Fresnillo connects Pyrites plant to Mexican power grid

Mexico’s Fresnillo completed the tie-in of its new US$155mn Pyrites plant with the national power grid during Q2, the precious metals miner said in its quarterly production report.

In March, the company said it expected the connection to take place in the second rather than the first quarter, as previously planned.

Fresnillo operates the Fresnillo, Saucito, Juanicipio, Ciénega, Herradura, Soledad-Dipolos, Noche Buena and San Julián assets.

Aside from Pyrites, the company’s Orisyvo, Rodeo, Guanajuato and Tajitos exploration projects are also in advanced stages, with various long-term exploration prospects in the pipeline.

Pyrites is expected to increase silver and gold recovery rates by processing old and new tailings from Fresnillo and Saucito. 

“We were … pleased to complete the tie-in of the new Pyrites plant to the national power grid with the plant moving quickly into operations,” CEO Octavio Alvídrez said in a statement.

London-listed Fresnillo is the world's biggest primary silver miner and Mexico's second-biggest gold producer, while Mexico is the world's top silver producer.

Silver

The miner reported a “quarterly attributable silver production of 14.9Moz (including Silverstream), up 12.9% vs. 1Q23, mainly driven by the ramp-up of Juanicipio and, to a lesser extent, a higher ore grade at San Julián disseminated ore body (DOB) and the increase in volume of ore processed at Saucito, partially offset by the lower ore grade at Fresnillo.”

It added that “first-half attributable silver production (including Silverstream) increased 1.4% vs. 1H22, respectively, primarily due to the ramp-up of Juanicipio, partially offset by the lower ore grade at San Julián (DOB).”

Gold

Quarterly attributable gold production was 152,000oz, down 11.9% quarter-on-quarter, “mainly due to the lower volume of ore processed at Herradura as a result of the temporary suspension of operations following an illegal stoppage by a very small group of unionized employees, as reported in May.”

Meanwhile, “first-half attributable gold production increased 5.4% vs. 1H22, mainly due to the increased volume of ore processed and higher ore grade at Herradura and Saucito, partially compensated for by the decrease in gold production at Noche Buena.”

Full-year production guidance remains unchanged, Alvídrez said. He added that higher silver production resulted from ramp-up at Juanicipio. Progress is in line with plans and full nameplate capacity expected to be reached in Q3.

“The continued strong grades and volumes at our Herradura mine, together with an increased contribution from Saucito, generated an increase in gold production from the previous half,” Alvídrez added.

Juanicipio

In a separate statement, Canada’s MAG Silver reported that Q2 marked a transformational quarter for the US$440mn Juanicipio project, 56%-owned by Fresnillo and 44%-owned by MAG.

“Ramp-up of milling activities have been progressing to plan with Juanicipio declaring commercial production during the quarter and achieving increased production of all metals, with the most noteworthy being a 134% increase in silver production relative to the first quarter,” MAG said.

The Juanicipio, Saucito and Fresnillo plants processed 377,018t of mineralized material during Q2 at an average silver head grade of 498g/t.

According to the statement, “the Juanicipio mill ramped up to approximately 85% of its design capacity of 4,000t/d, and production is expected to continue to increase steadily through Q3 when it is envisioned the plant will be running at design capacity.”

The statement added that “Q2 saw higher grade mill feed being introduced to the Juanicipio comminution circuit with a corresponding improvement in silver recovery rates and concentrate grades.”