1st Jul 2016 15:46
LONDON (Alliance News) - Fresnillo PLC on Friday said the Phase 1 construction at its San Julian project in Mexico has been completed on time and on budget, and reiterated its full year guidance for gold and silver production, despite some technical issues at the site.
The miner said it had experienced a technical failure at the mill after a few days of testings and starting to feed the mill continuously, with the lubrication system malfunctioning, causing wear of the mill pads. This, Fresnillo said, is "often experienced" during the start-up of a new project, and said it was addressing the issue.
Fresnillo said it now expects the milling facility to be up and running regularly towards the first week of August, at which point the mill will gradually be taken up to full capacity.
The company, however, reiterated its full year production guidance for 775,000 to 790,000 ounces of gold and 49.0 million to 51.0 million ounces of silver, saying that the shortfall in production at San Julian will be compensated for by its higher than expected volumes coming from Saucito, also in Mexico.
Fresnillo added that its San Julian project has an expected average production of 10.3 million ounces of silver and 44,000 ounces of gold per year once Phase 2 is commissioned, expected by the year-end, and full capacity is reached.
Shares in Fresnillo closed up 7.1% at 1,760.00 pence on Friday.
By Hannah Boland; [email protected]; @Hannaheboland
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