PRECIOUS METALS

Juanicipio JV project approved by Fresnillo board

Fresnillo’s board has approved the development of its 56%-owned Juanicipio joint venture project with MAG Silver Corp in Mexico.

Fresnillo has approved the dcevelopment of its JV Juanicipio project in Mexico

Fresnillo has approved the dcevelopment of its JV Juanicipio project in Mexico

Construction is due to start immediately and completion is expected in late 2020, subject to finalising detailed engineering and securing remaining permits.

Juanicipio is expected to have total average annual production of 11.7Moz of silver and 43,500oz of gold over an initial life of mine of 12 years.

Fresnillo, which will be the operator of Juanicipio, said there were considerable further exploration opportunities in the license area with potential to scale-up operations in future.

The project had an estimated pre-operative capex of US$395 million as of January 1, 2018, not reflecting the expenditures incurred since that date.

Fresnillo CEO Octavio Alvídrez said the approval decision reflected the work done by the JV partners de-risk the project to meet stringent development criteria.

"This decision to invest demonstrates our confidence in the long-term outlook for mining in Mexico," he said, adding that Juanicipio would be a key project for Fresnillo and  make a meaningful contribution to production from late 2020."

Jefferies analysts said the project's pre-operative capex estimation at $395 million was slightly above the bank's estimate of $360 million.

RBC's James Bell said the approval of Juanicipio was the next leg of growth for Fresnillo, helping to drive the cicra 3% production CAGR 2018-2021 estimate.

"The metrics look in line with what was previously in the market… While no economics have been released today we forecast an attributable NAV of $1 billion and IRR of circa 28% on our base case forecasts," he said.

"This is a high quality project that, in time, has scope to grow further in our view through resource extensions at depth."

 

A growing series of reports, each focused on a key discussion point for the farming sector, brought to you by the Kondinin team.

A growing series of reports, each focused on a key discussion point for the farming sector, brought to you by the Kondinin team.

editions

Mining Journal Intelligence Investor Sentiment Report 2024

Survey revealing the plans, priorities, and preferences of 120+ mining investors and their expectations for the sector in 2024.

editions

Mining Journal Intelligence Mining Equities Report 2023

Access an exclusive, inside look on the quarterly mining IPOs and secondary raisings data and mining equities performance tables with an annual Stock Exchange Comparisons supplement.

editions

Mining Journal Intelligence World Risk Report 2023 (feat. MineHutte ratings)

A detailed analysis of mining investment risks across 121 jurisdictions globally, built on 11 ‘hard risk’ metrics and an industrywide survey.

editions

Mining Journal Intelligence Global Leadership Report 2023: Social licence

Gain insights into social licence trends and best practices from interviews with 20+ top mining company executives and an industrywide survey.