REG - Fresnillo Plc - 3Q24 Production Report

FresnilloAnnouncement

23/10/2024 07:00

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RNS Number : 2050J  Fresnillo PLC  23 October 2024

 
 
                                       Fresnillo plc

21 Upper Brook Street

London W1K 7PY

United Kingdom

www.fresnilloplc.com (http://www.fresnilloplc.com)

 

23 October 2024

 

 

 

THIRD QUARTER PRODUCTION REPORT

FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2024

 

Octavio Alvídrez, Chief Executive Officer, said:

 

"We have delivered another solid quarter, in line with the consistent
operating performance we have achieved all year. Our full year guidance set
out in January remains unchanged. In silver, Saucito and San Julián Veins
have performed very well, helping to offset slightly lower output at
Fresnillo. In gold, we have delivered a rapid recovery at Herradura after the
mine plan was impacted by heavy rains earlier in the year, with gold
production increasing 40% quarter on quarter, and at Ciénega we have
delivered a strong increase in gold output year to date, testament to the
outstanding work of the team on the ground. This operational consistency gives
us confidence as we enter the final quarter. As we look further ahead, our
priorities are unchanged. Safety is our key focus while we continue to drive
efficiencies and performance across our mine sites."

 

HIGHLIGHTS

 

Silver

 

·    Quarterly attributable silver production of 14.4 moz (including
Silverstream) down 1.5% vs. 2Q24 due to the lower ore grade and decrease in
volume of ore processed at San Julián DOB as it approaches the end of its
life and lower ore grade at Ciénega. This was partly mitigated by the higher
ore grade at Saucito and increased volume of ore processed at San Julián
Veins.

 

·    Quarterly attributable and YTD silver production (including
Silverstream) increased 2.4% and 1.2% vs. 3Q23 and YTD23 respectively, mainly
due to the higher ore grades and volume of ore processed at Saucito and San
Julián Veins. This was partly offset by the decrease in production at San
Julián DOB, lower ore grades and volume of ore processed at Fresnillo, and
lower contribution from the Silverstream.

 

Gold

 

·    Quarterly attributable gold production of 156.8 koz, increased 20.6%
vs. 2Q24, predominantly due to higher ore grade and volume of ore processed at
Herradura, and higher ore grades in the Fresnillo District, partly offset by
the lower ore grade at Ciénega.

 

·    Quarterly attributable gold production increased 18.2% vs. 3Q23
primarily due to the increased volume of ore processed at Herradura and, to
lesser extent, higher ore grade at Fresnillo and San Julián Veins and
increased volume of ore processed and higher ore grade at Saucito. This was
partly offset by the mine closure plan at Noche Buena.

 

·    Year to date gold production of 427.6 koz, down 6.6% vs. YTD23 mainly
due to lower ore grade and recovery rate at Herradura and the mine closure
plan at Noche Buena. This was partly mitigated by higher ore grade at
Fresnillo and, to a lesser extent, higher ore grade and volume of ore
processed at San Julián Veins and Ciénega.

 

 

By-Products

 

•     Quarterly attributable by-product lead production increased 4.7%
vs. 2Q24, primarily due to the higher ore grade at Fresnillo, partly offset by
the lower ore grade at Ciénega and decreased contribution from San Julián
DOB.

 

•     Quarterly attributable by-product zinc production increased 10.5%
vs. 2Q24, mainly due to the higher ore grades at Fresnillo, Saucito and San
Julián DOB, partly offset by the lower ore grades at Juanicipio and Ciénega.

 

•     Quarterly attributable by-product lead production up 21.5% vs.
3Q23, due to the higher ore grade at Fresnillo and higher ore grades and
increased volume of ore processed at Saucito and Juanicipio, partly offset by
the decreased contribution from San Julián DOB.

 

•     Quarterly attributable by-product zinc production up 11.1% vs.
3Q23, primarily due to higher ore grades at Fresnillo and San Julián DOB, and
higher ore grades and increase in volume of ore processed at Juanicipio,
partly offset by lower ore grades at Saucito and Ciénega.

