MAG Silver Corp. [MAG-TSX, NYSE American] announced that, as planned, development material from the Juanicipio Project (56% / 44% joint venture between Fresnillo plc and MAG) commenced processing at the Fresnillo beneficiation plant during the quarter ended September 30, 2020.
As reported by operator Fresnillo, 42,476 tonnes were processed during the quarter, with total production of 394,000 silver ounces, 610 gold ounces, 138 tonnes of lead and 174 tonnes of zinc (attributable to MAG: 173.4 thousand ounces of silver, 268.4 ounces of gold, 60.7 tonnes of lead and 76.6 tonnes of zinc).
This first development material was processed through the nearby Fresnillo processing plant (100% owned by Fresnillo) with the lead (silver rich) and zinc concentrates treated at market terms under off-take agreements with Met-Mex Peñoles, S.A. De C.V. in Torreón, Mexico.
The revenue from this production, net of processing and treatment costs, will be used by the joint venture to offset cash requirements of the initial project capital.
“This first production from Juanicipio is a major milestone for the company” said George Paspalas, MAG Silver’s President and CEO. “The successful processing of development material not only provides cash flow to offset capex, but further de-risks the project as it heads toward commercial production. We are looking forward to the first production stope coming online in Q4 2020, and our potential to continue to produce cash whilst we complete the process plant construction.”
Fresnillo expects to process an average of 16,000 tonnes per month of mineralized material from the joint venture through its processing facility to mid-2021, at which time the Juanicipio beneficiation plant is scheduled for commissioning.
On Wednesday October 21 trading, shares of MAG Silver gained $1.43 to $24.52, or 6.2%, on a volume of 269,900 shares traded.