our
operations for both employees and contractors, remains the absolute priority
for the Group.
2024 OUTLOOK
Our 2024 outlook is in line with previous expectations:
· Attributable silver production expected to be in the range of 55.0 to
62.0 moz (including Silverstream)
· Attributable gold production expected to be in the range of 580 to
630 koz.
Expressed in silver equivalent ounces 1 , total production is expected to be
101-112 million ounces.
For further information, please visit our website www.fresnilloplc.com
(http://www.fresnilloplc.com) or contact:
FRESNILLO PLC Tel: +44 (0)20 7399 2470
London Office
Gabriela Mayor, Head of Investor Relations
Mark Mochalski
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
1Q24 4Q23 % Change 1Q23 % Change
Ore Processed (t) 622,390 609,135 2.2 668,366 (6.9)
Production
Silver (koz) 2,676 2,781 (3.8) 3,557 (24.8)
Gold (oz) 9,846 8,149 20.8 8,750 12.5
Lead (t) 6,191 5,226 18.5 5,651 9.6
Zinc (t) 11,668 10,592 10.2 12,094 (3.5)
Ore Grades
Silver (g/t) 151 160 (5.6) 184 (17.9)
Gold (g/t) 0.66 0.59 11.9 0.57 15.8
Lead (%) 1.15 1.03 11.7 1.00 15.0
Zinc (%) 2.58 2.42 6.6 2.42 6.6
Quarterly silver production decreased 3.8% when compared to 4Q23, mainly
driven by the higher proportion of volumes extracted from the western areas of
the mine with lower silver ore grade but higher gold and base metal contents,
the temporary operating constraints in the eastern areas, including ground
conditions and delays in mine infrastructure and, to a lesser extent,
variations with the geological model. This was partly mitigated by the
increased volume of ore processed from these areas.
Quarterly silver production decreased 24.8% vs. 1Q23, mainly due to the lower
ore grade as explained above and lower volume of ore processed in accordance
with the mine plan.
Mine development rates remained stable at an average of 3,027m per month in
1Q24 (4Q23: 3,038m per month).
Quarterly by-product gold production increased 20.8% and 12.5% vs. 4Q23 and
1Q23, respectively driven by the higher ore grade and increased recovery rate.
Silver ore grade in 2024 has been reviewed and is expected to be in the range
of 160 to 180 g/t, while the gold ore grade is estimated to be between 0.60 to
0.70 g/t.
SAUCITO MINE PRODUCTION
1Q24 4Q23 % Change 1Q23 % Change
Ore Processed (t) 574,969 576,189 (0.2) 471,959 21.8
Production
Silver (koz) 3,234 3,399 (4.9) 2,804 15.3
Gold (oz) 19,343 17,256 12.1 21,378 (9.5)
Lead (t) 4,908 6,311 (22.2) 4,301 14.1
Zinc (t) 6,694 10,335 (35.2) 5,991 11.7
Ore Grades
Silver (g/t) 198 204 (2.9) 207 (4.3)
Gold (g/t) 1.35 1.20 12.5 1.77 (23.7)
Lead (%) 1.00 1.27 (21.3) 1.07 (6.5)
Zinc (%) 1.52 2.29 (33.6) 1.68 (9.5)
Quarterly silver production decreased 4.9% vs. 4Q23 mainly driven by the lower
ore grade which resulted from: i) additional ground support required in some
areas with higher silver ore grade, and ii) a slight increase in dilution,
primarily in stopes mined through the long hole drilling method. Both factors
were addressed in early March by increasing ground support and adjusting the
drilling and blasting patterns, which will improve the silver grade going
forward.
Quarterly silver production increased 15.3% vs. 1Q23 primarily due to the
higher volume of ore processed as a result of the improved productivity and
increased equipment availability. This more than compensated for the lower ore
grade driven by the previously mentioned factors.
Quarterly by-product gold production increased 12.1% vs. 4Q23 mainly driven by
the higher ore grade.
Quarterly by-product gold production decreased 9.5% vs. 1Q23 driven by the
lower ore grade as a result of higher dilution and to a lesser extent lower
recovery rate, partly mitigated by the higher volumes of ore processed due to
previously mentioned factors.
Mine development rates remained stable quarter on quarter at 2,840m per month
in 1Q24 (4Q23: 2,810m per month), in accordance with the plan.
The silver ore grade for 2024 is expected to be in the range of 200-220 g/t,
while the gold grade is estimated to be between 1.10-1.30 g/t.
