Fresnillo (LON:FRES) has updated investors on its quarterly output this morning.
Highlights from Fresnillo's statement:
· Quarterly silver production of 13.5 moz (including Silverstream), up 10.7% vs. 1Q16 mainly due to the contribution of San Julián (phase I). On track to achieve 2017 production guidance of 58-61 moz silver, (including 4.0 moz from the Silverstream)
· Quarterly gold production of 222.3 koz, down 3.3% vs. 1Q16 and 17.1% vs. 4Q16 mainly due to the one-off reduction of inventory levels at the leaching pads in Herradura in 2016 and expected lower ore grades at Herradura. On track to meet 2017 production guidance of 870-900 koz gold
· Turnaround at the Fresnillo mine continues to show positive signs, with two consecutive quarters of increased ore grades and silver ounces produced and three consecutive quarters of increased ore throughput
· Construction of San Julián (phase II) on track with commissioning expected at the end of 2Q17
· Construction of the pyrites plant and the second line of the dynamic leaching plant at Herradura continues, both on track to start operations in 2018
Octavio Alvídrez, Chief Executive Officer, said:
"I am pleased to report a solid performance in the first quarter of the year. Silver production increased 10.7% compared to the first quarter of 2016 reflecting the contribution of the new San Julián (phase I) mine. The turnaround at Fresnillo continues with improvements in the maintenance process and enhanced operative supervision resulting in an increase in silver production. Additionally, access to the Taspana and the new Rosario-Transversal areas at Ciénega contributed favourably.
"As guided, gold production decreased slightly when compared to the first quarter of last year and Q4 2016 mainly because of the one-off reduction of inventories in 2016.
"We continue to make good progress with our development projects. Construction of San Julián (phase II) continued with the commencement of initial tests and the project is on track to be commissioned at the end of Q2. The pyrites plant and second line of the dynamic leaching plant are also progressing as expected.
"We continue to focus on maximising efficiency and productivity across all our mines, and remain on course to meet our 2017 production guidance of 58-61 million ounces of silver and 870-900 thousand ounces of gold."