Fresnillo, the Mexican precious metals miner, recently announced a decline in silver and gold production during the third quarter. However, there was an increase in by-product zinc and lead output, primarily attributed to lower ore grade and volume of ore processed in several mines.
Silver Production
In the third quarter, quarterly attributable silver production reached 14.1 million ounces (including Silverstream), reflecting a 5.1% decrease compared to the previous quarter. This decline can be mainly attributed to the lower ore grade and volume of ore processed at San Julian Disseminated Ore Body and Saucito mines. Additionally, there was a lower volume of ore processed at Juanicipio.
On a yearly basis, attributable silver production (including Silverstream) increased by 2.2% compared to the same period last year. This increase was driven by the ramp-up of production at Juanicipio and a higher ore grade at San Julian Veins. However, these gains were offset by the lower ore grade at Saucito and San Julián mines.
Gold Production
During the third quarter, quarterly attributable gold production amounted to 132.6 thousand ounces, experiencing a substantial 13.0% decline compared to the previous quarter. This drop was primarily due to lower production at Herradura mine, resulting from an electrical fault and lower ore grade. Furthermore, the decrease in gold production at Noche Buena mine as it approached the end of its mine life, along with lower ore grade and recovery rate at Saucito mine, contributed to this decline.
Overall, Fresnillo acknowledges the challenges faced in silver and gold production during this period. While there were setbacks in certain mines, the company remains focused on maximizing productivity and efficiency in its mining operations.
Quarterly Gold Production Decline
Quarterly attributable gold production for the company has seen a 16.7% decrease compared to the third quarter of 2022. This decline can be attributed to various factors, including a decrease in the volume of ore processed at Herradura, lower gold production at Noche Buena, and lower ore grade and recovery rate at Saucito. However, these reductions were mitigated by the ramp-up of Juanicipio and increased ore processed and ore grade at Fresnillo.
Year-to-Date Gold Production
Looking at the year-to-date figures, attributable gold production has experienced a 2.2% decrease compared to the same period in 2022. The primary drivers behind this decline are the lower gold production at Noche Buena. However, this decrease was partly offset by the higher ore grade and volume of ore processed at Herradura and the increased production at Juanicipio.
Zinc and Lead Production
Moving on to zinc and lead production, during the quarter, attributable by-product lead production saw an 8.6% increase compared to the third quarter of 2022. This growth can be attributed to the ramp-up at Juanicipio, higher ore grade and recovery rate at Saucito, and higher ore grade at San Julian. However, these factors were partially offset by the lower ore grade at Fresnillo and lower production at Cienega.
Similarly, attributable by-product zinc production experienced a 13.7% increase compared to the third quarter of 2022. This growth was driven by the higher ore grade and recovery rate at Saucito and the ramp-up of Juanicipio. However, it was partially offset by the lower ore grade and recovery rate at San Julian and lower production at Cienega.
Production Guidance
Looking ahead, the company expects attributable silver production to be in the range of 57.0 to 64.0 moz (including Silverstream). Furthermore, attributable gold production is projected to be in the range of 590 to 640 koz.
