Fresnillo and MAG Silver said in a January 2022 operational update for the Juanicipio project in the Fresnillo silver trends in Mexico that the project’s commissioning progress remains on schedule despite obstacles with power as well as the ongoing coronavirus pandemic.
The silver-lead-zinc-gold project, which is 56% owned by Fresnillo and 44% by MAG Silver, also has been at the mercy of new changes to labor contracting legislation guidelines.
The companies said the state-owned electric utility Comisión Federal de Electricidad has notified the operator, which is Fresnillo, that commissioning could potentially be six months away because its approval to complete the tie-in of the site to the national power grid cannot yet be granted.
“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 … ability to oversee three key tasks: review the existing installation, supervise physical connection to the active power grid; and approve required blackout prevention devices,” the two companies said.
Fresnillo, as a result, will be engaging closely with the CFE and El Centro Nacional de Control de Energía (CENACE) to help expedite 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,” Fresnillo officials confirmed.
In the meantime, stoping and mineralized mine development will continue at the site, and so that any potential adverse effects can be kept low, Fresnillo will make available any unused plant capacity at the Minera Fresnillo and Minera Saucito operations to process mineralized material produced at Juanicipio during this period – as well as matching commissioning and ramp-up tonnages if possible.
“As an industry, we continue to manage the ongoing impact of the pandemic and while frustrating for all concerned, we recognize this situation is beyond the control of all parties,” said Octavio Alvidrez, chief executive of Fresnillo.
Added 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.”
Fresnillo has seven operating mines, all of them in Mexico: Fresnillo, Saucito, Ciénega (including the San Ramón satellite mine, Las Casas Rosario and Cluster Cebollitas), Herradura, Soledad-Dipolos, Noche Buena and San Julián (veins and disseminated ore body), as well as three development projects: the Pyrites plant at Fresnillo, the optimization of the beneficiation plant also at Fresnillo, and Juanicipio. It also has three advanced exploration projects: Rodeo, Orisyvo and Guanajuato.