REG - Fresnillo Plc - Fourth quarter production report
25/01/2023 07:00
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RNS Number : 7568N Fresnillo PLC 25 January 2023
Fresnillo
plc
21 Upper Brook Street
London W1K 7PY
United Kingdom
www.fresnilloplc.com (http://www.fresnilloplc.com)
25 January 2023
FOURTH QUARTER PRODUCTION REPORT
FOR THE THREE MONTHS ENDED 31 DECEMBER 2022
Octavio Alvídrez, Chief Executive Officer, said:
"Fresnillo reports a solid operating result in the fourth quarter, with full
year production in line with our guidance. In particular silver output was
driven by a strong performance from our Fresnillo mine which is showing
consistent improvement and the continued contribution of our new Juanicipio
project offsetting the expected lower grades at San Julián. During the year
we have worked hard to minimise the impact of a very tight labour market and
to mitigate the impact of the labour reform in Mexico. Our recruitment and
training campaigns are now complete and the mines are well staffed for 2023. A
key highlight in the fourth quarter was the successful tie-in to the national
electricity grid of our new Juanicipio mine. Commissioning is ongoing and we
expect a gradual ramp up in the coming months. We very much look forward to
seeing this major new project deliver on its potential, making a sizeable
addition to our overall production for many years to come."
HIGHLIGHTS
Silver
· Full year attributable silver production of 53.7 moz (including
Silverstream), in line with guidance, slightly above FY21 with production
from Juanicipio and increased volumes of ore processed at Fresnillo, offset by
the lower ore grade at San Julián (DOB).
· Quarterly attributable silver production of 12.5 moz (including
Silverstream), down 7.8% vs. 3Q22 with stronger performances at the Fresnillo
mine and San Julián (veins) offset by lower production at other mines, and a
decrease in production from the Silverstream.
· Quarterly attributable silver production (including Silverstream)
decreased 3.0% vs. 4Q21 due to a decrease in ore throughput and lower ore
grade at San Julián (DOB) and Ciénega, mitigated by increased volumes of ore
processed and higher ore grades at Fresnillo.
Gold
· Full year attributable gold production of 635.9 koz, in line with
guidance, down 15.3% vs. FY21, primarily due to a lower recovery rate as
higher volumes of sulphide ore are processed and lower ore grade at Herradura,
and a decrease in the volume of ore processed and lower ore grades at Noche
Buena, Saucito and Ciénega.
· Quarterly attributable gold production of 168.0 koz, up 5.5% vs.
3Q22, mainly due to an increase in volumes of ore deposited at Herradura,
partly offset by decreased volumes of ore processed and a lower recovery rate
at Noche Buena and lower ore grade and a decrease in ore throughput at
Saucito.
· Quarterly attributable gold production increased 11.7% vs. 4Q21
driven by increased volumes of ore deposited and higher ore grades at
Herradura, partly offset by decreased volumes of ore deposited and lower ore
grade at Noche Buena.
By-Products
• Full year attributable by-product lead production decreased 6.4%
vs. FY21 due to a decrease in the volume of ore processed and lower ore grade
at Saucito and decreased ore grade at San Julián (DOB), mitigated by
increased ore throughput and higher ore grade at Fresnillo and increased
contribution from Juanicipio.
• Quarterly attributable by-product lead production decreased 4.9%
vs. 3Q22 due to decreased ore throughput and lower ore grade at Saucito and a
lower volume of ore processed from Juanicipio.
• Quarterly attributable by-product zinc production decreased 9.8%
vs. 3Q22 due to a decreased volume of ore processed and lower ore grades at
Saucito and Fresnillo, and lower contribution from Juanicipio.
• Quarterly attributable by-product lead production increased 7.8%
vs. 4Q21 driven primarily by increased volumes of ore processed and higher ore
grades at Fresnillo and increased contribution from Juanicipio, partly offset
by lower ore throughput at Saucito.
Attributable 4Q22 3Q22 % Change 4Q21 % Change FY 22 FY 21 % Change
Silver (koz) 12,073 12,787 (5.6) 12,230 (1.3) 51,052 49,961 2.2
Silverstream (koz) 450 799 (43.7) 684 (34.2) 2,688 3,134 (14.2)
Total Silver (koz) 12,522 13,586 (7.8) 12,914 (3.0) 53,740 53,095 1.2
Gold (oz) 167,969 159,205 5.5 150,313 11.7 635,926 751,203 (15.3)
Lead (t) 12,756 13,415 (4.9) 11,837 7.8 52,950 56,573 (6.4)
Zinc (t) 23,060 25,560 (9.8) 22,899 0.7 99,153 99,397 (0.2)
Silver Equivalent Basis 1 (#_ftn1)
Attributable quarterly silver equivalent ounces of 25.9 moz in 4Q22 (4Q21:
24.9 moz, 3Q22: 26.3 moz) and attributable full year silver equivalent ounces
of 104.6 moz (FY21: 113.2 moz).