PYRITES PLANT
1Q24* 4Q23* % Change 1Q23 % Change
Pyrite Concentrates Processed (t) 36,344 48,167 (24.5) 27,952 30.0
Production
Silver (koz) 356 328 8.5 111 220.7
Gold (oz) 628 599 4.8 270 132.6
Ore Grades
Silver (g/t) 497 331 50.2 177 180.8
Gold (g/t) 2.15 1.71 25.7 1.31 64.1
*Includes concentrates of Fe from Saucito and Fresnillo.
CIÉNEGA MINE PRODUCTION
1Q24 4Q23 % Change 1Q23 % Change
Ore Processed (t) 261,681 292,612 (10.6) 240,148 9.0
Production
Gold (oz) 10,688 9,187 16.3 9,302 14.9
Silver (koz) 1,201 1,213 (1.0) 980 22.6
Lead (t) 652 693 (5.9) 748 (12.8)
Zinc (t) 832 723 15.1 1,002 (17.0)
Ore Grades
Gold (g/t) 1.38 1.07 29.0 1.30 6.2
Silver (g/t) 166 151 9.9 147 12.9
Lead (%) 0.40 0.39 2.6 0.47 (14.9)
Zinc (%) 0.59 0.47 25.5 0.77 (23.4)
Quarterly gold production increased 16.3% vs. 4Q23 mainly due to the higher
ore grade from the Virginia stope. This was partly offset by the lower volume
of ore processed due to power outages in March.
Quarterly gold and silver production increased 14.9% and 22.6% vs. 1Q23
respectively, due to the increased volume of ore processed as a result of the
timely preparation of stopes at the Taspana and Veta Nueva areas, and the
higher ore grade from new stopes at the Jessica, Gota and Gotita areas.
Quarterly silver production slightly decreased vs. 4Q23 driven by the lower
volume of ore processed as mentioned above, partly offset by the higher ore
grade.
The gold and silver ore grades for 2024 are estimated to be in the ranges of
1.1-1.3 g/t and 160-180 g/t respectively.
SAN JULIÁN MINE PRODUCTION
1Q24 4Q23 % Change 1Q23 % Change
Ore Processed Veins (t) 291,003 291,661 (0.2) 283,752 2.6
Ore Processed DOB (t) 501,434 525,081 (4.5) 522,260 (4.0)
Total production at San Julián
Gold (oz) 12,582 11,034 14.0 12,033 4.6
Silver (koz) 3,039 3,156 (3.7) 3,412 (10.9)
Production Veins
Gold (oz) 11,973 10,117 18.3 11,139 7.5
Silver (koz) 2,039 1,719 18.6 1,312 55.4
Production DOB
Gold (oz) 609 918 (33.7) 894 (31.9)
Silver (koz) 1,000 1,437 (30.4) 2,100 (52.4)
Lead (t) 962 1,332 (27.8) 1,855 (48.1)
Zinc (t) 3,241 3,362 (3.6) 3,755 (13.7)
Ore Grades Veins
Gold (g/t) 1.35 1.13 19.5 1.28 5.5
Silver (g/t) 239 200 19.5 158 51.3
Ore Grades DOB
Gold (g/t) 0.06 0.08 (25.0) 0.09 (33.3)
Silver (g/t) 74 100 (26.0) 146 (49.3)
Lead (%) 0.26 0.33 (21.2) 0.46 (43.5)
Zinc (%) 0.89 0.86 3.5 0.96 (7.3)
SAN JULIÁN VEINS
Quarterly silver production increased 18.6% vs. 4Q23 and 55.4% vs. 1Q23,
mainly due to the higher ore grade at San Antonio, La Dura and Eliza veins and
increased volumes of development ore with high ore grade.
Quarterly gold production increased 18.3% vs. 4Q23 mainly driven by the higher
ore grade due to the aforementioned factors.
Quarterly gold production increased 7.5% vs. 1Q23 mainly due to the higher ore
grade and, to a lesser extent, the increased volume of ore processed driven by
the optimisation of the maintenance programme.
We expect the 2024 silver and gold ore grades to be in the ranges of 160-180
g/t and 1.00-1.20 g/t, respectively.
SAN JULIÁN DISSEMINATED ORE BODY (DOB)
Quarterly silver production decreased vs. 4Q23 and 1Q23 mainly as a result of
lower ore grade in the periphery of the ore body and the decrease in volumes
of ore processed as the mine approaches the end of its life.
The mine plan of the disseminated ore body was reviewed due to ground
instability in some of the remaining production areas. As a result, some
changes to the mine plan have been made, which will have an impact on the
average silver ore grade for 2024, which is now expected to be around 70g/t.
