Last checked at 6 Aug 2009 07:00
Fresnillo Plc
28 Grosvenor Street
London W1K 4QR
United Kingdom
www.fresnilloplc.com
6 August 2009
Board approves pre- feasibility study for first stage of Saucito project
Fresnillo plc, the world's largest primary silver producer and Mexico's second largest gold producer, is pleased to announce that the Board has approved the pre-feasibility study for the development of the first stage of Saucito project, in the Fresnillo region. The Saucito project is located approximately eight kilometres southwest of the Fresnillo mine and it aims to be another world class silver mine. The pre-feasibility study considers a 3,000 tonnes per day operation starting in 2011. The expected annual production at full capacity will be approximately 9 million ounces of silver and 45,000 ounces of gold. The first stage of the project only considers ore from the Saucito and Jarillas veins and does not include ore from the Mezquite, Madroño, Santa Natalia and Valdecañas East and West veins in the region as they need to be further explored. The estimated initial investment will be US$309 million with a sustaining capital of US$68 million over the life of the mine.
Jaime Lomelin, Chief Executive Officer of Fresnillo plc said,
"This is a very exciting chapter in our growth strategy as the discovery and development of Saucito illustrates our main drivers of value creation: large, long life assets developed by consolidating districts."
For further information, please visit our website: www.fresnilloplc.com or contact:
Fresnillo plc
London Office Tel: +44 (0)20 7399 2470
Octavio Alvidrez, Head of Investor Relations
Mexico City Office
Gabriela Mayor Tel: +52 55 52 79 3203
Brunswick Tel: +44 (0)20 7404 5959
Carole Cable
About Fresnillo plc
Fresnillo Plc is the world's largest primary silver producer and Mexico's second largest gold producer, listed on the London Stock Exchange under the symbol FRES.
Fresnillo has three producing mines, all of them in Mexico - Fresnillo, Ciénega and Herradura; two development projects - Saucito, Soledad & Dipolos; and three exploration prospects - San Juan, San Julian, Orysivo, as well as a number of other long term exploration prospects and, in total, has mining concessions covering approximately 1.75 million hectares in Mexico.
Fresnillo has a strong and long tradition of mining, a proven track record of mining development and reserves replacement, and a low cost of production, being in the lowest quartile of the cost curve for both silver and gold.
Fresnillo intends to maintain its position as the world's largest primary silver producer with the aim of approximately doubling silver production and increasing its gold production by 2018.
Forward Looking Statements
Information contained in this announcement may include 'forward-looking statements'. All statements other than statements of historical facts included herein, including, without limitation, those regarding the Fresnillo Group's intentions, beliefs or current expectations concerning, amongst other things, the Fresnillo Group's results of operations, financial position, liquidity, prospects, growth, strategies and the silver and gold industries are forward-looking statements. Such forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Forward-looking statements are not guarantees of future performance and the actual results of the Fresnillo Group's operations, financial position and liquidity, and the development of the markets and the industry in which the Fresnillo Group operates, may differ materially from those described in, or suggested by, the forward-looking statements contained in this document. In addition, even if the results of operations, financial position and liquidity, and the development of the markets and the industry in which the Fresnillo Group operates are consistent with the forward-looking statements contained in this document, those results or developments may not be indicative of results or developments in subsequent periods. A number of factors could cause results and developments to differ materially from those expressed or implied by the forward-looking statements including, without limitation, general economic and business conditions, industry trends, competition, commodity prices, changes in regulation, currency fluctuations (including the US dollar and Mexican Peso exchanges rates), the Fresnillo Group's ability to recover its reserves or develop new reserves, including its ability to convert its resources into reserves and its mineral potential into resources or reserves, changes in its business strategy and political and economic uncertainty.