Fresnillo PLC (LSE:FRES), the world's largest primary silver producer, said Mexico’s state-owned electricity regulator had requested additional testing before the Juanicipio underground mine can be tied into the electrical grid.
“Based on the timing of these tests, we expect that power for final commissioning and start of operations should be available by the end of October, and that production ramp up will commence immediately thereafter,” the FTSE 100 miner said in a statement.
It said there would be no impact on full-year production guidance, nor on expected production from Juanicipio in 2023 and beyond.
Stoping, underground development and material stockpiling at Juanicipio will continue uninterrupted. The precious metal miner will continue to make available any unused plant capacity at Fresnillo and Saucito operations to process mineralised material produced at Juanicipio during the testing period.
In December 2021, Fresnillo said it had been informed by the state-owned electrical company CFE that approval to complete the tie-in to the national power grid could not yet be granted. Fresnillo said at that time that it expected full load commissioning activities to be approved sometime after the first week of May 2022.
Fresnillo said today that all construction activities related to final tie-in to the electrical grid have been completed and all systems are ready to be energised. The additional testing is to verify the compatibility between new and updated substation equipment installed by Juanicipio and the existing older CFE infrastructure.
“Juanicipio is our next major growth project, the ninth new mine we have successfully constructed since we listed in London in 2008,” said chief executive Octavio Alvídrez. “Juanicipio will make a material contribution to our production from 2023 and we look forward to its successful commissioning in the fourth quarter."
Fresnillo has a 56% interest in the Juanicipio joint venture, with Canadian development and exploration company MAG Silver Corp (TSX:MAG). holding the other 44%.