Fresnillo PLC and MAG Silver Corp have provided a commissioning update on the Juanicipio silver-lead-zinc-gold project (56%/44% Fresnillo and MAG Silver, respectively). The Juanicipio Project team delivered the project for plant commissioning on schedule despite recent changes to labour contracting legislation and having successfully mitigated most COVID-19 related issues over the past two years, a testament to the dedication of the operational and development teams on the ground.
However, the ‘Comisión Federal de Electricidad’ (CFE), the state-owned electrical company, has notified Fresnillo, the Juanicipio Project operator, that approval to complete the tie-in to the national power grid cannot yet be granted and the mill commissioning timeline will therefore be extended by approximately six months. This is directly related to knock-on effects of the pandemic on the CFE’s operations, predominantly related to a lack of CFE staff which limits its ability to oversee three key tasks to: review the existing installation; supervise physical connection to the active power grid; and approve required blackout prevention devices.
As operator, Fresnillo will continue to engage closely with the CFE and ‘El Centro Nacional de Control de Energía’ (CENACE ) to do all that it can to expedite these necessary approvals. Although there remains uncertainty regarding the timing for connecting the Juanicipio Project to the power grid, the current estimate, which continues to be subject to potential COVID-19 related realities, is that full load commissioning activities will be approved sometime after the first week of May 2022.
Underground stoping and mineralised mine development at Juanicipio will continue. In order to minimise any potential adverse effect, Fresnillo will make available any unused plant capacity at its Minera Fresnillo and Minera Saucito operations to process mineralised material produced at Juanicipio during this period, and if possible matching commissioning and ramp up tonnages that were previously expected.
The effect on cashflow generation from Juanicipio therefore will also be mitigated while CFE approvals are pending. “As an industry, we continue to manage the ongoing impact of the pandemic and while frustrating for all concerned, we recognise this situation is beyond the control of all parties,” said Octavio Alvidrez, Chief Executive of Fresnillo. “The health and safety of our people and all our partners remains our priority. We thank the CFE for their engagement and will continue to work closely with them to accelerate grid connection as quickly as we can. Meanwhile, we will continue to process mineralised development material by using any excess capacity available at the Minera Fresnillo and Minera Saucito plants, minimising any impact on future cashflow generation.”
“We are very fortunate to be able to process mineralised material from Juanicipio through the excess capacity available at the Minera Fresnillo and Minera Saucito plants, which should minimise the economic impact of the electrical connection timing,” said George Paspalas, President and CEO of MAG Silver. “The Juanicipio Project team has managed through stringent COVID-19 protocols to make the process plant effectively ready for start-up. However, approvals for the electrical connection for the Project have been affected by governmental COVID-19 restrictions that have severely limited the CFE in carrying out their reviews and final sign-off. We look forward to the CFE resuming normal activities, so we can flip the switch on our plant.”
The 4,000 t/d process plant includes a SAG/ball mill comminution circuit followed first by a gravity concentrator and then sequential selective flotation to produce a silver-rich lead concentrate, a zinc concentrate and a gold-rich pyrite concentrate. The plant and the associated tailings storage facilities were built on open and flat Minera Juanicipio owned land just north of the conveyor ramp portal.