DEVELOPMENT PROJECTS
Commissioning of the Juanicipio plant is ongoing. We continue to expect a
gradual ramp up with the objective of reaching full nameplate capacity in the
third quarter of 2023. As reported, ore will be processed at the Juanicipio
plant but can also continue to be processed at our nearby Saucito and
Fresnillo operations if required.
Having achieved Juanicipio's tie-in to the national grid, the focus is to get
the pyrites plant connected by the end of 1Q23, with commissioning and ramp up
starting immediately afterwards.
SAFETY PERFORMANCE
We continue with our 'I Care, We Care' programme and will continue working
towards identifying preventive measures to provide a safer environment for our
workforce. We remain committed to meeting our Zero Fatalities target and
continue encouraging adherence to stringent safety policies and implementing
controls and training to guarantee a strong safety culture.
OPERATING ENVIRONMENT
As communicated in previous reports, the labour reform in Mexico which
restricts subcontracting of labour came into effect from September 2021. This
resulted in the requirement to internalise a proportion of our contractor
workforce. Contractor uptake varied across the Group, resulting in staff
vacancies and lower equipment availability at our underground mines. The
labour market remains very tight in common with other sectors and indeed
geographies. However, our recruitment and training campaigns are now complete
and the mines are well staffed for 2023.
ITEMS IMPACTING THE INCOME STATEMENT
Ahead of the release of the Company's Full Year Results, we are providing an
update on different factors impacting several items in the income statement.
Payability rates for all metals sold remained at the same levels as those
observed in 2021, while realised metal prices are expected to be very similar
to the average spot metal prices. In particular, realised prices for gold,
silver, lead and zinc for the full year are anticipated to be around US$1,800
per ounce, US$21.7 per ounce, US$96.3 cents per pound and US$152.2 cents per
pound respectively.
Adjusted production costs in 2H22 are expected to increase c.20% vs. 1H22
mainly due to:
1. an increase in volumes of ore processed at Herradura (+33.2%),
Fresnillo (+6.2%) and Saucito (+5.6%),
2. higher cost inflation observed in 2H22 vs 1H22,
3. an increase of 49% in waste material hauled charged to costs, despite
the 21% decrease in the total volume of waste material hauled (capitalised and
charged to costs), mostly related to IFRIC 20 accounting interpretation for
stripping costs in the production phase. In 1H22, 54.8 million tonnes of total
waste material was moved, of which 48% was capitalised; whereas in 2H22, 43.3
million tonnes of waste material was moved, but only 3% of this was
capitalised, with the rest being charged to costs. The reason behind this
significant change in the volume of waste material being capitalised is that
in 1H22 the total stripping ratio of c. 5.7 was significantly higher than the
prevailing average stripping ratio for the life of the mine (LOM) (under IFRIC
20 stripping costs above the average LOM stripping ratio are capitalised),
this higher stripping ratio was due to the need to prepare and gain access to
the mineral banks; whereas in 2H22 the 3.4 total stripping ratio was only
slightly higher than the prevailing average stripping ratio for LOM, thus
decreasing the portion of volume being capitalised.
4. increased maintenance as a result of the purchase of additional in-mine
equipment and increased personnel costs following the labour reform, an
increase in maintenance to guarantee the continuity of operations and
increased consumption of diesel and other operating materials due to longer
haulage distances.
Depreciation in 2H22 is expected to be 15% higher vs. 1H22 primarily driven by
the additional depreciation registered at Noche Buena to fully depreciate the
assets as it approaches the end of its mine life, an increase in the depletion
factor at Herradura due to the higher production, and the purchase of
additional equipment following the internalisation of contractors as a result
of the aforementioned Mexico labour reform.
As guided previously, exploration expenses are expected to be c. US$165-US$170
million.
2023 OUTLOOK
Our 2023 guidance issued today is in line with previous expectations in terms
of silver equivalent ounces. We expect increased production of gold due to an
updated mine plan at Herradura and a slight increase in volumes at Noche Buena
following condemnation drilling, alongside moderated production of silver due
to the later than expected ramp up at Juanicipio (from mid 2022 to early 2023)
and tie in of the pyrites plant at Fresnillo.