 

•     Year to date attributable by-product lead and zinc production up
18.1% and 11.2% vs. YTD23 respectively, mainly due to increased volume of ore
processed at Juanicipio and Saucito and higher ore grades at Fresnillo and
Juanicipio, partly offset by the decreased contribution from San Julián DOB.

 

 

                     3Q24     2Q24     % Change  3Q23     % Change  YTD24    YTD23    % Change
 Silver (koz)        13,886   14,038   (1.1)     13,434   3.4       41,041   39,905   2.8
 Silverstream (koz)  552      617      (10.5)    670      (17.6)    1,566    2,216    (29.3)
 Total Silver (koz)  14,439   14,655   (1.5)     14,104   2.4       42,607   42,121   1.2
 Gold (oz)           156,759  130,025  20.6      132,627  18.2      427,631  458,042  (6.6)
 Lead (t)            17,707   16,906   4.7       14,575   21.5      49,536   41,938   18.1
 Zinc (t)            32,297   29,240   10.5      29,073   11.1      87,695   78,861   11.2

 

SAFETY PERFORMANCE

 

We are deeply saddened to report a fatal accident during the third quarter at
the Ciénega mine. We continue working towards identifying preventive
measures, focusing on training and maintaining stringent adherence to our
safety policies to provide a safer environment for our workforce. We remain
committed to meeting our Zero Fatalities target by instilling a strong safety
culture through our operations.

 

 

2024 OUTLOOK

 

Our 2024 outlook remains in line with previous guidance:

·    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
 SODALI

 Peter Ogden                                                    Tel: +44 (0)7793 858 211

 

 

MINING OPERATIONS

 

FRESNILLO MINE PRODUCTION

 

                    3Q24     2Q24     % Change  3Q23     % Change   YTD24     YTD23      % Change
 Ore Processed (t)  578,523  589,602  (1.9)     673,233  (14.1)    1,790,515  2,009,374  (10.9)

 Production
 Silver (koz)       2,590    2,583    0.3       3,201    (19.1)    7,849      9,990      (21.4)
 Gold (oz)          14,396   13,309   8.2       9,013    59.7      37,551     28,760     30.6
 Lead (t)           7,526    6,433    17.0      5,175    45.4      20,150     16,147     24.8
 Zinc (t)           14,365   11,260   27.6      12,003   19.7      37,293     34,793     7.2

 Ore Grades
 Silver (g/t)       155      152      2.0       166      (6.6)     152        173        (12.1)
 Gold (g/t)         1.04     0.95     9.5       0.59     76.3      0.88       0.62       41.9
 Lead (%)           1.50     1.27     18.1      0.90     66.7      1.31       0.94       39.4
 Zinc (%)           3.32     2.61     27.2      2.33     42.5      2.83       2.29       23.6

 

Quarterly silver production was in line with 2Q24, as the higher ore grade was
offset by the slight decline in ore processed.

 

Quarterly silver production decreased 19.1% vs. 3Q23, due to the decrease in
volume of ore processed and lower ore grade mainly due to: i) the lower
availability of ore to feed the beneficiation plant as ore was hauled via
ramps while the two sections of the deepened San Carlos shaft were connected;
ii) narrower veins; and iii) changes to the mine plan as cut-off grades in
several areas were adjusted to reflect the higher metal prices.

 

Year to date silver production decreased 21.4% vs. YTD23 primarily driven by
the decreased volume of ore processed and the lower ore grade due to a higher
proportion of volumes extracted from western areas of the mine with lower
silver ore grade, but higher gold and base metal content, in addition to
narrower veins and changes to the mine plan as explained above.

 

Mine development rates increased to an average of 3,296m per month in 3Q24
(2Q24: 3,191m per month).

 

Quarterly and year to date gold production increased vs. all comparative
periods driven by the higher ore grade, partly offset by the decreased volume
of ore processed.

 

The silver ore grade in 2024 is expected to be in the range of 160 to 180 g/t,
while the gold ore grade is estimated to be between 0.70 to 0.90 g/t.

