pt 224 Feb 2020 07:56
With detailed engineering almost complete, major equipment purchases completed, and a number of significant construction contracts awarded or under review, the JV Partners are also updating the capex required for the project. The pre-operative capital cost of US$395 million, from 1st January 2018, has been revised to $440 million (which is within the expected range of variance as engineering was advanced) to reflect additional actual expenditure incurred by the JV Partners on the underground project more recently, and bringing forward the full construction costs for two large life of mine ventilation shafts, plus some sustaining capital to facilitate the early underground start.
Octavio Alvídrez, Chief Executive Officer of Fresnillo plc, said:
"Juanicipio is an outstanding project which will generate strong returns for our shareholders, and significant benefits to the region. We continue to de-risk and refine the best construction plan that will drive the most value and ensure we capitalise on the opportunity that Juanicipio presents. I am pleased to confirm we are accelerating development of the underground mine and as a result, I expect the mine will be producing silver and gold ahead of schedule in 2020."
George Paspalas, Chief Executive Officer of MAG Silver, said:
"We are very excited about the decision to bring forward the underground mine development of the Juanicipio project. Producing quantities of saleable mineralisation provides a very beneficial de-risking opportunity that gives confidence to both partners that the originally envisioned plant production ramp up may be improved."
Juanicipio Project Highlights
· Fresnillo plc is the operator of Juanicipio and holds a 56% majority stake in the Joint Venture, with partner MAG Silver Corp. owning the remaining 44%.
· Total average annual anticipated production of 11.7 moz silver, 43.5 koz gold, with an initial life of mine (based on Indicated Resources only) of 12 years.
· Additional years of production expected to be supported by the current Inferred Resources, which are being converted into the Indicated category. Further exploration opportunities exist in the JV license area with potential to scale-up operations in the future.
· Juanicipio development expected to create approximately 2,750 jobs during construction and 1,720 jobs once at full production.
The information contained within this announcement is deemed by Fresnillo plc to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain. The person making the notification is Carlos Ortiz Mena, Head of Legal, Fresnillo plc. The time of the notification is 7:00 am UK time.
https://www.lse.co.uk/rns/FRES/statement-re-juanicipio-project-update-x6jdawdxhvc47j4.html