By David Hodari
Precious metals mining company Fresnillo released its first-quarter 2018 production report on Wednesday. Here are some other remarks from the company's report.
On silver production:
"Quarterly silver production (including Silverstream) increased 14.0% vs. 1Q17 primarily as a result of the start of operations at San Julian (phase II) in July 2017; San Julian is now operating at full capacity. This was partially offset by lower production at Saucito due to a lower ore grade. Compared to the previous quarter, silver production (including Silverstream) decreased 3.7%... Our 2018 silver production target of 67-70 moz silver (including Silverstream) remains on track..."
On gold production:
"Quarterly gold production increased 4.1% vs. 1Q17 as a result of the continued drawdown of inventories and higher ore grade at Herradura and, to a lesser extent, the start of operations at San Julian JM (Phase II - mid July 2017). This was partly offset by the lower overall speed of recovery and volume of ore processed at Noche Buena, lower recovery rate at Saucito, and lower ore grades at Cienega and San Julian Veins (Phase I). Quarterly gold production remained broadly flat vs. the previous quarter (-0.3%)...Our 2018 gold production target of 870-900 koz gold remains on track."
On production at Saucito:
"Quarterly silver production decreased 6.1% vs. 1Q17 due to the lower ore grade resulting from ground instability temporarily restricting access to a high grade area of the Jarillas vein. This has since been resolved and by year end, we expect to recover the production lost as a result. Similarly, quarterly silver production vs. 4Q17 decreased 10.1% as a result of a lower volume of ore from development areas being processed and a lower ore grade due to the aforementioned factor."
On production at Cienega:
"Quarterly gold production decreased 6.2% vs. 1Q17 as a result of a lower ore grade due to a temporary access delay to higher ore grade areas mainly at the Taspana satellite mine and the Rosario Transversal development works. Notwithstanding, lost production is expected to be recovered over the course of the year. This decrease in gold production was mitigated by a higher recovery rate. Quarterly gold production decreased 10.0% vs. 4Q17 as a result of lower ore processed and lower ore grade due to the previously mentioned factor."
On the Juanicipio project and other exploration:
"Work to progress the Juanicipio project remains on track. The joint venture partners are working collaboratively and currently reviewing an advanced draft of the feasibility study. Once the final report is completed, the project will be submitted for Board approval...In 1Q18, 111,258 metres of drilling was completed at our operating mines with the aim of converting resources into reserves. Ore shoots were extended near the Fresnillo mine and east of the Cienega mine. At exploration projects, 79,626 metres of drilling was carried out across 15 projects with interesting results at San Julian South, Guazapares, San Juan and Guanajuato."
Write to David Hodari at [email protected]; @davidhodari
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04-25-18 0525ET