Fresnillo reports rise in silver output despite 'challenging' second half

28th Jan 2014 07:28

- Annual silver output rises but falls quarterly - Annual and quarterly gold output declines- Stoppage at Soledad-Dipolos expected through 2014Fresnillo reported a 4.3 per cent rise in annual attributable silver production of 42.7m ounces in the quarter through December 2013, ahead of the 41m-ounce guidance.The miner said output was driven by better-than-expected production at Saucito due in part to extra ore processed at higher grades from the rich Jarillas vein.Silver production was also boosted by higher silver ore grade from San Ramón, Ciénega's satellite mine, and increased ore throughput of 129,319 tonnes, an 11.6% increase on 2012.It offset lower-than-expected silver ore grade at Fresnillo. However, quarterly attributable silver production, excluding the Silverstream, fell 2.3% against the previous year due to lower ore grade at Fresnillo and Ciénega. Quarterly attributable silver production decreased 7.9% when compared to the previous quarter, excluding the Silverstream, reflecting weak results from Fresnillo and Ciénega. Annual attributable gold output dropped 10% year-on-year to 425,831 ounces due to the lower production volumes at Soledad-Dipolos as operations were halted following the court order regarding the "El Ejido" litigation process. The temporary suspension of explosives permits at Herradura and the fall in gold ore grade at Ciénega also contributed to the decrease production volumes of the yellow metal.Quarterly attributable gold production was down by 22.3% year-on-year and 33.9% quarter-on-quarter."The second half of 2013 was challenging, with the Ejido El Bajío conflict impacting annual gold production at the Penmont mines," said Chief Executive Octavio Alvídrez."Nevertheless, we are pleased that we achieved silver production of 42.7m ounces in 2013, including the Silverstream production volumes ahead of our original 2013 guidance. We will maintain similar levels of silver production in 2014."The group expects 2014 attributable silver production to be 43m ounces, including 3.5m ounces from the Silverstream. Attributable gold production is anticipated to return to 450,000 ounces following the anticipated resumption of operations at Herradura in March 2014, continued ramp up of production at Noche Buena and the start of operations at the Dynamic Leaching Plant. However, the stoppage at Soledad-Dipolos is tipped to continue throughout 2014."We are disappointed that we don't yet have a confirmation from the district court hearing on Friday regarding the explosives suspension, but we understand that the request to impede the lifting of the suspension should be denied," Alvídrez added. "The next stage in the process, if this ruling as expected is favourable to the company, would then be for the company to reiterate its request for the Ministry of Defense to formally lift the suspension before resumption of production at Herradura can take place." RD