A leading precious metals group, based in Mexico, has reported a huge pre-tax profit, thanks in part to significant expansions and improvements of its flagship operations.
Fresnillo, the world’s leading primary silver producer and one of Mexico’s largest gold producers, reported a 52% rise in first-half pre-tax profit, which is around $387.4 million.
This is a huge profit when compared to the same time in the previous year, with Fresnilo reporting a $255.1 million profit for 2016.
The pre-tax profit comes from a reported revenue of $1.07 billion, which again is a rise from the previous year of $959.4 million.
In its quarterly report, Fresnillo also reported that is well on course to achieve 58-61 million ounces of silver, and 870,0000 to 900,000 ounces of gold in 2017.
So, what is the cause for such an incredible profit margin?
The answer – significant ramping up and operational improvements of its flagship operations, the San Julian Mine and the Fresnillo Mine.
Octavio Alvídrez, Chief Executive Officer of Fresnillo plc, said: "We are pleased to report a strong first half of the year, with silver production up 11% and gold production stable at 446 thousand ounces.
“This performance was driven by the successful ramp-up of San Julián (phase I) since its start-up in the second half of 2016 and the operational improvements made at the Fresnillo mine.”
“The turnaround plan at the Fresnillo mine continues to progress with ore processed increasing for the fourth consecutive quarter.”
We completed the construction of San Julián (phase II) on time and on budget and I am confident that this new mine will be further proof of the effectiveness of our strategy of continued investment in quality growth.
Fresnillo is on track to meet 2018 silver production target of 65 million ounces, having already surpassed 2018 gold target of 750 thousand ounces.
Dubbed a “cornerstone” of Fresnillo’s 2018 production goals. Located on the Border Chihuahua/Durango, the underground mine is expected to have an average annual production of 11.6 moz silver and 63.7 koz of gold.
The project consisted of the construction of two plants:
Phase I: Dynamic leaching plant to treat ore from the veins
Phase II: Flotation plant with capacity of 6,000 tpd to process ore from dispersed mineral body
Construction of San Julián (phase II) completed on time and on budget and commercial production began in mid-July
The Fresnilo mine, located in Zacatecas, Mexico, is one of the world’s oldest continuously operating mines, 500 years to be exact as the mine was 1554.
Fresnilo, in 2015, was responsible for 33% of the entirety of Fresnilo Group’s entire silver production.
It is an underground mine and flotation plant with a reserve of 205.5 m oz. and 600 oz. of gold.