Mexico-focused precious metals miner Fresnillo (LON:FRES) said on Monday that it expected to begin production at its 56%-owned Juanicipio silver and gold project in Zacatecas in mid-2020, at an additional cost of $45 million.
The project, in which Canada’s MAG Silver (TSX: MAG) holds a 44% interest, is now expected to reach 85% of planned capacity in the fourth quarter of 2021, compared to previous guidance of 65%.
Bringing the mine’s production date forward means that Fresnillo will have to spend $440 million, 11% more that the $395 million estimated in January 2018.
Juanicipio, located eight kilometres from the company’s Fresnillo mine, is expected to produce 11.7 million ounces of silver and 43,500 ounces of gold annually over an initial operational life of 12 years.
Fresnillo, which cut its full-year production forecasts four times last year, has been striving to cut capital investment and costs after core profits almost halved in the first six months of 2019.
The company, one of the 100 businesses with the highest market capitalization listed on the London Stock Exchange, is the world’s largest primary silver producer and Mexico’s second-largest gold miner.
Fresnillo, which floated in London in 2008, is 75% owned by Mexican billionaire Alberto Bailleres. The company’s flagship mine is Saucito, the world’s largest silver operation.