 

 

 

SAUCITO MINE PRODUCTION

 

                    3Q24     2Q24     % Change  3Q23     % Change  YTD 24      YTD 23    % Change
 Ore Processed (t)  590,362  599,601  (1.5)     552,872  6.8       1,764,932  1,587,793  11.2

 Production
 Silver (koz)       3,697    3,577    3.4       2,892    27.8      10,507     8,703      20.7
 Gold (oz)          19,856   18,314   8.4       15,427   28.7      57,513     55,508     3.6
 Lead (t)           5,738    5,658    1.4       4,973    15.4      16,304     13,224     23.3
 Zinc (t)           9,280    8,909    4.2       9,663    (4.0)     24,884     22,656     9.8

 Ore Grades
 Silver (g/t)       219      208      5.3       183      19.7      208        192        8.3
 Gold (g/t)         1.35     1.23     9.8       1.14     18.4      1.31       1.39       (5.8)
 Lead (%)           1.13     1.10     2.7       1.06     6.6       1.08       0.99       9.1
 Zinc (%)           1.99     1.92     3.6       2.22     (10.4)    1.81       1.85       (2.2)

 

Quarterly silver production increased 3.4% vs. 2Q24 due to higher silver ore
grade, partly offset by a decline in volume of ore processed.

 

Quarterly and year to date silver production increased 27.8% and 20.7% vs.
3Q23 and YTD23 respectively, primarily due to the higher ore grade, and
increased volume of ore processed driven by the increased productivity and
availability of equipment, enabling a stricter adherence to the mine plan.

 

Quarterly by-product gold production increased 8.4% vs. 2Q24 mainly due to
higher ore grade, partly offset by lower volume of ore processed
quarter-on-quarter.

 

Quarterly by-product gold production increased 28.7% vs 3Q23 mainly due to the
increased volume of ore processed and higher ore grade.

 

YTD gold production increased 3.6% vs YTD23 as a result of the increase in
volume of ore processed, partly offset by the decrease in ore grade.

 

Mine development rates decreased to an average of 2,500m per month in 3Q24
(2Q24: 2,867m per month) primarily due to additional ventilation and pumping
needed in certain areas. The progress of the measures to improve these
services and increase the timely preparation of the areas to be developed is
being closely monitored and development rates are expected to increase in the
coming quarters.

 

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

 

                                    3Q24*   2Q24*   % Change  3Q23*   % Change  YTD24*   YTD23*   % Change
 Pyrite Concentrates Processed (t)  39,845  40,077  (0.6)     46,934  (15.1)    116,266  114,177  1.8

 Production
 Silver (koz)                       527     490     7.6       225     134.2     1,374    532      158.3
 Gold (oz)                          790     711     11.1      597     32.3      2,129    1,361    56.4

 Ore Grades
 Silver (g/t)                       564     576     (2.1)     220     156.4     547      212      158.0
 Gold (g/t)                         2.14    2.23    (4.0)     1.46    46.6      2.17     1.53     41.8

*Includes concentrates of Fe from Saucito and Fresnillo.

 

 

 

 

 

CIÉNEGA MINE PRODUCTION

 

                    3Q24     2Q24     % Change  3Q23     % Change  YTD24    YTD23    % Change
 Ore Processed (t)  272,133  257,861  5.5       270,531  0.6       791,676  771,931  2.6

 Production
 Gold (oz)          8,887    9,981    (11.0)    9,314    (4.6)     29,556   26,748   10.5
 Silver (koz)       1,218    1,379    (11.7)    1,131    7.7       3,799    3,122    21.7
 Lead (t)           669      982      (31.9)    683      (2.0)     2,303    2,187    5.3
 Zinc (t)           632      812      (22.2)    906      (30.2)    2,275    2,827    (19.5)

 Ore Grades
 Gold (g/t)         1.14     1.31     (13.0)    1.16     (1.7)     1.27     1.17     8.5
 Silver (g/t)       163      192      (15.1)    151      7.9       174      146      19.2
 Lead (%)           0.39     0.57     (31.6)    0.42     (7.1)     0.45     0.45     0.0
 Zinc (%)           0.44     0.58     (24.1)    0.64     (31.3)    0.54     0.69     (21.7)

Quarterly gold and silver production decreased 11.0% and 11.7% vs. 2Q24
respectively, mainly due to the lower ore grade, partly compensated for by the
increase in volume of ore processed in accordance with the mine plan.