• Attributable silver production expected to be in the range of 57.0
to 64.0 moz (including Silverstream).
• Attributable gold production expected to be in the range of 590 to
640 koz.
• Taking the above ranges and expressed in silver equivalent
ounces(1), production is expected to be 104 -115 million ounces.
FULL YEAR FINANCIAL RESULTS
Fresnillo will announce its full year 2022 results on 7th March 2023.
The information contained within this announcement is deemed by Fresnillo plc
to constitute inside information as stipulated under the Market Abuse
Regulation (EU) No. 596/2014. Upon the publication of this announcement, this
inside information is now considered to be in the public domain. The person
making the notification is Carlos Ortiz Mena, Head of Legal, Fresnillo
plc. The time of the notification is 7:00 am UK time.
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
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
4Q22 3Q22 % Change 4Q21 % Change FY 22 FY 21 % Change
Ore Processed (t) 624,105 643,945 (3.1) 528,103 18.2 2,462,409 2,216,467 11.1
Production
Silver (koz) 3,606 3,394 6.2 2,655 35.8 13,609 11,986 13.5
Gold (oz) 8,314 7,970 4.3 8,648 (3.9) 34,432 33,743 2.0
Lead (t) 5,609 5,715 (1.9) 4,525 24.0 21,756 18,796 15.7
Zinc (t) 11,097 12,107 (8.3) 10,025 10.7 43,343 34,530 25.5
Ore Grades
Silver (g/t) 197 181 8.8 170 15.9 189 186 1.6
Gold (g/t) 0.58 0.54 7.4 0.71 (18.3) 0.61 0.68 (10.3)
Lead (%) 1.05 1.05 0.0 1.03 1.9 1.05 1.01 4.0
Zinc (%) 2.37 2.45 (3.3) 2.65 (10.6) 2.38 2.20 8.2
Quarterly silver and gold production increased 6.2% and 4.3% respectively vs.
3Q22 driven by higher ore grades in line with the mine plan, partially offset
by a lower volume of ore processed from certain areas of the mine and
decreased development ore.
Quarterly silver production was up 35.8% vs. 4Q21 mainly due to a higher ore
grade and increased volume of ore processed as operating restrictions that
affected ore throughput in 2021 were addressed, including: i) the effect of
the labour reform in Mexico which resulted in staff vacancies and affected
equipment availability (the recruitment and training campaign is now complete
and the mine is well staffed for 2023); and ii) the residual impact in 4Q21 of
a short circuit of a main power line, which limited water pumping capacity
thereby affecting access to some mining areas and haulage levels.
Full year silver and gold production increased 13.5% and 2.0% vs. FY21
respectively, primarily due to a higher volume of ore processed driven by the
factors mentioned above.
Mine development rates slightly decreased quarter on quarter averaging 2,933
metres per month in 4Q22 (3Q22: 3,030 metres per month), with the full year
rate averaging 2,929 meters per month, in line with expectations. Works to
relocate the tunnel boring machine to a haulage level continued and are
expected to be concluded in 1H23. Notwithstanding, development rates are
expected to remain at 3,000 metres per month on average in 2023 while an
assessment is conducted to determine the optimal rate going forward, based on
production levels and updated reserves.
Quarterly by-product gold production decreased 3.9% vs. 4Q21 due to a lower
ore grade.
The silver ore grade in 2023 is estimated be in the range of 185-205 g/t,
while the gold ore grade is estimated to remain in the range of 0.50-0.70 g/t.
SAUCITO MINE PRODUCTION
4Q22 3Q22 % Change 4Q21 % Change FY 22 FY 21 % Change
Ore Processed (t) 508,455 556,199 (8.6) 558,101 (8.9) 2,072,812 2,434,449 (14.9)
Production
Silver (koz) 3,026 3,171 (4.6) 2,990 1.2 11,977 12,439 (3.7)
Gold (oz) 18,076 22,249 (18.8) 17,719 2.0 73,497 88,440 (16.9)
Lead (t) 3,859 4,513 (14.5) 4,272 (9.7) 17,816 24,615 (27.6)
Zinc (t) 5,868 6,882 (14.7) 6,672 (12.1) 28,415 37,469 (24.2)
Ore Grades
Silver (g/t) 208 199 4.5 186 11.8 201 183 9.8
Gold (g/t) 1.39 1.58 (12.0) 1.26 10.3 1.40 1.46 (4.1)
Lead (%) 0.90 0.96 (6.3) 0.90 0.0 1.01 1.18 (14.4)
Zinc (%) 1.56 1.64 (4.9) 1.60 (2.5) 1.78 2.08 (14.4)
Quarterly silver production decreased 4.6% vs. 3Q22 due to a decrease in ore
throughput driven by one off factors including lower equipment availability,
lower productivity as new employees completed training modules, and a longer
than planned shutdown required by CFE related to the tie at Juanicipio. This
was partially mitigated by the higher ore grade areas mined in 4Q22.