Mining activities are expected to conclude in 3Q24. The impact on production
at San Julián DOB has been partly offset by a better performance in San
Julián Veins, as previously described.-
HERRADURA TOTAL MINE PRODUCTION
1Q24 4Q23 % Change 1Q23 % Change
Ore Processed (t) 4,695,531 4,534,745 3.5 6,485,710 (27.6)
Total Volume Hauled (t) 22,140,776 24,409,823 (9.3) 29,223,867 (24.2)
Production
Gold (oz) 78,058 93,432 (16.5) 106,832 (26.9)
Silver (koz) 119 147 (19.0) 208 (42.8)
Ore Grades
Gold (g/t) 0.67 0.84 (20.2) 0.73 (8.2)
Silver (g/t) 1.32 1.69 (21.9) 1.72 (23.3)
Quarterly gold production decreased 16.5% vs. 4Q23 mainly driven by the lower
ore grade, in accordance with the mine plan. This was partly offset by the
increase in volume of ore processed driven by better performance at the
dynamic leaching plants in 1Q24, which had been impacted by the previously
reported electrical fault in the third and fourth quarters of 2023.
Quarterly gold production decreased 26.9% vs. 1Q23 primarily due to the lower
volume of ore processed as a result of heavy rain in March, which required
additional pumping at the bottom of the pit, and consequently disrupted mining
activities. Additionally, the lower ore grade also contributed to the
decreased gold production.
The gold ore grade in 2024 is expected to be in the range of 0.60-0.70 g/t.
NOCHE BUENA
4,144 ounces of gold were recovered from the leaching pads at Noche Buena
during the quarter. As previously reported, mining activities concluded in May
2023, and the closure plan is ongoing at this mine.
JUANICIPIO - ATTRIBUTABLE ORE PROCESSED AND PRODUCTION
1Q24 4Q23* % Change 1Q23** % Change
Ore Processed (t) 182,383 194,189 (6.1) 124,333 46.7
Production
Silver (koz) 2,489 2,523 (1.3) 1,260 97.5
Gold (oz) 5,559 5,931 (6.3) 3,392 63.9
Lead (t) 2,211 2,334 (5.3) 813 172.0
Zinc (t) 3,722 3,832 (2.9) 1,275 191.9
Ore Grades
Silver (g/t) 476 467 1.9 363 31.1
Gold (g/t) 1.32 1.37 (3.6) 1.08 22.2
Lead (%) 1.35 1.35 0.0 0.74 82.4
Zinc (%) 2.49 2.44 2.0 1.44 72.9
* Includes ore processed at the Fresnillo and Saucito beneficiation plants.
** Includes ore processed from initial tests during the commissioning of the
Juanicipio plant and ore processed at the Fresnillo and Saucito beneficiation
plants.
Attributable quarterly silver production decreased vs. 4Q23 primarily driven
by the lower volume of ore processed due to a minor maintenance stoppage of
four days, originally planned for two, in March. This was partly offset by the
higher ore grade and increased recovery rates.
Attributable quarterly silver and gold production increased significantly vs.
1Q23 as commissioning of the flotation plant concluded in 1Q23.
Attributable quarterly gold production decreased 6.3% vs. 4Q23 mainly due to
the lower volume of ore processed.
The silver ore grade for 2024 is expected to be in the range of 380-420 g/t.
SILVERSTREAM
Quarterly silverstream production decreased 35.1% and 51.6% vs. 4Q23 and 1Q23
mainly due to the decrease in volumes of ore processed driven by a technical
stoppage of the flotation plant, and a lower ore grade. The maintenance
programme was concluded in April.
Silver production in 2024 is estimated to be in the range of 2.5-3.0 moz.
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 eight operating mines, all of them in Mexico - Fresnillo,
Saucito, Juanicipio, Ciénega, Herradura, Soledad-Dipolos(1), Noche Buena and
San Julián (Veins and Disseminated Ore Body) and four advanced exploration
projects - Orisyvo, Rodeo, Guanajuato and Tajitos 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'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.
1 Au:Ag ratio of 80:1
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END DRLGDGDSSGDDGSSRecent news on Fresnillo
See all newsREG - Fresnillo Plc - 1Q24 Production Report
AnnouncementREG - Fresnillo Plc - Annual Financial Report and Notice of AGM
AnnouncementREG - Fresnillo Plc - Conversion rate for 2023 final dividend
AnnouncementREG - Fresnillo Plc - Board changes
AnnouncementREG - Fresnillo Plc - Board and Committee Changes
Announcement