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MAG Silver (TSX: MAG) announced on Monday that its flagship Juanicipio project has entered commercial production following a successful commissioning period. The underground mine, located in the Fresnillo silver trend of Mexico, is owned 44% by MAG and 56% by Fresnillo plc, its operator.
Commissioning of the plant at Juanicipio first began in early January, followed by concentrate production and first commercial shipment this spring. The Juanicipio mill is currently operating at approximately 85% of its design capacity of 4,000 tonnes per day, with silver recovery consistently above 88%.
On a 100% basis, approximately 3.2 million ounces of silver have been produced from the Juanicipio processing facility from March to the end of May, and production is expected to continue to increase steadily through the third quarter, where it is envisioned the plant will be running at design capacity.
All major construction activities have now been completed, and Juanicipio is demonstrating its ability to sustain ongoing production levels, MAG said in a statement. The operations team is continually seeking opportunities to improve and optimize the mine, plant and other critical systems to achieve and potentially exceed design capacities.
On top of underground mine production and processing of mineralized material, an expanded exploration program is in place, being carried out by Fresnillo, targeting multiple targets to both convert the inferred mineral resources into the indicated category and to further trace mineralization to depth.
Juanicipio represents a a high-grade silver-gold-lead-zinc-epithermal vein deposit that contains an estimated 6.9 million oz. of silver at a head grade of 556 grams silver per tonne.
“Today marks the beginning of a very exciting and dynamic growth phase for MAG as we combine stable, high-margin silver production with the ongoing high-grade exploration potential that has made and continues to make MAG so unique,” CEO George Paspalas said in a news release.
Shares of MAG Silver rose 3.4% by 11:50 a.m. EDT following the announcement. The company has a market capitalization of C$1.8 billion ($1.3bn).
