MAG Silver Corp. (MAG:TSX; MAG:NYSE A) announced in a news release that "as planned, development material from the Juanicipio Project (56%/44% joint venture between Fresnillo Plc and MAG) commenced processing at the Fresnillo beneficiation plant during the quarter ended September 30, 2020."
The operator at Fresnillo reported that during the quarter the plant processed a total of 42,476 tonnes of material, which yielded 394,000 ounces silver, 610 ounces gold, 138 tonnes lead and 174 tonnes zinc. The company stated that based upon its 44% ownership position in the project, the amounts attributable to MAG Silver were 173.4 Koz silver, 268.4 oz gold, 60.7 tonnes lead and 76.6 tonnes zinc.
The company stated that this first development material was processed through the Fresnillo processing plant, which is owned 100% by Fresnillo and is located very near to the property. The firm advised that silver-rich lead and zinc concentrates were treated at market terms under off-take agreements with Met-Mex Peñoles, S.A. De C.V. in Torreón, Mexico. MAG Silver noted that the net revenue from this production after treatment and processing expenses will be utilized by the JV to fund the initial project's capital and cash development requirements.
MAG Silver's President and CEO George Paspalas remarked, "This first production from Juanicipio is a major milestone for the company...The successful processing of development material not only provides cash flow to offset capex, but further de-risks the project as it heads toward commercial production. We are looking forward to the first production stope coming online in Q4/20 and our potential to continue to produce cash whilst we complete the process plant construction."
The company advised that up until mid-2021 Fresnillo anticipates that it will be able to process a monthly average of 16,000 tonnes of mineralized material from the joint venture operation at its current processing facility. The firm noted that after that period of time, the Juanicipio beneficiation plant is scheduled for commissioning; it will have the capability to process 4,000 tonnes per day.
MAG Silver indicated that the Juanicipio Project is located within Mexico's Fresnillo Silver Trend. The firm stated that during the quarter progress has been made on the Juanicipio processing plant's construction and added that on site development is continuing and that the final preparation of the first production stope was concluded during the third quarter.
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