Juanicipio Plant To Start Operations in 2Q22

MAG Silver has provided an update on its Juanicipio project and its production volume during 4Q21, considered the most significant of the year. In addition, the company said that Fresnillo continues to work with the authorities in order for the Juanicipio plant to begin operations in 2Q22.

The Juanicipio Project, which is owned by Fresnillo (56 percent) and 0MAG Silver (44 percent), processed 113,950 tons of mineralized materials during the October-December period. The amount is significant as it represents 45 percent of all tons processed in 2021. The total material processed last year was 251,907 tons, resulting in 3,200,000 ounces of silver and 6,557 ounces of gold.

MAG Silver explained that until Juanicipio’s processing plant is commissioned, minerals are being processed through Fresnillo’s plant. In December, of the 47,220 minerals processed, 8,725 were processed at the Saucito plant in Fresnillo, which flow is similar to that of Juanicipio and as a resultwill provide greater metallurgical benefits. The company explained that although the project is already providing profits from current production, they are being used to offset the initial project capital required.

“We are encouraged to see the increased throughput at the Fresnillo owned plants in the last quarter. The ability to utilize capacity at their plants when available to process Juanicipio material, helps us minimize any impact on this year’s cashflow while we await the electrical tie-in,” said George Paspalas, MAG Silver’s President and CEO.

Regarding the electrical tie in, the company explained that although the construction of the Juanicipio plant was delivered on time in 4Q21, its mill commissioning will be until the 2Q22. The company said it was delayed for six months as CFE could not tie the project into the grid on time. As a result, Fresnillo continues to work with authorities in order to comply with the new requirements and have the permit as soon as possible. Once Juanicipio operations begin, the company expects to reach 85-90 percent of its capacity by the end of 2022.

Previously, CFE notified Fresnillo that the delay was related to the effects of the pandemic on its operations, predominantly related to a lack of staff which limits its ability to review the existing installation, supervise physical connection to the active power grid and approve required blackout prevention devices.

“It has been a difficult year, not only because of the pandemic. We have lived through three years of dangers while fighting against the Energy Reform, effectively designed to eliminate CFE. But by following the president’s mandate to rescue [the state utility], we took measures to unify its subsidiaries and affiliates,” said CFE’s General Director, Manuel Bartlett, earlier in December.