MAG Silver Reports Production at Juanicipio

MAG Silver, based in Vancouver, Canada, has released its production report for the Juanicipio Project for 1Q23.

The Canadian mining company owns 44% of the Zacatecas-based Juanicipio project located in Zacatecas, while 56% is owned by Fresnillo. The development consists of two main vein systems: Valdecañas and Juanicipio, both prolific epithermal silver and gold structures. At the beginning of this year, the companies announced that they expected the project to produce 11.7Moz/y of silver and 43,500oz/y of gold.

In that sense, the project achieved a significant milestone in March 2023 by producing and selling its first commercial lead and zinc concentrates. During the quarter, surplus mineralized material was processed through the nearby Saucito and Fresnillo beneficiation plants, generating additional operating cash flows. The Juanicipio mill predominantly processed low-grade stockpiles that were designated for commissioning.

Fresnillo, the project operator, reported to MAG that a total of 222,023t of mineralized material from underground stopes and low-grade stockpiles were processed at an average silver head grade of 363g/t during the three months.

According to provisional estimates before offtake agreement adjustments, the total Juanicipio production for 1Q23 was 2,249 silver oz and 6,047 gold oz.

In addition, approximately 30% of the tons were processed at the Juanicipio beneficiation plant, which the company characterized as a notable achievement considering consistent mill feed only commenced in late February 2023. Moreover, MAG Silver will now focus on achieving steady-state operations, attaining the 4,000tp}/d nameplate and achieving commercial production. In March 2023, milling rates were around 60% of design, yielding an average of 2,476t/d with rates occasionally reaching up to 3,900t/d. 

George Paspalas, CEO and President, MAG Silver, said that “With the initial concentrate shipments behind us, our attention is now on achieving commercial production at Juanicipio. We have experienced some really promising days with milling rates at or around 4,000t/d. Our goal is to transform these good days into solid quarters and solid quarters into outstanding years.”

At the end of March, the company reported its financial results for 2022 showing a working capital of US$29,232 and net income of US$17,644 while Juanicipio had negative working capital of US$1,395 with US$1,102 cash. 

Previously, MAG Silver explained that the main challenge for Juanicipio was CFE’s six-month delay in connecting the project to the grid. However, Fresnillo explained that the project’s production forecast in 2023 will not be affected despite the delays.