Quarterly silver and gold production slightly increased 1.2% and 2.0% vs. 4Q21
respectively, due to higher ore grades from improvements to the short term
mine planning process and the regained access to certain areas of the mine
with higher ore grades, offset by a lower volume of ore processed for the
factors mentioned above.
Full year silver production decreased 3.7% vs. FY21 driven by a lower volume
of ore processed mainly due to changes to the short planning process and, to
lesser extent, a lower productivity from internalised personnel, offset by the
higher ore grade due to the factors explained above.
Quarterly and full year by-product gold production was down 18.8% and 16.9%
vs. 3Q22 and FY21 respectively, driven by a lower ore grade and a decrease in
ore throughput.
Full year 2023 silver ore grade is estimated to remain between 190-210 g/t,
while the gold ore grade is estimated to be around 1.20-1.40 g/t.
PYRITES PLANT (PHASE I)
4Q22 3Q22 % Change 4Q21 % Change FY 22 FY 21 % Change
Iron Concentrates Processed (t) 32,211 37,142 (13.3) 31,976 0.7 135,044 159,635 (15.4)
Production
Silver (koz) 111 142 (21.8) 121 (8.3) 529 567 (6.7)
Gold (oz) 374 653 (42.7) 455 (17.8) 1,959 2,294 (14.6)
Ore Grades
Silver (g/t) 145 159 (8.8) 158 (8.2) 164 151 8.6
Gold (g/t) 1.19 1.71 (30.4) 1.39 (14.4) 1.44 1.50 (4.0)
Quarterly silver and gold production decreased 21.8% and 42.7% vs. 3Q22 due to
a decreased volume of pyrite concentrates processed from the Saucito mine and
a lower ore grade.
Quarterly silver and gold production was down 8.3% and 17.8% vs. 4Q21
respectively, due to a lower ore grade.
Full year silver production decreased 6.7% vs. FY21 due to lower volumes of
pyrite concentrates processed from Saucito's flotation plant, mitigated by a
higher ore grade.
Full year gold production decreased 14.6% vs. FY21 due to a decreased volume
of pyrite concentrates processed from the Saucito mine and a lower ore grade.
Following the successful tie-in of the Juanicipio mine in the fourth quarter,
we now expect the pyrites plant to complete tie-in by the end of 1Q23, with
commissioning and ramp up starting immediately afterwards.
CIENEGA MINE PRODUCTION
4Q22 3Q22 % Change 4Q21 % Change FY 22 FY 21 % Change
Ore Processed (t) 256,928 294,210 (12.7) 301,968 (14.9) 1,114,232 1,282,367 (13.1)
Production
Gold (oz) 9,122 9,437 (3.3) 10,596 (13.9) 37,466 48,819 (23.3)
Silver (koz) 982 1,242 (20.9) 1,401 (29.9) 4,709 5,447 (13.5)
Lead (t) 930 904 2.9 772 20.5 3,518 3,947 (10.9)
Zinc (t) 1,372 1,419 (3.3) 1,240 10.6 5,387 6,373 (15.5)
Ore Grades
Gold (g/t) 1.20 1.09 10.1 1.18 1.7 1.14 1.27 (10.2)
Silver (g/t) 139 152 (8.6) 165.6 (15.9) 152 153 (0.7)
Lead (%) 0.56 0.48 16.7 0.43 30.2 0.49 0.51 (3.9)
Zinc (%) 0.94 0.87 8.0 0.75 25.3 0.86 0.90 (4.4)
Quarterly gold production was down 3.3% and 13.9% vs. 3Q22 and 4Q21
respectively, due to a lower volume of ore processed as a result of the
non-scheduled minor technical stoppages at the SAG mill, and lower
productivity from new personnel at the mine, mitigated by a higher ore grade.
