Last checked at 25 Oct 2012 07:00
Fresnillo plc
28 Grosvenor Street
London W1K 4QR
United Kingdom
www.fresnilloplc.com
For immediate release25 October 2012
Board Approval for the Development of San Julián andExecutive Management Change
Fresnillo plc is pleased to announce that following a board meeting this week, the Board has approved the feasibility study for the development of the US$500 million San Julián silver project. San Julián is 100% owned by Fresnillo plc and is a key project in reaching the Company's goal to produce 65 million ounces of silver and 500,000 ounces of gold per year by 2018.
The San Julián project comprises a series of silver-gold veins as well as disseminated ore and management remains confident that it has sufficient geological potential to become a new mining district in the future. The pre-feasibility study envisages the construction of two plants: i) a flotation plant with a capacity of 6,000 tpd to process ore from the disseminated body; and ii) a dynamic leaching plant to treat 3,000 tpd of ore from the veins. The expected production levels for the first year of operation are approximately 5.7 million ounces of silver and 1,300 ounces of gold, gradually ramping-up to an average of 9.6 million ounces of silver and 40,000 ounces of gold per year, once at full capacity.
The capital cost of the project is estimated at US$500 million with commercial production expected in the second half of 2014. Cash costs are expected to be in the first quartile of the international cash cost curve, and the updated resources include 21.8 million tonnes in the disseminated body with an average grade of 147 g/t of silver and 11.8 million tonnes in the vein system with average grades of 131 g/t of silver and 1.56 g/t of gold.
The Company also announces that the Board has accepted the resignation of its chief operating officer Manuel Luévanos, a member of the Company's Executive Committee. Following a 41-year career, firstly with Industrias Peñoles and then Fresnillo PLC, Mr Luévanos, 67, will now retire. The Board thanked Mr Luévanos for his long service and contribution to the company and the Group.
Octavio Alvídrez, Chief Executive Officer, will assume the responsibilities of Mr Luévanos and be supported by the rest of the Executive Committee including Mario Arreguín, Chief Financial Officer and David Giles, Chief Exploration Officer. Mr Alvídrez will be directly responsible for both project development and mining operations. These projects and operations are headed by highly experienced general managers who have been working for the Group for more than 20 years and who have an excellent track record having been instrumental in developing Fresnillo's three new mines since the IPO.
For further information, please visit our website www.fresnilloplc.com or contact:
Fresnillo plc London Office Gabriela Mayor, Head of Investor Relations | Tel: +44 (0)20 7399 2470 |
Mexico City Office Ana Belem Zárate | Tel: +52 55 52 79 3206 |
Brunswick Group Carole Cable David Litterick | Tel: +44 (0)20 7404 5959 |
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 seven operating mines, all of them in Mexico - Fresnillo, Saucito, Ciénega, San Ramón, Herradura, Soledad-Dipolos and Noche Buena; one development project - a dynamic leaching plant to treat high grade gold ore from the Herradura and Soledad- Dipolos mine; and five advanced exploration prospects - San Julián, Centauro Deep, Juanicipio, Orisyvo and Las Casas as well as a number of other long term exploration prospects. In total, has mining concessions covering approximately 2.1 million hectares in Mexico.
Fresnillo has a strong and long tradition of mining, a proven track record of mine development, reserve replacement, and production costs in the lowest quartile of the cost curve for both silver and gold.