Fresnillo reports record silver production in 'challenging' year

Miner Fresnillo reported record annual silver production of 61.8m ounces, up 5.3% mainly due to the first full year of operations at the San Julián operation.

Quarterly silver production of 15.5m ounces remained flat quarter on quarter and was down 3.2% year on year due to lower volumes of ore processed and ore grade at Fresnillo and Saucito.

Annual gold production of 922,527 ounces, up 1.3% vs. 2017 mainly due to the higher ore grade and recovery rate at Saucito, the contribution of a new pyrites plant and the higher ore grade at Fresnillo.

Quarterly gold production of 232,000, in line with the same period in 2017 and up 3% quarter on quarter mainly due to higher ore grades and recovery rates at Herradura and San Julián (Phase I/Vein system).

Full year by-product lead and zinc production was up 10.4% and 35.6% respectively vs 2017, representing 19.9m equivalent ounces of silver.

For 2019, silver production was expected to be slightly lower, in the range of 58m – 61m. Gold production was expected to be flat, in the range of 910,000 – 930,000 ounces.

The company said it also expected board approval for Juanicipio project in early 2019.

Chief executive Octavio Alvídrez said the record silver and “strong” gold production “does not mask what was a challenging year”.

“Despite the year on year increase in silver production resulting from a full year of operations at San Julián, we are reporting lower silver production than anticipated,” he said.

“This was mainly explained by the lower than expected ore grades at the Fresnillo and Saucito mines which have persisted into the final quarter, together with operational issues.”

“We are taking action to address this, not least by intensifying our infill drilling programmes, controlling dilution and further investment in equipment and infrastructure.”