Quarterly silver production decreased 20.9% and 29.9% vs. 3Q22 and 4Q21
respectively, due to a lower ore throughput for the reasons explained above,
and a lower ore grade in line with the mine sequence.
Full year silver and gold production were down13.5% and 23.3% vs. FY21
respectively, due to the lower volumes of ore processed and a lower gold ore
grade as a higher proportion of ore from the main Ciénega mine was processed,
as opposed to processing ore from a satellite operation in the surrounding
area with a higher average ore grade.
The gold and silver ore grades for 2023 are estimated to be in the ranges of
1.0-1.1 g/t and 150-160 g/t respectively.
SAN JULIÁN MINE PRODUCTION
4Q22 3Q22 % Change 4Q21 % Change FY 22 FY 21 % Change
Ore Processed Veins (t) 294,582 297,216 (0.9) 308,691 (4.6) 1,175,164 1,202,826 (2.3)
Ore Processed DOB (t) 517,733 498,882 3.8 533,631 (3.0) 2,092,971 2,070,563 1.1
Total production at San Julián
Gold (oz) 11,907 11,387 4.6 12,887 (7.6) 46,727 55,847 (16.3)
Silver (koz) 3,113 3,171 (1.8) 3,967 (21.5) 14,252 16,772 (15.0)
Production Veins
Gold (oz) 11,062 10,625 4.1 12,142 (8.9) 43,397 51,840 (16.3)
Silver (koz) 1,288 1,115 15.5 1,200 7.3 4,638 4,224 9.8
Production DOB
Gold (oz) 845 762 10.9 745 13.4 3,330 4,006 (16.9)
Silver (koz) 1,825 2,056 (11.2) 2,768 (34.1) 9,614 12,548 (23.4)
Lead (t) 1,712 1,461 17.2 1,914 (10.6) 7,105 8,543 (16.8)
Zinc (t) 3,604 3,790 (4.9) 4,419 (18.4) 17,487 19,991 (12.5)
Ore Grades Veins
Gold (g/t) 1.23 1.17 5.1 1.29 (4.7) 1.21 1.42 (14.8)
Silver (g/t) 149 128 16.4 131 13.7 135 119 13.4
Ore Grades DOB
Gold (g/t) 0.08 0.08 0.0 0.08 0.0 0.08 0.10 (20.0)
Silver (g/t) 130 153 (15.0) 187 (30.5) 168 221 (24.0)
Lead (%) 0.43 0.39 10.3 0.45 (4.4) 0.43 0.51 (15.7)
Zinc (%) 0.93 1.01 (7.9) 1.10 (15.5) 1.09 1.27 (14.2)
SAN JULIÁN VEINS
Quarterly silver and gold production increased 15.5% and 4.1% vs. 3Q22 as we
gained access to higher ore grade stopes, in line with the mine plan.
Quarterly silver production was up 7.3% vs. 4Q21 due to a higher ore grade
driven by the operational decision to adjust the mine plan to prioritise
extraction from wider veins of the mine with higher silver content but lower
gold ore grade, partly offset by a lower ore throughput driven by faster than
expected mill maintenance in 4Q21.
Quarterly gold production decreased 8.9% vs. 4Q21 due to a lower ore grade in
narrow veins at Refugio and San Atanasio areas and the depletion of high ore
grade areas at the Shalom and Santa Maria stopes, and a decrease in volumes of
ore processed.
Full year gold production decreased 16.3% vs. FY21 mainly due to a lower ore
grade for the factors mentioned above and, to a lesser extent, lower volume of
ore processed.
Full year silver production increased 9.8% vs. FY21 due to the higher ore
grade for the reason explained above, partly offset by lower ore throughput.
We estimate the 2023 silver and gold ore grades to average 130-140 g/t and
1.20-1.30 g/t, respectively.
SAN JULIÁN DISSEMINATED ORE BODY (DOB)
Quarterly silver production decreased 11.2% vs. 3Q22 due mainly to a lower ore
grade consistent with the mine sequence and additional ground supporting
activities required, which limited access to certain higher grade areas. This
was partly compensated for by a higher volume of ore processed due to the
optimisation of the maintenance programme.
Quarterly silver production was down 34.1% vs. 4Q21 driven by the expected
decrease in ore grade as we move towards the periphery of the ore body, and a
lower ore throughput due to the lower availability of haulage trucks and the
need to prioritise ground support activities in the mine.
Full year silver production decreased 23.4% vs. FY21 due to the expected lower
ore grades in 2022 following the higher than anticipated ore grade in 2021 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.