Quarterly gold production decreased 4.6% vs. 3Q23 primarily due to lower ore
grade and decrease in recovery rate.

Quarterly silver production increased 7.7% vs. 3Q23 mainly due to the higher
ore grade at the Jessica Transversal and Taspana Sur areas.

Year to date gold and silver production increased 10.5% and 21.7% vs. YTD23
due to the higher ore grade as mentioned above and an increased volume of ore
processed driven by the contribution from the Taspana area, and the timely
preparation of stopes.

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

 

                                  3Q24     2Q24     % Change  3Q23     % Change  YTD24      YTD23      % Change
 Ore Processed Veins (t)          314,786  301,643  4.4       292,391  7.7       907,432    850,648    6.7
 Ore Processed DOB (t)            435,804  458,793  (5.0)     498,607  (12.6)    1,396,031  1,548,765  (9.9)

 Total production at San Julián
 Gold (oz)                        12,412   12,846   (3.4)     11,161   11.2      37,839     33,453     13.1
 Silver (koz)                     2,997    3,117    (3.8)     3,185    (5.9)     9,154      10,193     (10.2)

 Production Veins
 Gold (oz)                        11,914   12,353   (3.6)     10,428   14.3      36,240     30,892     17.3
 Silver (koz)                     2,095    2,022    3.6       1,359    54.2      6,156      3,839      60.4

 Production DOB
 Gold (oz)                        498      493      1.0       733      (32.1)    1,600      2,561      (37.5)
 Silver (koz)                     902      1,096    (17.7)    1,826    (50.6)    2,998      6,354      (52.8)
 Lead (t)                         1,068    1,303    (18.0)    1,595    (33.0)    3,332      5,511      (39.5)
 Zinc (t)                         3,763    3,472    8.4       3,273    15.0      10,476     11,049     (5.2)

 Ore Grades Veins
 Gold (g/t)                       1.24     1.34     (7.5)     1.18     5.1       1.31       1.19       10.1
 Silver (g/t)                     226      228      (0.9)     158      43.0      231        154        50.0

 Ore Grades DOB
 Gold (g/t)                       0.06     0.05     20.0      0.08     (25.0)    0.06       0.08       (25.0)
 Silver (g/t)                     77       88       (12.5)    134      (42.5)    80         148        (45.9)
 Lead (%)                         0.34     0.38     (10.5)    0.42     (19.0)    0.32       0.46       (30.4)
 Zinc (%)                         1.14     1.03     10.7      0.90     26.7      1.01       0.96       5.2

 

SAN JULIÁN VEINS

Quarterly silver production increased 3.6% vs. 2Q24, mainly due to the higher
volume of ore processed driven by the timely preparation of stopes, partly
offset by the lower ore grade.

Quarterly gold production decreased 3.6% vs. 2Q24 due to the lower ore grade,
mitigated by the increase in volume of ore processed.

Quarterly and year to date silver and gold production increased vs. 3Q23 and
YTD23 respectively, mainly due to the higher ore grades at the San Antonio, La
Dura, Eliza and Última Tierra areas, together with improved dilution control
as wider veins were mined. The additional preparation of stopes and the
implementation of an operational plant optimisation programme increased the
processing capacity, hence increasing silver and gold production during these
periods.

Silver and gold ore grades are expected to be in the ranges of 200-230 g/t and
1.20-1.40 g/t, respectively.

 

SAN JULIÁN DISSEMINATED ORE BODY (DOB)

Quarterly and year to date silver production decreased vs. all comparative
periods as a result of the gradual decrease in production at this mine and the
unforeseen geotechnical behaviour of the ore body as it approaches its final
stage, with mining activities expected to conclude in 4Q24.

We expect the 2024 silver ore grade to be around 80 g/t.

