23rd Oct 2019 07:43
(Alliance News) - Mexican gold miner Fresnillo PLC warned on Wednesday annual production is likely to be the lower end of its guided range.
Fresnillo, a FTSE 100 member, has guided for 880,000 ounces to 910,000 ounces of gold for 2019, and for between 55 million ounces and 58 million ounces of silver.
The company expects 2019 production to be towards the lower end of each range. In 2018, Fresnillo produced 923,000 ounces of gold and 61.8 million ounces of silver.
In July, Fresnillo cut 2019 production guidance from what it had provided at the start of the year, due in part to lower-than-expected ore grades and ore throughput at the Fresnillo mine in Mexico.
Turning to third-quarter output, gold came in at 209,752 ounces, 5.2% below the second quarter and 6.9% lower than the year before. Year-to-date gold production has declined by 7.0%.
Silver production was 13.3 million ounces for the quarter, 7.9% lower than the previous three months and 15% lower than the year before. Year-to-date output has slipped 12% to 40.8 million ounces.
Fresnillo said quarterly gold production declined mainly due to lower ore grades at the Herradura mine, with silver falling due to lower grades at the Saucito mine and the San Julian ore body. All of Fresnillo's producing mines are in Mexico.
On the development front, Fresnillo is concluding "detailed" engineering at the Juanicipio project, while construction of the Pyrites plant in the Fresnillo mining area remains on track and on budget.
"We continued to implement the performance improvement plan for our Fresnillo district mines during the third quarter. This programme includes intensive infill drilling to improve the geological model, dilution control and raising development rates, whilst also taking actions to address maintenance performance, contractor productivity and equipment availability," said Chief Executive Octavio Alvidrez.
"As a result, while grades remain variable, we are now processing higher volumes of ore on a more consistent basis at Fresnillo."
"Our development pipeline is progressing well. Construction of our next major mine Juanicipio is moving forwards. The second phase of the pyrites plant project and the optimisation of the beneficiation plant to deal with higher lead and zinc grades at the Fresnillo mine remain on track. Both are due to be commissioned in the second half of 2020," Alvidrez continued.
By George Collard; [email protected]
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