We estimate the 2023 silver ore grade to be in the range of 130-140 g/t as we
mine lower grade areas in the periphery of the ore body.
HERRADURA TOTAL MINE PRODUCTION
4Q22 3Q22 % Change 4Q21 % Change FY 22 FY 21 % Change
Ore Processed (t) 7,084,437 5,592,474 26.7 4,271,069 65.9 22,195,187 20,311,876 9.3
Total Volume Hauled (t) 27,446,767 28,590,141 (4.0) 33,115,154 (17.1) 120,370,290 132,838,820 (9.4)
Production
Gold (oz) 103,826 85,245 21.8 69,177 50.1 349,715 421,535 (17.0)
Silver (koz) 191 199 (4.0) 168 13.7 776 926 (16.2)
Ore Grades
Gold (g/t) 0.71 0.71 0.0 0.65 9.2 0.69 0.76 (9.2)
Silver (g/t) 1.35 1.71 (21.1) 1.91 (29.3) 1.65 2.05 (19.5)
Quarterly gold production increased 21.8% vs. 3Q22 due to the increased
volumes of ore processed as a result of the positive variations with the
geological model and faster recovery from ore deposited on the lower layers of
the leaching pad 14B.
Quarterly gold production was up 50.1% vs. 4Q21 due to the increased volume of
ore processed for reasons explained above, and a higher ore grade driven by
the positive variation with the geological model.
Full year gold production decreased 17.0% vs. FY21 as a result of the expected
decrease in ore grade and lower recovery rates as higher volumes of sulphide
ore are processed, partly mitigated by the increase in volume of ore processed
for the factors explained above.
The gold ore grade in 2023 is estimated to be in the range of 0.65-0.75 g/t.
NOCHE BUENA TOTAL MINE PRODUCTION
4Q22 3Q22 % Change 4Q21 % Change FY 22 FY 21 % Change
Ore Processed (t) 1,232,125 1,811,987 (32.0) 2,903,023 (57.6) 7,428,189 8,996,842 (17.4)
Total Volume Hauled (t) 7,296,832 6,274,060 16.3 6,482,783 12.6 26,854,547 25,953,967 3.5
Production
Gold (oz) 13,331 19,235 (30.7) 28,591 (53.4) 79,669 96,835 (17.7)
Silver (koz) 3 3 0.0 11 (72.7) 20 32 (37.5)
Ore Grades
Gold (g/t) 0.51 0.44 15.9 0.70 (27.1) 0.53 0.59 (10.2)
Silver (g/t) 0.21 0.16 31.3 0.20 5.0 0.22 0.19 15.8
Quarterly gold production decreased 30.7% vs. 3Q22 due to expected decrease in
volume of ore deposited as the mine approaches the end of its life and a lower
recovery rate, partly mitigated by the higher ore grade.
Quarterly gold production decreased 53.4% vs. 4Q21 due to the decrease in ore
processed and lower ore grade as the mine approaches the end of its life,
partly compensated for by a higher recovery rate due to shorter irrigation
cycles.
Full year gold production decreased 17.7% vs. FY21 due to a decreased volume
of ore processed and lower ore grade consistent with end of mine life.
The 2023 estimated gold ore grade will remain in the range of 0.40-0.50g/t, as
the mine approaches the end of its operational life.
JUANICIPIO
Mineralised material from Juanicipio continued to be processed through the
Fresnillo and Saucito flotation plant during the quarter. On an attributable
basis, Juanicipio produced 1,042 koz of silver and 3,020 oz of gold in 4Q22,
and 5.2 moz of silver and 12,461 oz of gold in 2022.
As reported in December, the final testing of the downstream power
distribution and control systems was completed and the entire electric system
energised. Commissioning of the Juanicipio plant is ongoing. We expect a
gradual ramp up with the objective of reaching full nameplate capacity in the
third quarter of 2023. As reported, ore will be processed at the Juanicipio
plant and can also continue to be processed at our nearby Saucito and
Fresnillo operations if required.
SILVERSTREAM
Quarterly Silverstream production decreased against all comparative periods
due to a decrease in volume of ore processed driven by a technical stoppage of
the flotation plant in December. The maintenance programme was concluded and
operations have resumed according to plan.
Silver production in 2023 is estimated to be in the range of 2.5-3.5 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 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), two development projects - Juanicipio and the Pyrites
Plant at Fresnillo, which has been completed and is awaiting tie-in of the
plant to the national electricity grid, 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
1 (#_ftnref1) Au:Ag ratio of 80:1
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