 

HERRADURA TOTAL MINE PRODUCTION

 

                          3Q24        2Q24        % Change  3Q23        % Change  YTD24       YTD23       % Change
 Ore Processed (t)        6,257,754   5,756,109   8.7       3,983,615   57.1      16,709,393  15,689,168  6.5
 Total Volume Hauled (t)  26,148,467  27,093,586  (3.5)     24,462,202  7.0       75,382,829  75,131,727  0.3

 Production
 Gold (oz)                89,030      63,628      39.9      72,184      23.3      230,716     262,053     (12.0)
 Silver (koz)             119         100         19.0      120         (0.8)     338         464         (27.2)

 Ore Grades
 Gold (g/t)               0.70        0.59        18.6      0.73        (4.1)     0.65        0.74        (12.2)
 Silver (g/t)             1.10        1.06        3.8       1.51        (27.2)    1.15        1.54        (25.3)

 

Quarterly gold production increased 39.9% vs. 2Q24 mainly due to higher ore
grade, improved recovery rate and increased volume of ore processed as mine
preparation was intensified and access to higher grade oxidised ore areas was
regained. This trend is expected to continue into 4Q24, thus further
compensating for the lower production in 2Q24.

Quarterly gold production increased 23.3% vs. 3Q23 as a result of the higher
volume of ore processed due to the electrical fault in 3Q23, partly offset by
the lower ore grade and recovery rates.

Year to date gold production decreased 12.0% vs. YTD23 primarily due to the
lower ore grade as a result of the change in the mine sequence in 1H24 and
decreased recovery rate. This was partly mitigated by the higher volume of ore
processed.

The average gold ore grade in 2024 is expected to be in the range of 0.70-0.80
g/t.

 

NOCHE BUENA

 

5,339 ounces of gold were recovered from the leaching pads at Noche Buena in
3Q24. Year to date gold production totalled 15,534 ounces. As previously
announced, mining activities concluded in May 2023, and the closure plan
continues as expected.

 

 

JUANICIPIO - ATTRIBUTABLE

 

                    3Q24     2Q24     % Change  3Q23*    % Change  YTD 24   YTD 23*  % Change
 Ore Processed (t)  186,082  188,492  (1.3)     180,460  3.1       556,957  516,315  7.9

 Production
 Silver (koz)       2,736    2,791    (2.0)     2,678    2.2       8,016    6,892    16.3
 Gold (oz)          6,049    5,185    16.7      5,289    14.4      16,793   14,640   14.7
 Lead (t)           2,707    2,529    7.0       2,150    25.9      7,447    4,868    53.0
 Zinc (t)           4,257    4,788    (11.1)    3,227    31.9      12,767   7,536    69.4

 Ore Grades
 Silver (g/t)       481      498      (3.4)     523      (8.0)     485      474      2.3
 Gold (g/t)         1.32     1.20     10.0      1.32     0.0       1.28     1.23     4.1
 Lead (%)           1.58     1.56     1.3       1.33     18.8      1.50     1.07     40.2
 Zinc (%)           2.83     2.99     (5.4)     2.25     25.8      2.77     1.92     44.3

* 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 2.0% vs. 2Q24 driven by the
lower ore grade and decreased volume of ore processed both in accordance with
the mine plan. Attributable quarterly gold production increased 16.7% vs. 2Q24
mainly due to higher ore grade and improved recovery rate.

 

Attributable quarterly silver and gold production increased 2.2% and 14.4% vs.
3Q23 respectively, due to higher recovery rate and increased volume of ore
processed as the beneficiation plant is now operating at full capacity and the
flotation process has been optimised.

Year to date silver and gold production increased significantly vs. YTD23 as
commissioning of the flotation plant concluded in 1Q23 and ramp up of the
beneficiation plant took place in 2Q23 and 3Q23.

 

The silver ore grade in 2024 is expected to be in the higher end of the range
of our previously stated guidance of 420-460 g/t.

 

SILVERSTREAM

Quarterly silverstream production decreased vs. all comparable periods mainly
due to a decrease in volume of ore processed and lower ore grade and recovery
rates as a result of lower availability of equipment to prepare mine areas
with higher silver grades.

Silver production in 2024 is estimated to be in the range of 2.0-2.5 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

 

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