Joint venture partners MAG Silver Corp. (MAG:TSX; MAG:NYSE A) and Fresnillo Plc (FRES:LSE) announced in a news release that their Juanicipio underground mine in Mexico will start producing silver and gold ahead of schedule, in mid-2020.
"We continue to derisk and refine the best construction plan that will drive the most value and ensure we capitalize on the opportunity that Juanicipio presents," Octavio Alvídrez, CEO of Fresnillo, Juanicipio's operator, said in the release.
Moving up the underground mine start-up achieves three benefits, according to the companies. It improves cash flow by speeding up revenue generation from new production and deferring capex outlay. Since Jan. 1, 2018, preoperative capex increased 11.4%, to $440 million from $395 million.
Earlier start-up also derisks the metallurgical process, affording a faster and more certain ramp-up to 4,000 tons per day. Third, it bolsters "certainty around the geological block model prior to start-up of the flotation plant," the release noted.
Now, Juanicipio is expected to reach 85% nameplate capacity in Q4/21 versus 65% previously.
Currently, based on Indicated resources and an initial 12-year life, the mine is forecast to produce an average of 11.7 million ounces of silver and 43,500 ounces of gold per year.
As for where Juanicipio development stands, more than 25 kilometers have been finished to date. The Fresnillo beneficiation plant will be ready in June 2020 to start processing mineralized material from development and initial production stopes, the first of which is expected to be fully prepared by Q3/20, according to the release.
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