Update on temporary explosives suspension
Fresnillo plc
28 Grosvenor Street
London W1K 4QR
United Kingdom
18 September 2013
Update on Minera Penmont's temporary explosives suspension
Fresnillo plc announces an update regarding the temporary suspension of Minera Penmont's explosives permits (at Dipolos, Soledad, Herradura and Noche Buena).
Background
As previously noted in Fresnillo's interim financial statement on 6 August 2013, the local Magistrate in Sonora issued requests to the Ministry of Defense which resulted in a temporary suspension of Minera Penmont's explosives permits. Minera Penmont has presented legal proceedings before authorities requesting re-activation of its explosives permits outside Dipolos (at the Soledad, Herradura and Noche Buena mines) and is of the opinion that the explosives suspension is excessive since it goes beyond the area of land pertaining to the original court order around the El Bajío litigation.
Update
The Magistrate has instructed a court appointed expert to determine the boundaries of the area of land pertaining to the original court order and to submit a written report clearly delineating these boundaries. The Company has obtained confirmation that this report has been received by the Magistrate and expects the Magistrate to review it and reach a decision quickly.
Fresnillo plc believes that given the fact that the report submitted by the court appointed expert establishes the boundaries of land, there is no further dispute over the same and therefore expects that the suspension be lifted by the beginning of October although no assurances can be made.
Separately, Fresnillo plc has complied with the original court order and vacated the land at the Dipolos open pit and has dismantled and removed the plant, and is working on relocating it to Herradura.
Production guidance
As announced on 6 August, Fresnillo plc reduced full year gold production guidance to 465,000 ounces as a result of the El Bajío litigation and expected no impact to production from Herradura and Noche Buena as a result of the explosives suspension as there were sufficient inventories at Herradura until early August and at Noche Buena until late August.
Although the inventory of blasted mineral which is hauled to the leaching pads at both mines has been run down to date, Fresnillo plc reiterates the 2013 full year gold guidance of 465,000 ounces as the leaching pads continue to process ore at the normal rate and the Company expects to make up any production short fall by the end of December, subject to the lifting of the explosives suspension by the beginning of October, as described above.
A further update will be made in due course.
For further information, please visit our website www.fresnilloplc.com or contact:
|
Fresnillo plc London Office Gabriela Mayor, Head of Investor Relations |
Tel: +44 (0)20 7399 2470 |
|
Mexico City Office Ana Belem Zárate |
Tel: +52 55 52 79 3206 |
|
Brunswick Group Carole Cable David Litterick
|
Tel: +44 (0)20 7404 5959 |
About Fresnillo plc
Fresnillo plc is the world's largest primary silver producer and Mexico's second largest gold producer, listed on the London Stock Exchange under the symbol FRES.
Fresnillo has six operating mines, all of them in Mexico - Fresnillo, Saucito, Ciénega (including the San Ramón satellite mine), Herradura, Soledad-Dipolos and Noche Buena; three development projects - a dynamic leaching plant to treat high grade gold ore from the Herradura and Soledad-Dipolos mine; San Julián and Saucito II and four advanced exploration prospects - Centauro Deep, Juanicipio, Orysivo and Las Casas Rosario as well as a number of other long term exploration prospects. In total, has mining concessions covering approximately 2.1 million hectares in Mexico.
Fresnillo has a strong and long tradition of mining, a proven track record of mine development, reserve replacement, and production costs in the lowest quartile of the cost curve for both silver and gold.
Fresnillo's goal is to maintain the Group's position as the world's largest primary silver company, producing 65 million ounces of silver and 500,000 ounces of gold by 2018.
This information is provided by RNS
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