JOHANNESBURG (miningweekly.com) – Mexico-focused Fresnillo has reported a year-on-year increase in silver and gold production during the March quarter, as the new San Julian JM (Phase 2) mine is now operating at full capacity.

Silver production jumped 14% to 14.24-million ounces, when compared with the first quarter of 2017. The positive contribution from the the San Julian mine was partially offset by lower output at Saucito, as a result of lower ore grades.

Total silver production, including Silverstream, increased to 15.42-million ounces in the quarter under review.

Compared with the fourth quarter, however, total silver output decreased by 3.7% as a result of lower volume of ore processed and ore grade at Saucito, and the lower ore grade at San Julián JM (Phase 2) owing to ground instability in certain areas temporarily preventing access.

Gold production increased by 4% year-on-year to 231 458 oz, as a result of the continued drawdown of inventories and higher ore grade at Herradura. The start of operations at San Julian JM (Phase 2) also contributed to the higher production, but to a lesser extent.

Quarterly output remained broadly flat, on the previous quarter.

Fresnillo has reaffirmed its full-year silver production target of 67-million ounces to 70-million ounces and its gold production target of 870 000 oz to 900 000 oz.

Octavio Alvidrez, CEO of the London-listed company, commented in a statement issued on the Regulatory News Service that Fresnillo had “started the year well” and stated that the firm continued to make good progress with its development projects.

“Both the Pyrites plant and the second Dynamic Leaching Plant projects have advanced on time and on budget. We expect to commission both projects during the second quarter and for them to make a positive contribution to full year production in 2018,” he said.

The Pyrites plant, in the Fresnillo district, is expected to improve overall recoveries of gold and silver by processing historical and ongoing tailings from the Fresnillo and Saucito mines. The $155-million project is expected to contribute about 3.5-million ounces a year of silver and 13 000 oz of gold once it reaches full capacity in 2019.

The second line of the Dynamic Leaching Plant at Herradura will enable sulphides occurring deeper in the pit to be processed more efficiently. The $110-million project is expected to extend the life-of-mine (LoM) at Herradura to 12 years with average gold production of 390 000 oz/y over the LoM.