Fresnillo Plc (LON:FRES) and MAG Silver Corp (TSE:MAG) have announced that underground mine production at the jointly-owned Juanicipio project in Mexico will commence ahead of schedule.
However, capital expenditure has risen by 11.4% to US$440mln.
Juanicipio is expected to reach 85% of nameplate capacity in the fourth quarter of next year, and between 90% and 95% in 2022. Commissioning of the flotation plant will be underway mid-2021.
Access to the upper portion of the resource has been achieved. Initial development indicates that the grade and width of the vein is in line with previous estimates.
Exploration is ongoing on the property.
"Juanicipio is an outstanding project which will generate strong returns for our shareholders, and significant benefits to the region,” said Octavio Alvídrez, chief executive of Fresnillo.
“We continue to de-risk and refine the best construction plan that will drive the most value and ensure we capitalise on the opportunity that Juanicipio presents. I am pleased to confirm we are accelerating development of the underground mine and as a result, I expect the mine will be producing silver and gold ahead of schedule in 2020."
Fresnillo plc is the operator of Juanicipio and holds a 56% majority stake in the joint venture, with partner MAG Silver Corp owning the remaining 44%.
Total average annual anticipated production is set at 11.7mln ounces of silver, 43,500 ounces of gold, with an initial life of mine of 12 years.
Additional years of production are likely to be supported by the current inferred resources.