Fresnillo's Q3 gold and silver production rises

Precious metals miner Fresnillo reported an increase in silver and gold production during the third quarter at its Mexico mines on Wednesday, while the turnaround plan at the company continued to progress, but not at the pace expected.

Chief executive Octavio Alvídrez, said: “The turnaround plan at Fresnillo continues to progress, although not at the pace at which we had originally planned.

"We continue to expect an increase in silver grades and production for the full year compared to 2015.

"However, recent volumes processed have come under pressure due to availability of equipment and personnel issues relating to a skills shortage."

He added that the company remains “on track to meet our full year production guidance of 850-870k ounces of gold and 49-51m ounces of silver, including Silverstream".

Third quarter silver production was up by 6.7% to 11.8m ounces, including contributions from the Silverstream operation, compared to the same period last year, due to the start of phase 1 at the San Julián mine, increased ore processed at the Saucito mine and an increased contribution from Silverstream.

However silver production was down 9.4% in comparison to the previous period, mainly due to the expected lower ore grades and lower recovery rate at the Saucito mine.

For the year to date, silver production was 37m oz including Silverstream - an increase of 6.3% compared to last year, due to the start-up of San Julián, increased volumes processed at Saucito and higher silver ore grades at the Fresnillo and Ciénega sites.

Gold production rose by 20.9% to 220k ounces, due to higher volumes processed and higher ore grades at the Herradura and Noche Buena mines.

For the year to date, gold production increased by 22.3% to 667k ounces, due to high speeds of recovery at Herradura and Noche Buena, and higher volumes processed at Herradura.

At the San Julián mine, which is currently under phase one of the production process, the milling facility is processing ore and the leaching plant has been operating normally since August and the company said the second phase is now expected in the second quarter of 2017 due to external factors including usually high rainfall, a security incident and delays in equipment delivery.