Recovery at Herradura boosts gold output for Mexico's Fresnillo

The recovery at Herradura after the mine suffered the effects of heavy rains earlier in the year boosted Mexican miner Fresnillo Plc’s gold output in Q3 and the company kept its full-year guidance unchanged.

“We have delivered another solid quarter, in line with the consistent operating performance we have achieved all year. Our full-year guidance set out in January remains unchanged,” CEO Octavio Alvídrez said in the company’s Q3 production report.

“In gold, we have delivered a rapid recovery at Herradura after the mine plan was impacted by heavy rains earlier in the year, with gold production increasing 40% quarter on quarter, and at Ciénega we have delivered a strong increase in gold output year to date, testament to the outstanding work of the team on the ground.” 

Quarterly attributable gold production was 156,800oz, up 20.6% on 2Q24, predominantly due to higher grades and volume of ore processed at Herradura and higher grades in the Fresnillo district, partly offset by lower grades at Ciénega. 

Quarterly attributable gold production increased 18.2% from 3Q23 primarily due to the increased volume of ore processed at Herradura and, to a lesser extent, higher grades at Fresnillo and San Julián Veins and increased volume of ore processed and higher grades at Saucito. The mine closure plan at Noche Buena partly offset this, the company said. 

However, year-to-date gold production was 427,600oz, down 6.6% year-on-year mainly due to lower grades and recoveries at Herradura and the mine closure plan at Noche Buena. “This was partly mitigated by higher ore grade at Fresnillo and, to a lesser extent, higher ore grade and volume of ore processed at San Julián Veins and Ciénega,” the report states.  

According to Alvídrez, Saucito and San Julián Veins have performed very well in silver, helping offset slightly lower output at Fresnillo.

The miner said quarterly attributable silver production of 14.4Moz (including Silverstream) was 1.5% down from 2Q24 due to the lower grades and decrease in volume of ore processed at San Julián DOB (disseminated orebody) as it approaches the end of its life and lower grades at Ciénega. This was partly mitigated by higher grades at Saucito and the increased volume of ore processed at San Julián Veins. 

“Quarterly attributable and YTD silver production (including Silverstream) increased 2.4% and 1.2% vs. 3Q23 and YTD23, respectively, mainly due to the higher ore grades and volume of ore processed at Saucito and San Julián Veins,” the statement said. “This was partly offset by the decrease in production at San Julián DOB, lower ore grades and volume of ore processed at Fresnillo, and lower contribution from the Silverstream.”

Alvídrez added that this operational consistency gives the company confidence as it enters the final quarter. 

Fresnillo’s 2024 outlook aligns with previous guidance, with attributable silver production expected to be 55.0-62.0Moz (including Silverstream). Attributable gold production is expected to be 580,000-630,000oz for production of 101-112Moz silver equivalent, the company said.

“We are deeply saddened to report a fatal accident during the third quarter at the Ciénega mine. We continue working towards identifying preventive measures, focusing on training and maintaining stringent adherence to our safety policies to provide a safer environment for our workforce”, Alvídrez said. “We remain committed to meeting our zero fatalities target by instilling a strong safety culture through our operations.”