Mexico's Fresnillo sets its sights on 4 early stage projects

Mexican precious metals miner Fresnillo plc is focused on advancing four exploration projects following the successful start of commercial production at the underground Juanicipio mine – a 56:44 JV with MAG Silver – in mid-2023.

“The most important projects we have in the pipeline, in order of progress, are Orisyvo in Chihuahua, which is an underground deposit; Rodeo in Durango, a deposit that could be open pit and mixed, and then it would become underground; Tajitos in Sonora, also within the Herradura and Noche Buena cluster; and finally, Guanajuato,” CEO Octavio Alvídrez said in an interview with BNamericas.

He was speaking as an initiative that includes banning open-pit mining which was presented in February by outgoing President Andrés Manuel López Obrador is advancing in congress.

Fresnillo, a subsidiary of Industrias Peñoles, is the world's largest primary silver producer and Mexico's biggest gold miner. The company produced 28.2Moz of silver in H1, flat from a year earlier, and 270,872oz of gold, down 16.8%.

The CEO added that the firm has the necessary concessions to continue advancing the projects, while the progress of permits depends on each stage.

“Permits progress depends on each stage. Right now we're on the land, surface, communities, advancing with prefeasibility. They are progressing in each of their stages,” added Alvídrez.

In the company's Q2 results presentation, Fresnillo said Orisyvo is in the feasibility stage, while the other three are in the preliminary economic assessment stage.

Although Fresnillo had announced an investment of US$180 million in exploration during 2024, in its Q2 results report it said exploration expenses for this year are expected to be approximately US$170mn.

Orisyvo, Rodeo, Tajitos and Guanajuato represent 24% of the amount to be spent this year, according to the corporate presentation.

The miner also revised capital expenditure for 2024 from US$440mn to US$410mn.

WATER TREATMENT

Part of Fresnillo's strategy to ensure that it obtains the necessary permits to operate, especially those related to water, is to build wastewater treatment plants at the sites where it operates.

“To treat wastewater from the city, we treat it, we use it in our processes and we also return part of the water to the communities,” said Alvídrez, adding that the company already has treatment plants operating at its Fresnillo and Ciénaga mines while at Caborca there is a project underway.

At Fresnillo the company took over two municipal plants to operate them at cost and invested in a new one and at Ciénaga it made a smaller tripartite investment with the municipal and state governments.

“It's one of our priorities,” said Alvídrez.

The miner's 2024 guidance remains unchanged: Fresnillo's attributable silver production is expected to be 55.0-62.0Moz in 2024, while attributable gold production is expected to be 580,000-630,000oz.

“At Juanicipio we're operating at full capacity, with higher production than expected because that's how we saw it based on the zoning of higher silver grades in the upper part and more base metal content in the lower part,” said the CEO.