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Fresnillo achieves record silver, gold output in FY'16

Fresnillo Plc achieved record silver and gold production in 2016, mainly due to the start up of the first phase of the San Julian operations in Mexico.

Silver production in the year increased 7.1% year over year to 50.3 million ounces, including 4.6 million ounces from Silverstream.

The increase in silver production was also supported by a higher ore grade at Cienega, the Mexico-focused producer said Jan. 25.

Gold output jumped 22.8% to 935,513 ounces in 2016, beating the year's guidance, on the back of reduced gold inventories at Herradura, the San Julian start up and an improved overall average recovery speed at Noche Buena.

Zinc and lead production in the year increased 23.5% and 13.5%, respectively, to 56,845 tonnes and 48,144 tonnes, on a yearly basis.

In 2017, Fresnillo expects silver production of 58 million ounces to 61 million ounces, including 4 million ounces from Silverstream.

Gold production is expected between 870,000 ounces and 900,000 ounces, mainly due to the stabilization of production at Herradura following the reduction in inventories.

The first phase of San Julian is processing 3,600 tonnes per day, 20% above its nominal capacity, and the second phase is expected to be commissioned in the second quarter.

The company expects an average annual life-of-mine production of 10.3 million ounces of silver and 44,000 ounces of gold from San Julian as the second phase reaches full capacity.

Fresnillo has budgeted about US$160 million for exploration in 2017.

In the fourth quarter of 2016, total silver production increased 9.5% to 13.3 million ounces, including 1.1 million ounces from Silverstream, compared to the same year-ago period.

The quarter's gold production jumped 24.2% year over year to 268,104 ounces.

Zinc output in the three months rose 16.2% to 16,989 tonnes, and lead production improved 2.6% to 13,003 tonnes, compared to the fourth quarter of 2015.